Investors who are able to tolerate the decline in asset prices by tens of percent will be successful in the cryptocurrency market, says Jim Bianco, president of the analytical company Bianco Research. “Some of these coins, like Ethereum, will rise significantly higher over time,” he told CNBC. "But you will have to endure numerous repetitions of what we saw last week, over the next months or a year."

There are great long-term prospects hidden behind speculative betting on cryptocurrencies, Bianco said. He is confident that digital assets can successfully transform the existing financial system. “They have big promises and it really means a lot. The problem is that another driver is a kind of uncontrolled casino in which people place bets on the rise and fall of such coins, ”he said.

Bianco warned that at any moment there is a risk of a 50-70% decline in cryptocurrencies, as this is still a relatively new technology. However, with the end of the diffusion phase, they will acquire a fundamental role in the real economy, and their prices in general will become significantly higher. Investors who churn in the early years of the industry will be disappointed. “This means that in the future, profits will be significantly lower. As volatility spreads, it will slow down and the risks and rewards will diminish, ”he added.

In his own words, Bianco has been holding a basket of digital currencies since 2017 and avoids active trading. He usually rebalances the portfolio once or twice a year and holds Ethereum, but not Bitcoin. He also believes that owning cryptocurrencies is important, as they show an increasing connection with other risky assets, including stocks. “This was not three or four years ago, but it is now. If volatility in financial markets continues to rise, such as in the VIX, it will help build confidence in the cryptocurrency space. “Yes, we need a solution, and this is the solution,” he said.