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“Now, when everyone is saying … it’s over, that’s it, bitcoin is dead, for the 175th time. Now’s the time you start looking at it, on the buy side,” Kelly, portfolio manager of the BKCM Digital Asset Fund, told CNBC on Tuesday.
With uncertainty over the regulatory environment of digital currencies in South Korea and China, Kelly pointed out that cryptocurrency is in a “hand-off” period, moving from retail Asian investors to U.S., European and Japanese institutional investors.
“And that money is still coming in,” he said. “The flows have not stopped.”
“When we talk about bitcoin being up at $20,000, everyone is running around being all excited,” he said. “Those are the times to be a little cautious.”
Bitcoinprices have remained stagnant between $10,000 and $11,000 for the last week, not recovering from price highs of $19,500 in mid-December. The 45-percent drop in value has some market experts worried that the bitcoinbubble may have burst for good.
1. Only risk 1 percent to 5 percent of assets.
“This is a new technology,” said Kelly. “Things break. This is the internet in 1995.”
With an asset that fluctuates in price so much, the potential for growth is exponential — but so is the loss. If the investment doesn’t work out, losses can easily be absorbed, Kelly pointed out.
2. Don’t sell too soon.
3.Do not panic when coin drops 50 percent.
Understand the volatile nature of digital currency. “These things can move 20 percent to 30 percent in a day,” he said.
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