- Michael Bucella of BlockTower Capital holds a bullish view on crypto, noting that volatility in Bitcoin, Ethereum, and other cryptocurrencies is not surprising.
As Bitcoin prices fell to levels not seen since July 2021, crypto investors and BlockTower Capital general manager Michael Bucella urged retail investors to view the decline as an opportunity to re-enter the market.
Bucella added that while volatility remains a major concern for some participants, it should not be unexpected given that this asset class is still maturing.
Despite the sharp drop that has taken Bitcoin down more than 50% from its all-time highs, the investor said the long-term prospects for Bitcoin remain bright.
In a pre-recorded interview with CNBC, Bucella suggested crypto is likely to regain momentum as broader markets begin to recover from the recent sell-off. He noted that expectations of higher interest rates from the Federal Reserve and other central banks have weighed on investor sentiment.
With cryptocurrency markets operating 24/7, the BlockTower Capital executive pointed to a positive dynamic that can help support Bitcoin prices over the long-term bullish trend. He said the leading cryptocurrency is “growing steadily” even as it trades in line with risk-on market movements.
On the question of volatility, Bucella described Bitcoin and other digital currencies as a “young asset class.” Because of that, dramatic price swings like those observed over the past years should not be overly surprising.
He added that the declines seen in recent months followed the steep rallies in Bitcoin and Ether during the first half of 2021. Those price surges, he argued, were driven more by value creation and speculation than by underlying fundamental growth.
Still, he expects cryptocurrencies to accelerate upward as fundamentals improve and market structures rebuild.
The analyst also pointed out that crypto has held up relatively well through the sell-off compared with certain legacy assets; some IPO and SPAC stocks have fallen as much as 80% in recent weeks.