CNBC’s Brian Kelly Doesn’t Like Fast Money’s Mock ‘Bitcoin Funeral’ and Explains Why He Is Still Bullish on Bitcoin

Siamak Masnavi

On Friday (22 June 2018), Melissa Lee, the host of CNBC's Fast Money show, whilst wearing a somber black dress, said during one segment that Bitcoin's price dropping to around $6,000 had made them pause and wonder if the show should still be covering Bitcoin:

"Should we continue to cover Bitcoin? And the answer, sadly, is no. So today we are having a funeral for Bitcoin."

She then proceeded to hold a mock funeral for Bitcoin and started her eulogy during which she used a set of screen captures from previous episodes where various people, including one of the show's own hosts, hedge fund manager Brian Kelly, had made quite bullish predictions about Bitcoin. However, before she could the last sentence of her eulogy, her colleague Brian Kelly could not contain himself any longer and interrupted her:

"Hold on! Hold on! Hold on! I mean, listen, I've got a couple of things I want to say here. This is not the funeral for Bitcoin whatsoever."

Kelly explained that there were three reason why believed in a  "Bitcoin Resurrection":

  • Negative sentiment seems to be approaching new lows, which if you believe in contrarian indicators, might suggest that this might be a good to buy Bitcoin. Or as legendary U.S. investor Warren Buffett once said: "As an investor, it is wise to be fearful when others are greedy and greedy when others are fearful.”
  • Japan's financial regulator, the Financial Services Agency (FSA), slapping six Japanese crypto exchanges with business improvement orders (with regard to preventing money laundering) was a good thing because whilst it would create some short term pain (in that some people would not be able to open new accounts under the new guidelines), in the long term, better run, more robust exchanges there would boost investor confidence and help the overall crypto market.
  • The Tokyo District Court halting Mt. Gox's bankruptcy proceedings and starting a civil rehabilitation process would mean that creditors would be repaid from Mt. Gox's remaining assets (around 170,000 Bitcoin, worth at $1 billion at current prices), but in Bitcoin (and not Japanese Yen) -- which should mean much fewer large Bitcoin sell-offs -- and the creditors being repaid early to mid 2019 gives the Bitcoin market a chance to breath.

He continued to say that although Bitcoin's price has dropped by around 70% since its all time high in December 2017, this kind of correction was not so unusual for Bitcoin, and that people should remember where Bitcoin's price was a year ago: $2500.

 

Featured Image Credit: Photo by "David McBee" via Pexels; licensed under "CC0"

Morgan Creek Digital's Anthony Pompliano Explains Why He Is So Bullish on Bitcoin

Siamak Masnavi

On Tuesday (February 25), Anthony Pompliano (aka "Pomp"), a co-founder of crypto-focused asset management firm Morgan Creek Digital Assets, gave an interview -- to CNN's Julia Chatterley -- during which he extolled the virtues of Bitcoin.

Pomp focused on two main aspects of Bitcoin:

1. Bitcoin's Proof-of-Work (PoW) Consensus Mechanism and Its Energy Costs

He told Chatterley that Bitcoin is "the most seure computing network" in the world, and "it is going to take electricity or power consumption in order to power that security."

However, he said we don't need to get too alarmed by this since Bitcoin miners are "financially incentivized" to "find the cheapest power sources" because "that's how they make money."

Then, he pointed out that the cheapest form of energy is renewable energy, and so that is what they will try to use to power their mining hardware. In fact, he said that based on the studies he has seen, 60 to 80 percent of the energy being used is renewable.

2. Bitcoin's Store of Value Use Case 

"I think that store of value is really important. You have to have store value before you can have medium of exchange. 

"The store of value comes down to two things. One is security -- it can't disappear, it can't be hacked, etc.; and Bitcoin being the most secure computing network in the world, it is very secure...

"When it comes to price, what you want to see is, over long periods of time, either you're preserving your wealth, so the price stays flat, or it continues to increase.

"The monetary policy of Bitcoin relies on one thing: supply and demand economics -- artificially capped supply, demand increases, price will go up in U.S. dollar terms. And so, again, if you zoom out, over last decade, it's the best performing asset, over the last 12 months, up 150%, in the last you know what six weeks or so, it's up 30% or so.

"It's continuing to do exactly what it's kind of built to do. Now, there's high volatility on an intraday basis... but again people who put their wealth... in Bitcoin have been rewarded very well with this store of wealth thesis. And so we tend to think that the non-correlation with traditional assets will continue to be a valuable kind of aspect of Bitcoin."

Other Bitcoin-Related Topics

Pomp also responded to legendary billionaire investor Warren Buffett's most recent criticisms of Bitcoin by saying that although Buffett is "one of the best investors of all time," when it comes to technology, there are "better people to listen to." 

Finally, with regard to central bank digital currencies (CBDCs), here is what he had to say:

"These central back digital currencies are all coming, and really what I think people need to understand is all of the central back digital currencies are simply taking the existing monetary policy and changing the technology form factor.

"What Bitcoin does is it actually is a different monetary policy. It's not a fiat inflationary type model, and so ultimately we're going to have as a competition of currencies, but it's not going to be a competition on technology...

"We're going to have a competition of monetary policy... We believe that the Bitcoin monetary policy is superior to central bank monetary policies, and ultimately Bitcoin will be the winner, and will be the next global reserve currency."