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- Bitcoin volatility is still a concerning factor for BNY Mellon’s subsidiary’s CEO
- Francesca Fornasari believes that massive price fluctuations make the digital coin risky for investors
- Slow transaction speed with the high cost and high volatility is making BTC more unsuitable for institutional investors as per Francesca Fornasari
- Insight Investment considers that altcoins will grow, more specifically the coins that can solve the BTC-related issues
Bitcoin volatility has again proved that it exists after the recent market crash. In mid-May, celebrity words and strict regulations had pulled the BTC price. At the time, Bitcoin lost more than 50% of its all-time high level. Since then, the flagship crypto asset has remained fluctuating between the price range of $30k-$40k. Following the scenario, several Bitcoiners globally are concerned. Recently, Francesca Fornasari, the CEO of the BNY Mellon subsidiary, has shown volatility concerns.
Bitcoin volatility is making the asset risky
After a great bullish rally since last year, the leading cryptocurrency has again shown its volatile nature. Several institutional investors have found the asset as an inflationary hedge. However, now those investors are highly speculative.
Like other institutional and billionaire investors, Bitcoin has also attracted BNY Mellon. The national custody bank was the first name among traditional banks to embrace digital assets. However, recently, Francesca Fornasari, the CEO of one of the bank’s asset management units, is still skeptical. Fornasari believes that there is a major risk associated with the coin designed by Satoshi Nakamoto.
Why is Francesca Fornasari skeptical?
On Tuesday, Fornasari had an interview with Bloomberg, where she shared his views regarding the flagship crypto coin. The discussion revealed that Fornasari believes that BTC can be more difficult to evaluate in comparison to traditional Gold. Fornasari, who is also the head of currency solutions at Insight Investment, deemed tha BTC may not be suitable for most institutional investors.
He further explained that Bitcoin volatility, low liquidity, governance issues, and environmental-related risks are a few factors that make the asset unsuitable for institutions. Moreover, Fornasari highlighted that Bitcoin volatility further complicates the asset’s possible reactions in an inflationary environment.
Slow and costly transactions could hinder the adoption
Over the past year, Bitcoin has seen mainstream adoption globally. Fornasari believes that BTC investors should stay cautioned with the associated risks while investing. The foreign exchange expert deemed an entirely different count of factors and considerations that impact investors’ value. Notably, she highlighted that such elements have nothing to do with inflation or inflation hedge.
The CEO also stated that slow transactions and high costs are other factors that hinder the adoption of the asset. Hence, all the aforementioned factors make the coin skeptical regarding the ability as the mode of payments.
Insight Investment is optimistic regarding altcoins
Although the CEO of Insight Investment is observed to be skeptical due to Bitcoin volatility, the firm seems optimistic about other digital currencies. BNY Mellon’s asset management subsidiary estimates that altcoins will rise. Notably, the firm mentioned those particular virtual currencies that can help solve transaction speed and cost issues, and price volatility can surge more.
BNY Mellon will embrace the leading cryptocurrency
Earlier this year, BNY Mellon announced its plans to embrace Bitcoin. According to the announcement, the firm will offer custodian and transfer services as an asset manager. BNY Mellon is optimistic about BTC, as the firm mentioned that one of its exchange-traded funds (ETFs) was underperforming due to a lack of exposure to firms investing in the asset. Notably, Fornasari’s skeptical stance on the leading crypto coin comes despite the bank’s positive stance.
