Bitcoin, the chase for the $27 trillion gold market begins..."Even if it shakes like tech stocks, it will eventually rise"

▲ Nasdaq, Bitcoin (BTC)/AI generated image

Despite criticism that Bitcoin (BTC) is a risky asset that fluctuates with tech stocks, it is once again drawing attention as a long-term asset to avoid expanding government debt and declining currency values.

Phil Rosen, CEO of Opening Bell Daily, stated in an interview on May 13 (local time) with The Lark Davis Show, a podcast hosted by crypto analyst Lark Davis, that while Bitcoin was caught in the software stock sell-off this year, its high correlation with software stocks may not last long in the long term. Rosen analyzed that artificial intelligence (AI) is changing the valuation structure of software companies, and that "debasement trades" to prepare for currency debasement could strengthen over the next 10 years.

Rosen said that Bitcoin's core investment thesis has hardly changed. He argued that holders of Bitcoin and gold could be in a favorable position in the long run, given that government debt is likely to continue to increase and currency issuance will persist. Rosen explained, “Governments will continue to print money, and debt will continue to explode,” adding, “Bitcoin's investment thesis remains strong as a scarce asset.”

The video also covered Ray Dalio's criticism of Bitcoin. Dalio pointed out that Bitcoin has not served as a safe haven asset as expected, and its traceable transaction structure, high correlation with tech stocks, and smaller market size compared to gold are limitations. While acknowledging some of Dalio's points, Davis countered that Bitcoin is more efficient than gold in terms of movement, verification, and divisibility. He emphasized that younger generations are more naturally accepting internet-based assets like Bitcoin than gold.

Davis characterized Bitcoin as an an asset chasing gold. He argues that while the gold market is valued at approximately $25 trillion to $27 trillion, Bitcoin remains a much smaller market size, implying greater long-term upside potential. He suggested that even if gold could rise to $10,000 per ounce, its rate of increase would be limited, while Bitcoin could reach $1 million in the long term, presenting higher return potential than gold.

From a technical perspective, the key point highlighted was that Bitcoin broke above the top of its existing channel on the weekly chart and is now retesting that area. Davis explained that a recovery above the channel top on a weekly closing basis is crucial. The price has approached the area where the November support zone has now turned into resistance, and a retest of the 20-week exponential moving average was also mentioned as a possible technical move. He noted that Strategy is buying over 2,000 BTC per day, assessing that Michael Saylor's continuous purchases are serving as a major demand base for the Bitcoin market.

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