Bitcoin has characteristics ‘to be a superior value’ relative to gold: Analyst

Travis Kling, Ikigai Asset Management Founder joins the Yahoo Finance Live panel to discuss the latest with Bitcoin.

Video transcript

ZACK GUZMAN: As we are seeing Bitcoin retreat more than 5% at last clip. It's been a hot start, obviously, for ProShares in their Bitcoin strategy ETF, the first Bitcoin futures linked ETF to get clearance. A record $1 billion in inflows in just two days of trading in terms of natural inflows there, celebrated by the crypto community. And there's another one slated to begin trading tomorrow coming from Valkyrie. So where do we go from here in terms of Bitcoin's prices?

We could turn to a few people to answer that, but top of mind today was Ikigai Asset Management founder Travis Kling who called some of these moves as early as September 1st. If you go back to a tweet that he shared back then looking at Bitcoin's price chart when it was at 48,000, he was already talking about topping 50, then 58k, and then, of course, the all-time high that we saw hit earlier this week.

So I want to bring Travis Kling back into the show today. And Travis, good to be chatting with you, because you saw a lot of this shaping up. But now that we've crossed that all-time high, I wonder, you know, looking back historically I think to the last time we crossed, what was it, 20,000, the last all-time high, we didn't just sit there for a little bit. It really exploded. So what do you see happening in the next few weeks here as momentum builds?

TRAVIS KLING: Yeah, thanks, Zack, for having me back on. I think it's instructive to look at how we got here in the first place and just quickly walk through some of the things that have happened year to date with Bitcoin and crypto. Broadly started off with a really hot start to the first, you know, about 4 and 1/2 months of this year. And then, on the ESG and China situations, you had a 54% pullback over the summer, consolidation right around that kind of $30,000 level, and then expansion as we got through the end of summer.

And, you know, it got to a point where just purely from a technical perspective on the chart, once you started getting up into that kind of high 40s area, there wasn't a whole lot of resistance between that level and all-time highs. And one of the things that I was looking at over the course of this summer that has certainly continued through the fall so far is just stunningly positive news flow coming out of the crypto ecosystem broadly.

And if you don't spend all day every day like I do looking at this stuff, it's easy to kind of lose track of just how much positive news is coming out of this space-- all kinds of massive fundraises, all kinds of new projects, all kinds of new institutional onboarding capabilities, and then, this Bitcoin ETF narrative, which really started in the first part of August.

ZACK GUZMAN: Yeah, and I mean, we've got the ProShares one, as I said, Valkyrie tomorrow. But then after that, there's a slate of about seven still posed to potentially come here in 2021. So you're looking at a few people chasing Bitcoin futures linked ETFs here.

I guess, you know, we've heard a lot of price target calls. Fundstrat was talking about maybe 168,000 on Bitcoin, if they continue to see strong inflows into all of those ETFs. 100,000 floated before that. I mean, where do you see it, I guess, year end to wrap this up, if that momentum continues? Not to press the point further, but in the short-term, I guess, there are a lot of questions as some of those gains are getting, you know, given back today.

TRAVIS KLING: Well, I try hard not to come on things like this and give exact price targets. And that's certainly not the way that we manage our portfolio. I think one thing I'll say about that is it would be extremely odd from a technical perspective to have a six-month 54% pullback, consolidation, accumulation, and then expansion to new all-time highs and to have price just go kind of a little bit higher. That's just not typically how these sorts of things work out, so. And when I look at the macro landscape, there's a little bit of things that you've got to watch out for in terms of tapering.

But look, the S&P 500's at new all-time highs. The VIX is trading 16. And the just stunningly positive news flow has continued for crypto. You've got PIMCO that has now, just as of yesterday, announced that they are officially getting into crypto. You have the Houston Firefighters Pension Fund announced that they have directly bought both Bitcoin and ETH.

And you had FTX this morning, one of the leading crypto exchanges, announced a $420 million series B, after they just raised a $900 million round earlier this summer, $25 billion valuation with BlackRock and Ontario Teachers Pension Fund in the round. So, it just feels like a tipping point at this point.

AKIKO FUJITA: Yeah, when you get pension funds on board, I mean, that's the last piece that we've been talking a lot about, really lifting the price further. What are you seeing in terms of inflows away from gold? We were talking about this earlier, how, increasingly, Bitcoin is seen as a hedge against inflation, something that's on the minds of a lot of investors. Are you seeing it-- are you seeing more institutional money coming in as a result of that? Are there any correlations that we can make?

TRAVIS KLING: Yeah, I mean, look, gold is a 5,000 year old rock. It's an element on the periodic table. It's had a place in time in financial markets and in money in general for thousands of years. But when you look at the characteristics of Bitcoin and evaluate how good Bitcoin is at storing value from kind of a first principles perspective and evaluate it relative to gold, it does have the characteristics to be a superior store of value relative to gold. And I think investors are increasingly understanding that.

And it's why I love Paul Tudor Jones's moniker of the fastest horse for Bitcoin. In a world where central banks are racing to see who can devalue their currency the fastest, it appears that Bitcoin was purpose built to be the fastest horse to capture more of that monetary supply inflation than any other asset class on the planet.

ZACK GUZMAN: The other points that you've been raising, too, Travis is kind of the bifurcation, I guess, between Bitcoin's price moves here as of late and maybe farther along in the altcoins when you look past Ether. Ether is actually holding its gains today, so that's interesting to see, too.

But when you look at maybe how the alts could perform, I guess, also, historically, had a few guests this week pointing out that Bitcoin will run up, it'll come back down to Earth. And that's when the altcoins might take off. I mean, how are you maybe looking at that dynamic playing out here, as we move farther along in this adoption cycle? It seems like a lot of money is coming into Bitcoin now, but what does that mean maybe for those other ones a little bit farther down in terms of investor appetite and risk?

TRAVIS KLING: Yeah, Bitcoin has taken the front stage, again, over the last month or six weeks or so with this CME futures ETF that just got launched a couple of days ago. But the amount of innovation, the amount of excitement, the amount of user adoption, the amount of capital flow, both in liquid crypto assets and in the venture markets and crypto, going into projects and use cases outside of Bitcoin is just so far beyond anything we've ever seen and the crypto ecosystem before.

And you're starting to really have some other use cases that are firming up in terms of the market's understanding of why these sorts of things could be valuable and why they are really just getting started. And DeFi is something that we've been talking a lot about since the summer of 2020. And then just over the last handful of months, you've had NFTs and gaming and play to earn and metaverse.

And specifically on the metaverse side and the play to earn side, these are two emerging use cases for crypto assets and distributed ledger technology that have captivated, you know, not just my attention, but-- and not just crypto ecosystem participants' attention, but the attention of some of the biggest companies all over the world. And case in point there, Facebook is hiring 10,000 people in the EU to go deploy into metaverse. Facebook is literally changing their name to better reflect their movement towards this metaverse concept. And that is, like, in the earliest stages of coming to fruition. It's going to be a key narrative for years to come.

ZACK GUZMAN: Yeah, we've seen them partner up with Coinbase to move forward with a lot of those crypto efforts. Of course, "The Verge" reporting. We're still trying to-- we're taking guesses. We're going to see if we can get some viewer prompted guesses around what the name change could be. But Travis Kling, appreciate you coming back on here to chat with us today, Ikigai Asset Management founder. Thanks again for the time. We'll chat again soon.