Invest or Not: Hedge-Fund Manager And UBS Chairman Oppositely Advice on Bitcoin

Invest or Not: Hedge-Fund Manager And UBS Chairman Oppositely Advice on Bitcoin

Since the beginning of 2018, bitcoin has not shown any drastic changes in the price. Sure, there were some significant declines, like to $9,500 on January 17, or promising soaring, as to $17,600. But on the whole, all the swings have been rather smooth than radical, as we look at the monthly graph.


And lots of experts, analysts, and strategies in the field have been giving various predictions concerning bitcoin’s fate in 2018. There have been lots of claims that it might double by the end of the year. Therefore, different opinion leaders have been giving different pieces of advice on whether to invest in bitcoin now or not. Among the recent ones are the opposed claims of Axel Weber, the Chairman of UBS Group AG, and Brian Kelly, who is the founder of BK Capital Management.

To Invest…

Brian Kelly, the constitutor of the BKCM, an investment company focusing on macroeconomics and crypto assets, says right now is the time for piling into bitcoin. The time is proper as BTC prices are currently low, said he in an interview with CNBC on January 23:

"Now, when everyone is saying ... it's over, that's it, bitcoin is dead, for the 175th time. Now's the time you start looking at it, on the buy side."

Being also a portfolio manager at BKCM Digital Asset Fund, Kelly is sure the flows of funds in bitcoin has not stopped. According to him, now institutional investors in EU and Japan, who are keeping an eye on BTC, after Chinese and South Korean regulators partitioned retail investors from piling into the coin.

Kelly also warned those who want to invest in bitcoin that they should not do it when the prices soar. This can even jeopardize investors as high prices indicate BTC’s fluidity. Mocking people who jump on the crypto bandwagon, when bitcoin reaches the top of $20,000, as it was last year December, the BKCM founder stressed there should also be time for some prudence.

However, remaining bullish, Kelly said the king of all cryptos had not come to an end yet, as lots of skeptics started assuming when its price plunged this January. He also believes that the dropping prices is a natural phenomenon and it is even beneficial for the whole cryptosystem.

Moreover, Kelly gave three brilliant instructions for green digital investors. Here they are:

  1. Only risk 1% to 5% of assets.
  2. Try to be a ‘hodler’ – do not sell out bitcoin too early.
  3. Keep calm. 50% drop is OK, so do not ring the alarm.

Concerning the first piece of advice, Kelly said that cryptos are new technology, it behaving like the internet did 20 years ago. Thus, it is better to consider the risks very well. If a coin soars often, it will also lose in value often.

Regarding holding on to the asset, Kelly said it is better not to vend it even if it skyrockets by 20-30%. Likewise, it is also better not to panic as currency may either surge or plunge by 30% just in a day. One should be ready for it if he or she does not want to turn white by the end of a day.

…or Not To Invest

The other shark of the finance world, Axel Weber, gives a drastically opposite to Kelly’s piece of advice – do not invest in bitcoin now.

According to his words, BTC’s price is uncertain. Hence, Swiss bank (UBS Group AG) will not trade bitcoin or offer it to retail investors. The reason lies in the fact that governments keep curbing on cryptos, which can lead to a devastating fall in bitcoin’s price. Talking with a Bloomberg TV journalist on January 24 at the World Economic Forum in Davos, Switzerland, Weber said:

“This is something where the price is really unclear. We fear that in the future if these investments implode and the market corrects, then investors will be looking at ‘who sold us this?’"

Weber also emphasized that the reason why bitcoin’s price rises are the increase in demand. And the need, in its turn, is triggered by the digital scarcity of bitcoin, which is in nature of bitcoin. Therefore, he believes, governments’ watchdogs should carefully look into this currency.

Regulators Getting Fed Up

Governments and authorities all over the world express their concerns and doubts regarding bitcoin. Besides China and South Korea, European regulators show the interest in curbing on cryptos. For example, this January the European Commission assumed it increase regulation over digital money due to sings of a ‘bubble.’

So What to Do?

Anyway, invest in bitcoin right now or not, it is only up to you. But what is sure that for the past week bitcoin has been fluctuating between $10,000 and $13,000 in price, and has not shown the signs of complete recovery since last year December when it was trading at $19,000-$20,000.

Chart Source: coinmarket.com