PRICE drops do not mean the end of bitcoin but indicate it is the perfect time to buy cryptocurrency, a digital currency hedge-fund manager has revealed.
Fund manager Brian Kelly has insisted claims cryptocurrency is dead have been hugely exaggerated and revealed key tips for investing in the current environment.
He said: “Now when everyone is saying… it’s over, that’s it, bitcoin is dead, for the 175th time. Now’s the time you start looking at it, on the buy side.”
Prices of all major cryptocurrencies plummeted after China and South Korea made regulatory moves to restrict their use.
The impact on its value was especially dramatic as the Asian countries are two of the biggest players in the market.
Mr Kelly claimed market was in a transitional “hand-off” phase moving from retail investors in Asia to institutional investors in the US, Europe, and Japan.
Following the regulatory roadblock, the price of bitcoin plummeted to $10,772 after sitting at $17,135 earlier this month before the news broke.
The hedge-fund manager said: “This is not the end of bitcoin,” Kelly said, warning investors that buying the extremely volatile asset when prices are high can be dangerous.
“When we talk about bitcoin being up at $20,000, everyone is running around being all excited.
“Those are the times to be a little cautious.
In the last week, the price has remained relatively stable at between $10,000 and $11,000 after rocketing to its highest ever value last month when it smashed $19,000.
Despite the gloomy market, Mr Kelly insists the prices are “incredibly healthy for the ecosystem. You shake out the weak hands. You get strong hands in there”.
The expert also revealed his three key rules for crypt investors.
He told traders to only risk one to five per cent of assets due to the highly volatile values.
“Things break. This is the internet in 1995.”
Potential traders were also warned not to sell too soon even if it is up 20 or 30 per cent.
He said: “Once there’s momentum, you hold onto this thing.”
Finally, traders were told not to panic even if prices drop 50 per cent.
The hedge-fund manager said: ”These things can move 20 percent to 30 percent in a day.”
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