The president of Payne Capital Management has warned that crypto is â€œone of the biggest bubbles ever.â€ Stressing that the crypto market is â€œbecoming a bigger and bigger casino,â€ he predicts that the bubble will eventually burst and â€œItâ€™s going to be ugly.â€
Crypto Is a Big Bubble Waiting to Burst, According to the Financial Adviser
Financial adviser Ryan Payne, president of Payne Capital Management, talked about the future outlook for bitcoin and the cryptocurrency market on Yahoo Finance Monday.
Payne co-designs his firmâ€™s investment and financial planning strategies while supervising all the financial advisers in his firm. Prior to establishing Payne Capital Management, he spent almost eight years as a financial adviser at Merrill Lynch.
The executive began by agreeing with Berkshire Hathaway Vice Chairman Charlie Munger, who recently stated that the current markets are wilder than the dot-com bubble. Noting that â€œthere are pockets of bubbles being formed,â€ the financial adviser stressed:
This whole bitcoin thing, this whole cryptocurrency, is one of the biggest bubbles ever.
Munger, who is often called Warren Buffettâ€™s right-hand man, also commented on cryptocurrency, particularly bitcoin. He commended China for banning crypto and said he wishes crypto had never been invented.
Payne noted that bitcoin can still go higher, adding:
Thereâ€™s too much money out there that can funnel into this market. Itâ€™s just becoming a bigger and bigger casino.
â€œAt the end of the day, weâ€™re not using it for that much more commercial use. Itâ€™s just more people speculating,â€ he continued, adding that â€œitâ€™s very analogous to when the tech bubble burst.â€
The president of Payne Capital Management further opined: â€œThe reasons for owning it donâ€™t make a lot of sense because really itâ€™s not a great store of value as we know. Itâ€™s extremely volatile. Itâ€™s fake scarcity. Itâ€™s not like gold that has real scarcity.â€ He emphasized:
I do think eventually that bubble is going to burst. Itâ€™s going to be ugly.
Noting that the global crypto market cap â€œis somewhere over $2 trillion,â€ Payne detailed: â€œWhen the dot-com bubble burst, those dot-com stocks were worth like half a billion dollars â€” inflation-adjusted thatâ€™s like $1 trillion in todayâ€™s dollars. Most of those stocks became worthless. Even Amazon went down 80% to 90% when the tech bubble burst. It took you like 14 years to get back on your money.â€
He concluded: â€œSo I do think that bubbles are there. They are pervasive right now. The smart money here is you can get out early. Itâ€™s better to be early than late and get into some of those cyclical names which are selling off right now. Diversify your portfolio. Protect yourself because eventually the musicâ€™s going to stop and when it does, no oneâ€˜s going to tell you ahead of time.â€
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