(Kitco News) - As the Securities and Exchange Commission (SEC) cracks down on cryptocurrency exchanges like Kraken, the "main threat" to Bitcoin remains regulation, according to Florian Grummes, Managing Partner at Midas Touch Consulting.
Grummes, who has over two decades of experience in financial markets and is a technical analyst by training, said that he is particularly concerned about on-ramps and off-ramps for Bitcoin.
"They cannot stop the [Bitcoin] network itself, but if it's forbidden to send certain amounts of money to exchanges, there will not be enough people to buy it, and then it's going to move underground," he claimed.
After a rough 2022, in which Bitcoin lost 64 percent of its value, the coin experienced a rally in 2023, and is up 31 percent since January 1st.
Grummes, using historical data and technical analysis, forecast that this upward trend would continue, and that Bitcoin could reach as high as $50,000 this year.
"If it does the same like [it did] in 2019, after the bear cycle that started in December 2017, which took Bitcoin down from $20,000 to $3,200… But then Bitcoin quickly recovered starting in March 2019, and it went up 350 percent over three months," he observed. "We could see something similar over the next few weeks and months, with Bitcoin recovering towards $35,000 to $50,000."
Grummes spoke with David Lin, Anchor and Producer at Kitco News.
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Bitcoin as a reserve asset?
A common argument among so-called Bitcoin Maximalists, those who promote Bitcoin as the only true digital asset, is that Bitcoin will become a reserve asset in the future, due to its scarcity and decentralized network. Bitcoin maxis claim that central banks around the world can use Bitcoin in a manner similar to how gold was employed during the gold standard.
Grummes called such a proposal a "wet dream" that would take "decades" to manifest.
"There is certainly the potential there, but I think it will also take decades," he said. "We could see a totally different setup, if there is no trust between the big nations that are ruling the planet."
To find out what Florian believes could lead to a breakdown in trust between big nations, and whether he thinks World War 3 is likely, watch the video above.
Follow David Lin on Twitter: @davidlin_TV
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