Cryptocurrency investor Brian Kelly believes that the decision to drop bitcoin futures by the Chicago Board Options Exchange (CBOE) represents a watershed in the history of bitcoin, signaling that the crypto market’s longest-ever decline has finally found a bottom.

BKCM FOUNDER: CBOE EXIT SHOWS BITCOIN BEAR MARKET IS ‘EXHAUSTED’

Speaking on Tuesday’s edition of CNBC Fast Money, the BKCM Digital Asset Fund founder and CEO stated that he sees improvement in bitcoin address growth and market sentiment since December 2018 as evidence that the retail end of the bear market is “exhausted.”

CCN recently reported that CBOE ditched bitcoin futures, announcing earlier in March that it decided to stop listing new XBT futures contracts, at least for now. Following the announcement, prominent trader Mark Dow stated that abysmal liquidity figures make it difficult to believe that institutional investment is actually going into bitcoin

MUCH ADO ABOUT INSTITUTIONAL ENTRY

Speaking on the “Fast Money” panel, Kelly explained that a unique mixture of factors including shifting fundamentals make it likely that bitcoin is poised to break out of its prolonged bear phase which has lasted more than a year now.

While this might sound plausible on paper, there is one tiny problem with such a hypothesis – institutional investment did not take off as expected when the CBOE launched bitcoin futures contracts in December 2017. In fact, Mark Dow’s withering assessment of bitcoin liquidity is much closer to the mark, which raises the question of what happened to the expected entry rush and what comes next for bitcoin.

Challenged by the host to answer this question, Kelly stated that while institutional entry has been “much slower than we all expected,” that on its own does not tell the entire story. For instance, he said, institutions now have other avenues for bitcoin investment open to them such as custody which enables them to purchase and hold bitcoin positions directly. According to him, the supporting infrastructure on both the lending and the shorting side of bitcoin have become more “robust,” which significantly lessens the need for XBT futures to begin with.

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