Fund manager Brian Kelly says that the market is mispricing bitcoin and â€œwhen bitcoin gets that mispriced it is the sign of the bottom.â€ He sees a string of â€œall positive thingsâ€ that are reflected in the pricing of the cryptocurrency.
Asset Manager Brian Kelly Says Market Is Mispricing Bitcoin
Brian Kelly, the founder and CEO of digital currency investment firm BKCM LLC, was asked about where he sees the price of bitcoin heading in an interview with CNBC on Tuesday.
Kelly manages the BKCM Digital Asset Fund and the REX BKCM Blockchain ETF (NYSE: BKC). He authored â€œThe Bitcoin Big Bang â€“ How Alternative Currencies Are About to Change the World.â€ In addition, he was previously a hedge fund manager at Shelter Harbor Capital, where he co-founded. He also co-founded MKM Partners, a brokerage firm catering to institutional investment managers.
â€œFor me, when you look at bitcoin, itâ€™s all about network effect and address growth,â€ the asset manager said. â€œOne of the key metrics I look at when managing crypto money is how fast addresses are growing versus what the market is expecting the addresses to grow.â€
Referencing his chart, he explained: â€œAddress growth is basically flat but the market is applying we are going to have a decline of 20% in address growth. We havenâ€™t seen that type of differential since March 2020.â€ Kelly elaborated:
He continued: â€œSo we look back to March 2020 when we had a massive divergence when bitcoin was $3,500 and it roared to $60,000. We are looking at the exact same type of situation where it looks like bitcoin is trying to bottom.â€
As for his fundâ€™s investment, he disclosed that he â€œpersonally added to our fund this month because I think itâ€™s that big of an opportunity. In the fund, we are long and getting longer.â€
The fund manager then opined, â€œNow what I would like to see, obviously, bitcoin is very momentum driven, so now we need to see more price follow through here and get that momentum going,â€ emphasizing:
He reiterated, â€œThose are all positive things for me and that to me is reflected in that pricing.â€
Kelly was then asked about how low the price of bitcoin could fall to and whether $30K was the bottom. â€œI donâ€™t know if $30,000 was the low,â€ he admitted. â€œI have pretty high conviction that it was.â€ However, he noted that â€œBitcoin has a funny way of making you look silly.â€ He affirmed: â€œIf it got down to $20,000, I would be buying with both of my diamond hands for sure.â€
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