During a recent interview with CNBC anchor Brian Sullivan, Mark Yusko, the Founder, CEO and Chief Investment Officer of Morgan Creek Capital Management, talked about why Bitcoin is performing so well and why it should continue to do well in the future.
When he was asked why this year we have seen a surge in interest in Bitcoin, Yusko replied:
“We have the perfect storm for why Bitcoin is doing so well, and why it will continue to do so well. We have aging demographics in the Western world, we have massive debt, massive personal debt, massive corporate debt, massive government debt, and it’s getting worse with all the impact of Covid…
“The response from central banks is to print money, and when you print more of something, what happens to its value? It goes down.
“So Bitcoin is one of the only sound moneys on the planet. You have [gold], silver, and now you have digital gold: Bitcoin. So when a scarce asset is compared to a not scarce asset, we have what we call the ‘fiat fiasco’. And it’s been going on really since the 70s, and if you look at the value of money, it’s continued to be destroyed by the creation of it.
“And Bitcoin does the opposite. We know how much Bitcoin is going to be created every day for the next 140 years, and it’s controlled by math, not by individuals.”
Sullivan then asked if Bitcoin can really be considered a currency since its price is so volatile. Yusko answered:
“It’s programmable money. And when money is young, money is very volatile. Think about when the dollar was first used… It had wild swings because people didn’t know what it was. The dollar has only been around since the 1700s. It’s a very young currency. And currencies over time have been spectacularly volatile…
“In these early days, when people think of it as a commodity, and people think of it as a scarce asset, it’s going to have more volatility, but over time we’ll see that it becomes digital money.”
Next, Sullivan asked what would happen to Bitcoin once its maximum supply (i.e. 21 million BTC) has been mined; would it then be priced as a rare collectible?
“The best-performing asset over the last decade is not stocks; it’s not even Bitcoin… It’s actually collectible Porches because there’s only three guys in the world that buy them: Jerry Seinfeld, Jay Leno, and [former Microsoft President and COO] Jon Shirley. When there’s limited supply… and rising demand, prices rise. So, the price will continue to rise for Bitcoin forever.”