Brian Kelly, founder and CEO of crypto hedge fund BKCM LLC, said in an interview on CNBC's Fast Money yesterday — the day that Bitcoin’s price reached nearly $10,000 — that he can see three major catalysts that will push the price even higher: Goldman Sachs’ entry into the market; regulatory clarity; and New York City’s upcoming “Blockchain Week.” Let us take a look at each of these in turn.
Goldman Sachs’ Entry Into the Market
Last year, on 30 Nov 2017, Goldman Sachs CEO Lloyd Blanfein, in an interview with Bloomberg, called Bitcoin (BTC) “a vehicle to perpetrate fraud”. However, earlier this week, Goldman Sachs, one of the most respected Wall Street banks, finally overcame its skepticism towards Bitcoin enough to confirm to the New York Times that the rumors about its plans to open what will probably be the first crypto trading desk on Wall Street.
Initially, Goldman wil be offering its clients who want exposure to Bitcoin various types of futures contracts (such as non-deliverable forwards), but the bank is also considering buying/selling actual bitcoins if it can get regulatory approval. One of the Goldman executives in charge of supervising the creation of this new trading operation, Rana Yared, explained that the bank had concluded that Bitcoin was not a fraud, and that Goldman was entering the BItcoin market due to the demand from clients who see Bitcoin “as an alternate store of value.”
Kelly found Goldman’s entry into the market significant. Here is how he explained it:
The last time Goldman made a big move into into the cryptocurrency space was when they bought into Circle Financial… Bitcoin was at $200 at that point in time… So Goldman is definitely the leader among the institutions in the space… So that's one catalyst we have.
Regulatory Clarity
Next, Kelly moved to what he conidered the second catalyst: regulatory clarity. Here is he how he put it:
We could get some regulatory clarity. And the one thing that is interesting is [that] Bitcoin is clearly a currency. Everybody that I have talked to is thinking about Bitcoin as a currency, not a security.
This makes sense given that on 26 April 2018, Jay Clayton, Chairman of the U.S. Securities and Exchange Commission (SEC), while speaking before the U.S. House of Representatives Committee on Appropriations, stated that Bitcoin was not a “security”:
It’s a complicated area. Because, as you said, there are different types of cryptoassets. Let me try and divide them into two areas. A pure medium of exchange, the one that’s most often cited, is Bitcoin. As a replacement for currency, that has been determined by most people to not be a security… Then there are tokens, which are used to finance projects. I’ve been on the record saying there are very few, there’s none that I’ve seen, tokens that aren’t securities… To the extent something is a security, we should regulate it as a security, and our securities regulations are disclosure-based, and people should follow those and provide the information that we require.
New York City’s ‘Blockchain Week’
Finally, Kelly moved to the third catalyst: “The big event of the year is ‘Blockchain Week’ in New York… And essentially everybody from the world will be descending upon New York to talk about cryptocurrencies.”
New York City's first ever “Blockchain Week”, which is being jointly organized by CoinDesk and New York City Economic Development Corporation (NYCEDC), runs from May 11th through to May 17th. The idea is to showcase New York City as one of the major blockchain capitals of the world. The highlight of the week will be the Consensus 2018 Conference, which is being held 14-16 May.
Feature Image Credit: “Bitcoin” by “Hektor Ehring Jeppesen” via Flickr; licensed under “CC BY 2.0” Image credit: BitCongress
