Bitcoin’s Heart Is in the Right Place

Our Co-founder and Managing Partner Antoni Trenchev joined CNBC anchors Hadley Gamble and Matthew Taylor to talk Bitcoin’s latest $61.8K all-time high, the subsequent dip, and a not-at-all-unlikely hike up to $100K by end of year.

Antoni’s interview with CNBC comes hot on the heels of Hadley Gamble’s talk about “bad-boyfriend Bitcoin” with Canadian businessman and Shark Tank co-host Kevin O’Leary, aka Mr. Wonderful, where he acknowledged that cryptocurrencies were here to stay after calling them “garbage” in 2019.

The important thing is that Bitcoin’s heart is in the right place.*

*Antoni in response to Hadley Gamble's "bad boyfriend" comparison. The conversation between the two and Mr Wonderful went on off-screen on her Twitter account, so join in.

Watch the full interview or read a brief summary below:

• Over time, BTC has outperformed any other asset and the current macroeconomic situation remains in Bitcoin’s favor, laying the ground for a continued upward trend.
• With Bitcoin recently reaching the $1 trillion market cap, the current BTC rally remains predominantly institutionally driven. This means Bitcoin could well reach $100K within the next 12 to 18 months.
• Using Bitcoin as a hedge against inflation is a growing trend as BTC challenges gold’s position as the go-to investment for such purposes.
• The current dip in BTC’s value is most likely due to leverage trading by retail investors, betting on people putting their stimulus checks into crypto.

With crypto on a roll and potential obstacles to its ascent swept aside by enthusiasm from both retail and institutional investors, it’s sure to be an interesting few months.

Transcript

Hadley Gamble (00:01)

Welcome back to Capital Connections. Well, here are some of the top stories we are watching for you right now. America's secretaries of State and Defense kick off a four-day Asia tour, meeting with counterparts in Japan today, as they look to affirm Washington's commitment to the region. And major countries in Europe have halted the use of AstraZeneca's COVID vaccine over safety fears. Plus Volkswagen is set to announce full-year earnings a day after an announcement that it would have an electric strategy. We are live in Europe in this hour.

Mattew Taylor (00:39)

Bitcoin price is taking a bit of a breather today. Let's give you a look at where we're sitting. 53,997. Remember the weekend we were sitting above that $61,000 level. Price is pulling back as investors digest a potential ban from India on the cryptocurrency. A year today, Bitcoin has risen nearly 100% and our next guest thinks that it could hit $100,000 by the end of this year. Hadley.

Hadley Gamble (01:08)

Well, Antoni Trenchev is the Co-founder of Nexo – a London-based crypto lender with over $5 billion of assets under management. It's great to have you on the program. I mean, I just want to kick off with getting you to walk us through the benefits of investing in Bitcoin at this point, because I tend to think of this as the bad boyfriend. It gets you extremely emotional. It's up, it's down. How do you play this?

Antoni Trenchev (01:30)

Hadley, the important thing is that Bitcoin's heart is in the right place. So, you know, there is always ups and downs in any relationship, but ultimately it's about horizons it's about time perspective and, on whatever long-term scale, you take a look at Bitcoin, it's outperforming any other asset, and I don't see any reason why these trends should discontinue at this stage. The macroeconomic environment remains, with the printing machines working around the clock, there's a fight for scarce assets and everything is in Bitcoin favor still.

Mattew Taylor (02:08)

There are a lot of investors out there that are saying that the price gains that we're seeing in Bitcoin are being driven by speculation. You think that it will hit $100,000 by the end of the year. Explain the rationale behind that call on Bitcoin, which is currently sitting at $53,000.

Antoni Trenchev (02:25)

I made a call for $50,000 when Bitcoin was trading around $6,000. My rationale back then was the macroeconomic environment and the fact that Bitcoin is a better version of gold. I made the case that if it captured only 10% of gold's total market cap, it will be at $50,000. I see it go to a $100K in the next 12 to 18 months for the simple reason that we are in the stage where this is still and predominantly an institutionally driven rally. We haven't yet seen the retail come as strong, which would be indicative of a top, and last but not least, Bitcoin has gotten to a stage where it's now an investable asset, because it has reached the $1 trillion threshold. And there are a lot of entities, institutions, pension funds that are not even allowed to invest in anything that has a market cap below $1 trillion. So a lot of new players are coming in taking the lead from Elon Musk, Мicrostrategy, and some of the guys that we have already seen entering crypto.

Mattew Taylor (03:30)

Right. We had a guest on the show a little bit earlier on who said that Bitcoin is not replacing gold as a hedge against inflation or rising interest rates. What do you think of that?

Antoni Trenchev (03:42)

I beg to differ. What we see at Nexo – we have our finger on what the pulse of the market – is rotation out of some of the ETFs that are following gold and inflows into Bitcoin. That's how we came to grow from a modest startup three years ago to an entity that now manages over $5 billion in assets. We do see that trend accelerating and you see that in the price section, you see that in the flows. Gold hasn't really moved that much since May last year, whereas Bitcoin has outperformed significantly.

Mattew Taylor (04:20)

So I'm suggesting that the decline that we're seeing today is on the back of a potential ban coming out of India. We're of course yet to still hear about the regulatory impact that the United States may put on Bitcoin as well. Could that be a headwind for the cryptocurrency going forward?

Antoni Trenchev (04:37)

Well, bans are as strong as countries are united. Unless we see a coordinated effort by the G20, where they all do the same thing, it's going to be just a drop in the sea. And quite frankly, India has been banning Bitcoin and mining and everything crypto-related every two months, so I don't think it's that big of a news. The correction that we're seeing right now, I think, was largely due to some leverage-trading over the weekend by some retail traders, betting on the notion that the stimulus checks that are starting to hit US households are going to make their way into Coinbase, and from there into crypto. But when a trade is too obvious, it usually turns out quite different. This has nothing to do with the long-term prospects of Bitcoin, which to me remain quite bullish.

Mattew Taylor (05:39)

Well, wait and see, Antoni Trenchev from Nexo, UK. Thank you very much for joining us.