Bitcoin has continued to baffle investors as it straddles the line between a store of value and a high-risk asset. Wolfe Research suggests that regardless of how it is classified, it is still worth owning. This year, bitcoin’s price has remained within a narrow range of $25,000 to $30,000, at times behaving like a risky tech stock and at other times resembling digital gold. Wolfe’s Rob Ginsberg believes that bitcoin can be seen as both a risk asset and a store of value, and he emphasizes the significance of its performance during times of market uncertainty.
Despite its fluctuating narrative, bitcoin has important support at the $25,000 level, which it has managed to hold steadily this year. Its first major rally came during the U.S. regional banking crisis, as investors recognized its potential as an alternative banking system. While originally intended as digital cash, bitcoin has often been traded as a speculative asset in 2022. However, it has also benefited from positive developments such as landmark legal cases and the race to launch the first spot bitcoin exchange-traded fund (ETF). Although regulatory hostility and uncertainty in the U.S. have hindered its progress, bitcoin has shown resilience and upheld its floor at the $25,000 support level.
In light of these factors, Wolfe Research sees bitcoin as a viable option despite the market’s uncertainty. With strong support below and the potential for further market volatility, bitcoin’s current position suggests it is not a bad investment choice. Ginsberg highlights the resilience of bitcoin during significant market downturns and asserts that owning it above the $25,000 support level is still a sound decision. As the market continues to evolve, it becomes increasingly apparent that bitcoin’s dual nature as both a risk asset and a store of value shouldn’t be ignored.