Investors looking to participate in the frenzied growth of cryptocurrencies may want to take a strategic approach.
Bitcoin The price has surged about 30% since Election Day on November 5, hitting a record of more than $93,000 on Wednesday, according to Coin Metrics. Price fell below $88,000 before Thursday’s market close, as post-election rally shows signs of fading.
Matt Bartolini of State Street Global Advisors advises investors to consider how the political environment could affect future prices.
“You need to understand what’s going on in the cryptocurrency market, especially around new government policies,” the firm’s head of research for the Americas at SPDR told CNBC.ETF Edge” on Monday.
Bartolini expected Trump administration’s pro-cryptocurrency policies further boosting the asset class.
He added: “Government regulatory policies will become more supportive of cryptocurrencies, and the barriers to cryptocurrencies and other digital assets starting to gain widespread financial institutional support may be reduced.”
“The price of entry is everything”
While Astoria Portfolio Advisors CEO John Davi agrees that Donald Trump’s victory is driving near-term gains, he is skeptical about how much room Bitcoin has left to run.
“The Trump administration will be supportive of cryptocurrencies. I would remind viewers that a lot of that is priced in,” David said in the same interview. “A lot of it was front-running ETF flows.”
The first spot Bitcoin ETFs Trading starts on January 11thSince then, the underlying cryptocurrency is up more than 90%.
“In this industry, entry price is everything, and it’s gone up a lot. So I would be cautious about where you enter,” David added.
To manage downside risks, State Street’s Bartolini advises investors to take an active approach to digital currency investing.
“I think being able to use actively managed strategies to decipher the winners and losers from regulatory-induced headwinds or continued use and adoption of digital assets is something I think could be the beneficiary.”
