He said this in a short interview with Bloomberg in which he analyzed the historical moment that Bitcoin and cryptocurrencies are experiencing.
Certainly this was the year when institutional investors opened their doors to Bitcoin. Microstrategy and MassMutual are just two of the companies that have chosen to allocate their resources in BTC. Says Kraken’s CEO in this regard:
„I think a lot of institutional investors have a lot of cash on their balance sheet. A lot of publicly traded companies are now acquiring Bitcoin. I think the question historically has been how do you justify having an exotic and volatile asset like Bitcoin on your balance sheet, whereas this year it’s become how do you justify not having Bitcoin on your balance sheet, with the performance we’ve seen.“
According to Kraken’s CEO, the dollar has also proven to be very volatile:
„With the inflation we’re seeing now in the market, having dollars seems very risky compared to something like Bitcoin, which is completely finite and predictable and also a bigger store of value than something like gold.“
His talk goes on to argue that people don’t believe in fiat currency now because too much is being put into circulation and economic stimulus is likely to continue. That’s why they are investing in more.
This explains the entry of institutional investors in BItcoin, but not for this reason the volatility of BTC, defined by the host as „The Achilles heel“ of the cryptocurrency, is destined to decline. In fact, for Jesse Powell, Bitcoin’s volatility will not decrease until BTC replaces all the world’s coins (a rather suggestive scenario). He adds:
„Between $28,000 and $1 million we’re going to have a lot of volatility, potentially for another decade. That’s why I think the volatility is not going to end anytime soon. Bitcoin certainly isn’t for the faint of heart.“
Jesse Powell: Bitcoin is not the Wild West
But there’s more to Bitcoin than that. For Jesse Powell, those who want to invest in cryptocurrencies should also look to Ethereum. Ethereum’s performance in this 2020 has been astonishing, certainly also due to the boom in the DeFi sector. Decentralized finance, according to Kraken’s CEO, has had the merit of removing intermediaries from contracting and this is called:
„A great success story.“
2021 will be the year of regulation. Jesse Powell explains in this regard that the industry is not the Wild West as people would have you believe. On the contrary, the nations where the markets are largest see almost regime-like regulation, while others simply enforce the rules that are already there. Certainly the industry has changed a lot since the year Kraken was founded, 2011. Per Jesse Powell:
„Regulators are becoming more experienced. I don’t think there’s a risk of some sort of hasty market crackdown. I think they’re getting a better understanding of the risk and they’re getting educated, and they’re understanding that this is a remarkable technology not unlike the internet that has the potentiatlity to completely change the world.“
Bitcoin and cryptocurrencies can change the world because they will also reach the unbanked, Powell argues. In fact, a quarter of the world’s population does not have a bank account. Cryptocurrencies solve this problem, and therein lies their potential. That’s why governments, particularly that of the United States, won’t want to „crush“ cryptocurrencies.
In fact, the facts say that regulation is likely to be more stringent, especially in the United States. This is precisely where we risk putting exchanges in the position of not transferring funds to anonymous wallets, making one of the strengths of cryptocurrencies disappear.
While the case of the SEC’s lawsuit against Ripple, and the consequences on the price of XRP, which literally plunged, show how national governments can hurt the industry.
There is still much work to be done on these issues.