Charles Bobrinskoy from Ariel Investments has issued a warning that Bitcoin is a momentum-driven bubble, forecasting an upcoming decline in price as regulatory factors and market sentiment evolve.

Bobrinskoy characterized Bitcoin (BTC) as a “get-rich-quick scheme,” emphasizing that its rise is fueled by momentum rather than any intrinsic value.

While speaking on CNBC’s The Exchange, Bobrinskoy voiced concerns about Bitcoin’s dependence on minimal regulatory oversight, arguing this makes it susceptible to collapse when market sentiment shifts.

According to Bobrinskoy, Bitcoin’s charm stems from its regulatory absence, allowing for substantial, anonymous transactions.

He pointed out the cryptocurrency’s link to illegal activities and its disconnection from conventional Know Your Customer regulations as threats to the wider financial landscape. He dismissed the initial narrative of Bitcoin as a transactional medium, claiming its current status as a store of value lacks long-term viability.

Bitcoin’s price increase is entirely speculative

Bobrinskoy, who oversees Ariel’s focused value investment strategy and has extensive experience in investment banking, attributed the recent Bitcoin price spikes to speculative fervor instead of solid economic fundamentals.

He forecasted a steep drop in Bitcoin’s value when its momentum disappears, reiterating concerns that the cryptocurrency could undermine the U.S. dollar and expose investors to considerable risks.

“The key point is that it has risen because it has risen, and it will fall significantly if that momentum begins to wane — and that will happen,” he stated.

Ariel Investments, recognized for its disciplined value strategy, has traditionally concentrated on conventional equities. Bobrinskoy’s comments mirror the persistent skepticism within traditional financial circles regarding the long-term viability of cryptocurrencies without stricter regulatory measures.