In less than a week, Bitcoin has lost nearly 7% of its value, went back above $10,000 and then dropped back below $9,500. As such the entire crypto market has turned red, with altcoins hit much harder.
But according to Mark Yusko, CEO of Morgan Creek Capital, it doesn’t matter as his focus is on the long period of time. And if Bitcoin drops,
“you should buy it, buy it now, tomorrow. Stack your sats. Build that portfolio.”
Fundamentals continue to get stronger
During his interview with CNBC's “Fast Money” he explained why Bitcoin has been red hot in 2020 and will continue to move higher.
“The best thing about the bitcoin market is the fundamentals, the fundamentals continue to improve; adoption is growing, the number of wallets is up, the number of transactions is up.”
Overall, all the fundamentals continue to get stronger. And with the halving event coming up in May, things are going to be more interesting.
Halving basically compresses the bitcoin supply which means there won’t be as many rewards every ten minutes and every block. That will put some decrease pressure on the sales from the miners and prices usually adjust around those events, said Yusko.
We are seeing a lot of upward momentum this year, with BTC up 30% so far and in the second half, Yusko says we’ll probably,
“get to see a lot of chasing that we saw back in 2017, just like we are seeing the chasing in the stock market today.”
Bitcoin is designed to be the safe haven
With the supply getting cut in half again on the halving, the stock to flow model ratio will improve and be better than gold. Bitcoin will become the digital form of gold and a pure store of value, said Yusko.
On being questioned if that is the main-underpinning of bitcoin, he said today, its store of value. Bitcoin is not designed to be an exchange-traded token like Visa or Mastercard substitute, that’s for the Lightning Network which will make the case of that second order for payment level for speed.
The digital currency is the most secure and most powerful computer network in the world. It is designed to be the safe haven that we use as part of the diverse portfolio, said the hedge fund veteran.
Lower interest rates “massively bullish” for bitcoin
Talking about the macro factors’ effects on the digital asset, he shared that the interest rates that are going lower across the globe are “massively bullish” for bitcoin
“In the world of rouge central bankers, bitcoin is king. Interest rates around the world are all going to zero, all of them, US rates are going to zero, China's rates are going to zero. They all are going to zero.”
Yusko explains that it is because of the demographics, deflation, and too much debt. And in today’s environment, that’s the only choice.
“You can't pay the debt, can’t default the debt, they gotta be inflated away by devaluing your currency, the central banks are gonna print and that's massively bullish for bitcoin.”
The fiat currency crisis is bullish for bitcoin, according to him as it is an opt-out from the fiat fiasco.