Wells Fargo strategist: coin markets cannot serve as fiat market state indicator
Christopher Harvey, head of equity strategy in Wells Fargo, a major trading and consulting company, does not think that Bitcoin and other cryptocurrencies’ downfall indicates anything about the bigger market, as suggested by the CNBC journalists who interviewed him on Fast Money several hours ago.
Talking about Bitcoin, Christopher Harvey told that this phenomenon was a much bigger concern for Wells Fargo when it cost higher. He reiterated that while the fiat market can serve as a possible reason for the current decline of the major cryptocoins, the decline of digital currencies cannot serve as an early indicator for the fiat market.
Speaking of early indicators, it seems that the growing or falling amount of requests on Google for Bitcoin corresponds with the growth or fall trends of actual Bitcoin price shortly after.
The probable reason why Wells Fargo thought Bitcoin was dangerous at higher values lies in the fact that with higher Bitcoin, the capitalization of the market is higher which increases competitiveness. By the way, the overall cryptocurrency market cap has shrunk from 476 billion USD at the end of February to 310 billion today. This indicates that the speculative nature of crypto-related investments remains despite recent steps towards institutionalization.
Image courtesy of Spencer Platt / Getty Images
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