With volatility additionally spurred by Elon Musk’s recent disclosures and China’s crypto ban, our Co-founder and Managing Partner Antoni Trenchev joined CNBC hosts Matthew Taylor and Dan Murphy today to discuss the current market dip, making the case for digital assets’ long-term potential.
Although the temporary plunge in prices has tensions high among institutional and retail investors alike, Antoni confidently reiterated that this latest correction will not stop Bitcoin and crypto’s ongoing, institutionally-driven bull cycle from progressing, and neither will it affect sustainable businesses like Nexo.
As we wait for the market to stabilize, we urge you to closely monitor your assets, whether they be held with Nexo or elsewhere, and to check out Antoni’s commentary on this week’s market decline and the all-too-likely bounceback to help guide your investment strategy.
Some highlights of today’s interview:
Every bull run in crypto has seen 5-7 declines of 30% or more. This bull cycle is no exception and in the long term, crypto will continue to thrive.
Bitcoin is still set to hit $100K in the next 12 to 18 months.
Crypto is bigger than any one individual and that includes the world’s richest men, such as Elon Musk.
Unsurprisingly, China banning financial institutions from offering crypto services had an adverse effect on the already dropping market.
At Nexo, we have seen a lot of our clients rolling out of Bitcoin and into Ethereum. With the run-up Bitcoin had, it is now time for some of the other currencies to shine.
With crypto, you have to take the long-term view because, on the one-, five-, ten-year scale, it tends to outperform just about any asset.
On May 24, Antoni and Bloomberg’s Joanna Ossinger will elaborate on the above topics within an institutional context in a one-on-one session on Bitcoin and Corporate Treasury Management at CoinDesk’s Consensus 2021.
Looking ahead into the long-term potential of assets is at the core of Nexo’s success and the inherent antifragility of our business and the blockchain space. We therefore remain as certain as ever, translating this confidence into the Earn and Borrow services that we continue to provide our clients, regardless of the market’s twists and turns.
We trust you will continue investing with us as we glide over this bump in the crypto road.
Let’s get talking crypto now and bring in Antoni Trenchev, he’s Co-founder of Nexo. Antoni, so good to have you on this morning. Thanks again for joining us. So you heard Sam outlining the latest from China, the PBOC saying these digital assets cannot be used as a form of payment. But [there are] no real surprises there, given the fact that China is also pushing ahead with the digital yuan – just your reaction to the price of Bitcoin this morning, which is now tracking at its lowest levels since about February as a result.
Well, I miss the world of yesterday where we could all blame it on Elon Musk, it was a much simpler time. And now we have China, yet again, banning something crypto-related. They do this every three months, so I don’t know whether that has any sway over the markets. And frankly, they’re pushing their own agenda, they now have their own government centrally issued cryptocurrency, so it’s obvious they are going to be trashing and pushing down other cryptocurrencies. No surprises here.
Ok, so explain to me why we’ve seen such a downward drift since Tesla announced you can no longer buy cars using Bitcoin. Obviously, there’s something else going on as well here, right?
Yeah, well, quite frankly, I don’t think anyone was lining up to buy Teslas with Bitcoin. A total number of seven people perhaps, but that’s why you have services such as Nexo where you can borrow against your crypto, keep the upside potential of your digital assets – whether it’s Bitcoin or something else – and buy the Tesla you want. So it’s another in a long line of back-and-forths within Elon Musk’s own narratives. And, quite frankly, Grimes, if you’re watching, please take this guy off Twitter. X Æ A-12, please take your dad’s phone away so that we can live in a simpler world.
Right, that’s going to bring me to my next question. You’ve been publicly on the record saying that Elon Musk needs to wake up to the reality that with his following, even single-worded tweet can move the market. How difficult then has the crypto space been given all of the tweets and commentary that have been coming out from Elon Musk?
Well, quite frankly, crypto is bigger than any one individual and that includes the world’s richest or second richest man, depending on what Tesla stock is doing. And, every bull run within crypto has seen 5-7 declines in excess of 30%. So this bull cycle is no exception to that. And a curious thing we’re seeing on the Nexo platform: Actually a lot of people are rotating out of Bitcoin and into Ethereum and you can see that in the price action – Ethereum is dramatically outperforming Bitcoin these past few months. So I think with the run-up we had in Bitcoin, now it’s time for some of the other smaller guys to perform rather well. So I don’t think that the bull run in crypto is over just yet.
Ok, we’ll ask you on your call on that in a moment. But going back to the issue around China, if crypto is to become mainstream, doesn’t China need to be part of that given that it’s the second-largest economy in the world?
Well, obviously, it’s better to have China on board whether it’s climate change, cryptocurrency adoption, you know, fighting the ill-actors of this world, it’s obviously better to have them on board. But as I mentioned, they now have their own cryptocurrency, so they are pushing their own agenda. To bring down crypto, there needs to be a coordinated action by the G20 countries and I don’t think this is happening quite yet. Obviously, it’s better for adoption if everybody is on board, but, you know, everybody has got their own agenda.
Antoni, nevertheless, all of this is really underscoring how regulation is still a major risk for this asset class, but I digress. I wanted to ask you about your price call. Last time you were on CNBC you said it’s inevitable that Bitcoin reaches $100,000 in the next 12 to 18 months. Are you holding onto that call now?
Well, I am. Long term, I do think that crypto is going to continue to outperform. It’s just the macroeconomic environment as such is in favor of Bitcoin. But I also said that if we cannot convincingly break out of the $65K level, we could revisit the $40Ks of $30Ks of Bitcoin and that wouldn’t have a bearing on the overall bull run. As I said, these are corrections that are normal in any bull market so it is a matter of the right time horizon. And with crypto, you gotta take the long-term view because, in the one-, five-, ten-year scale, crypto tends to outperform just about any asset.
Antoni, we have to leave it there. Thank you very much as always for your insights. Antoni Trenchev from Nexo joining us there.