A top wealth manager has warned that now isn’t the time to buy cryptocurrencies. Neither does he feel investors need to look at what many investors consider a safe haven asset – Gold.
Speaking on CNBC, Peter Mallouk of Creative Planning said the current bear market presents “tempting” investment opportunities. But according to the wealth management advisor, younger generations looking at speculative assets are betting on the wrong investment.
Mallouk warns that Bitcoin, and other assets such as Gold, Silver, and even cannabis stocks “don’t bring any income to the investor.”
The investment advisor previously said Bitcoin was like a “dead man walking” and believes the bear market presents better investments in firms like Disney, McDonald’s’ and Accenture.
“It’s a lot sexier to buy things like cryptocurrencies, gold, and silver but … they don’t bring any income to the investor,” he said, noting that crypto had lots of “booms and busts.”
Bitcoin surged to an all-time high of nearly $20k to the USD in 2017, up from almost nothing in 2009. But prices crashed throughout 2018 to hit lows $3,000. The cryptocurrency has already seen its price bounce to highs of $14,500 in October 2019, before another crash in March 2020 saw it fall to $3,800.
Bitcoin’s price struggles over the weekend
Last week, Bitcoin lost its upward momentum and slumped below $9,000, hot on the heels of speculation when 50 bitcoin mined in the Satoshi Nakamoto era were moved for the first time since 2009.
Investors appeared scared of an imminent massive price crash, as speculation was rife that it could have been Bitcoin’s creator, or some other early adopter about to dump their holdings onto the market. Prices dropped more than 10% going into the weekend, and Bitcoin’s Monday morning trading is struggling to rebound from the flash crash that sent prices from highs of $9,900 to $8,800.
Analysts have since debunked the unlikely scenario that the wallet that sent the bitcoins belonged to Satoshi Nakamoto. However, the idea that it could be an early adopter sitting on thousands of bitcoins has caused some panic-selling to send prices downward.
Bitcoin price is looking at a potential struggle above $9,000 given it has chopped close to 5% off its value in the past 24 hours. The downside has seen its previous support zone at $9,200 turn into a key resistance level, with $8,600 the main support level short term.
But despite holding above $8,800 at press time, the cryptocurrency remains vulnerable to a push lower to yesterday’s lows of $8,000. $9,200-$9,400, is gone and now forms a major hurdle for any upward momentum bulls are likely to mount.
Bitcoin’s failure to establish a foothold above $9,000 has opened up room for another decline if it fails to keep prices above critical support at $8,650.
As noted last week, if Bitcoin fails to hold $8,600, the immediate support is at $8,400 and $8,200. Below these levels, the cryptocurrency could retest May lows around $8,000 and beyond that, $7,400.