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Bitcoin at $50,000: Traders on How to Play the Space After Cryptocurrency Briefly Reclaims Marker

Egdar Su | Reuters

Bitcoin fell back below $50,000 on Monday after reclaiming that threshold over the weekend.

The cryptocurrency traded at roughly $49,400 by the afternoon session, still shy of its all-time high above $64,000 set in April.

The space has seen a boost in the past week on increasing adoption. PayPal said Monday it would open its platform in the U.K. to crypto buying and selling, and Coinbase said last week that it would buy $500 million in cryptocurrency on its balance sheet.

Bill Baruch, president of Blue Line Capital, is a bitcoin bull but remains wary of jumping in right here.

"I think it needs to be in your portfolio, but is $50,000 the place to be buying it? I wouldn't chase it," Baruch told CNBC's "Trading Nation" on Monday.

Bitcoin fell below $30,000 during a summer sell-off. Weakness in recent months was largely tied to a regulatory crackdown in China wherein some mining operations were forced to close. Since a June low of $28,600, it has rallied 73%.

In a separate email to CNBC, Baruch said he owns bitcoin but began to trim his holdings once it bounced back to $45,000 — roughly the same level as its 200-day moving average and a 50% retracement level measured from its April peak and its June low. He said that level could prove a good entry point if bitcoin falls back to it.

"Again, I think it's a great space to be in, but don't chase it just because you see $50,000 in the headlines. Pick your spots and stick to your game plan," he said.

John Petrides, portfolio manager at Tocqueville Asset Management, said there are more ways to play the bitcoin bounce than just through the asset itself.

"If you put your long-term investment hat on, there are two ways to look at this space — one is cryptocurrency the asset class and then the second one is an investment in the blockchain. For our team specifically, from a long-term theme perspective, we think that blockchain has a lot of value to it," Petrides said during the same interview.

He plays the space specifically through the ETHE Grayscale Ethereum Trust, which solely invests in ethereum open source blockchain, and mirrors the value of the ethereum held by the trust. It has risen 105% this year.  

"As the world moves to more non-fungible tokens, NFTs, as we see more big players like PayPal and Visa and others start moving and converging in this space, we think that's going to lead to more activity on the blockchain, and ethereum is the largest open source blockchain out there," Petrides said.

Disclosure: Blue Line Capital holds bitcoin. Petrides holds ETHE.

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