“Some of these coins like Ethereum will be much higher down the road,” the president of Bianco Research told CNBC’s “Trading Nation” on Wednesday. “But you’re going to have to put up with a lot more of what we’ve seen last week in the next few months or a year or two. “
According to Bianco, speculative betting masks a long-term bullish picture. He believes cryptocurrency is successful in remaking the financial system.
“It has a lot of promise, and that’s really what’s important,” he said. “The problem is, the other engine is kind of an out of control casino with people betting on these coins going up and down. “
Bianco warns that coins are extremely vulnerable to 50% to 70% drops at any time, as this is still a new technology.
He said once the adoption phase is over and crypto has a fundamental role in the real economy, prices overall will be significantly higher.
But it could cost investors who bailed out during the asset’s formative years.
“This means that from then on the gains will be much less,” said Bianco. “The risk and the reward are now that you will have less risk and less reward once it gets passed and the volatility slows down. “
Bianco, who has had a basket of digital coins since 2017, said he is resistant to actively trading them. He often buys or sells them about once or twice a year. He owns Ethereum, but not Bitcoin.
He suggests that having exposure to crypto is also essential, as the space shows more links to other risky assets, including stocks.
“That wasn’t the case three or four years ago. But it is now, ”said Bianco. “If we were to get more financial market volatility in the stock market like the VIX index, it could help strengthen the cryptocurrency space as a belief, yes we need a new fix, and this is the fix. “
Disclosure: Jim Bianco owns a basket of cryptocurrencies, including ethereum.