Bitcoin has to get over what Elon Musk says to become a global currency, a digital asset investment chief says
- The whole point of bitcoin is that no one person should be able to influence its price.
- It can't be swayed by billionaire Elon Musk if it is to become a global currency, Brian Kelly said.
- The dramatic sell-off in bitcoin is a good buying opportunity, according to him.
Elon Musk's bitcoin retreat over its energy consumption moved the market, but the digital asset will have to move on from what he says if it is to become a global currency, according to Brian Kelly, founder and CEO of BKCM Digital Asset Management.
"The entire point of the creator, Satoshi Nakamoto, getting out of the way is that there would be no single person that has control over it - either the protocol, the code, or the price," Kelly told CNBC's "Closing Bell" on Wednesday.
"Now we have Elon Musk, who voiced some concerns. It did move the market, but bitcoin has to get over it in the long run if it is going to fulfill that promise of becoming a global currency. I happen to think that it will," he added.
He said a price correction has taken place multiple times across several cycles, and each time, bitcoin has rebounded more strongly.
Bitcoin was last trading 8% higher at $39,423 on Thursday, after falling to as little as $30,016 the previous day. It is up 38% so far this year. Other coins were still struggling to regain some stability after the rout the day before. Ethereum's ether fell 10% to $2,632 and meme-crypto dogecoin fell 14% to 35 cents.
Kelly said the theory that bitcoin is a hedge against inflation and institutional adoption now playing into the crypto market in a big way is still driving the market. "None of those things over the last 24 hours have changed at all," he said. "So I have to say, 'no, my thesis isn't broken.' This is just a mechanical sell off that got exacerbated."
The fact that financial institutions, hedge funds, and more high-net worth investors are getting involved has legitimized the industry and relieved some concern among market players over crypto's long-term viability. But its volatility this week has eroded confidence in the asset class as a whole, as illustrated by a "fear and greed" indicator signaling extreme nervousness among investors.
Still, the dramatic sell-off in bitcoin is a good buying opportunity based on technical analysis and fundamentals, Kelly said.