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‘Bitcoin is not an asset and we don’t know its intrinsic value yet,’ investment banker says

Chief investment strategist: Bitcoin is not an asset and we don't know its intrinsic value yet

BMO Capital Markets chief investment strategist Brian Belski has questioned bitcoin’s intrinsic value status amid the asset’s ongoing bull run powered by institutional investors. 

Speaking to Fox Business, Belski said that without clarity on bitcoin’s intrinsic value, the crypto should not be part of an investment portfolio because it is neither a currency nor an asset. 

“What is the intrinsic value of bitcoin or crypto? From our land, we don’t know yet, and it is our official view from an investments strategy position that bitcoin and crypto should not be part of your asset allocation given the fact that it’s not an asset, it’s not a currency, it is a trading instrument,” said Belski. 

He further said that bitcoin’s supply and demand situation explains why it cannot be an investment tool since it is in a momentum-based market. 

Belski acknowledged that bitcoin has gained momentum since 2019, and once the demand dries up, it will be hard to establish the digital asset’s intrinsic value.

He added that bitcoin’s popularity had removed pressure from the stock market, with most people concerned by the asset’s price movement. 

‘Bitcoin has no existential threats’

Belski’s view strongly differs from Michael Saylor, the CEO of MicroStrategy, a pioneer bitcoin institutional investor. According to Saylor, bitcoin is a strong store of value and will not face any threats in the near future. 

Saylor believes that even if authorities ban the asset’s use as a currency the investment tool status will stay. According to Saylor. 

“I think that Bitcoin is going to be the emerging strong money store of value asset in the 21st century. There are 8 billion people that need strong money or a monetary asset. If they’re going to live a decent life, that asset needs to be digital,” said Saylor. 

Besides MicroStrategy, electric vehicle manufacturer Tesla also invested $1.5 billion in bitcoin. Visa (NYSE: V) and PayPal (NASDAQ: PYPL) have also emerged as key players in the crypto sector.

By press time, bitcoin was trading at $56,288, a drop of 2.62% in the last 24 hours according to data provided by CoinMarketCap.

Watch the video: BMO Capital Markets chief investment strategist Brian Belski on market bubbles, gold and bitcoin

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