Cryptocurrency is on a tear this year, and it could end in the summertime. Schlossberg says Coinbase Global Inc. has the “easiest shorts there can be.” if Dogecoin and Bitcoin begin to “crack.”
What Happened with Dogecoin and Bitcoin
Cryptocurrencies have been on a wild ride this year, with the prices of some coins doubling in value. Bitcoin has seen its price rise from the beginning of January up to recently. But, the Chinese ban is affecting it. Ether also enjoyed an impressive gain as it climbed over 1000% before dropping back down. Ripple and Dogecoin, too, saw significant growth. But, Litecoin seems more lackluster when compared to others.
The DOGE community is going wild over Musk’s upcoming appearance on “Saturday Night Live.” Traders are betting that he will create buzz for his favorite cryptocurrency.
Musk is not the only celebrity to throw their support behind cryptocurrency. Despite the negativity surrounding cryptocurrencies, celebrities are coming out to show their support. This week we saw “Tiger King” personality Carole Baskin announce a new digital coin, $CAT. With $CAT, fans can buy items and experiences through her organization with ease.
Suppose Dogecoin reaches many traders’ $1 target by Musk’s SNL appearance. It’s important to consider the risks involved. Boris Schlossberg from BK Asset Management said on “Trading Nation” on Wednesday. She believes investing in a space with limited fundamental catalysts carries this type of hazard relating to price.
“The party … is going to come to an end one way or the other,” said Schlossberg.
“If crypto begins to crack as the summer proceeds, on a corrective basis, Coinbase is going to be, from a stock point of view, one of the easiest shorts there is.” She said of the newly public crypto exchange.
Coinbase went down by close to 3%, while Doge experienced growth.
“To me, the weakness in Coinbase is suggestive that there’ll be a further weakness if any of the cryptos begin to crumble as the summer goes by,” Schlossberg said.
Longer-term, yet, “bitcoin does have some value” as an alternative to gold even though it “will never be a currency.” She said, “In that sense, it’s far superior to gold because of its affordability,” Schlossberg added, calling it. “The single pre-eminent crypto asset on a store of value basis.”
Contrary Opinion
Yet, there was a contrary opinion from Gina Sanchez, CEO of Chantica Global.
“None of these things pass muster in terms of stores of value. They’re very volatile, and so, it’s hard to see them as a true form of money.” She said in the same “Trading Nation” interview.
“This broad space, crypto, has been the marginal benefactor of excess stimulus and a closed-down economy,” said Sanchez, also a chief market strategist at Lido Advisors.
“People had money, they couldn’t easily spend it in the economy, and so, they put it to work in the form of gambling. And that gambling has taken on a mania.”
As countries crackdown on electricity-guzzling crypto mining, there may be hope.
“I don’t know that this play has long legs in front of it. But, I think that the mania and the ability to go viral and become a meme has been what drives this right now,” she said. “That’s not valuable, and we have to keep reminding ourselves of that.”