Despite a somewhat infamous reputation in the crypto community, CNBC’s head cryptocurrency analyst, Brian Kelly, remains bullish on Bitcoin. Now that Bitcoin has dropped below $6,000 per coin, the negative comments from the mainstream media have been increasing. “Bitcoin is dead!” can be heard from every angle, except from CNBC’s Brian Kelly.
In a recent interview, Kelly expressed his bullishness on Bitcoin and cryptocurrencies, and offered some guidelines for investors. “I am a believer in this asset class…but this is subject to massive booms & busts…”
To help protect investors from being overexposed to bitcoin bear market drawdowns, Kelly suggested that investors limit their portfolio allocation to cryptocurrencies.
It's important to size this in your portfolio correctly and appropriately. One to five percent, to me, sounds like the right number, then you can ride out this bear market.
Kelly also offered some insights into how his hedge fund is handling the recent Bitcoin bear movement. “Through the decline, we’ve had a lot more cash in the fund than we have at any other time…probably over 70% cash.” The entire video can be viewed in the tweet below:
After #bitcoin's crash below $4k, @BKBrianKelly shares where he stands now. pic.twitter.com/OwS2MRP7sV
— CNBC's Fast Money (@CNBCFastMoney) November 27, 2018
Ending the Bear Market
Kelly reflected on what could end the bear market for cryptocurrencies. He explained:
We have a couple different catalysts coming up…potentially the BAKKT launch…Fidelity will have their custody program coming up in January…but we haven't really seen that catalyst yet…We've seen actual institutional inflows and I think over time…we're going to start to see interest in this.
Lastly, Kelly commented on how to use blockchain data to assess market sentiment: “we’re seeing transactions increase here. If I saw transactions on the Bitcoin network fall, I’d be worried.”