CNBC contributor Brian Kelly says Bitcoin’s imminent halving is likely to once again trigger a significant rally for the top cryptocurrency.
On a new episode of Fast Money, the founder and chief executive of crypto investment firm BKCM says Bitcoin’s monetary supply stands in stark contrast to the widespread push to prop up the global economy by printing money.
“What people should know is, as the whole world is quantitative easing, Bitcoin’s about to be quantitative hardening. So the software is going to cut the daily supply. It doesn’t mean that the price of Bitcoin is being cut in half. It just means that the daily supply is being cut in half. You might want to think about it like oil, where all of a sudden [in] 11 days, half the oil rigs are turned off, and therefore that supply gets reduced. In the past, this has been a catalyst for very big run-ups.
We’ve had a tremendous run-up coming into this. It’s got some wood to chop around $9,000. But I think in the medium to long term, you now have an asset that’s going to be more scarce than gold based on the stock-to-flow ratio, in an environment where the entire world is printing money.”
Despite his optimism in the long run, Kelley warns that when the actual halving occurs on May 12th, a short-term sell-off could be in the cards.
“It very well may be [a sell the news event]. We’ve had quite a run-up. If you look at the last two [halvings], it took about 30 to 60 days for this really to filter through the market.
Remember, this is how the miners make their money – by those Bitcoin rewards. So some of the weaker miners might actually have to sell out. But 30 to 60 days from now, we could see a nice run-up again.”
— CNBC's Fast Money (@CNBCFastMoney) May 1, 2020