Brian Kelly: Bitcoin perception is like the Internet in the 80s, not 90s

Brian Kelly: Bitcoin perception is like the Internet in the 80s, not 90s

Brace for volatility: tomorrow is tax day for the US and cryptocurrencies are given no exemption.

In CNBC’s Fast Money, Brian Kelly, founder and CEO of BKCM LLC, said that the perceptions and conditions blockchain technology is currently in is comparable to the Internet back in the 80s—not the 90s.

“This is like the Internet in the 1980s. I used to think the Internet in the 95, but after the last couple of months talking to folks, I think we’re more like the 1980s. So, you know, I think this technology’s going to work, it’s going to be game-changing, but it’s very early days so we can have this massive volatility,” he said.

Kelly also tackled an impending volatility due to tax liabilities. Earlier this month, Fundstrat Global Advisors head of research Thomas Lee—who was also the former chief equity strategist at JP Morgan Chase, said that the looming tax filing deadline in the US tomorrow (April 17) could cause a massive selloff of cryptocurrencies, adding that the estimate amount owed by US cryptocurrency holders in taxes for their crypto gains is over $25 billion.

“This is a massive outflow from crypto to USD and historical estimates are each $1 of USD outflow is $20-$25 impact on crypto market value,” Lee said.

“Additionally, we believe there is selling pressure by crypto exchanges who are subject to income tax in U.S. jurisdictions,” Lee said. “Many exchanges have net income in 2017 [of more than] $1 billion and keep working capital in [bitcoin]/[ethereum], not USD — hence, to meet these tax liabilities, are selling BTC/ETH.”

Kelly says that the tax deadline could cause a huge drop in cryptocurrency values, but that people have to see how things go after the deadline.

“Presumably after April 17th (deadline for tax liabilities in the US is April 15), if we can hold these gains, we’ll know that tax selling impacted—if you used Tom Lee’s work, we probably had about 500 to 600 billion dollars come off the market for tax purposes,” Kelly said.

He added that the problem with the way people view Bitcoin trading values is that they look at it as if it were a stock when in fact it isn’t.

“This is an open-source software, so you can’t think of it as a company, right? And I think that’s where people make a mistake—they quote market cap and say all that. This is not a stock, it’s not a company. It’s open-source software.”

Talking about negative news and price drops, Kelly says his favourite time to buy any asset is when bad news is dragging its price down. “That’s when I wanna buy any asset—whether it’s Bitcoin or not,” Kelly said.

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