Crypto is “one of the biggest bubbles of all time”: strategist

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When it comes to cryptocurrency, financial adviser Ryan Payne agreed with billionaire Charlie Munger when he said, “These days are even crazier than the dot-com era.”

“This whole Bitcoin (BTC-USD) thing – all this cryptocurrency – is one of the biggest bubbles of all time,” Payne, president of Payne Capital Management, told Yahoo Finance Live Friday.

“I think this bubble will eventually burst. It will be ugly,” he added.

The global crypto market “sits at over $ 2 trillion. When the dot-com bubble burst, those stocks were worth about half a billion dollars. Adjusted inflation is equivalent to $ 1 trillion in dollars. “Today. Most of those stocks have become worthless,” says Payne.

Payne’s prediction is bold, even though the crypto has been volatile recently. Over the weekend, Bitcoin plunged below $ 50,000, dashing hopes of $ 100,000 by year-end. Yet since the start of the year, the cryptocurrency has grown by 70%.

Many would agree that 2021 has become the year crypto went mainstream. Big banks have hired crypto talent, and people like Goldman Sachs (GS) are even exploring Bitcoin-backed loans. Not to mention that a growing number of companies are in one way or another exposed to at least Bitcoin, including Meta (FB) Facebook, Square (SQ), Tesla (TSLA) and MicroStrategy (MSTR), among others. .

Despite its volatile nature, Payne believes Bitcoin may rise further due to excess liquidity in search of housing.

“There is too much money that can flow into this market. It is becoming a bigger and bigger casino,” said the advisor.

“At the end of the day, we’re not using it for much more commercial use. It’s just more people speculating and I think it’s very similar to when the tech bubble burst, or you go back to the real estate bubble… where everyone is involved, ”Payne said.

The strategist is a supporter of investing money in cyclical stocks instead, even amid the recent threat of the Omicron variant.

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“Cyclical trading is the long game because things will continue to improve,” he added.

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