In a recent Bloomberg interview, Michael Purves, CEO of Tallbacken Capital Advisors, says that he has been bearish on Bitcoin since January, and his stance hasn’t changed.
He claims that his firm entered a short trade with a target of $15,000 last week.
Bitcoin’s long-term bullish momentum started to break in late January, according to Purves.
The top cryptocurrency is down 55.86% on a year-to-date basis.
Institutions could abandon Bitcoin
Bitcoin soared past the $20,000 mark in late December and then went on to reach new highs in 2021. Purves says that the massive rally was mainly driven by institutional investors who started buying the flagship cryptocurrency en masse due to the “inflation hedge” narrative.
However, Bitcoin has failed miserably as a portfolio diversifier. As noted by Purves, it has been heavily correlated with the S&P 500 and the Nasdaq 100.
“What we’ve learned over the past year is that Bitcoin is not uncorrelated. It hasn’t been uncorrelated,” he said.
Due to Bitcoin's inability to act as an inflation hedge, Purves whether institutions will show up to buy the dip if the Bitcoin price drops significantly lower.
Bitcoin’s underwhelming month
As reported by U.Today, Bitcoin is the worst-performing asset class this month after shedding 15% of its value.
David Kelly, the chief global strategist at JPMorgan Asset Management, recently opined that investors had to liquidate their cryptocurrency holdings due to the U.S. Federal Reserve’s aggressive monetary policy.
The cryptocurrency is currently sitting just below the $20,000 level on the Bitstamp exchange.