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The popular cryptocurrency dropped below $10,000 this week for the first time since November. The price dip, a loss of approximately 50 percent, sent investors in a frenzy in desperate attempts to sell.
While bitcoin’s volatile nature is widely known, Evercore ISI Manager Director and Technical Analyst Rich Ross told CNBC that it’s never wise to put your money in the digital currency.
“It’s never safe to invest in bitcoin, let’s be crystal clear,” he said on “Fast Money” Wednesday evening.
“The thing that bothers me the most is that we’re staring at the greatest bull market in the last 20 years, where you can double your money in, like one of the world’s best industrial companies, like a Boeing, which is sort of pillaring here for no good reason, up over 200 percent in two years and we’re talking about this thing here that’s lost 50 percent of its value in a month,” Ross said.
As bitcoin prices continue to fluctuate with record highs and lows and increased sell-offs, Ross instead recommended investing the old fashion way: in the stock market.
“There’s a lot to like about stocks,” he said. “Which are awesome.” People investing in cryptocurrencies are “people looking for a shortcut, that are gambling,” Ross said.
But cryptocurrencies’ volatility – which includes digital coins such as ripple, ethereum and litecoin – and the chance to win big is what attracts some investors.
“Some of the smartest people in the world are convinced this is going to the be the next big thing the way the internet was,” said Dan Nathan, co-Founder and editor of RiskReversal.com, calling Ross’s assessment of bitcoin “glib.”
Long-time investors in cryptocurrency, some dating back to 2013, are accustomed to market ups and downs, Nathan pointed out.
At its high, in mid-December, bitcoin was trading at around $19,500. At the end of day Wednesday, bitcoin was valued at around $11,300, a loss of $156 billion in market cap.
And bitcoin isn’t the only cryptocurrency to lose money. Ripple was down $106 billion, ethereum lost $40 billion and litecoin was $11 billion below its high.
“Smart people can go broke too,” Ross said.