Where is Bitcoin going in 2015? My interview on CNBC

I am heavily long and have not sold one Bitcoin for myself or for my companies.

The price of Bitcoin is derived from general market sentiment short term, but long term the price is derived from the utility of the invention of programmable money. Something which is a true invention with many applications.

2014 made record progress for Bitcoin utility picking up merchants like Microsoft, Dell, Expedia and Virgin and the innovation and services built around it made huge progress, yet the price trended down. 

This year Bitcoin ETF’s will be listed on Stock Exchange that will allow large institutional investors to invest in Bitcoin and individuals through their 401k pension plan that will provide a lot of buying pressure once they come through in my opinion. Especially in an environment where yields on traditional investments are only being held up by Quantitative Easing where companies are borrowing from central banks and using funds to buy back stock creating bubbles in bond and stock prices and banks are borrowing from central banks to make property loans continuing the property bubble. Those bubbles will burst as they are built upon a Ponzi scheme using central bank reserves.

If we see anymore crisis like we saw in Ireland, Cyprus, Greece and around the globe, such events have historically led to spikes in the price of Bitcoin as it is a hedge against a financial crisis. I do not wish this upon any country, but I am afraid 2007 taught governments and central bankers around the world nothing about banking and no reforms that can prevent such events repeating themselves.

I believe these low prices will drive many out of the mining market and create a reduction in competitiveness that will allow the bullish to accumulate more coins and predicted difficulty rates have already reflected an upcoming drop. At these low prices electricity costs eat into the number of coins miners receive because they pay in their expenses generally in dollars, but decreased difficulty allows people to get into the game again for those that feel they missed the boat.

My opinion is that there will be a bull market after this unexpected bear, I am not sure when it will begin though. If the EU situation continues to worsen this could be the start of the bull market. Something political could catalyse the reversal of the trend or bitcoin integration into a service like Amazon for example.

Gold has just turned around from a similar unexpected extended bear market, I expect Bitcoin to follow at some point.

It is for the brave right now and the short term speculators that were in it for short term profits are creating a lot of selling pressure. I will not be joining them, in fact I will take the other side of the trade as a long term value investor, rather than a short term speculator.

What have people in the know said about Bitcoin?

Below are quotes from individuals and companies:

“I have invested in Bitcoin because I believe in its potential, the capacity it has to transform global payments is very exciting.” Sir Richard Branson, founder of Virgin Group (October 30th 2013)

“Bitcoin is better than currency in that you don’t have to be physically in the same place and of course for large transactions currency can get pretty inconvenient.” Bill Gates, Founder of Microsoft (October 3rd 2014)

“I think the fact that within the bitcoin universe an algorithm replaces the functions of [the government] … is actually pretty cool. I am a big fan of Bitcoin” – Al Gore, 45th Vice President of the United States (The Innovation Project 2013)

“I do think Bitcoin is the first [encrypted money] that has the potential to do something like change the world.” – Peter Thiel, Co-Founder of Paypal (November 10th 2013)

“[Virtual Currencies] may hold long-term promise, particularly if the innovations promote a faster, more secure and more efficient payment system.” – Ben Bernanke, Chairman of the Federal Reserve (November 12th 2013)

“Bitcoin is a remarkable cryptographic achievement and the ability to create something that is not duplicable in the digital world has enormous value” – Eric Schmidt, CEO of Google (March 16th 2014)