Bitcoin slammed as "least favourite asset for investment"

The notorious volatility of cryptocurrencies is on display today, with most major cryptos spiralling sharply lower.

Bernd Struben

Author bio Bernd Struben earned his BA in economics from the University of Michigan in 1991, with post-graduate studies in environmental economics at the University of Connecticut. Over the years he’s written about and analysed the tourism industry in the Caribbean; Europe’s commercial real estate markets; and, since moving to Australia in 2010, global and Aussie share markets. Bernd studies geopolitical and macroeconomic trends, alongside sector and company specific data, to gauge what he believes could be tomorrow's best investments. In his free time, you might find Bernd at the beach with his family or working on his next science fiction novel. Areas of expertise Australian and global share markets Macroeconomic and geopolitical trends Real estate Education Economics, University of Michigan Favorite investment quote "The four most dangerous words in investing are: 'This time it's different." — Sir John Templeton

Published June 8, 2021 5:06 pm AEST

The Bitcoin (CRYTPO: BTC) price is in freefall.

One Bitcoin is currently trading for US$32,901 (AU$42,727). That's down 9.4% over the past 24 hours.

It also trims Bitcoin's year-to-date gains down to a fairly meagre 13.8%.

Don't get me wrong. A 13.8% return in under 6 months would be stellar from any blue-chip ASX share. But with the notorious volatility inherent across all cryptocurrencies, some investors may be thinking the risk isn't worth the potential gains.

As Bitcoin's price has crumbled from April's all-time highs of US$64,829, so too has its market cap. This now stands at US$615 billion, down from some US$1.1 trillion at its peak.

Bitcoin cryptocurrency coins bounce around on a black background, indicating a volatile price — Image source: Getty Images

Least favourite asset for investment

Bitcoin has been receiving a lot more institutional investor interest this year. But not all professional investors are keen to add it to their portfolios.

eToro's crypto expert Simon Peters noted that May was the worst month on record for Bitcoin's price performance. He added that "caution remains the watchword for bitcoin in particular after a sell-off sparked by a crackdown in China on trading, as well as a bout of profit-taking".

Peters also pointed to a note from Goldman Sachs, indicating the CIOs of various funds are less than enthralled with the world's largest crypto:

Professional investors remain concerned about the near-term outlook. A note from Goldman Sachs said their meetings with 25 chief investment officers of long-only and hedge funds revealed bitcoin as the least favourite asset for investment.

Which isn't to say some investors haven't made a mint trading the digital token. According to Peters, "Asset manager Ruffer has made more than $1 billion in profit from a $600 million Bitcoin investment it made during November 2020."

Ruffer closed out its Bitcoin position in April banking US$1.1 billion in profit.

Most cryptos spiralling lower…but not all

It's not just Bitcoin falling hard today.

The vast majority of the top-100 cryptocurrencies are spiralling lower.

Ethereum (CRYPTO: ETH) is down 11% over the past 24 hours. And the much-hyped Dogecoin (CRYPTO: DOGE) has shed 15%, according to data from CoinMarketCap.

But there is an outlier. The sole crypto in the top 100 (by market cap) to be up more than a fraction of a percent today is Theta Fuel (CRYPTO: TFUEL). Theta is up more than 10% over the past 24 hours.

And it's not just today. Yesterday I singled out Theta as the past week's top performing crypto. A spot it still holds onto today

Over 7 days Theta is up 46%, compared to an 11% loss for Bitcoin at the same time.

Invest with care!

Automatic Renewal

By taking up this offer, you will also be enrolled in our auto-renewal program, which is our way of making your ongoing subscription easier by ensuring uninterrupted service. Don't worry, though – you're not locked in, and can cancel your auto-renewal at any time before each 'anniversary' date without question or penalty.