Key takeaways

• Lee Cooperman warns investors to be careful with Bitcoin.
• The warning is coming amidst an over $400 market sell-off and growing skepticism.
• Notable proponents are however unbothered by the shaky market.

Lee Cooperman, the Veteran investor, and Chairman of hedge fund Omega Advisors has warned investors to be careful with Bitcoin as it was in opposition to the interest of the U.S. government.

He said this on CNBC’s Squawk Box while speaking about markets, the federal reserve, and investing in general. Cooperman, who is a gold bug whose wealth is estimated to be around $2.5 billion, advised that gold makes more sense to him as a store of value. The 78-year old however concedes that due to his age, Bitcoin does not make a lot of sense to him.

“If you don’t understand Bitcoin, it means you’re old. I’m 78. I’m old. I don’t understand it,” he said. “I’d be very careful with Bitcoin. It does not make a great deal of sense, and if you are nervous about the world, gold to me would be a better place to store value.”

Despite not understanding the flagship cryptocurrency, the billionaire is certain that Bitcoin is not in the interest of the U.S government. This may as well be so as Bitcoin has been touted to be a better substitute for fiat currencies in general. Ergo, Bitcoin threatens the dominance of the U.S. dollar as the majority world reserve currency. Cooperman warns of this noting that the U.S. government would not further the growth and adoption of a substitute to its currency.

Significantly, his warning is coming at a time when the cryptocurrency market is experiencing another major turbulence. Forbes reported that since the adoption of Bitcoin as legal tender in El Salvador on September 7, over $400 billion has been wiped off the entire cryptocurrency market.

Bitcoin, in particular, plunged 16% to trade below $43,000 the day as around $3.5 billion in leveraged long positions liquidation took place cross-crypto. Bitcoin has been staging a recovery as it is currently trading at around $46k but is still 14.6% down from the latest high of around $52,000 it reached about a week ago.

This dramatic price action has raised and further galvanized the minds of several skeptics of the crypto market. Pseudonymous analyst and investor Mr. Whale reiterated his bearish stance, warning that Bitcoin was bound to even go lower than current levels.

Similarly, Stefan Ingves, the Governor of Riksbank – Sweden’s central bank – at a banking conference in Stockholm warned that Bitcoin and other cryptocurrencies are at risk of collapsing. “Private money usually collapses sooner or later,” Bloomberg reported him saying. 

In contrast, Bitcoin proponents are not afraid of the volatility manifesting in the market and have shown it in their actions. Michael Saylor’s company, MicroStrategy, yesterday announced that it had bought the dip. The company bought an additional 5,050 bitcoins for about $242.9 million in cash at an average price of about $48,099 per Bitcoin. This brings their total holding to about 114,042 bitcoins acquired for around $3.16 billion.

Many analysts are also still bullish on the market. On-chain analyst, PlanB has also reaffirmed that his prediction, based on the stock-to-flow (S2F), of a $100,000 Bitcoin price by the end of the year still stands.