Bitcoin market is ‘a little different now,’ Blockstream CEO says

00:00 Speaker A

So this year has certainly been an interesting one for Bitcoin and cryptocurrency more generally. But it may be somewhat surprising that we ended the year with big gains, given that we’re reaching new milestones in corporate adoption and new types of regulatory and legislative support. So how do you think about this as we close out the year with this kind of support?

00:27 Speaker B

Yes, I think Bitcoin is generally short-term volatile and there is no difference here. I think the market is a little different now. There are more institutional buyers who are slow and steady buyers. So there is a cycle like this

00:46 Speaker B

As you know, Bitcoin goes through bull market and bear market phases. I think there’s some speculation that that might be the case, but there were some structural issues that led to the sell-off, you know, some currency issues and macro news and high leverage, basically. So, we’re already 15% off the low we had a few weeks ago.

01:10 Speaker B

For example, JP Morgan wants $170,000 in the next 6 to 12 months. Stratefor’s Tom Lee is asking for $200,000 over a similar time frame. And I think there are a lot of corporate acquisitions, so far in the very early stages.

01:26 Speaker A

I mean, some of these people were asking for these kinds of price targets for the end of this year, and we didn’t quite get there. But would you generally agree with such figures that you see and hear?

01:38 Speaker B

I think timing is pretty hard to predict, but I guess people have short memories too, right? Remember last cycle, we hit a peak of 69,000, around that time, you know, about 40% of the cycle, and people thought that was the peak, but it hit a higher peak much later in the cycle, right? So, I think the timing is overly focused on the cycle.

02:01 Speaker B

So, if people go away and think the timing is less accurate and there are different buyers, you know, ETF buyers are pretty sticky. They are very long term investors. The Swiss National Bank is buying the Micro strategy, some of the sovereign wealth funds in Abu Dhabi are buying Bitcoin, some pension funds are buying Bitcoin, and as you know, some banks and investment companies like Fidelity are calling for allocations between 1 and 5%.

02:26 Speaker B

Bank of America from 2nd to 4th and Blackrock from 1st to 3rd. They were the first to introduce the model price target as a portfolio allocation model. I think these are very interesting. They create comfort and support within the investor community. But these things take time to be effective, right? Because, as you know, banks need to go through training programs and get information from their sales staff. So I think this will continue over the next few years.