For many, bitcoin has become the prime investment tool. If you want to strike it rich and have all your wealth solidly in one place, one needs to invest in the world’s primary digital currency by market cap. That’s the attitude several traders have, but it’s not shared by all. A few – such as Kyle Bass – believe that the big money has already been made in BTC, and the time has come to move on.
Kyle Bass On Bitcoin… It’s Days Are Numbered
Bass is the founder and chief investment officer at Hayman Capital Management. In a recent interview, he stated that he thinks bitcoin has run its course, and that investors have already made all they’re going to make on the currency. He believes the time has come for investors to refocus their attention and turn to other tools if they’re looking to keep their wealth stable.
One of the reasons Bass thinks BTC might be over and done with is because he sees heavy regulation making its way into countries like the U.S. in 2022. He says that following the China crackdown that occurred over the summer, there will be many other countries that repeat this behavior given that the entire space is largely unregulated and puts people at risk of losing their funds to hackers.
I think that the blockchain, I think that NFTs [non-fungible tokens], those things are all very much here to stay. Private crypto, I put a question mark by that over the long run. I’d be careful with that, now.
At the same time, he thinks other assets – such as real estate – are going to continue to explode given that interest rates are in the hands of the Fed, which is limited in the kind of fluctuations it can cause. He comments:
I think assets, including real estate, are going to continue to move much higher over the next decade because I think the central banks can’t raise rates more than 100 basis points.
He also says that despite all the gloom and doom permeating the market and investors’ minds as of late, he doesn’t see the economy crashing the way it did in 2008. Bass explains:
I don’t believe we’re in a bubble today as far as ratios are concerned, and leverage in the system is a concern.
One of the reasons he thinks a recession isn’t likely to happen again is because there is a lot more foreign money making its way into U.S. markets. He comments that the United States boasts approximately 40 percent more foreign income today than it did just two years ago.
The Economy Probably Isn’t in Danger
I’m a monetarist at heart. I believe if you increase the money supply by 40 percent, you’re going to have a 40 percent depreciation in purchasing power roughly thereabouts.