Bitcoin will surely have notable value fluctuations in the future, but it’s out of the bubble territory, stated Michael Wu, CEO of Amber Group
A number of institutions and individuals have called Bitcoin (BTC) a bubble since its inception, a narrative which has continued to this day, roughly 12 years after Bitcoin’s inception. Michael Wu, CEO of Amber Group, (a digital asset financial services firm) however, thinks otherwise.
“I think it’s always something like this when people come into a new paradigm shift,” Wu stated in a CNBC interview on Thursday, referring to Bitcoin as a new paradigm shift and/or a bubble. “People start with doubts and scepticism, which is very natural because they need to take time to understand what exactly is new there, is it sustainable, etc.,” he said, adding:
“In the early stage of acceptance, that kind of understanding and scepticism always come with a lot of price volatility. On the other hand, I don’t think you can call Bitcoin a bubble anymore. This is because, like I mentioned earlier, you have these institutions, billionaires, multi multi-billion-dollar listed companies, as well as all these newcomers into crypto. They’re all buying Bitcoin, they’re buying crypto and there are only 21 million Bitcoins out there.”
Big boys in town
Wu’s references to large mainstream players buying Bitcoin have not been isolated incidents, having become much more common in recent months. Microstrategy, one of the largest institutional BTC supporters, allocated more than $1 billion to Bitcoin in 2020 alone. MassMutual put around $100 million into BTC sometime thereafter, while Square later stepped in with $50 million.
The rationale for Bitcoin’s price increase, in the long run, includes its limited supply matched with a significant increase 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 has passed.
Wu also commented on BTC and its “digital gold” store of value role. “The worst-case scenario for Bitcoin is still a better form of gold,” he stated.