In a recent interview with Bloomberg, Michael Purves came forward to say that he had a highly bearish outlook on Bitcoin, which has been on since January.
He further claimed that last week, his company made a short bet with a target of $15,000.
On analyzing the current market downtrend, Purves stated that the long-term positive trend for Bitcoin began to weaken in late January, possibly because the top cryptocurrency experienced a year-to-date decline of 55.86%.
The latest trend reveals that previously, Bitcoin had shot beyond the $20,000 threshold, and continued to soar in 2021, setting new records. Purves claims that the “inflation hedge” narrative led institutional investors to start purchasing the leading cryptocurrency in large quantities, which is what mostly drove the significant rally.
Bitcoin, meanwhile, has utterly failed to diversify its portfolio. It has a strong correlation with the S&P 500 and the Nasdaq 100, as reported by Purves.
“Over the past year, we’ve discovered that Bitcoin is not uncorrelated. It has been connected,”
Purves questions if institutions will step up to buy the dip if the price of Bitcoin declines noticeably because it cannot serve as an inflation hedge.