The Commodities King, Dennis Gartman, continues to say that he will not buy Bitcoin, in spite of recent news that the cryptocurrency has been approved for futures trading on a number of exchanges. Speaking on ‘Fast Money,’ Gartman reiterated his view that Bitcoin is in a ‘tulip mania’ stage and will inevitably pop.
Gartman’s own expertise in commodities dates back to the 1970s when he helped to manage several large companies’ futures divisions. He now produces an investor advice newsletter called ‘The Gartman Letter.’
The main concern, says Gartman, is the massive volatility that Bitcoin is often subject to. He maintains that margining something that moves with huge volatility is wildly difficult and dangerous. He told ‘Fast Money’:
"Bitcoin on a volatile day moves 15 and 20 percent. How can you margin something that can move 15 to 20 percent on a regular basis? It's the volatility that frightens me."
Some legitimacy or full legitimacy?
However, in a shockingly positive turn, Gartman did affirm that the inclusion of Bitcoin futures on the CBOE has given the cryptocurrency ‘some legitimacy,’ though not enough to tempt him into the market. He maintained that, until the cryptocurrency ceases to be a ‘place where drug dealers are making transactions,’ he’ll stay out.
However, many industry insiders disagree regarding the legitimacy of Bitcoin. In fact, the futures trading brings Bitcoin legitimacy as an asset class unto itself, albeit highly volatile. According to Shai Novik, vice chairman of CRYPTALGO HOLDINGS AG:
"The initiation of Bitcoin futures trading provides legitimacy to Bitcoin as an asset class. Bitcoin was not defined until now as an asset class in which investors can invest as part of their asset allocation strategy. Now, asset managers would be able to do so. It would still be a highly-volatile and unpredictable asset class, but so are other assets."