Long-Term Investors Can Benefit from Cryptocurrency Volatility, Predicts Asset Manager CEO

Despite the possibility of higher volatility in the crypto market, Nigel Green, CEO of the financial advising and asset management company DeVere Group, anticipates that cryptocurrency investors will increase their holdings in the upcoming months.

This emerges at a time when major central banks are signaling that this year will see further rate rises in an effort to leash the inflationary trend. Even the Bank of England and the US Federal Reserve have left no doubts about this.

CEO Green pointed out that most stock market segments were likely to experience more reductions as businesses cut back on borrowing out of concern for the unprecedented global recession.

“Given Bitcoin and Ether’s current correlation with stock markets, we anticipate further, perhaps heightened, volatility in the crypto market before the end of 2022,” he said.

“However, for serious investors, this will not necessarily be seen as bad,” Green added.

That is because “Some of the world’s best investors consistently use market volatility as major buying opportunities in traditional financial markets — and the cryptocurrency market is now no different,” said Mr. Green.

“When used effectively and efficiently, volatility can be an extremely powerful investment strategy.”

Except for a few altcoins, there were no noticeable price movements over the weekend in the pricing of large-cap cryptocurrencies.

However, immediately following the publication of US Consumer Price Index data that showed inflation at 8.2%, a severe decline was generated, followed by a decrease in market volatility. 

Although the Federal Reserve has increased interest rates three times this year, five of its top members have maintained a hawkish perspective, according to CEO Green. This is because global inflation is high and only rising. 

Inflation in the US is much higher year-over-year at 8.2 percent compared to the 5.39 percent reported the year before. 

Green anticipates another 75 basis-point increase at the upcoming Federal Open Market Committee (FOMC) meeting, which is anticipated to take place early next month.

As the year comes to a close, not just the Fed is anticipated to maintain its hawkish stance. The Bank of England’s Monetary Policy Committee has also made overt references to rising interest rates at its upcoming meeting on November 3. 

DeVere claims that Bitcoin is still the world’s best-performing asset class and has regularly been rated among the top performers in both the traditional and crypto investing sectors. 

The company also noted that over the previous five years, Bitcoin had beaten big tech firms by a wide margin, including Amazon (355%), Google (322%), Microsoft (183%), and Apple (166 percent). 

However, as businesses cut back on borrowing, high-interest rates typically result in a crash in the stock market.

This has a ripple impact on several industries, including the cryptocurrency industry. At this time, there is a strong link between the financial markets and Bitcoin and Ether.

Therefore, a rise in interest rates starting next month will make the bitcoin markets more volatile before the year ends. 

However, the CEO of deVere claims that the volatility won’t harm serious investors. 

He claimed that substantial investors, particularly institutional investors, would probably handle the cryptocurrency market’s volatility similar to that of traditional markets.

“Savvy, long-term crypto investors will be looking to benefit from panic-sellers by buying their digital currencies ‘on the cheap’ to enhance their investment portfolios,” Mr. Green added.

“Serious investors will not be spooked by further volatility. This isn’t their first rodeo.”

But Nigel Green is not alone!

Co-founder and CIO of digital asset fund manager Valkyrie Investments Steven McClurg claims that buying Bitcoin is a good idea. Especially when it is at a price of $17,000 to $8,000.

“That’s when we’re buying. We’re waiting for those opportunities,” he said in an interview.

But he also sees “good opportunities” with staking certain assets.

He favors tokens like “Avalanche since it suffered a severe blow earlier in the year.” Purchasing it and staking it presently yields an 8 percent return. 

McClurg has changed some of his company’s assets into cash, nevertheless, in light of the present condition of uncertainty. He asserts that, on occasion, doing nothing could be a sensible choice.

Some of his plans include a financial component of over 50%. That might refer to plain old cash, but it could also refer to a stable coin like the USDC or the Gemini token.

Considering a Bigger Picture 

Going long makes sense, according to Zaheer Ebtikar, portfolio manager of cryptocurrency fund LedgerPrime, considering where Bitcoin is now trading.

“The market factors I look at tell me that a lot of people are positioned in the opposite way, so I think the expected value is for me to go long,” he said.

He’s noticed the “vol crush” in the market, which he likened to Bitcoin’s last halving event in 2020.

But at some point, volatility will get “super attractive, the range will break, and vol will surge again.”

“This makes it pretty attractive to get long volatility because then you can make money if the range breaks if you think there’s another catalyst,” he added.

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