Think Twice Before Buying Cryptocurrencies Despite Increase, Warns Wall Street Analyst

Professional analyst Nick Colas demotivates on the purchase of Bitcoin

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Professional analyst in the Wall Street, Nick Colas demotivates on the purchase of Bitcoin despite the recent value increase of cryptocurrencies. Colas, the first brokerage analyst investigating on Bitcoin in-depth, mentioned during an interview with CNBC on the 4th May 2018.

Colas is the author of well-known Morning Markets Briefing for 14 years published by Convergex. He is well reputed as a professional in the Wall Street community. He disproved the suggestions made by some analysts that it is a good time to invest in cryptocurrencies after the drop in the market earlier during this year.

Colas says a lot of people in the Wall Street are asking whether now is the right time to buy Bitcoin. But he believes that the short answer is no, for two fundamental reasons. The first is there are not much incremental engagement from people interested in buying Bitcoin for the first time. Like any new technology it requires new adopters to come in to make it more valuable. And in terms of Google searches, they are way down from the peaks back in December and January, by almost 85 to 90 percent which is not good.

In April 2018, there was only an increase of 2.2 percent of Bitcoin wallet creations to buy and store cryptocurrencies. This is something to consider as Colas mentions, as it used to be 5 to 7 percent monthly increase of Bitcoin wallet creations during 2017. As of 6th May 2018, according to Bitfinex.com, the current value of Bitcoin is 9,707 USD.

Wall Street view by Colas on cryptocurrencies

Colas’ view on market valuation of Bitcoin, that went up largely in December 2017, proves the fact that it is indeed a bubble;

Certainly, in retrospect it was absolutely a bubble based around the Futures launch in December … [I’ve covered Bitcoin] since 2013, [I] fundamentally believe in the structure of the technology and the story, but it obviously has huge price volatility around it, and we’ve seen that even in the past month with [the market] rallying as much as it has.

There is reluctant behavior of Colas to take risks as to make a reality the mainstream adoption of cryptocurrencies specially in the Wall Street in near future. This perspective of his, sets his viewpoint away from other perspectives of cryptocurrency investments. This is due to the fact that most perspectives of many analysts are biased either to those who question the validity big time or those who are bullish towards Bitcoin.

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