There are a lot of bullish cases being thrown out here and there. And yes this is another one where Brian Kelly talks about bitcoin and how it is undervalued. He goes on to say that bitcoin is near the bottom and it is 50% undervalued at the moment meaning we should be back to 6k. I do agree with him and think 8-10k is where we are heading this year.
But the reason I wanted to write about this article is there is an interesting part talking about bitcoin as a store as value. A lot of people argue that is not true because of how volatile it is. But Mr. Kelly takes a different approach. He thinks it is a great store of value not because of the lack of volatility but because it is not tied to anything that effects the traditional markets. This is an asset class completely removed from the things that effect the market and thus is a great place to invest when there is trouble in the markets. And the fact that it is volatile makes it better as people make money in it when a recession hits.
There are two ways to look at it. Bitcoin might be a risk asset and will be the first to lose value when markets go down (as risk is the first to be sold) or it is something new that is completely separate from the market. I think it will depend on how people see it. Psychology is always a big factor in investing. And if we start to see markets go down and bitcoin go up I can see a lot of investors going to it to hedge their bets.
What do you think? Does crypto stand completely separate from the market.
Here is the link if you want to read the full article:
https://cointelegraph.com/news/interview-with-crypto-optimist-brian-kelly-bitcoin-is-still-50-percent-undervalued
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