Bitcoin (BTC)’s appeal among investors is rising as both a store of value and a hedge against “the world going to hell,” according to Circle CEO Jeremy Allaire.
During an interview with CNBC on Tuesday, the crypto exec outlined three catalysts that he believes are behind crypto’s latest rally – all of which are irrespective of macroeconomic factors.
Building During The Bear
According to Allaire, part of the rebound was already being staged during the depths of the bear market last year, when numerous high-profile exchange bankruptcies left a stain on the industry’s reputation.
“You had very significant investments continuing in the actual infrastructure side of this,” Allaire noted.
He likened the temporary crash to when internet companies fell out of investor favor in 2002 after the dot-com bubble, yet broadband and mobile devices were being “lit up” in preparation for full adoption a few years later.
One example rests with the Solana blockchain, a Circle favorite for enabling fast and cheap USDC payments. The network’s native asset, SOL, is up 10% over the past seven days.
The construction of new crypto investment products from major financial players – namely BlackRock and Fidelity – is also a key factor. Both asset managers are participating in a heated race to launch the first Bitcoin spot ETF in the United States, which analysts may be approved by early January.
The ETF is expected to invite significant, previously untapped institutional capital into BTC. According to Allaire, institutional involvement has also helped breed global regulatory clarity around crypto, even if the United States specifically has fallen behind on that front.
“In every major financial market center around the world, they’re actually putting in place clear regulations on digital assets and stablecoins… the U.S. is behind,” he said.
Bitcoin: Hedge, Not A Currency
When speaking on Bitcoin specifically, Allaire acknowledged Bitcoin as the largest “digital commodity” – an asset class that’s “here to stay” alongside physical variants like gold and silver.
He does not, however, view BTC as a currency, believing digital dollars will continue to lead.
“I believe that you’re hearing from sovereigns to the Ray Dalio’s of the world, to the Larry Fink’s of the world… in a complex geopolitical environment, this is an asset that you should have some exposure to,” Allaire concluded.