Stock market expert and Birinyi Associates founder Laszlo Birinyi thinks that the phenomenal rise of Bitcoin price, which has grown by 1,950 percent since January 2017, is serving as a catalyst for the global financial market overall and attracting more new investors to the stock market.
He added that the cryptocurrency mania is also providing a badly needed “shot in the arm” for the traders in the stock exchanges.
In a phone interview with CNBC, Birinyi said that the Bitcoin mania is forcing more of the cash that has been kept idle on the sidelines back into the stock markets.
"Bitcoin is a catalyst for a lot of interest. It's everybody. It's also giving the guy on the trading desk, sitting at a hedge fund, a shot in the arm…All of a sudden more and more people are aware there's a market going on, the stock market and there's a way to make money.”
However, according to Birinyi, Bitcoin has been showing bubble-like features in the past few weeks. He added that if Bitcoin is indeed a cryptocurrency bubble, it is already bigger than some of the largest financial bubbles in history, including the Nasdaq bubble of the late 1990s.
Birinyi also said that he is not willing to invest in Bitcoin long-term, but that he sees it as better suited for a trading instrument. As a matter of fact, he claimed that he successfully traded the cryptocurrency during the world’s second Bitcoin futures launch on the Chicago Mercantile Exchange (CME) December 18.
"I made $3,000 in an hour. This is not investment money. This is the money you would spend on that new driver for your golf bag."
While the most well-known digital currency has its share of skeptics, more and more Wall Street investors are entering the crypto market. The renowned American investor Bill Miller recently told reporters that 50 percent of his hedge fund’s money is currently invested in Bitcoin.
The recent explosion of Bitcoin coverage in mainstream media outlets is also paving the way for other cryptocurrencies to potentially see increased adoption.