Just one day shy of Christmas Eve, Bloomberg’s Kailey Leinz and Guy Johnson gathered final pre-holiday crypto insights from Nexo’s Co-founder and Managing Partner Antoni Trenchev. While on air, Antoni discussed predictions for Bitcoin, the new wave of institutional investors coming into crypto, and how this spells out wider, more sustainable adoption.
Watch the interview here and read the transcript below to get up to date with the latest industry news:
Or skim over some of the key moments:
- The fabric of people engaged in Bitcoin investment has changed from cyberpunks on the fringe of the financial industry to institutional investors, household name billionaires, and large corporations putting their treasuries into BTC.
- Bitcoin has remained close to its new all-time high despite a last-minute push for regulations from the Trump administration, indicating that current, tenured BTC investors are no longer spooked by regulation.
- Bitcoin’s volatility is a blessing and a curse that makes it just as attractive as it seems risky. Ultimately, a proper long-term strategy is needed for successful investment.
- Unsurprisingly, Bitcoin and other truly scarce assets are rallying as the Fed prints another $4.1 trillion right before Christmas.
As always, we are happy to bring you positive news from our industry, and particularly so during the festive season.
Happy holidays from all of us at Nexo and, as always, stay ahead!
Time now for Futures In Focus and today we’re looking at Bitcoin. It’s up more than 200% this year and last week we spoke to Scott Minerd, who is Guggenheim’s global CIO and he said it's fair value still has a long way to go.
Scott Minerd: “We made the decision to start allocating toward Bitcoin when Bitcoin was at $10,000. It’s a little more challenging with the current price closer to $20,000. Amazing over a short period of time how big of a run-up we had but, having said that, our fundamental work shows that Bitcoin should be worth about $400,000.”
$400,000. Joining us now is Antoni Trenchev, Nexo Co-founder and Managing Partner. Nexo is a London-based provider of instant crypto credit lines. Antoni, I have to ask for your reaction to that. $400,000 is a far cry from where we are now and we climbed to $23,000 with such velocity. Where do you think Bitcoin goes in the near-to-medium term? How far away is something like $400,000?
Well, not too far away. It’s going to take a while but, ultimately, that price level would bring Bitcoin on par with gold, with the total market cap of gold, and since Bitcoin is a better version of gold, I think that’s pretty realistic. I made a prediction earlier this year, towards the beginning of the year, that Bitcoin will have an intermediary stop at $50,000 and I think that’s where we’re headed right now.
Scott Minerd is an institutional name and I’m wondering if this year was the big shift, Antoni, in the way that people approach Bitcoin. If we are to see institutional managers starting to allocate towards Bitcoin, how big a shift in the usefulness case does Bitcoin present? Because now it’s being operated on a wider basis, there’s a broader base. Does that continue to support the rally that would take us up to those kinds of numbers?
I really think so. Everything is on the side of Bitcoin right now, what you mentioned about the long-awaited institutional adoption is finally coming in, you see some household-name billionaire investors, a lot of companies putting in their treasuries. Whether Elon Musk is going to do the same with the Tesla treasury remains to be seen – he’s trolling us every now and then on crypto Twitter. But it’s a perfect set-up, the macroeconomic environment as well, so the fabric of the people who are engaged in Bitcoin is changing very rapidly and it is very sustainable from that perspective, so I do think we are in for some good times here.
What do you think about regulation, Antoni, has that caught up with this market yet?
To a certain extent. This goes back to what I just said that the fabric of the people engaged in Bitcoin has changed quite dramatically, because early on it was all about cyberpunks, anonymity, and being a side thing from the financial institutions and the way regulated entities work. Right now we’re seeing this last-minute push for rule-making within crypto by the Trump administration and you see that the markets, the price action hasn’t budged and I’m a believer in the efficiency of the markets and if this was of some concern of the overall market, we would have seen this reflected in the price and we haven’t – it’s actually quite near all-time highs since the announcement.
The Achilles heel of Bitcoin continues to be volatility. When other asset classes have seen volatility being suppressed, volatility remains relatively high in Bitcoin. Do you see that volatility coming down and again, if we were to see that, does that make it a much more investable asset to a wider base of investors?
I would argue that if it weren’t for Bitcoin’s volatility, I wouldn’t be on Bloomberg right now talking about it – it’s one of its attraction points. It’s a blessing and a curse, obviously, Guy and Kailey, but the fact of the matter is that it is about the investment strategy in Bitcoin. You just have to bite the bullet, you have to be invested in Bitcoin, and take the long-term perspective because on any scale – one-year, three-year, five-year, ten-year scale – Bitcoin has outperformed any other asset, so it is about the right strategy and here you got to be in for the long run.
Antoni, do you think Bitcoin is a correlated asset? There’s been a lot of debate about that in recent weeks, given Bitcoin tends to do better on risk-on base?
Well, we, human beings, tend to find correlation in just about anything. Every now and then, it is correlated to the stock market, to gold, you can find all sorts of analogies here. Fundamentally, I think that Bitcoin is very different from anything except gold because of its in-built scarcity that we have in the Bitcoin software and that makes it very attractive in an environment where we had the Fed just before Christmas printing another $4.1 trillion. It is no surprise then that we see the truly scarce assets rally in the way that they have and, going into 2021, I think that’s going to be one of the major topics and it’s very likely that we see a melt-up towards the price action in those scarce assets.