Bitcoin will certainly see significant fluctuations in value in the future, but is outside the bubble area, said Michael Wu, CEO of Amber Group
A number of institutions and individuals have referred to Bitcoin (BTC) as a bubble since its inception, a narrative that continues roughly 12 years after Bitcoin was founded to this day. Michael Wu, CEO of Amber Group (a digital asset financial services company), thinks differently.
“I think it’s always like that when people get into a new paradigm shift, “Wu said in a CNBC interview on Thursday, describing Bitcoin as a new paradigm shift and / or a bubble. “People start with doubts and skepticism, which is very natural because they have to take the time to understand what exactly is new there, whether it is sustainable, etc.. “He said, adding:
“In the early phase of acceptance, this type of understanding and skepticism is always associated with high price volatility. On the other hand, I don’t think you can call Bitcoin more of a bubble. This is because, as we mentioned earlier, you have these institutions, billionaires, multi-billion dollar public companies, as well as all of these newbies to crypto. They all buy bitcoin, they buy crypto and there are only 21 million bitcoins. ”
Big boys in town
Wu’s references to major mainstream players buying Bitcoin weren’t isolated, as they have become much more common over the past few months. Microstrategy, one of the largest institutional BTC backers, raised more than $ 1 billion for Bitcoin in 2020 alone. MassMutual invested around $ 100 million in BTC at some point thereafter, while Square later stepped in with $ 50 million.
The rationale for Bitcoin’s price hike in the long run is the limited supply that comes with a significant surge in interest, Wu explained. He stated that there will be short-term price corrections and volatility, but that the era of calling Bitcoin a bubble is over.
Wu also commented on BTC and its “digital gold” value creation role. “The worst case scenario for Bitcoin is still a better form of gold,” he explained.