Bitcoin, the largest of the digital currencies, is no stranger to controversy, as the bitcoin price prediction changes often. During its meteoric rise, the cryptocurrency has gained plenty of doubters, including some well-known asset managers. Add Allianz Global Investors to that group.
“The cryptocurrency is worthless, even if blockchain technology could bring significant benefits to investors, said Allianz,” according to Bloomberg.
The price of bitcoin has fallen by about 50% since December. In recent months, regulators around the world have stepped up scrutiny of digital currencies and related assets, including some blockchain investments.
According to coinmarketcap.com, the market capitalization or value of all digital coins stood at $310.4 billion early on Thursday morning, down from $372.9 billion a day before.
Many predict the price of bitcoin may encounter a low of $6,000.
Continued Bitcoin Concerns With SEC
“The SEC staff has concerns that many online trading platforms appear to investors as SEC-registered and regulated marketplaces when they are not,” said the SEC in a statement. “Many platforms refer to themselves as ‘exchanges,’ which can give the misimpression to investors that they are regulated or meet the regulatory standards of a national securities exchange. Although some of these platforms claim to use strict standards to pick only high-quality digital assets to trade, the SEC does not review these standards or the digital assets that the platforms select, and the so-called standards should not be equated to the listing standards of national securities exchanges.”
Bitcoin doubters have frequently said the digital currency is an asset bubble waiting to pop, a sentiment echoed by Allianz.
“In addition, the world’s largest cryptocurrency ‘ticks all of the boxes’ of the essential criteria for any asset bubble, including overtrading, “new-era” thinking and rising leverage, he wrote. Bitcoin mania is a textbook-like bubble, ‘one that is probably just about to burst,’” Bloomberg reports, citing Stefan Hofrichter, Allianz head of global economics and strategy.
Still, some firms are pushing assets related to digital currencies. Two U.S. exchange operators currently offer bitcoin futures and, earlier this month, Grayscale Investments, the operator of the Bitcoin Investment Trust (OTCQX: GBTC) introduced the Bitcoin Cash Investment Trust, Ethereum Investment Trust, Litecoin Investment Trust, and XRP Investment Trust.
Coinbase, the operator of the largest U.S. cryptocurrency exchange, launched an index based on bitcoin and other digital currencies traded on Coinbase. The Coinbase Index Fund debuted last week.
The fund is available only to accredited investors defined as those with an annual income of $200,000 or a net worth of $1 million or more. The minimum investment is $10,000 and the fund has an annual management fee of 2%, according to Coinbase.
For more information on the cryptocurrency, visit our Bitcoin category.