Wall Street veteran Art Cashin told CNBC, on Tuesday that he believes there is no material link between fluctuations in cryptocurrencies such as Bitcoin and stock market trading.
"I don't think it has had a significant impact because it is not very interrelated," Cashin said in an interview with Squawk on the Street.
However, people on Wall Street are "nervously" watching the crazy price fluctuations of Bitcoin and other cryptocurrencies, UBSSaid Cashin, floor operations director of the group's New York Stock Exchange.
Cashin said he expected the volatility to continue, in large part because of the risky trading strategies of some cryptocurrency participants.
"I'm still nervous about the cryptocurrency market," he said. "fortunately, unlike long-term capital and other things, I don't think it will spread to stocks-at least not very serious," he added. Long-Term Capital Management, a hedge fund, threatened the global financial system when it imploded in 1998.
Others take a different view from Cashin, including CNBC's Jim Cramer, who recently sounded a warning about the impact of cryptocurrency activity on the US stock market.
"I don't want to see all these things related," Cramer said Thursday, when bitcoin rebounded after falling more than 30% in a single day.
"all this is very frightening. I mean, on NASDAQThere are real companies, "said the Crazy Money host. He added on Friday that he expected the link between the stock market and the virtual currency to "end soon".
To be sure, Cashin admitted on Tuesday that a sharp fall in bitcoin like the one seen last week could prompt investors to adjust their portfolios, including stocks.
"what is happening now is that people have quite a wide range of shareholdings. If one of the particularly volatile parts forces you to make a margin call, you may have to sell other assets, "Cashin said."
If investors use leverage to magnify their bets on a particular security, margin calls will occur when the price of the security falls and brokers require investors to deposit additional capital in their accounts to meet established requirements. In some cases, there may be a predetermined price at which forced selling occurs. In other cases, investors may sell different securities to comply.
"there is an old saying on Wall Street. When you can't sell what you want, you sell what you can, sometimes even your grandmother's jewelry, "Cashin joked."
Some analysts say leveraged Bitcoin traders-which can be as leveraged as 100 to 1 Mel-are a factor in the recent wave of cryptocurrency volatility.
Bitcoin, the world's largest cryptocurrency by market capitalization, traded at about $38000 on Tuesday. Although it is up from last week's low of nearly $30000, Bitcoin is still well below last month's all-time high of nearly $65000.
Some observers, such as Guggenheim Partners's Scott Minerd, expect a further sell-off in Bitcoin. (Chinese Investment Network)