Troy Gayeski, co-chief investment officer and senior portfolio manager at SkyBridge Capital, a hedge fund with $7.5 billion in assets under management, has revealed he believes a Bitcoin supply shock may be around the corner.
During an interview with Bloomberg, Gayeski noted that on-chain signals indicate “strong holders” are once again accumulating bitcoin while planning to hold onto it for longer periods of time. These holders are buying up coins from speculators who got into the market when BTC’s price started surging. He said:
When we look right now at the on-chain, data what is basically telling you is a lot of the strong holders are reasserting themselves and accumulating from those that got into the market late last year. And that it is setting itself up for some type of supply shock, very similar to what we had last October/November.
Last October, the price of bitocin started surging shortly after PayPal revealed it was allowing investors to buy, sell, and hold cryptocurrencies on its platform. Its price surged as more organizations invested in it, until it reached a $64,000 all-time high in May.
Gayeski added bitcoin will continue to “be a volatile asset” but will also continue to “be very non-correlated,” and to the firm, its “risk-reward is now skewed again to the upside.” While the hedge fund is bullish on BTC, Gayeski detailed it reduced its position before the crypto market crash.
Since hitting its all-time high, BTC dropped to a $30,000 low and is now ranging between $40,000 and $30,000. SkyBridge Capital cut its position to “keep it from going further” and reallocated some of those funds to Ethereum.
Bitcoin will be the market leader in terms of store of value and Ethereum, at least so far, is the market leader in terms of transaction use. So, we have a little diversification there. All in all, we have a 9% position size.”
Last month, as reported, the fund revealed it believes the price of gold will hit fresh highs in the next year, but investors may be better off gaining exposure to bitcoin instead as there’s “more upside” in holding the cryptocurrency.
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