Over the weekend, Bitcoin began to see rising market dominance, rising from the $7,400 price level to near $7,800 as of the time of writing, while altcoins stagnated, with many falling by two to three percent.
This surprising price action has led some to ask where it is going to go next.
As pointed out by Bob Pisani at CNBC, Bitcoin is now 30% higher than its yearly lows at around $5,750, leading some to think that it will continue to head higher, and may begin to approach 2017’s all-time highs later this year.
In a recent appearance on CNBC’s “Fast Money” segment, Brian Kelly, the CEO of the digital asset focused BKCM fund and CNBC’s in-house crypto analyst, gave multiple reasons why Bitcoin is beginning to look a lot more bullish.
Investors Await The Upcoming Verdict On The Bitcoin ETF
The Bitcoin ETF has become the talk of the town in the cryptocurrency community, with one of the world’s largest exchange holding firms recently resubmitting a request for an ETF to the SEC. The ETF proposal, which was filed on June the 26th, quickly gained support from many members of the cryptocurrency community.
While Brian Kelly didn’t think that the SEC would approve the ETF this time around, he noted that this hasn’t stopped the market from speculating, resulting in a “bottoming out” phase for Bitcoin off $5,750. He stated:
I think the chances of an ETF in 2018 are relatively low. There’s still quite a few things, but that doesn’t stop speculation on that. And that’s one reason why we’ve seen this bottoming process here from $5,800 all the way up here.
Institutions Are Starting To Pile Into The Industry
Next, the BKCM CEO pointed out that institutions from the legacy markets are starting to “get serious,” indicating that they see these price levels and the current state of the market as a good entry point. He noted:
Institutions are starting to get serious, I can tell you from the calls I’m getting. People that looked at it (cryptos) in December that didn’t like the price are coming back now and saying all right this thing is not going away. We need to understand what it is, where does this asset class fit into our portfolio.
He went on to point out that Coinbase has possibly secured the business of a $20 billion hedge fund for the Coinbase Custody service, which means that large institutional players are starting to get interested in this industry.
Additionally, as reported by Ethereum World News, a report from the blockchain-centric Grayscale Investments has shown that approximately 56% of all the capital they received in the first half of 2018 came from institutional investors, which amounted to over $125 million.
These figures go to show how there is a growing institutional sub-industry in what was a previously retail-dominated market.
Blockchain’s Role As “Web 3.0”
Highlighting the three ‘iterations’ of the internet, the CNBC crypto specialist first pointed out that Web 1.0 and 2.0 are coming to a close, with the web moving from a “database to a databank.” This now means that data can be monetized, with Kelly pointing out that cryptocurrencies will play a key role in this new era of Web 3.0.
He also notedthat cryptocurrencies make a great investment for institutional firms looking to get involved in Web 3.0, which means that adoption rates will only increase moving into the future.
Brian Kelly: The Headwinds For Bitcoin Are Gone Now
Kelly closed out his segment by stating that the headwinds which were previously present for Bitcoin have begun to disperse, with selling pressure beginning to alleviate off the shoulders of the market. He summed it up nicely with the following statement:
Five months ago we had some headwinds. Remember we had multiple different bouts of tax selling, we had Mt.Gox trustee selling. There were a lot of big sellers out there, (but) that appears to be over and so now you’ve had this positive news flow… sometimes it just takes the market a little bit to catch up, so here we are and I don’t think its done (yet).