The first Wall Street analyst to cover bitcoin cites several reasons why the headline crypto is not a good place to put your money right now.
Nick Colas, the Co-founder of DataTrek Research and the person widely credited as being Wall Street’s first bitcoin analyst, has warned investors to be wary of staking their money on the headline cryptocurrency. Speaking to CNBC, Golas told the channel’s Trading Nation show that when people ask him if – in light of its fall in price over the first quarter of 2018 – now is the right time to buy bitcoin, “the short answer is no.”
“It was absolutely a bubble based around the futures launch in December,” he continued, before noting a considerable drop-off in interest through the new year. “In terms of Google searches, they are way down from the peaks back in December and January — like 85 to 90 percent.”
“The second issue,” he added, “is that we’re also not seeing a lot of wallet growth – growth in wallets is just 2.2 percent last month, it was 5 to 7 percent per month all of last year.”
Colas believes the key to seeing a rise in value across the crypto market is real-world usage that will encourage people to buy into it.
“Like any new technology, you need new adopters to come in to make it more valuable,” he said. “Then, we have a solid trek higher. Then, interest will reengage.”
The analyst also made some comments about the volatility of the bitcoin markets, saying that despite his company’s best efforts to link its price performance with movements in other markets such as stocks and gold, is “its own beast… Which makes a tonne of sense given the fundamentals.”
“It would be great to have it be caught to something else, but it just isn’t.”
Where he does see correlation, however, is between the price of bitcoin and other less well-known cryptocurrencies.
“Right now, bitcoin is that market leader… so when it rallies, the other members of the group – the Ethereums, LiteCoins and Bitcoin Cashes of the world – tend to get pulled up as well.”