Bitcoin’s summer rally is here to stay, according to Brian Kelly, a regular contributor on CNBC’s Fast Money.
The bitcoin price is now trading over $8,000, a figure unseen since late May, and CNBC correspondent Bob Pisani began the segment noting that some of the gains could be attributed to CBOE’s reapplication of a bitcoin ETF. Since the SEC normally takes 45 days to make a decision, many are expecting a decision by Aug. 15. The approval of a cryptocurrency ETF could bring a major boost to the markets, though some argue this uncertain event has already been priced in.
Neither Pisani nor Kelly, however, thinks the SEC is likely to approve the first bitcoin ETF this year.
Why Bitcoin’s Future Looks Bright
Kelly, the founder of BKCM, said long-term positive indicators include institutions getting serious about bitcoin and the arrival of what’s known as “Web 3.0.”
“What we’re doing is we’re moving from a database to a data bank,” he said, describing the Web 3.0 revolution.
“The data that is in the Internet is valuable,” he said. “Web 3.0 is the new Internet, an improved Internet, with data that can be monetized. How do you send something of value across an open network like the Internet? With a cryptocurrency, and that is exactly why institutions are starting to get into this [bitcoin]. They’re seeing how this fits into a portfolio of Web 3.0 stocks.” Google is reporting significant market gains because it is selling data, he added.
The higher price will also attract more investors, Kelly said. Investors who did not like the price in December are coming back into the market.
“The more valuable it becomes, the more valuable it becomes, and that’s very true for bitcoin, for gold and for other currencies,” he said.
Also read: Wall Street adopting bitcoin will lead crypto market to surge — Brian Kelly
Why This Rally Is Different
Kelly said back in May that the adoption of cryptocurrency by Wall Street’s largest financial institutions, including the New York Stock Exchange (NYSE) and Goldman Sachs, would drive bitcoin’s price in the short- to mid-term. That short-term prediction did not materialize.
But five months ago, there were some “headwinds” for bitcoin, with big players selling their holdings, Kelly said. “That appears to be over,” he said. “Sometimes it just takes the market a little bit [of time] to catch up.”
In the meantime, neither Kelly nor Pisani believes the SEC will approve CBOE’s bitcoin ETF application. Pisani said he has interviewed SEC officials who have stated they are taking a “go slow” approach on cryptocurrency.
Pisani said he expects the SEC will not deny the request but will rather extend the comment period. Such a ruling will cause the least amount of market friction. The SEC will cite its prior concerns about thefts of wallets and break-ins and possible manipulation. There are also custodial questions to be settled, he said.
On the positive side, Coinbase has formed a political action committee for U.S. elections, Pisani said.
Images from Shutterstock
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