Local crypto boss says US banking turmoil means it’s bitcoin’s ‘time to shine’
The boss of one of Australia’s largest cryptocurrency exchanges says recent banking turmoil in the US and Europe provides an opportunity for digital assets such as bitcoin.
Adrian Przelozny, chief executive of Independent Reserve, believes it is bitcoin’s “time to shine” after the collapse of three mid-sized US banks and the emergency takeover of Swiss banking giant Credit Suisse.
“The economic situation that we’re in right now, it’s what bitcoin was made for,” Przelozny says. “It was created off the back of [the GFC], and now we’re seeing echoes of that again; I think this is the time for bitcoin to shine.”
Over the past 10 days since the collapse of Silicon Valley Bank, the price of bitcoin has rallied more than 35 per cent, with the high-profile digital asset currently trading at about $42,000.
Przelozny, whose exchange has about 250,000 users and more than $1 billion in assets under custody, says the crypto market is still subject to the whims of the US Federal Reserve’s interest rate decisions, but thinks that will change in coming months.
“Right now we are still very much at the mercy of the monetary policy decisions in the US. But ultimately, interest rates will have to reach a point where they peak,” he says. “We also have the bitcoin halving next year, so I think the crypto market will turn over the next 12 months.”
Crypto’s rise in the face of the current market turmoil marks a change in behaviour for the nascent asset class, which has risen and fallen in lockstep with traditional markets for the past 18 months.
Proponents believe bitcoin is akin to “digital gold”, and can serve as a hedge for investors in times of high inflation and market instability, a view Przelozny shares.
“If we start to get into another quantitative easing cycle, which people expect because it’s the only way to save the US banking system, I think there will be people who begin to see bitcoin for what it is,” he says.
On Thursday, Independent Reserve finalised the acquisition of local crypto trading business bitcoin.com.au for $3 million, with the main asset being the company’s eponymous domain name.
‘The economic situation that we’re in right now, it’s what bitcoin was made for.’
Adrian Przelozny, head of Independent Reserve
The deal was initially struck with Australian-founded crypto company Banxa last September, with Independent Reserve also purchasing the domains coinloft.com.au and buyabitcoin.com.au. As part of the deal, Banxa will also take a small equity stake in the crypto exchange.
Przelozny hopes the purchase will reduce the barrier to entry for would-be crypto purchasers in Australia, saying he believes many prospective buyers are put off by the complexity of crypto exchanges.
Investor confidence has also been shaken recently by the spectacular collapse of US crypto exchange FTX last year, a move which prompted a number of Australian exchanges – including Independent Reserve – to publicly pledge to provide proof of their assets and audited financials.
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Source: Thanks smh.com