Bitcoin continues its sharp decline.
The digital currency plunged more than 6% on Tuesday, falling to $ 32,000 and ending the day at around $ 33,300. after US officials seized more than $ 2 million in Bitcoin tied to the Colonial Pipeline ransom. While questions remain as to how the US gained access to the hacker’s Bitcoin wallet, concerns arose as to how impregnable the cryptocurrency could be.
Michael Binger, president of Gradient Investments, says security is just one of the reasons he remains on the sidelines when it comes to Bitcoin.
“I understand that crypto is a global currency, it is unregulated. I understand some are concerned about US inflation and a weakening dollar, but I still think gold is a better hedge if those are your concerns, ”Binger told CNBC.Trading nation” on Tuesday.
Bitcoin is viewed by some investors as the digital alternative to gold as it has a store of value that can hedge the risk of inflation.
“Crypto is just way too volatile, way too speculative for our customer base,” said Binger. “I really think the crypto market is more for retailers trading both up and down with price momentum, and a handful of companies willing to get in.”
Gina Sanchez, CEO of Chantico Global and Chief Market Strategist at Lido Advisors, is also foregoing the asset.
“We are still Bitcoin sellers,” said Sanchez in the same interview. “The broader market and the economy frankly show that a lot of money is flowing back into the economy through consumption and investment, and that hurts all speculative assets.”
Tuesday’s sell-off was just the most recent drop for Bitcoin. It has come under pressure even after that Tesla has reversed a decision to allow payments in the coin and as regulation looming in the US and overseas.
“Bitcoin is landing solidly in this area as a speculative asset, but we are also seeing SPACs, IPOs all hit at the same time, and we see this only as a sign that money is moving from speculation back into the real economy”, added Sanchez.