Erik Finman, a teenager and early bitcoin (BTC) adopter who became a millionaire when the flagship cryptocurrency’s price reached nearly $20,000 late last year, recently warned investors about the potential risks of investing in digital currencies.
Finman: Bitcoin's Long-Term Outlook Looks Bleak
Finman, who started buying bitcoin at the age of 12 after receiving a gift from his grandmother, told MarketWatch that investors should not put all their eggs in one basket. In other words, the teenage bitcoin millionaire recommended that investors diversify their investment portfolios.
According to Finman, bitcoin has a finite shelf life as its long-term outlook does not look too good. He remarked:
Bitcoin is dead, it’s too fragmented, there’s tons of infighting. I just don’t think it will last. It may have a bull market or two left in it, but long-term, its dead.
Notably, Finman has made a fortune from investing in bitcoin. He had bought about $1,000 worth of BTC in 2011, an amount which was worth over $4 million when digital currency prices reached their all-time highs. However, Finman now believes with “almost certainty” that cryptocurrencies will have a bad ending.
Teenage BTC Millionaire Claims Some Altcoins May Succeed
He has also predicted that litecoin (LTC) is on its way out as he thinks the silver to BTC's hold “has been dead for a while.” He also noted:
It’s like when the sun is going down and there’s that eight minute period just before it goes dark. Litecoin is in its seventh minute.
Interestingly, Finman believes project-based digital currencies have the best chance of achieving mainstream adoption.
The early crypto adopter said ether (ETH), privacy-oriented Zcash (ZEC) and bitcoin cash (BCH) have a good chance of succeeding. However, he expressed concerns about BCH supporters doing a bad job of marketing the BTC fork.
Finman’s comments about bitcoin and other cryptoassets have come at a time when cryptocurrency prices have again reached new lows. As CryptoGlobe reported on December 14, BTC price hit a 15-month low of $3,230. The market capitalization of all digital currencies could now drop below $100 billion as it currently stands at $101 billion.
Tom Lee: BTC's Fair Value Is Between $13,800 And $14,800
While Finman’s lack of confidence in cryptocurrencies may be understandable given the market crash, many other analysts are still optimistic about the future of digital assets, particularly bitcoin. As CryptoGlobe covered recently, well-known bitcoin bull Thomas Lee, who is the head of research at Fundstrat Global Advisors, has said the market is wrong about BTC’s “fair value.”
Lee explained that bitcoin’s fair value is well above its current market price - based on the number of active wallet addresses, the overall activity of the crypto accounts, and other factors which can potentially affect the cryptocurrency’s supply. Lee estimated that BTC”s fair value is “between $13,800 and $14,800.”