Spencer Bogart commented on the incident …
Spencer Bogart commented on last week’s rise in bitcoin
Spencer Bogart, General Partner of Blockchain Capital, commented on the sharp fluctuations in the Bitcoin exchange rate that occurred in the market last week.
“First, it is the natural behavior of any asset class with limited supply and variable demand. This is also true for bitcoin, especially considering the fact that it is in the early stages of development, “Forbes quotes him as saying..
Bogart noted that similar fluctuations are often observed in other assets that serve as a store of value, such as gold and high-value collectibles. The latter, according to Bogart, represent a $ 4-5 trillion market.
“People assume that you buy a piece of art because it’s beautiful, right? Are you buying a vintage Ferrari because maybe you’re going to drive it? These things don’t adorn the walls. They don’t drive the streets. They are locked up in vaults. They serve as a store of value and are a scarce asset, because there will no longer be new Picasso paintings or vintage Ferraris, “he said..
According to Bogart, similar examples are found in the real estate world, when certain objects are used exclusively as a means of accumulation. In particular, he pointed to the Vancouver real estate market, where a significant part of the demand comes from overseas buyers who then do not live in these houses and do not rent them out..
“This is the purchase of a scarce asset that is used as a store of value to preserve capital over time,” he added..
Based on these observations, Bogart draws a parallel with Bitcoin, which he says is capable of absorbing some of the money supply in the aforementioned markets. At the same time, he does not recommend allocating more than 1% in the portfolio for cryptocurrency. From the moment of purchase, bitcoin must be held for at least 3 years, the partner of Blockchain Capital believes..
Last week, Bogart pointed to the announcement of Facebook’s cryptocurrency project as the largest driver of Bitcoin price growth. Additional incentives could be the global monetary policy and negative interest rates on bonds of various countries these days, he said..
Talking about the prospects for Libra, Bogart said: “I think they will get to the operational stage and may be successful.”.
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