Article by Chris Morris Edited by CryptoClarified
Cryptocurrencies are recording their biggest gains in weeks after the president of the European Central Bank shrugged off talk of a ban.
Bitcoin was up more than 7% in early trading Wednesday, gaining over $400 and adding $7.7 billion in market capitalization. In the past week, Bitcoin’s value has bounced back from recent turbulence, adding over $1,100 in value and over $19 billion in market cap.
While European banking officials warned consumers about the highly volatile nature of Bitcoin, Ethereum, Ripple and other cryptocurrencies, Mario Draghi, president of the European Central Bank, said in a video response to user submitted questions that no ban or regulation was forthcoming.
‘Many of you posted questions about whether the ECB is going to ban Bitcoins or it’s going to regulate Bitcoins,” he said. ‘I have to say it’s not the ECB’s responsibility to do that.’
Traders had worried that officials would impose regulations on the currency after the head of the head of the World Bank compared cryptocurrencies to “Ponzi schemes” last week.
Bitcoin and other digital currencies aren’t out of the woods yet, though. While the ECB isn’t planning any new rules, French Finance Minister Bruno Le Maire said in December he will ask his counterparts in the Group of 20 nations to consider joint regulation of bitcoin. That group is scheduled to meet in March.
Hedge fund manager Brian Kelly doesn’t just believe in the future of cryptoassets — he’s betting the majority of his portfolio on it.
Hedge Fund Manager Brian Kelly Invests 90 Percent of Assets in Cryptocurrency
“Like 90 percent,” Kelly, a regular CNBC contributor, estimated on the network’s “Squawk Box” when asked how much of his wealth was tied up in cryptoassets. “I run a fund. I have my money in that. I’ve got investments elsewhere.”
Kelly, who founded BK Capital Management, oversees the BKCM Digital Asset Fund, which provides its investors with exposure to both cryptoassets and blockchain companies.
As Strategic Coin reported, Kelly recently inked a deal with fund provider REX to launch a suite of cryptoasset exchange-traded funds (ETFs), beginning with a bitcoin ETF that would track the price of bitcoin futures contracts.
However, the two firms have been prevented from moving forward with these plans because the US Securities and Exchange Commission (SEC) has stated that it is not yet comfortable approving retail-focused investment products related to cryptoassets.
‘Not for Everybody’
Although he is long-term bullish, Kelly cautions that holding such a large percentage of one’s wealth in cryptoassets requires a particular temperament and investment horizon.
“But that’s not for everybody,” said Kelly, of his heavy allocation of his investments into cryptoassets. “I’m making a big bet” and “I am comfortable” with wild market swings.
Will Cryptocurrencies Perform Again This Year?
Former macro Advisor and professional trader, Matt Siebenthal thinks it’s definitely a possibility. Siebenthal is another huge believer in Blockchain Technology and cryptocurrency.
The founder of BlockWealth Capital postponed plans to launch a crypto hedge fund- in December with the market near all time highs citing a possible correction to 7500 or lower before the cryptocurrency market- led by Bitcoin resumes it’s uptrend. At the time, Bitcoin was trading near $20,000. With so many hedge funds rushing into the space in the 4th quarter of 2017, it looks like the seasoned advisor’s patience could pay off.
We’re anticipating a bull run similar to 2017, possibly greater. But I wasn’t comfortable with prices where they were (December) I don’t think Bitcoin is out of the woods just yet, so in my opinion the celebration is a little premature. We could see a breakout, but we could just as easily find support short term.
For those newer to the cryptocurrency markets or visiting our blog for the 1st time- last year was an exceptional year for digital assets. Cryptocurrencies like Bitcoin finished the year up close to 2,800%, while Ethereum’s 8,500%, Ripple up 10,900%, NEM: up 14,000%
For investors who’ve held throughout the entirety of 2017’s volatile year, they were able to see a lifetime’s worth of gains before the 60% selloff in recent months. Bitcoin has seen more than 5 corrections similar to what we have seen in recent months. All followed suit with tremendous rallies.
Longer term, Siebenthal is very bullish on both Bitcoin and cryptocurrencies. He plans to launch a crypto fund once Bitcoin has bottomed. We’re not in any rush, I didn’t want to be in the position of explaining to clients a 50% down quarter. By waiting, and with some patience, we believe that we can get entries on price levels we may not see again in our lifetimes.
The BlockWealth Capital founder also went on to explain that cryptocurrency investing isn’t for everyone. It’s extremely volatile. The returns can be exceptional, but there’s always to sides to a coin.. the risk is greater as well. I wouldn’t recommend going all in on cryptocurrency. But this space is extremely exciting, and I believe it can be a part of a diversified portfolio.
The importance of diversification has been quite apparent in recent weeks, as the cryptocurrency market has endured a fairly severe correction. It has especially proven hazardous to individuals who invested in cryptoassets using credit cards or personal loans, gambling that they would be able to use profits to pay off the balance.
Bitcoin recorded the biggest gains on the news, but all major cryptocurrencies saw their value increase. Ethereum was up 5.8% just before 9am ET, Ripple eked out a 4% gain. The biggest winner of the morning, though, was Litecoin, which soared 38%.
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