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BlackRock strategist Richard Turnill says there is no real bitcoin, but the markets carry "many features of a bubble".
Turnill, chief investment strategist for the $ 6 trillion fund manager, told Business Insider that BlackRock "looks a lot" at blockchain and believes that this technology see the increasing adoption over time. However, Turnill does not anticipate that this will lead to a correlative increase in the adoption or value of bitcoin:
"We've been watching a lot of blockchain technology, especially BlackRock, we're starting to use blockchain, I think it's a technology that's going to be more and more adopted over time." said Turnill, "which is not to say, it is that the value of bitcoin and wider cryptocurrencies should continue to increase."
The price of bitcoin has risen nearly 800% over the past year, and Turnill says it's an indication that cryptographic markets might be in a bubble. He says the main reason why people buy bitcoin is that the price goes up, which pushes the price up and attracts new buyers into the ecosystem. The financial services firm UBS made a similar claim arguing that the price of bitcoin is trapped by a "speculative bubble".
"I would say that cryptocurrencies show many features of a bubble right now," added Turnill, "which is [to say] you've seen dramatic price increases." Main argument for buying them is that prices have risen, and will therefore continue to increase over time.But there is no inherent or false price for bitcoin. "
In the end, he says that, unlike conventional investments such as stocks and bonds, there is no "inherent" fair value in the price of bitcoin.
"You could say" what is the fair value? "You know, I'm an investor, I like to think about the fair value of stocks or bonds, I can not answer what is the fair value for bitcoin or any cryptocurrency," he concludes. "For this reason, I am not an owner."
However, Turnill's assertion that it is impossible to accurately determine the fair value of bitcoin is not universally shared by Wall Street strategists. Tom Lee, of FundStrat, thinks for example that Bitcoin is subject to the Metcalfe law, which states that the value of a network – in this case Bitcoin – is proportional to the square of the number of users network. Using this model, he predicts that the price of bitcoin will reach $ 25,000 by 2022.
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