Bitcoin Seeing a Massive Influx of Demand from Hedge Funds, Retailers, & Traders: Kraken CEO Jesse Powell
Kraken co-founder and CEO Jesse Powell said the cryptocurrency exchange has been seeing a huge demand for bitcoin and cryptocurrencies from all types of investors looking for safe-haven assets after the US Federal Reserve started printing money like crazy to stimulate the economy battered by the COVID-19 pandemic.
“In the past three months we're seeing a massive influx of new accounts from all personas, we're seeing hedge funds, we're seeing wealth managers, we're seeing retail investors, we're seeing day traders, everyone is signing up for it,” Powell said in his interview with Bloomberg.
A massive new number of signups are the result of people having a lot of free time at home who are rolling their stimulus checks in bitcoin or the stock market, he said.
“I think people are very worried about the traditional markets and what's happening with the US dollar and they're looking for a safe haven asset.”
And institutions are getting just as comfortable, who moves in herds. Macro investor Paul Tudor Jones investing in bitcoin is what’s helping and “the more that happens the easier it becomes for more people to get it because they have someone else to point to say look this guy did it you trust him so we're gonna do it.”
Bitcoin is a hedge against the inflation
As for the volatility of the bitcoin market, bitcoin has returned more than the S&P 500 in 2020 and it was the best performing asset of the last decade. While traditional markets are all over the place,
“bitcoin is the only thing you can look at over the last 10 years and see it's up a million percent.”
On being enquired about the presence of whales and manipulation in the system, Powell pointed towards the Fed buying junk bonds from failed United States corporations which he said is a “joke” and that the market is clearly manipulated.
Moreover, the central bank is printing trillions of dollars to pump up the value of publicly traded stocks. Powell said,
“You can't price anything in dollars anymore. The inflation is gonna be out of control very soon here, personally I would be buying Bitcoin as a hedge against that inflation.”
Layer 2 solutions will make BTC work like USD
The world’s leading cryptocurrency is currently hovering around $9,400, down 0.79% managing just $1.3 billion in ‘real’ volume. Despite making several attempts to breach $10,000, bitcoin has been unable to achieve the level.
During the global markets sell-off in mid-March, bitcoin had one of its worst crashes. But despite that bitcoin is becoming a store of value, said Powell.
“Bitcoin has ten years of history behind it… people are flocking to it as a safe haven because of that finite predictable supply,” Powell said. No one can print bitcoin or mine an asteroid full of it, so it's very predictable and that’s why people are flocking to it, he added.
And the price of bitcoin may be ranging for now, but in the long term, it’s going to surpass gold in terms of a store of value, is what Kraken CEO believes.
Moreover, unlike gold, you don’t need to transfer it on the blockchain, rather the layer 2 solutions allow everyone to move bitcoin around just like cash can be moved through PayPal and Venmo. Powell explained,
“I think it becomes much easier over time as we build out these tools for the ecosystem for people to use Bitcoin and interact with Bitcoin and pretty soon all of the technology behind Bitcoin will just disappear and it'll be just like the US dollar, where no one really understands how it works, but everyone uses it.”