Cointelegraph editor: Bitcoin will reach six figures during this market cycle

Folks, welcome Sam Borgi. He is the business editor at Cointelegraph where he brings a decade of experience in economic analysis and financial market writing. Past roles included think tanks, boutique research firms, in the wild world of freelance crypto. His passions include bitcoin, Austrian economics and writing. Also heavy music and strong coffee. Sam Borgi, welcome to the show today. We appreciate you having back. Great friend of the show.

Oh, it's wonderful to be here and to connect with all you guys again. Hope everyone's doing well.

We are super, super excited to get into some stuff with you today. A lot of stuff happening on the markets and we want to hear from you. So why do you think crypto transactions are surging in in Central and Southern Asia right now? What are you kind of seeing from where you sit?

Well, that's a really interesting question. We covered this earlier in the week. It's based on a chainalysis report. They've been releasing a lot of really great research that looks at crypto transactions regionally. So before it was focused on Europe, the second report came around Central Southern Asia as well as Oceania. And we saw, I think a 700% spike year over year in the Asian countries. A lot of it actually is coming from emerging markets. A lot of us, when we talk crypto, we talk about it as an investable asset class, which it is. But in a lot of emerging markets, crypto is being used for remittances. It's also being used to circumnavigate a lot of the stringent forex policies as well as maybe in some Latin American countries and in Africa, hyperinflation as well. So in the case of Asia, we're seeing countries like Vietnam, India and Pakistan actually leading in terms of adoption. So if I told you, for example, that Vietnam has become the leader in crypto adoption, you might be like, no. Really? Well, yeah. There's actually been multiple reports now that have been showing a large uptick in Vietnam of crypto usage of actual usage, especially for remittances. So that whole aspect of remittances is becoming really, really prominent in emerging markets and we saw that in the chain analysis report.

I just have a quick follow up question to that. Do you think it's because there currently isn't a massive traditional financial infrastructure in a lot of these countries and that's why they're being pushed to this new ME mechanism?

Yeah, that's definitely one of them. And it's also ease of use, lower cost, especially when it comes to, you know, transacting in bitcoin and we also saw in places like, like Nigeria, for example, they actually put controls on transfers in the NARA and the local currency. So bitcoin, actually Bitcoin fixes this, right? In a sense. So you are starting to see real world use cases for crypto in these emerging markets, whereas maybe in advanced industrialized countries it's mostly an investable asset class. I think both are really important. But to really see the utility and the need for something like bitcoin, go to the emerging markets and you'll see it.

I think that's a really good use case for stablecoins more than Bitcoin. At least the first experience of those underdevelopment countries. I've seen that in Brazil. But changing subject a little bit, Ethereum is the absolute smart contract leader right now. But we were seeing a lot of competitors such as Polkadot Cardano Avalanche rising up right now. So do you believe on any of those Ethereum killers, which is your topic and why?

I don't necessarily see any imminent threat to Ethereum's dominance. We've been talking about ethereum killers since 2016. I think it was, I've been writing about that. The next one, not really. For me, Solana is really promising because I take a look at the money flowing in from venture funds. We wrote a report a few months ago, about $300 million, $314 million token sale facilitated by private venture funds into Solana. So obviously something like Solana is expanding massively. But do I think that it can take Ethereum's lunch? I don't. Ultimately, I think it's kind of like Bitcoin, the tide that rises all ships. I think that Ethereum's dominance will create an ecosystem so big that a lot of these other smart contract platforms can compete. But right now, in the next foreseeable future, I don't see anyone coming close.

It seems like a lot of the recent like momentum in the market actually came after the Fed was like, we're not going to ban crypto because China said they are going to ban it. Like, what do you think about the whole future of like regulation in this country and what that means for crypto in the long term?

Well, I'd like to, you know, be confident about what the Fed said, but in general you shouldn't believe anything that they say because nothing they say actually turns out to be true. I mean this is, this is absolutely. You don't believe me, go look at their dot plot summary of interest rate forecasts every quarter. Take a look at how they plot out where they think interest rates are going to go and then actually take a look at where interest rates go. So for me, what the Fed says doesn't really mean much, but all I take from what, from what Powell said and what all these other people are saying is that we're not going to ban crypto. There's no crypto as an asset class is here to stay. A lot of the regulatory talk right now is around altcoins and stable coins. That's where we could see some more stringent regulation. Obviously, the infrastructure bill had some. Some pretty negative outcomes for a lot of these different developers. I think that it really is meant to corporatize crypto in a lot of ways, which is. Which isn't good. But I think that will always find a way. There's always going to be a market. I think that bitcoin seems to be, you know, not within that realm of regulation that they're talking about, but overall, it seems like regulators are starting to kind of catch up to the conversation, for better or for worse.

Shifting gears a little bit into more crypto security. What do you think about security in the crypto market, and should people be worried about that, considering a recent Coinbase attack?

Well, I think we should always be worried about that. Right. We've seen countless attacks targeting exchanges, especially a lot of the phishing scams. And we saw that with Coinbase. Reportedly, I think 6,000 accounts were compromised earlier in the year. So I think that this threat is always going to be there. It's probably going to increase as the valuations of crypto continues to grow. So even though security is on the rise among these various exchanges, as the value of bitcoin and cryptos rises, are going to be primed for attack. So I just don't see any way around that in terms of the actual thread. So what you can do is you can store your crypto off of exchanges. That might be the best way to go about it and to learn not to be susceptible to phishing scams.

