Bitcoin’s price volatility is once again the subject of criticism from bankers as analysts from Société Générale take aim at the premier cryptocurrency.
In an investor note quoted by CNBC, analysts at the bank argued that Bitcoin’s (BTC) “erratic price movements” devalued its place in investment portfolios.
According to the investor note, the looming threat of government crackdowns across the globe puts significant downside pressure on future Bitcoin price action.
Indeed, the recent BTC price plunge has also coincided with several negative regulatory moves from government agencies across the world. As previously reported by Cointelegraph, the United States Treasury is looking to mandate reporting of crypto transactions above $10,000 to the Internal Revenue Service.
The Société Générale analysts also touched on the Bitcoin and gold comparisons, agreeing that investors see both assets as hedges against monetary debasement. However, beyond partial protection, the analysts identified positive price movements and fear-of-missing-out buying as the only claim to fame to both store of value assets, stating:
“The only potential reward to investors in Bitcoin and gold is from their positive price movement, which is essentially the only thing they have in common, apart from their ability to trigger rush buying.”
Despite the recent price troubles for Bitcoin, BTC is up 38% year-to-date and 312% in the last year. While some bankers may identify volatility as a bug, proponents like Mark Yusko, CEO of Morgan Creek Capital Management, see volatility as a feature of Bitcoin’s long-term value potential.
Speaking to CNBC on Thursday, Yusko argued that volatility was a necessary part of Bitcoin’s 223% per annum positive compounding capability over the last decade.
"#Bitcoin has the same amount of volatility as Amazon stock...when was the right time to sell Amazon? That would be never. Volatility is not your enemy." @MarkYusko on $BTC and crypto volatility: pic.twitter.com/QLWcoR7DzA
— Worldwide Exchange (@CNBCWEX) May 20, 2021
“Bitcoin has the same amount of volatility as Amazon stock […] When was the right time to sell Amazon? That would be never. Volatility is not your enemy.”
Meanwhile, Singapore’s crypto-friendly banking giant DBS has released a report calling Bitcoin “an opportunity that fiat money cannot buy.”