- Bitcoin is overbought and at risk of a pullback, according to hedge fund chief Mark Yusko.
- "A 'pause that refreshes,' given how overbought we are right now, wouldn't surprise me," he told CNBC.
- Bitcoin extended gains above $60,000 as ProShares said it would debut the first US bitcoin-linked futures ETF on October 19.
- Sign up here for our daily newsletter, 10 Things Before the Opening Bell.
Bitcoin looks "overbought" right now as excitement over an ETF launch keeps pushing the price higher – and that means it might be shaping up for a pullback, according to hedge fund chief Mark Yusko.
The cryptocurrency could soon retreat from its recent levels above $60,000 as investors take profits, Morgan Creek Capital's CEO and CIO told CNBC's "Trading Nation".
"There is some risk of the buy the rumour, sell the news," Yusko said Friday.
To support that, he pointed to bitcoin's tumble after El Salvador adopted the cryptocurrency as legal tender, when it lost much as 17% to around $44,000.
"There was a little mini-crash," Yusko said. "So I think there's some risk of that around October 27, when we find out which, if any – and I think it'll actually be multiple – of the ETFs are approved."
Bitcoin was last trading at $61,094 on Monday, and is up 109% so far this year, according to Bloomberg data. Its price is climbing toward a new all-time high as investors get excited about the Securities and Exchange Commission beginning to allow several crypto-related ETFs to go to market.
ProShares, a US specialist in exchange-traded products, said on Monday it would debut the first US bitcoin-linked ETF on the New York Stock Exchange on Tuesday, October 19. Called the ProShares Bitcoin Strategy ETF, it will trade under the ticker "BITO."
"We're excited, obviously, that people are recognizing that approval is likely imminent," Yusko said. "We've been bullish on cryptocurrency, and bitcoin in particular, for a long time."
"There are a lot of people that think we could hit $100,000 by the end of the year," he added. "The stock-to-flow model says we should."
But he remains skeptical about the high level of attention bitcoin has had recently, and what that means for the token's short-term prospects.
"I wouldn't be surprised of a little consolidation. Look, we're up 40% this month which is only 15 days old," he said. "So - a 'pause that refreshes,' given how overbought we are right now, wouldn't surprise me."
The hedge fund chief predicted earlier this year that bitcoin could hit $250,000 within five years, if its market capitalization approaches the same level as gold's.
"Bitcoin is digital gold, and as it approaches that monetary value of gold at $4 trillion - that gets you to that $250,000 value," Yusko said in May.
His logic is partly based on a long-term deflationary outlook.
"We have bad demographics, too many people reaching retirement age. We have too much debt. That all leads to deflation."
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