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On 22 April 2024, Brian Kelly, the founder and CEO of Brian Kelly Capital, talked about Bitcoin’s prospects following its fourth halving on CNBC’s “Fast Money.”
He discussed several points that could be crucial for investors and enthusiasts interested in Bitcoin’s future movements:
- Halving Impact on Sell Pressure: Kelly noted that the Bitcoin halving reduced the daily sell pressure from about $60 million to $30 million. However, he argued that in the context of Bitcoin’s trillion-dollar market, this reduction is relatively small and might not have a significant direct impact on Bitcoin’s price. Instead, the psychological effect and the narrative around the four-year halving cycle could play a more substantial role.
- Institutional Participation and Spot Bitcoin ETFs: He highlighted the potential influx of institutional investors as a critical factor for Bitcoin’s future. Kelly said that with major brokerage firms like Morgan Stanley and UBS preparing to allow their clients to invest in Bitcoin, there’s considerable pent-up demand that could enter the market.
- Bitcoin as a Safe Haven Asset: Kelly touched upon the idea of Bitcoin evolving into a safe haven asset, akin to gold, but suggested this transition could take another 10-20 years. He acknowledged that Bitcoin is still in the early stages of its adoption curve.
- Impact of Geopolitics: The discussion also covered Bitcoin’s reaction to geopolitical events. According to the CNBC contributor, while Bitcoin has shown a correlation with gold during times of geopolitical tension, it responded negatively to recent events like the Israel-Iran conflict. Kelly explained that Bitcoin is still figuring out its “personality” as it becomes more integrated into the financial system and attracts diverse types of traders.
- Federal Reserve Policies and Bitcoin’s Value: Kelly argued that as long as the Federal Reserve tolerates higher levels of inflation to manage the debt-to-GDP ratio, it could indirectly benefit Bitcoin. He explained that with potential reductions in purchasing power and real income due to inflation, Bitcoin could become a more attractive investment as a non-sovereign store of value. He said that as long as interest rates stay the same or go down, Bitcoin should do well, and the only nightmare scenario would be if the Fed decided to hike rates to a crazy level, say 10%, in an effort to crush U.S. inflation.
- Other Ways of Getting Exposure to Crypto: He suggested that Ethereum and Solana were other good cryptocurrencies to invest in and that another good play could be investing in Bitcoin mining stocks.
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