On Thursday (January 10th), following the drop in Bitcoin's price below the $4,000 level, Bloomberg TV's "Bloomberg Technology" show featured a segment called "The Future of Bitcoin After a Sudden Tumble."
During the discussion that took place in this segment between the host Emily Chang, Bloomberg Opinion columnist Stephen Gandel, and BitPay Chief Commercial Officer (CCO) Sonny Singh, Singh made various interesting remarks about Bitcoin that we felt were worth highlighting.
Chang: How bullish still are you?
Singh: "Yeah, I'm still long term bullish. All the leading indicators, as far as new companies going into this space, new tech people going into this space, businesses are still moving a long... I think you're going to see a lot of bad businesses go out of business, though, that built their business around having a [Bitcoin] price at $10,000."
Chang: But you are talking about an $800 billion market that has lost $700 billion in a year.
Singh: "... You are seeing traditional incumbents like Fidelity [and] Goldman Sachs still launching their products. You just don't know when it's going to happen. Bakkt got delayed again. That could take a couple of more months. Nothing movies in FinTech with the regulators, yet the regulators are making this an asset class that's going to be traded around the world."
Gandel: Now that Bitcoin's has dropped by 80%, shouldn't we say that Bitcoin is only worth $4,000 or less?
Singh: "Yes. So, I think everything built in the last year was a little overvalued, overhyped, and yet usage is starting to catch up a little bit, but again new products are launching and again last year was a total anomaly, and I think you're going to see how these new products launch and what happens. When institutional buyers can actually buy these products in a big way, then I think you see demand start coming back."
Chang: How can you say last year was an anomaly when this market has only been around a few years?
Singh: "Well, anything that goes up 20X in one year is a pretty big anomaly. That's why it came back down. And it went up not based on fundamentals, [but] on a lot of hype. Everyone thought banks were using blockchain... And it turns out not a lot of this is happening yet. It still is far down the road actually. When these new exchanges launch, when tZERO launches, things will start moving in the right direction, but it takes time."
Gandel: A lot of Bitcoin's usage was for illegal goods. That usage is going away, and Bitcoin hasn't transitioned into a currency for legitimate transactions.
Singh: "The illegal usage went away a couple of years ago, and for the last three or four years people were always unsure about regulations."
Chang: What regulatory action are you expecting this year?
Singh: "Three or four years ago, we weren't sure if government was going to make Bitcoin illegal. We are pretty sure now that Bitcoin is legal in America and they are just regulating it in a way that can be traded properly on exchanges. That was never talked about two or three years ago. That was a big progress that we've made. So, is Bitcoin a safe haven? That is a different story, but at least now Bitcoin is going to be traded in a regular way that institutions can trade properly that they wouldn't have been able to do two years ago. That's a big win when this happens."
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