Michael Purves, CEO of Tallbacken Capital Advisors, believes that Bitcoin might not see institutional money after failing to perform as an uncorrelated asset
recently bloomberg interviewMichael Purves, CEO of Tollbacken Capital Advisors, says he has been going through a bearish phase on bitcoin since January, and his stance hasn’t changed.
He claims that his firm entered a short trade with a target of $15,000 last week.
According to Purves, Bitcoin’s long-term bullish momentum began to break at the end of January.
The top cryptocurrency is down 55.86% on a year-to-date basis.
Entities Can Abandon Bitcoin
Bitcoin surpassed $20,000 in late December and then hit new highs in 2021. Purves says the massive rally was driven primarily by institutional investors who started buying the major cryptocurrency because of the “inflation hedge” narrative.
However, Bitcoin has failed miserably as a portfolio diversifier. As noted by Purves, it has been heavily correlated with the S&P 500 and the Nasdaq 100.
“What we have learned over the past year is that bitcoin is not uncorrelated. It is not uncorrelated,” he said.
Due to Bitcoin’s inability to act as an inflation hedge, Purves whether institutions will show up to buy the dip if the Bitcoin price drops significantly lower.
Bitcoin’s Great Month
Bitcoin is the worst-performing asset class of the month, losing 15% in value, as reported by U.Today.
David Kelly, the chief global strategist at JPMorgan Asset Management, recently opined that investors had to liquidate their cryptocurrency holdings due to the U.S. Federal Reserve’s aggressive monetary policy.
The cryptocurrency is currently sitting below the $20,000 level on the Bitstamp exchange.
