Bitcoin has reached the mainstream. The former president of the New York Stock Exchange (NYSE), Thomas Farley, said in an interview at Squawk Box that the cryptocurrency is “trustworthy and resistant to censorship. There are only 21 million and therefore each portfolio should contain a part of Bitcoin.”
American banker and current CEO of Far Point Acquisition Corp Thomas Farley commented on Bitcoin:
“When the price was at $ 60,000, a lot of institutions became attentive and began to think about investing. Portfolios, such as pension funds, should therefore hold 1-3% in the cryptocurrency in the future. However, the price at that time was $ 60,000, and the mood on the market seemed very euphoric. So these institutions waited and met first with their investment committees. When the price finally fell to $ 17,000, it was hardly surprising that some of them made the first Bitcoin purchases.”
The volatility of Bitcoin
Asked about the volatility of BTC, Farley replied that there was “a moment of capitulation”.
“I think there are some really smart Bitcoin whales that have been around for 10 years and then some institutions got in pretty quickly as well. Bitcoin is up 40% right now. However, this does not mean that the price will rise another 40%. In the crypto area, Bitcoin distinguishes itself from all other coins by its properties. This system is trustworthy, largely censorship-resistant and there will only ever be 21 million of them. Therefore, Bitcoin should be part of any diversified portfolio, such as pension funds. Even if only to a small extent.”
Subsequently, Farley commented on the entire crypto market. “Then there are the other coins. Ethereum is a special class in itself, and stablecoins are also a separate category. All other cryptocurrencies behave like speculative stocks: an investment can turn out to be profitable, or it can be completely lost.”
Despite his strong sympathy for Bitcoin, Farley recalls the risk associated with the cryptocurrency.
This includes bitcoin, too, by the way. Bitcoin is a store of value but the price fluctuations are much, much higher than other stores of value. Yes, the upside potential of holding btc is high. But so, too, is the downside. The ”to the moon” verbiage is dangerous.
– Thomas Farley (@ThomasFarley) May 21, 2022
“Bitcoin is an investment with exceptionally high price fluctuations. Yes, the upside potential of BTC is high, but the downside potential is also high. This ‘talk to the moon’ is dangerous.”