BlackRock, Inc. (NYSE:BLK) Warns against Bitcoin and Ethereum
Bitcoin was the first cryptocurrency developed by unknown programmers and issued as a digital currency in 2009. Since then, the value of bitcoin has risen astronomically such that currently a bitcoin trades at $2,326.
Since its launch, bitcoin has elicited mixed reactions from industry experts with some embracing the digital currency, while others predict its demise. However, bitcoin has delivered impressive returns to investors who own the currency given that it has doubled in value this year as compared to its price in 2016.
Major investment firms such as BlackRock, Inc. (NYSE:BLK) and Goldman Sachs Group Inc (NYSE:GS) have steered clear of the digital currency advising their investors not to invest in the currency. However, this has not stopped bitcoin’s growing popularity as a means of payment and a store of value.
Speaking at a press briefing on Tuesday, BlackRock's global chief investment strategist, Richard Turnill, stated that the blockchain technology, on which bitcoin and other cryptocurrencies operate, is reminiscent of the dot-com boom of the late 1990s.
Last week, Goldman Sachs also issued a report warning investors that Bitcoin could fall another 19 percent by end of year.
The recent rally in bitcoin prices has spooked many investors who think that bitcoin, ethereum and other digital currencies might be part of a bubble that has reached its peak.
Given the proven track record of major investment firms such as BlackRock and Goldman Sachs, their warnings merit some consideration.
This leads to the logical question as to whether it is prudent to invest in firms such as BlackRock and Goldman Sachs, which have steered clear of digital currencies.
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