The investment baking giant’s head of commodities has said the solution to the digital currency’s price swings is to pump in more cash, not pull it out
The week so far in the crypto space has been something of a volatile one as the ongoing status of Bitcoin continues to dominate the headlines.
After grabbing attention recently after surging to fresh highs, alarm bells are likely to have gone off on a more than few trading screens on Monday suffered a sharp decline, tumbling to around US$30,000 from US$40,000 in a single day and wiping out pretty much all of its gains since the start of the month.
TALES FROM THE CRYPTO: Bitcoin’s recent slide is more of a stumble than a tumble
While the price has recovered since then (Bitcoin is trading at around US$38,900 as of time of writing), the sudden drop may have some of the crypto market’s veterans worrying that Bitcoin could be in for a repeat of its price crash in late 2017, which saw the currency soar to a then-record high of over US$19,000 before plunging to less than half that less than two months later.
However, while many may be thinking now may be the time to take their profits and get out, an executive at has said institutional investors should instead shovel more money into the coin to prevent such swings in the future.
On Tuesday, the vampire squid’s head of commodities research Jeff Currie told CNBC that the Bitcoin market is “beginning to become more mature” and more cash was needed from institutions to prevent massive price swings in the future.
“The key to creating some type of stability in the market is to see an increase in the participation of institutional investors and right now they’re small”, Currie said, adding that institutional money only made up “roughly 1%” of the more than US$600bn currently invested in Bitcoin.
However, with major tech firms such as Inc () offering customers the option to pay in Bitcoin and analysts at JP Morgan forecasting the price of the crypto could reach US$146,000 in the long-term, the floodgates for institutional cash may just be starting to open.
Less of that funny business, says Lagarde
Meanwhile, on the other side of the Atlantic Bitcoin is once again finding itself under pressure from regulators, with current European Central Bank (ECB) head and scarf enthusiast Christine Lagarde calling for global regulation of the cryptocurrency.
Speaking to the Reuters Next conference on Wednesday, Lagarde said the cryptocurrency has been involved in “some funny business” as well as “some interesting and totally reprehensible money laundering activity” and that any loopholes in regulation needed to be closed to prevent similar activity in the future.
The ECB boss went on to say Bitcoin as still a “highly speculative asset”, a view echoed this week by the UK’s Financial Conduct Authority (FCA), which warned crypto investors that they should be “prepared to lose all their money” if they parked it in…