DailySun
Charles Bobrinskoy from Ariel Investments has cautioned that Bitcoin is a bubble fueled by momentum, forecasting a forthcoming price drop as regulatory conditions and market perceptions change.
Bobrinskoy expressed this serious concern about Bitcoin (BTC), characterizing the cryptocurrency as a “get-rich-quick scheme” motivated by momentum instead of fundamental value.
During a segment on CNBC’s The Exchange, Bobrinskoy voiced his worries about Bitcoin’s dependence on sparse regulatory supervision, arguing that this makes it susceptible to collapse when investor sentiments shift.
According to Bobrinskoy, Bitcoin’s allure stems from its unregulated nature, which facilitates substantial, anonymous transactions.
He also pointed out its links to illicit activities and its disconnection from conventional Know Your Customer guidelines as threats to the broader financial ecosystem. He dismissed Bitcoin’s original narrative as a medium of exchange, stating that its present role as a store of value lacks durability over time.
Bitcoin’s price increase is entirely speculative
Bobrinskoy, who oversees Ariel’s focused value investment strategy and boasts decades of investment banking expertise, credited Bitcoin’s recent price hikes to speculative fervor rather than fundamental economic drivers.
He forecasted a steep drop in Bitcoin’s value once its momentum diminishes, reiterating concerns about the cryptocurrency threatening the U.S. dollar and subjecting investors to substantial risks.
“The essence of this is that it has risen simply because it has risen, and it will decline sharply if it starts to lose that momentum — and that will occur,” he stated.
Ariel Investments, recognized for its methodical value-based approach, has historically concentrated on traditional stocks. Bobrinskoy’s statements mirror the persistent skepticism within traditional finance regarding the viability of cryptocurrencies in the absence of more robust regulatory measures.
