Earlier this week, in Bank of America () and Citigroup (). Now it’s a long-term bullish bet on bitcoins.
What will Bove pull out of his sleeve tomorrow?
:
Bitcoins aren’t going to crash and burn, and could be be a good investment at $50.
So says famed banking analyst Richard Bove, vice president of equity research at Rafferty Capital ÃÛÌÒ´«Ã½s. What’s more, Bove wouldn’t mind buying bitcoins at the right price. “If I could buy them at a low enough price, like $50, then I think it would be worthwhile speculating with a few of them,” he said in a phone interview.
As of this writing, bitcoins were valued around $96 USD — almost double the buy-under price Bove mentioned — so this speculative trade isn’t one that he’ll likely take action on in the near future.
My initial thought? “Eh, bitcoins will probably fizzle out in the time it takes for that to happen.” But the total number of is up approximately 60% YTD. Trading volume is low — around 90,211 — but since bitcoins must be created by
and mining keeps occurring, people apparently still are interested enough in the currency to keep it growing. Plus, the as payment is longer than you might imagine — and includes names you’ve probably heard of, like WordPress.
So it would appear Bove’s claim that there is a market for this isn’t all that crazy:
“The demand for new currencies is so compelling in a world where fiat currencies are so easily manipulated by central banks and financial systems are proving to be so fragile that these currencies keep growing,” Bove wrote in a research note.
For better or worse, like bitcoins and others will likely continue to see additional interest in coming months — despite and the fact that they can be — as the Fed shares the specifics of its tapering plan and traders panic.
Do I think we’ll be using bitcoins to buy soda from vending machines anytime soon? Absolutely not. But with the currency starting to gain favor from people like Bove, it seems to be growing rather than fizzling out.
As of this writing, Carla Lake did not hold a position in any of the aforementioned securities.
