Economist David Rosenberg, president of Rosenberg Research said that the volatile nature of cryptocurrencies like Bitcoin (CRYPTO: BTC) makes them akin to gambling rather than sound investing.
What happened: Drawing a comparison to more conventional investments, Rosenberg said in a morning note on Monday that stocks represent a stake in a company’s future earnings, whereas bonds and savings accounts yield consistent interest, reported Business Insider.
Furthermore, commodities possess industrial value and their demand can be forecast using economic data. “These things are real,” Rosenberg said. “You want to get rich by believing in crypto ‘currencies?’ Then barbell your holdings with lottery tickets. Seriously — let’s get a grip.”
Barbelling is a strategy used by investors to hedge uncertainty in the financial markets by combining the potential for high returns with a conservative risk management approach. It typically refers to a style of investment where an investor allocates assets that emphasize extreme positions on either end of the risk spectrum.
The well-regarded former chief North American economist at Merrill Lynch asserted that Bitcoin and similar digital tokens epitomize the “greater fool” theory, implying that their value is speculative and reliant on selling to someone else at a higher price, rather than any inherent worth.
This criticism comes amid numerous spot Bitcoin ETFs receiving a green light from U.S. regulators. Rosenberg took note of Bitcoin’s recent volatility, with its price plunging from a two-year peak of $49,000 to $44,000 in a mere day and a half last week.
Questioning the need for such volatility in investing, Rosenberg stated, “Who needs this degree of volatility in their lives? Not me, that’s for sure.”
This isn’t the first time Rosenberg called Bitcoin a speculative asset. In 2020, he said that Bitcoin “is in a massive bubble”.See More: Dogecoin HODLERs Are Beating Shiba Inu With 57% Landing In Profits, IntoTheBlock Data Reveals
Why It Matters: Last week, Edward Jones’ senior investment strategist, Mona Mahajan said, “I think the bitcoin ETF is a great part of your speculative basket.” Emphasizing its fit for risk-tolerance portfolios, she added, “Everyone has that 5% that’s lottery ticket money, but that’s a great place…
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