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Brian Kelly, the founder and CEO of crypto investment firm BKCM LLC, shared his thoughts on where Bitcoin’s price could be heading next in an interview with CNBC on June 2. According to the asset manager, BTC’s price is bottoming out and the crypto could be poised for another rally.
“For me, when you look at Bitcoin, it’s all about network effect and address growth,” Brian Kelly said. “One of the key metrics I look at when managing crypto money is how fast addresses are growing versus what the market is expecting the addresses to grow.”
Kelly believes that this difference could be the sign that Bitcoin’s price has bottomed. “Address growth is basically flat but the market is implying that we are going to have a decline of 20% in address growth,” he added. “We haven’t seen that type of differential since March of 2020. Generally, when bitcoin gets that mispriced, it is the sign of that bottoming process.”
The asset manager likened the current situation to what happened back in March 2020. At that time, BTC’s price dropped to its lowest that year before soaring to around $29,000 by year-end.
“And do we look back to March of 2020, when we had a massive divergence, that was when Bitcoin was $3,500 and it roared to $60,000,” Kelly explained. “We’re looking at the exact same type of situation here where it looks like Bitcoin is trying to bottom but the market is mispricing what’s going on underneath the fundamentals underlying Bitcoin.”
Brian Kelly was asked how convinced he is of his interpretation of his charts and if he thinks the current price level of Bitcoin is a buying opportunity. “I do, I personally added to our fund this month because I think it’s that big of an opportunity,” he revealed. “In the fund, we are long and getting longer.”
The asset manager also enumerated the positive things going on for Bitcoin. “We are getting institutional adoption as an inflationary hedge and, regulatory-wise, we are getting watered-down regulation. It’s not going to be banned, we are talking about bringing it into the fold,” he said.
He also explained why technicals are important when it comes to crypto. “Technicals are important when it comes to Bitcoin because it is difficult to value,” Kelly said. “It’s very much like the foreign currency market - technicals play a very big role. That’s why I want to see the momentum follow on because momentum is that first signal that the technicals are turning.”
