Bitcoin is too vulnerable to Elon Musk's tweets to put money in, Kleinwort Hambros investment chief says
Bitcoinis far too vulnerable to Elon Musk's tweets to invest in it, Kleinwort Hambros' CIO said.
- Musk sent bitcoin back above $40,000 with a tweet saying Tesla could resume accepting it as payment.
- But Kleinwort's Fahad Kamal said bitcoin is "not really an asset class that we have any conviction in."
- Sign up here for our daily newsletter, 10 Things Before the Opening Bell.
Bitcoin fans will have cheered Elon Musk's latest market-stirring tweet. The Tesla CEO said the car company would start accepting bitcoin payments again once crypto mining became greener, driving the token's price back above $40,000.
Yet for the chief investment officer of Societe Generale's UK private bank, Musk's tweet was another example of why bitcoin is not worth investing in.
"Any asset class that basically moves 10% based on one guy's tweets is not fit for purpose," Fahad Kamal, investment chief at Kleinwort Hambros, told Insider.
"When an asset class is so susceptible to a tweet… [investing in it is] just putting too much risk on the table for a very unpredictable return," he said.
Musk has emerged as one of the key drivers of bitcoin and other cryptocurrencies. His announcement in February that Tesla had bought $1.5 billion of bitcoin, and would start accepting it as payment, fueled a crypto boom.
But the electric-car maker later changed its mind, halting payments in view of what Musk called bitcoin's "insane" energy use. The move triggered a steep price slide that has seen the token fall 37% below April's record high of close to $65,000.
For many big investors, that kind of volatility means bitcoin is simply too dangerous to go near.
"It's too unpredictable, volatile, and not really an asset class that we have any conviction in," said Kamal, who has been CIO at private bank and wealth manager Kleinwort Hambros since 2020.
The Kleinwort Hambros investment chief said that in time, bitcoin could well evolve and become more predictable. But until there is more basis for analysis, investing in bitcoin is "pure speculation," he said.
Other investors share Kamal's views. Kevin Kang, co-founder of crypto hedge fund BKCoin Capital, told MarketWatch earlier in June that "Musk is definitely too influential on bitcoin prices."
- Kellyanne Conway says her husband was 'cheating by tweeting' his disdain for former President Trump in her new memoir
- Putin's leadership is unraveling as he takes regular breaks for medical treatment and is constantly surrounded by doctors, says British ex-spy
- The worst for Indian startups is yet to come — be prepared for layoffs, unicorn slowdown and startup shutdowns in 2022
- What would happen to Twitter if Elon Musk backs out now?
- Researchers develop a virus that works even when iPhone is switched off
- Supreme Court of India extends time for submitting Pegasus probe report
- Chopper services launched in Goa for tourists, locals
- Both Ambuja Cements and ACC are bet worth investing with strong parent Adani