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Bart Smith, head of digital assets at Susquehanna, sat down with CNBC’s Squawk Box to discuss the various factors that have been driving Bitcoin’s recent price rally.
Smith began by discussing how Bitcoin managed to set new yearly highs. While he admits it’s difficult to pick one specific factor, he says the trade war with China has been a large influencer. He explains that, in 2017, much of Bitcoin’s rise came from countries like China and Korea where Bitcoin was seen as a way of getting money out of the country.
He also notes the recent Consensus conference which saw the price of Bitcoin go from $6,000 to $8,000. Additionally, he mentions that traders are optimistic about online US brokerages offering Bitcoin to retail customers. While no one has yet announced this, he speculates a lot of traders are buying Bitcoin now ahead of such an announcement.
Smith then discussed the state of liquidity in the crypto market. He states that while it's hard to pinpoint a number due to the disparate nature of the industry. However, argues that there’s “more liquidity in the market place than most people would ever need.”
Smith was then asked if Bitcoin is “just purely a speculative medium.” Smith responded, stating that while there is certainly an element of speculation, he argues that as adoption increases, the speculation will subside. While stating that the crypto market is definitely risky, “risk should have returns associated with it. The question is do you understand the risk and are you taking the appropriate amount."