Bart Smith, a crypto analyst and the Head of Digital Assets at financial services firm, Susquehanna, has said that even though there are quite a few factors that contributed to the recent Bitcoin price rally, the asset is still significantly speculative.
Speaking during an interview on CNBC’s Squawk Box, Smith discussed a few issues surrounding the world’s largest cryptocurrency.
On Why Bitcoin Surged
According to Smith, there are a few reasons why Bitcoin was able to shoot as high as it did and these reasons are considerably interconnected.
A factor which has been corroborated quite a few times by some leading industry analysts is the ongoing trade war currently being fought between the United States and China. It is said that people began predicting that the Yuan will be negatively affected and decided to shift base to Bitcoin. This shift, among other things, caused Bitcoin to rise.
Smith also believes that the recently held Consensus conference might also be a factor to be considered with Bitcoin’s surge. According to him, all the publicity, promotion and advertising done in anticipation of the conference did a lot to keep Bitcoin and crypto in general, on the lips of many people. This, unsurprisingly, may also have helped the coin to shoot up as press was quite favourable.
There is also the news that Fidelity Investment, a key asset management firm, is also making serious plans to begin Bitcoin trading very soon. Reports have it that when it begins, the firm will allow financial institutions exclusively and will not allow individual clients just yet.
The decision made by Fidelity could be a direct action from a recently concluded survey where the firm found that about half of all institutions view cryptocurrency as a viable financial invention to be used sometime in the future.
On Bitcoin’s Volatility
It has been said times without number, that the fact that Bitcoin is very unstable and volatile would affect its future as a widely accepted form of payment. This opinion has been supported by the Congressional Research Service (CRS) as well Richard Fisher, a contributor for CNBC.
Smith however defended the asset without completely dismissing its volatility, arguing that the market still has a lot of room to develop and possibly grow out of it high volatility. According to him:
“People who are bearish on that would say it’s too volatile. I would argue that it’s kind of in a nascent phase and if a broader adoption occurred, the volatility would damper.”
Smith also believes that the recent Bitcoin surge and its generally impressive trajectory that has been upheld so far this year, will definitely help its chances as the atmosphere is generally a bullish one. Smith explained this by pointing out that
“there is a lot of optimism from people within the Bitcoin community over the things that happened in recent months. And I think that is reflective in the price.”
Bitcoin, according to most analysts and experts is still expected to rise and do better numbers. Many people are looking forward to the Bitcoin halving that is expected to happen in May next year, as a major push for a price surge.