Brian Kelly, the host of CNBC Fast Money, assessed the value of Bitcoin (BTC) after the recent drastic sell-off. He indicated that the reasons for investing in Bitcoin have remained intact, despite this week’s dramatic price drop.
He called the Bitcoin crash, which caused the royal coin to drop from about $ 45,000 to just over $ 30,000 within hours, a “mechanical sell-off.” However, Kelly remains optimistic about BTC’s overall trajectory, indicating that he is a buyer:
“On days like today, I always ask myself," Is my thesis broken? "And what drives this Bitcoin market for me is institutional acceptance and a hedge against currency devaluation. So I have to say no, my vision is not broken. This is just a mechanical sale that has been exacerbated and I want to become a buyer. ”
According to Kelly, the Bitcoin crash was largely due to a deluge of liquidations in the options market and the resulting high volumes on some exchanges, overloading them. He said the following:
“Most of this sell-off was mainly due to margin calls and liquidations. And the stock markets couldn't handle the volume - they effectively stopped trading and it just went down. ”
Kelly also suggested that China’s move to ban financial institutions from offering crypto-related services, a move that preceded the Bitcoin price crash, is prompted by the world’s most populous country’s plans to successfully withdraw the digital renminbi (RMB) guarantee:
“What China has actually done is probably more based on the fact that they are launching their digital currency from the central bank (CBDC), the digital RMB. And so they wanted to make sure that no one was going to use alternatives, that everyone was going to use the digital RMB. Once they have the digital RMB, there is no reason why they shouldn't be able to turn these things back on. It just so happens that the disaster in it will then be the digital RMB, as opposed to something like Tether (USDT). ”