Finance expert, talk show host, and Bitcoin enthusiast, Max Keiser, returned to KITCO News last week. In an interview on the market news channel he restated his belief that the king of cryptocurrencies will reach US$100,000. He also gave an explanation for the recent rising trend that has prices back above US$7000.
Manipulation of Other Currencies Makes BTC Safe
According to Keiser, one reason for the recent rise in crypto prices has to do with a policy under consideration by the US government. The policy would allow banks to exchange treasuries for reserves to decrease the size of the Central Bank’s balance sheet. The policy is similar to “quantitative easing”, a method explored in the 1940s.
When the Federal Reserve signaled that they were going to permanent quantitative easing I said ‘Look, that’s the bottom for Bitcoin.’ That was about $3,200 on Bitcoin, because they’re making clear now that there’s going to be no accountability by the fed, that they’re going to print ad infinitum, Keiser said in the interview.
So, anybody with money, with wealth, is looking for a store of value.
Historically, this store of value had been gold. However, the gold market is being manipulated, according to Keiser. This is driving investors away from gold into crypto.
Gold is problematic because there’s no genuine price discovery in the price of gold, said Keiser.
There are too many sharks and charlatans manipulating prices with those naked short sales.
Keiser defined “naked short sales” as sales of gold that hasn’t been accounted. This prevents the price of gold from accurately reflecting its real value. These market movements have strengthened crypto but also lends to volatility in the short term.
[Bitcoin] had this epic move down into $3,000 – a 75 percent, 80 percent correction. It’s the third or fourth, if you’re keeping score, going back to 2010 or 2009, when it was first launched, said Keiser.
This is the way it trades because it’s making this huge transition from store of value, commodity thing, to medium of exchange, to unit of account. By the time it gets to $100,000 the volatility will ebb.
Institutional Investors Make Bitcoin Stable
Any time someone says something like
Bitcoin is going to reach $100,000., it’s easy to ask,
when?. However, Keiser doesn’t play that game, as he explained in a follow-up video.
It’s silly to try to time a move like this, said Keiser.
With Bitcoin at $3,300 people were saying ‘I’m going to time it and buy it at $2,000.’ Now it’s at $7,000 and people are all like ‘Why did I do that?’ Just own it. Stack sats. Stack satoshis.
In the meantime, Keiser pointed to examples of increased adoption which helps to increase value and decrease volatility.
Whole Foods just announced they’re going to start using Bitcoin. eBay is now gonna start using Bitcoin. Fidelity has now got a major Bitcoin interest, he said.
It’s making an institutional play now. There’s going to be a mass fear of missing out, or ‘FOMO’, is going to jump to the institutional level. And they’ve got the big bucks and now we’re going to see big moves.
Keiser also used the recent hack of a big crypto exchange to illustrate that crypto markets are also stabilizing.
Going back to the Mt. Gox hack of 2014, that would crush the price. It’d take a couple of years to recover, Keiser said.
These things are happening now and the market is recovering within days, within hours. It shows maturity.
People are also starting to believe in crypto as more than just an investment. That’s why Keiser didn’t sell and why crypto will strengthen.
I’ve seen all kinds of markets over many, many years and so nothing changed why I would own [Bitcoin]. The fundamentals didn’t change, he said and concluded:
If you like it at $20,000, you like it at $4,000.