Bitcoin’s latest surge past $10,000 hasn’t gone unnoticed; retail investors are once again talking crypto, trends for search terms like “Bitcoin” have started to tick higher, and mainstream media outlets are once again covering this nascent industry.
On Tuesday, for instance, CNBC’s “Fast Money” show, long known for covering developments in the cryptocurrency and blockchain space, talked about Bitcoin’s latest rally higher.
Interestingly, the anchors of “Fast Money” were quite bullish, referencing a number of fundamental factors that have driven BTC higher and will likely continue to thrust this nascent market higher in the future.
Why is Bitcoin Surging Higher? CNBC “Fast Money” Panel Weighs In
Anchor Timothy Seymour, CIO of Seymour Asset Management, argued that Bitcoin’s recent uptrend is a result of developments in institutional involvement in the cryptocurrency space, likely referencing the forays into this industry by Fidelity Investments, the Intercontinental Exchange, TD Ameritrade, and other players in traditional finance that validates digital assets.
Not to mention, actual central banks have started to dabble in digital currency and blockchain, further validating Bitcoin.
Seymour then discussed how “money has become freer than free,” referencing the attempts by central banks around the world to drop policy interest rates lower and lower, injecting liquidity into the economy as investors seek investments with higher yields than zero. The investor said that as central banks do this, gold gains steam and, thus, Bitcoin should too.
"In a world where central bankers are tripping over themselves to devalue their currency, Bitcoin wins. In a world of fiat currencies, Bitcoin is the victor."
— Pomp 🌪 (@APompliano) February 12, 2020
Another anchor on the panel agreed with this sentiment, saying that a world where central banks are devaluing their money to keep the economy “healthy” is a world where Bitcoin “wins”:
In a world where central bankers are tripping over themselves to devalue their currency, Bitcoin wins. In a world of fiat currencies, Bitcoin is the victor.
There was also a brief mention of how the coronavirus outbreak in China could be affecting the price of Bitcoin due to the safe-haven narrative, which is exacerbated because of the large number of Chinese crypto investors. Though, this topic was not discussed in depth.
The Anchors are in Good Company
The CNBC anchors are in good company in terms of their opinion that central bank activity is boosting Bitcoin by proving its inherent value and giving it safe-haven-like qualities.
Thomas Lee, a co-founder of market research firm Fundstrat Global Advisors, argued that the combination of new all-time highs in equities markets and “supportive” central banks should add to Bitcoin’s bull case. (Supportive, in this context, means central banks that are accommodating growth by lower interest rates and injecting liquidity in other ways.)
He elaborated to CNBC in September of last year:
If markets make a new all-time high and we see central banks still supportive, it’s kind of good for liquidity, so there’s … liquidity going into bitcoin.
Lee isn’t the only one who thinks so.
In a column for the Nikkei Asian Review, Henny Sender of the Financial Times wrote that the cutting of policy interest rates and the use of open market operations, “which amount to competitive currency devaluations in the name of reflating economies.” are driving up the price of Bitcoin.
She specifically cited how low — sometimes negative — policy interest rates by central banks are only “dropping the opportunity cost of holding gold or Bitcoin dramatically.”
Also, Peter C. Earle, a research fellow at the American Institute for Economic Research, told Bloomberg that once monetary policy reaches a point where printing any amount of money necessary without any checks, “precious metals and cryptocurrencies would swiftly rise in popularity and therefore [their] price.”