A Vanguard analyst compared bitcoin to popular Labooboo toys

One of the world's largest asset managers, Vanguard Group has compared bitcoin to a collectible asset like the viral toy Labooboo, Bloomberg writes. The token lacks the characteristics such as income, compound interest and cash flow that Vanguard looks for in long-term investments, explained its top manager John Ameriks.

"In the absence of compelling evidence that the underlying technology creates sustainable economic value, I have a hard time seeing bitcoin as anything more than a digital Labooboo," Amerix said at the Bloomberg ETFs in Depth conference in New York on Dec. 11.

Despite this, the $12 trillion wealth manager has allowed its clients to buy ETFs on digital assets. "We allow people to invest in these ETFs on our platform if they want to, but they do so at their own discretion," Bloomberg quoted Amerix as saying. - We're not going to give them advice on whether to buy or sell and which crypto-tokens they should hold. That's not part of our practice right now."

Amerix added that Vanguard is generally optimistic about the benefits of blockchain and the technology's potential to improve market infrastructure. He admitted that there are scenarios in which bitcoin could theoretically acquire value unrelated to speculation. In particular, he admitted that the asset's value could increase in conditions of high inflation or during periods of political instability.

"If we could see a reliable price movement in such circumstances, then we could have a more meaningful conversation about what an investment idea might be and what role bitcoin is capable of playing in a portfolio," he said. - But that's not there yet - the story is still too short."

These comments were made against the backdrop of a prolonged drawdown of the largest digital asset: bitcoin is now trading near $90,000 per token, while just a few weeks ago the price reached $126,000. At the same time, it has repeatedly gone through sharp cycles of growth and collapse, losing much of its value and then recovering. Given such fluctuations, Vanguard executives previously called cryptocurrencies speculative investments, Bloomberg recalls.

Now bitcoin continues to move to the lower boundary of its recent trading range: any price increase is met with sales from investors who bought the asset near the October peak, the agency noted. The market has entered a moderately bearish phase, with the volume of new purchases failing to cover sustained pressure from large holders exiting positions, according to a report by analyst firm Glassnode, cited by Bloomberg. Bitcoin is stuck in a "weak but limited range," the analysts emphasize. In such a market, even time begins to play against investors as unrealized losses accumulate, they write.

Relative unrealized losses on bitcoin rose to 4.4%, the highest in almost two years. In previous months, this indicator was kept below 2%. According to Glassnode, this indicates a transition from a phase of euphoria to a period of increased stress and uncertainty.

This article was AI-translated and verified by a human editor