With the price of Bitcoin reaching an all-time high of $58,332.36 on Sunday, most people were in a frenzy to sell the cryptocurrency. This huge jump in the BTC price is great news for a lot of investors. But Barclays Chief Investment Officer, Will Hobbs, has an unpopular opinion on Bitcoin.
Barclays is a major British multinational bank. This statement coming from a significant person from the multinational bank says a lot about its take on Bitcoin. He believes that Bitcoin is a cult. Most people are investing in it because of the interest of major companies like Tesla, Visa, Mastercard, and others.
He also believes that the largest cryptocurrency would become a “flightless bird” if there is an increase in the interest rates. A major reason for people investing in Bitcoin is its minimal interest rate. If those rates rise, many people and investors would steer away from it.
What Are The Reasons For Barclays Unpopular Opinion On Bitcoin?
Will Hobbs gives credit to “Magical Thinking” for the constant surge in Bitcoin’s price. He believes that most people don’t know much about Bitcoin, yet they’re investing in it because they don’t want to miss out on earning profits.
Another reason for his skepticism is the highly volatile nature of cryptocurrencies, especially Bitcoin. One day the price might reach through the roof and on the next, it might come crashing down.
Barclays will only add investments to its portfolio which pass all the levels set up by the bank. Those levels help to avoid risks for the bank and the investors.
Will Hobbs says, “To add an investment to our portfolio, a number of conditions must be met. First, the expected return of a financial instrument must be positive. In addition, it must be interesting from a diversification point of view.”
Every bank wants to have a good reputation among its customers. By evaluating investments in this way, Barclays makes sure that they offer only the best investment options to their customers.
Will Barclays Opinions Change With Time?
Although Bitcoin’s price reached an all-time high recently, Barclays has no interest in Bitcoin.
The Chief Investment Officer has put across valid points that a lot of people and investors ignore. Most people just look at the positive side of Bitcoin. But it is necessary to evaluate both the negative and the positive aspects of a cryptocurrency.
JPMorgan said that the prices of Bitcoin and other cryptocurrencies go up because of the retail investors. They believe that major institutions don’t have a significant role in increasing the price of cryptocurrencies.
Recently, Reddit users were able to increase the price of GameStop’s shares.
We have to keep in mind that all hope from Barclays is not lost yet. At present, Will Hobbs doesn’t want Bitcoin as an investment. But it can change over time. He said, “We’ll wait on the sidelines and see what other investors are doing.”
This is a positive statement coming from a major British multinational bank. A major US bank, Bank of New York Mellon (BNY Mellon) might launch a digital currency platform soon. This platform would allow people to transact using digital currencies.
Barclays could walk in BNY Mellon’s footsteps.
Lastly, Bitcoin’s position in the future will affect the bank’s decision.
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