Bitpay CCO Sonny Singh has stated that the $20,000 bitcoin price at the back-end of 2017 and the price fluctuations throughout 2018 were a bit of “an anomaly”. He also agrees that bitcoin demand and usage were at a low last year and although crypto volatility has been a continuing trend into the new year, prices could still steadily rise over the course of 2019.
Singh made the statements when talking to Bloomberg in regards to the future of bitcoin after its sudden stumble in the final quarter of 2018.
Bitcoin was Not a Hedge Against Falling Stock Prices
The lively conversation on the Bloomberg Technology show with Bloomberg Opinion’s Stephen Gandel and the Bitpay chief commercial officer Sonny Singh brought up some interesting points on both sides of the bitcoin argument.
The discussion started with Gandel talking about the defining factors that have contributed to not only the massive drop in bitcoin prices from the end of 2017 but also the recent drop to below $4,000 in November 2018. Gandel went in hard on bitcoin by saying:
It’s been a terrible week for bitcoin. A huge breaking thing is that there is this concept that bitcoin was some kind of port in a storm. That it would be a safer asset because inflation would hurt the dollar and stocks. But we didn’t see that. Damage is one of the main reasons people were buying it for an investment.
He went on to suggest that when stock prices fell, bitcoin fell because the two are intrinsically connected. He mentioned that this was the reason why people were buying bitcoin to hedge against falling stock prices, but it didn’t hold its value as expected.
Bitpay CCO Defends Bitcoin on Bloomberg
In response to Gandel’s thoughts on the matter, Sonny Singh suggested that the overall state of the crypto industry is still healthy despite the problems in 2018. He talked about how a lot of new businesses in 2018 were built around bitcoin remaining around the $10,000 mark. However, he is still “long-term bullish” on bitcoin prices moving into 2019.
Singh went on to point out that major companies such as Fidelity and Goldman Sachs are still launching their crypto products. He also talked about how an increase in regulations shows that the crypto industry is readying itself for wider adoption so the long term philosophy of bitcoin is still sound.
When pressed on the issue of lower usage of bitcoin in purchasing and other consumer-based areas in 2018, Sonny Singh conceded by saying that:
Everything built last year was a little overvalued and overhyped. Yet usage is now starting to catch up a little bit, but again new products are launching. Last year was a total anomaly, but I think you are going to see how these new products launch.
Singh talked about how hype was a main component of the massive price increases at the $20,00 mark and was not based on fundamentals. The idea was that banks would soon be integrating blockchain into their systems and how everyone thought it was about to take off. But in reality, nothing much happened and we came to realize that greater adoption is still “further down the road.”
Featured image from Shutterstock.