Especially not your keys, not your cheese.

Exactly.

I think keeping coins at exchanges is just crazy. So just stay with the fiat system if you need somebody to take care of your money. So, keeping on the exchange subject again. So do you think exchange should play a more important or central role in education? Too many scams, we're seeing so many listed coins that developers simply go away with the money. So do you think exchange should be intervening or educating more?

Yeah, well, I think what they should be doing is maybe upping the standards on what coins get listed, I think that might be a really good start. Like, you know, not every Tom, Dick and Harry coin should be listed on exchanges. But you do see that, right? There are certain exchanges where getting listed is really easy. I'm not going to mention them right now, but you know, so I think, I think Coinbase kind of had a really high standard, but then you see maybe some coins that some people don't necessarily think make, make that grade. So I think they should be setting a better standard on the types of coins that they, that they are able to list. But overall it's a free market and I think that people should do their due diligence and ultimately the best way to avoid those types of scams is to really educate yourself and to don't buy the coin that was created last week and then pumped on a random exchange.

So we'll talk about like, like being created last week and being pumped. Like with this whole NFT game has gotten a little crazy the last couple months and like, I don't know, what do you think about longer? Are they ever even going to be able to sell these NFTs on exchanges? Like how is this, what's the long term game of this NFT thing?

Yeah, I mean, honestly Jordan, from a adoption standpoint, in a lot of ways I don't really get NFTs, but the market seems to get them. I think we saw 4 billion in, in turnover and transactions in August alone. We're seeing billions of dollars flow onto, onto NFT platforms and, and in the facilitation of the transactions. So it seems like this market for digital collectibles, whether it's on the sports side or the art side, it seems like this is something that people really, really care about and they really, really enjoy. So I actually see it as being a new niche within crypto that can probably stick around. Don't ask me to explain the value proposition because I don't get it. I guess I don't have to.

Right?

I guess enough people get it that the NFT market is now a multi billion dollar market.

Yeah.

No, I do want to kind of like zoom out here from a macro perspective and obviously El Salvador earlier this year. Big. What is your opinion about El Salvador as a use case or study for the rest of the world and has it been successful so far?

Well, I think it's a fascinating use case especially it's a country that I think for me it's like a perfect size to really experiment with something like Bitcoin and in crypto. And if you take a Look at the president, what he said. It seems like it has been a success because we saw, I believe, an adoption rate of over 30% so far actively using the Shivo wallet. So people are using it. It seems like it's trending in the right direction despite there being some protests and the burning down of an atm. I think that the way I see bitcoin, I don't necessarily see it replacing the monetary system. I see it as a parallel to the existing monetary system. And in that capacity, seeing a country like El Salvador adopted into law, I think is fascinating. I think there's going to be other countries that follow suit as well. Good.

Makes sense. Yeah. And speaking of adoption, how about your experience, Sam? Have you been able to convince any friends or family to invest, I don't know, 30, 50% of their assets in cryptocurrencies?

Well, I've convinced people to go, I've talked crypto to all the people that I'm close with, but I never advise them to actually buy anything because I personally don't think they can handle the volatility. Just being very honest. But I have convinced several people to actually dabble in the market. They actually ended up dabbling way more than I, than I would have recommended. But a lot of people now actually it's interesting because you start getting comments and messages from people you haven't heard from in years about buying crypto. I just got one this morning as well. So that for me is, is a, is a, you know, barometer of where we are right now in the market. Right.

And speaking of volatility, what do you think about the price action for bitcoin heading to the end of the year? We gonna get to 200,000 like Bobby Lee's like always wrong about.

But well, oh wait, Bobby Lee said that? No, then in that case we're definitely not getting there in that case.

So I think Bobby. No, but, but look, I think Bobby Lee said it recently too.

Like, look, you just made me nervous there, Jordan. In that case I might have to revise my, my outlook. But.

No, that's why I'm saying it.

Yeah, yeah, I, I've been, look, I've been following this four year cycle theory since December of 2018 where we identified the bottom and given, you know, the having event, we're able to kind of maybe create a model for where we think bitcoin is going to go over four years. I was expecting the market to peak in Q4 of this year after the puke that we saw back in April, May. I've kind of revised that. I think that will probably peak within the next two or three quarters. So it could go into the Q1, into the Q2 of next year. I don't necessarily have a price target because you know, those are notoriously difficult to predict. I do think this cycle we will hit a six figure bitcoin and obviously the entire market will rise with it. And then beyond that we'll probably get into a bear market at some point. There could be something said about the cycle theory. The cycle theory may no longer pan out in the future, but I do expect a massive correction at some point after this bull, this bull market.

What would that correction look like, do you think? Like 50K?

Like what? Yeah. So obviously you're always going to get people who say this time is different, this time is different. You got institutional adoption, you got corporate balance sheets, you got governments. It's not gonna. Guys, we just saw 55 correction during a bull market. So during a bear market we're gonna see something probably even bigger than that. I think it go if we hit six figures we can probably go below 50, I think and consolidate in a lower range, maybe in the 30s. But that's going to depend on how high we peak coming into the next few quarters in my opinion.

Excellent insights as always. We appreciate Sam Borgi joining us today from all different perspectives. Security, macro, price talk. We love hearing from Sam, big friend of the show. We appreciate you joining us on the market report today.

Thanks a lot, guys. Anytime.