- Lot more activity coming from South Korea, Vietnam, and most of Southeast Asia
- In the short term, we have much higher to go, In the long term, Bitcoin can rise 5x of current market cap
Bitcoin is used to buying fake ID’s drugs and illicit sex. “I have never done that with Bitcoin,” is Brian Kelly’s response to Bitcoin skeptics.
“What we’re seeing this year is macro funds, traditional investors are trading Bitcoin as an alternative or a supplement to gold and using it as this kind of macro hedge.”
Capital flight coming into Bitcoin
Bitcoin acting as a macro hedge to an extent is because of what is going on in Hong Kong and currency devaluation.
“We’re seeing a lot of activity from Asia, but not necessarily in Bitcoin in some of the other stable coins, something like a tether.”
But as it’s very difficult to get money out of China, he says it’s no capital flight rather “speculation about capital flight.”
However, because getting money out of Hong Kong into Bitcoin is relatively easy, “there is some capital flight coming into Bitcoin.”
Interestingly, Asia has been a hotbed for Bitcoin and cryptocurrencies and with the threat of trade war and China devaluing yuan along with other currencies under threat of going down in tandem, not just China, other countries in the region are turning to Bitcoin.
“We have seen a lot more activity coming from South Korea,”
along with Vietnam and most of Southeast Asia, and that’s where the capital flight is coming from, said Kelly. He further points out how between Japan and Southeast Asia, it’s more than fifty-sixty percent of the daily trading volume.
In the short term, we have much higher to go
Bitcoin is currently trading around $11,850, up over 217% in 2019.
Should Bitcoin be worthless or more?
Kelly says, the interesting thing about Bitcoin is, the value is whatever the market puts on it, it’s almost like working capital.
“Right now, the market’s telling us you need two hundred billion dollars worth of working capital. I would argue that as it grows, we’re probably talking about a couple trillion dollars worth of working capital, so I think we have much higher to go in the very short term. Sure we could. We could drop to six.”
As for the interviewer’s question about killing Bitcoin, Kelly says, “it’s very difficult, very much like the Internet.”
In the long term, Bitcoin can rise 5x of the current market cap
The global market is currently under the threat of trade wars, economic slowdown, negative interest rates, and currency crisis. This has experts calling out for finding an alternative currency and asset to hedge their investment risks.
Gold is one and now Bitcoin is increasingly becoming another safe-haven asset.
The correlation between Bitcoin and gold is “undeniable,” from 0.496 the past year, it has gone up to 2.827 in the past three months.
About Bitcoin being a long term safe haven, Kelly said,
“In 2009, Bitcoin was a start-up and it’s kind of going through this phase where we are now commodity much more like gold. Eventually, I think we’ll get to the currency stage and that’s what will be used much more of medium exchange.”
“I do think it can still survive as digital gold. I mean, it’s a two hundred billion dollar market cap today. Gold is a ten trillion-dollar market cap. So even if it took ten percent, you’re talking about a 5x from here. So, I think we will get there.”