Brian Kelly, a highly regarded CNBC analyst and founder of cryptocurrency-focused hedge fund BKCM, laid out three major reasons to invest in bitcoin in the short-term.
On CNBC’s Fast Money, Kelly emphasized that the vast majority of analysts, researchers, investors, and businesses in both the technology and financial sectors strongly believe that bitcoin will “Amazon” the banks in the upcoming years. Essentially, Kelly explained that as Amazon rendered the existence of traditional retailers useless, the adoption of bitcoin will lead to the decline of banks and the entire financial industry.
“Bitcoin is going to ‘Amazon’ the banks. Bitcoin is is a way to remove the third party from financial services. Just like Amazon to retail. Amazon comes in and they go direct to consumers. [This is going to be] the ‘bitcoining’ of the banks,” said Kelly.
Depth of the Bitcoin Market and Rapidly Increasing Liquidity
According to Kelly, investors are highly optimistic in the depth of the bitcoin market and the increasing liquidity exchanges, trading platforms, and recently, regulated markets have given to bitcoin users, traders, and investors.
In consideration of the magnitude of the financial market and the trillions of dollars banks move across the globe on a daily basis, Kelly emphasized that bitcoin is able to target a “massively addressable” market and potentially penetrate the market in the long-term.
“I was like to look at how big is the market. This [bitcoin] is a massive addressable market. By [JPMorgan CEO] Jamie Dimon’s own admission, he moves $7 trillion around the world every day. There is a lot more than that out there and bitcoin has only a $100 billion market cap right now. The upside on this is 10x or more,” said Dimon.
At the current stage of development, bitcoin evidently cannot handle a $7 trillion daily transaction volume given its block size limit. But, like any technology, as bitcoin continues to scale with innovative solutions and robust software, in the long run, it will be able to penetrate the traditional financial market and operate as the global digital currency, facilitating the transfer of payments internationally.
Rapid Increase in Demand From Consumers
Lastly, Kelly referred to the exponential increase in unique bitcoin addresses to demonstrate the rapid increase in demand for bitcoin from general consumers.
“This [unique bitcoin addresses] is akin to bank accounts. On the Bitcoin network, when you have an address, that’s like your bank account. [The number of unique bitcoin addresses] is still increasing at an exponential rate. Now, I have a product that people want, in a market that is massive, and there is a disruptive technology going on. Those are three elements of any investment that I want. And bitcoin to me at a $100 billion market cap is so low relative to where it could be.”
Currently, bitcoin is at an optimal position to grow and surge in value. The demand from general consumers is increasing rapidly continuously, it is disrupting the financial market, and the technology behind bitcoin is scaling proportionally.