Enthusiasm around Bitcoin is becoming “increasingly cultish” and rests on “magical thinking,” said Will Hobbs, investment director at Barclays Wealth & Investments, in an interview with Business Insider.
The first cryptocurrency could end up as a flightless bird if interest rates rise, he added.
Hobbs emphasised that his firm is not interested in investing in Bitcoin despite the record rally. The main reason he cited is volatility:
“It is several times more volatile than our riskiest asset class, namely emerging-market equities.”
The investment director noted two main criteria that an asset must meet to enter Barclays Wealth & Investments’ toolkit:
- have positive expected return;
- be attractive for diversification.
“Perhaps, over time Bitcoin will satisfy both. But at the moment it’s hard to say. We are standing on the sidelines and watching others,” Hobbs concluded.
He expressed concern about the enthusiasm around Bitcoin:
“This looks like a religion — increasingly sectarian.”
Earlier, Barclays’ chief strategist Gerald Moser said that Bitcoin is unsuitable for institutional investors due to volatility.
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