24 Jul CNBC’s Brian Kelly: Why this bitcoin breakout is the real thing
Bitcoin is up 30% from its low in May this year and bitcoin bulls are hoping for the stampede to continue. CNBC Host Bob Pisani and analyst and trader Brian Kelly explore what’s driving the resurgence in bitcoin.
Pisani opened by saying market watchers are watching to see if CBOE’s June 2018 application for a bitcoin ETF gets approved by the SEC.
“There’s no doubt a positive verdict would lead to another run-up for bitcoin but don’t hold your breath on this. I don’t think so,” Pisani warns.
He says both SEC chair Jay Clayton and the regulator in charge of bitcoin policy at the SEC have made it clear that they are taking a “go slow” approach. Pisani expects the SEC will not deny the request but will delay a decision and keep it open for comments, citing hacking and security concerns.
On the industry side, Pisani notes that cryptocurrency exchange Coinbase has formed a political action committee to raise funding for election advocacy.
Kelly begs to differ
Kelly agrees that an ETF decision by the SEC is not likely soon. That hasn’t stopped the market from getting excited about the prospect.
“Institutions are starting to get serious. I can tell you that from the calls that I’m getting, people that back in December didn’t like the price are coming back and saying ‘all right, this thing is not going away. We need to understand what it is, and where does this asset class fit into our portfolio?’ Just this weekend, we saw that Coinbase has secured a $20 billion hedge fund for their custody service,” Kelly said.
He said financial institutions realize Web 3.0 is here to stay. Web 1.0 was like a giant library where books got dumped into a database. Web 2.0 is all about companies like Google Facebook and Twitter who provided a global publishing platform.
In Web 3.0, Kelly says, “We’re moving from a giant database to a giant databank. And what does that mean? The data on the internet is valuable.” He said companies like Google have been able to earn significant revenue from data and that is why financial institutions are interested in cryptocurrency.
A reflexive market like gold
Kelly acknowledged the cryptocurrency market is “very reflexive” like gold. He said as the value rises, investors tend to pile on.
He said we are now past the tax selloff season and “sometimes it just takes the market a little while to catch up and I don’t think it’s done.”
You can view the Bob Pisani/Brian Kelly clip at CNBC here.