In a stark rebuke to Bitcoin enthusiasts riding the cryptocurrency's latest surge past $100,000, veteran economist David Kelly declared the digital asset "still about $70,000 too high," underscoring persistent doubts about its fundamental value amid euphoric market highs. Speaking at a financial conference in New York, Kelly, chief global strategist at JP Morgan Asset Management, argued that Bitcoin's price reflects speculative frenzy rather than intrinsic worth, drawing parallels to past asset bubbles like the dot-com era and tulip mania.
Kelly's assessment comes as Bitcoin has skyrocketed over 150% in the past year, fueled by institutional adoption, ETF approvals, and geopolitical uncertainties driving investors toward decentralized alternatives. Yet, he pointed to key vulnerabilities: Bitcoin's fixed supply of 21 million coins does nothing to address scalability issues, regulatory crackdowns in major economies, and its energy-intensive proof-of-work mechanism, which he likened to "digital gold mining with no refinery." Citing on-chain data, Kelly noted that long-term holder accumulation has stalled, with exchange inflows signaling potential profit-taking at these levels.
The critique resonates in broader financial circles wary of crypto's volatility. Historical precedents abound—Bitcoin's 2022 crash from $69,000 to under $17,000 wiped out trillions—yet proponents counter that network effects and scarcity will propel it higher. Michael Saylor of MicroStrategy, a vocal Bitcoin maximalist, dismissed such views as "fiat bias," insisting the asset's halving cycles and growing corporate treasuries ensure a path to $1 million. Kelly, however, remains unmoved, projecting a fair value closer to $30,000 based on discounted cash flow models adapted for digital scarcity.
Market reactions were swift, with Bitcoin dipping 3% in after-hours trading following Kelly's remarks, though it quickly recovered amid ETF inflows topping $2 billion last week. This episode highlights deepening divides in the investment world: traditionalists like Kelly advocate for diversified portfolios anchored in productive assets, while crypto advocates see Bitcoin as a hedge against fiat debasement and central bank overreach. As the 2026 halving approaches, Kelly's warning serves as a cautionary note in an otherwise bullish narrative.
Beyond price, Kelly's commentary touches on cultural fault lines, where Bitcoin symbolizes rebellion against legacy finance for some, but reckless gambling for others. With U.S. elections looming and potential policy shifts on digital assets, his voice amplifies calls for measured optimism, urging investors to scrutinize hype against hard economics.
