On Tuesday, bitcoin jumped above $8,000 and is now up 20 percent in one week.
While bitcoin is nowhere near its December highs of around $19,500, the cryptocurrency has steadily increased in the last few weeks alone. Bitcoin fell below $6,000 in June and left market watchers wondering if the coin had hit bottom.
“There were a lot of big sellers out there,” Kelly, founder and CEO of BKCM LLC, an investment firm focused on digital currencies, said Monday on CNBC’s “Fast Money.” Those big sell-offs included sales ahead of tax season and the Mt.Gox hack.
“That appears to be over,” Kelly said, calling the cryptomarket “a very reflexive one,” meaning, the more valuable it becomes, the more investors want it.
Kelly explains a few other reasons why bitcoin is on a positive track.
In June, money management firm VanEck tried for a third time to form a bitcoin exchange fund. The firm is currently awaiting approval from the U.S. Security and Exchange Commission. If the ETF is approved, crypto traders are optimistic that it will send bitcoin’s price higher. Kelly said the chances of approval are slim.
“But that doesn’t stop speculation on that,” Kelly said, adding that the increased attention is helping bolster bitcoin’s value.
Other recent positive news includes Coinbase’s potential $20 billion hedge fun for its custody service.
Institutions and large banks are starting to get serious about cryptocurrency, Kelly said.
“I can tell you from the calls that I’m getting, people that looked at [bitcoin] in December and didn’t like the price are coming back now and saying, ‘Alright, this thing is not going away. We need to understand what it is. Where does this asset class fit in to our portfolio?'” Kelly said.
The internet is evolving in what Kelly said is “Web 3.0.”
“We’re moving from a database to a databank,” he said. “What does that mean? The data in the internet is valuable.”
“Web 3.0 is the new internet, an improved internet,” Kelly said.
And how do you send valuable assets across an open network like the internet?
“With a cryptocurrency,” Kelly said. “And that is exactly why institutions are starting to get into this. They’re seeing how this fits into a portfolio of web 3.0 stocks.”
Originally published at CNBC