Billionaire Hedge Fund Managers Spar on Bitcoin’s Potential

The bitcoin price is now gunning for $7,500, and after yesterday’s performance, it’s no time to be underestimating the leading cryptocurrency by market cap. It’s been too long since bitcoin’s 10% advance would seem modest in comparison to some of its altcoin peers, but that’s precisely the case today, with coins like Stellar, Cardano and Zcash all advancing between 15%-33%. Bitcoin bulls are coming out of the woodwork, including the likes of billionaire hedge fund manager Marc Lasry, who appeared on CNBC.

Lasry, who is a co-founder of the $9.6 billion investment firm Avenue Capital Group, is calling for bitcoin $40,000. The catalysts will be bitcoin making its way into the mainstream and becoming less cumbersome to trade, the timing for which can be more difficult to predict. Lasry has been a bitcoin bull since at least last year when he reportedly kicked himself for not getting in on the cryptocurrency when it was still trading in the low hundreds of dollars. He told CNBC:

“As it gets more into the mainstream, and as more markets end up allowing it to trade where it’s freely tradable, to me that’s more of the bet.”

While hedge funds are among the institutional investors that are expected to begin pouring capital into the crypto space, Lasry has bitcoin in his personal portfolio, not the firm’s, despite the fact that Avenue Capital is no stranger to risk, as evidenced by distressed debt as its investment strategy. But with companies like Coinbase providing a custody solution, there are going to fewer and fewer reasons for hedge fund traders not to join. Especially given the bullish technical signs that are ahead.

Well, maybe not Lasry’s billionaire peer Ken Griffin, who is at the helm of hedge fund Citadel. He told CNBC he doesn’t believe in bitcoin, and neither do any of his portfolio managers. Griffin finds bitcoin to be a “head scratcher” and even advised the up-and-coming generations to find something more productive to do rather than wasting their money on cryptocurrencies.

Don’t expect Citadel to open a position in bitcoin any time soon, as Griffin told CNBC: “I have a hard time finding myself wanting to be in a position of being a liquidity provider for a product I don’t believe in.”

Moving Average

Meanwhile, with the cryptocurrency market finally out of the doldrums, you might be wondering where it goes from here. Fundstrat Co-Founder Thomas Lee pointed out on CNBC that the bitcoin price currently trading 30% below its 200-day moving average. From a historical perspective in 2011 and 2014, that’s a “positive signal.”

Source: CNBC

Both times that bitcoin was trading 30% below its 200-day moving average, it found a bottom within a month. And looking ahead for the coming six months, “you’re going to do pretty well owning bitcoin here,” Lee said. So basically, he’s advising investors to hold their bitcoin.

Featured image courtesy of Shutterstock.

Gerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. She owns some BTC and ETH.