Spencer Bogart, a highly regarded investment analyst and a partner at venture capital firm Blockchain Capital gave an interview on Friday during which he rated BTC, ETH, XRP, EOS, BCH, TRX, ADA, NEO, MIOTA, as Buy, Sell, or Hold and explained why.
Bitcoin (BTC), which, according to CryptoCompare, has lost more than 34% of its value during the past three weeks, is the only cryptocurrency that he would still rate a Buy even in the current bear market.
Although Bogart cannot predict where Bitcoin will go in the very short term, he says that “the long term thesis is very much intact,” but as far as the net one or two years are concerned, “the story is very much materializing.” He continued:
“The institutionalization of Bitcoin is absolutely occurring. That was very evident to anybody that was circulating around Blockchain Week in New York. Every major bank is trying to do something in this space. Either they are going to be offering Bitcoin to their clients, [or] they are working on a custody platform, or they are operating a trading desk. So, that's absolutely taking place.
So, which are the major banks that he is talking about here? Well, let’s take a quick look at each of these three categories.
- Banks offering Bitcoin to their clients: It started with the private banks. In July 2017, Falcon Private Bank in Switzerland became the first bank to offer Bitcoin, Ether, Litecoin and Bitcoin Cash to its clients. On 2 May 2018, in a report by The New York Times, Goldman Sachs executive Rana Yared said: “It resonates with us when a client says, ‘I want to hold Bitcoin or Bitcoin futures because I think it is an alternate store of value’.” And according to the same report, a team at the bank is looking at “buying and selling actual Bitocoins” if “it can can get regulatory approval and figure out how to deal with the additional risks associated with holding the virtual currency.”
- Banks working on a Bitcoin custody platform: Here, Bogart must be referring to Japan-based investment bank Nomura, which announced its digital asset custody offering on 15 May 2018.
- Banks operating a Bitcoin trading desk: The same New York Times report referenced earlier also confirms that Goldman Sachs is currently setting up a Bitcoin trading desk, where it will be trading Bitcoin futures contracts on behalf of its clients, as well as offering a non-deliverable forward (NDF) to its clients. There are also various rumors that rivals such as investment bank Morgan Stanley are not far behind.
Next, Bogart said that as far as the other crypto assets were concerned, he would Hold Ethereum (ETH), Bitcoin Cash (BCH), Ripple (XRP), and EOS (EOS), and Sell Cardano (ADA), TRON (TRX), IOTA (MIOTA), and NEO (NEO).
He explained as follows:
“I think that, longer term again, I would put most of the coins that are in the number two to number 7 range as a “neutral” just saying ‘hey, listen, these could be going up significantly but they also have significant headwind’, especially something like Ethereum, which, again, I am very constructive on a long term basis, but it has a lot of overhang because a lot of tokens, a lot of these ICOs have been built on top of Ethereum, and I think a lot of those tokens are overvalued, and ETH itself, the token of the Ethereum work is used essentially as fuel to invest into these ICOs. So, I think that will present some headwind to something like Ethereum.”
When asked if the current Bitcoin sell-off was different than the sell-off that seems to occur once or twice every year, Bogart said that this time it seemed very different:
“In the past years, when we’ve had these kind of drawdowns and I’ve talked to people within the industry, media, everyone has had this question of ‘Is this the end of Bitcoin?’. And this is the first downturn where when I’ve tried to explain to people ‘hey, listen, Bitcoin is not going away, it’s going Keep On Keeping On’, it was the first time that everybody’s response was ‘No, of course, we know that Bitcoin is not going away’ and to me that’s a huge change.”
With regards to the Bitcoin price, Bogat summarized his thinking in this way: “Could Bitcoin trade lower? Certainly, but do I think it will higher a year from now, absolutely.”
Finally, he left a strong warning for people betting the farm on which ICO was going to the moon:
“That’s a dangerous game. Please don’t do that… Most of them are over-promising and under-delivering. Meanwhile, you still have a few that are excelling in their use cases, Bitcoin being one of them.”