Bitcoin is still 'seen as the best hedge against inflation,' CryptosRUs founder says

CryptosRUs Founder George Tung joins Yahoo Finance Live to discuss the adoption of crypto in 2021 and expectations for bitcoin and other cryptocurrencies in 2022.

Video transcript

KARINA MITCHELL: Want to bring your attention now to the crypto market and take a look at some of the numbers. We'll see that Bitcoin is not having the greatest start to the new year, down 642 points, firmly stuck at 46,000. So what does the outlook look like for 2022?

Want to bring in our next guest, George Tung, CryptosRUs founder. George, thank you so much for joining us today. How did we leave off 2021, and what is the outlook for 2022 in this space?

GEORGE TUNG: Well, it's important to remember, in 2021, Bitcoin and crypto had a fantastic year. Even though the last few months and the start of the year hasn't been towards the upside, Bitcoin performed 60-plus percent in 2021-- and not only Bitcoin. You look at Ethereum, and you look at the entire crypto, market cap has more than doubled.

So 2021 was actually a really fantastic year for Bitcoin and crypto overall, and I expect more of the same in 2022 because, if you look at the adoption, the growth, even media attention, it's all growing. And now we have even countries that are changing their economic policies to suit crypto and Bitcoin. And that's very, very encouraging going forward.

ALEXIS CHRISTOFOROUS: But George, I'm wondering to what extent the Federal Reserve and its plans to, you know, roll back stimulus and raise interest rates this year-- what is that going to mean longer term for cryptocurrencies?

GEORGE TUNG: Well, right now, we know that inflation is no longer transitory, and inflation is a real thing. And right now, a lot of companies and institutions are looking at hedging against inflation with Bitcoin. So short term, there may be some volatility if there is tapering, there is, you know, rate hikes. The equities market does tend to react to it, and Bitcoin at times does tend to react to what the equity markets also do.

The long term, inflation is going to be a continual issue, and Bitcoin is seen as the best hedge against inflation at this point. Even JP Morgan and Goldman Sachs have come out with studies that say that institutions are preferring Bitcoin over gold at this point. And I expect that will continue on.

KARINA MITCHELL: Now, how much more mainstream does it become this year? Because you have exchanges like Crypto.com, you know, taking over the Staples Center and naming it after them, now making a big push to get involved in Super Bowl ads. So, you know, with all of this happening, what happens to those exchanges and the level of interest in them?

GEORGE TUNG: I think 2021, because of the explosiveness, a lot of exchanges like Crypto.com now has the money to really market themselves and get the word out about not only themselves but also crypto. I mean, Crypto.com did something no one thought was possible. They bought the naming rights to the stadium where the Lakers play, and that was a monumental deal.

And it's not just them. FTX also done the same thing, and many others are utilizing their war chest, their treasury now, to really get the word out about themselves, but more importantly, get the word out about crypto. And the more education, the more awareness there are, the better it is overall.

ALEXIS CHRISTOFOROUS: George, I want to talk about where you think we could see Bitcoin by the end of this year because the president of El Salvador saying, this is going to be the year Bitcoin hits $100,000. Now, he may have his own reasons for saying that since El Salvador began accepting Bitcoin as legal tender in September. But where do you think it can really go? I mean, we saw it hit 60-- or above 60,000 last year before falling back a bit. What are your expectations for this year?

GEORGE TUNG: I think we move towards that number and possibly even break it. You know, obviously, President Nayib-- or President Bukele, he has fully embraced Bitcoin for his country. And many other countries like Turkey and Venezuela, they're looking at adopting some form of either a CBDC or Bitcoin. And, you know, with adoption and if you look at a lot of the on-chain metrics, things that measure Bitcoin-- whether or not it forms a top-- those kind of metrics and a lot of indicators that show that the reserves on exchanges continue to drop, the liquid supply being held by the holders and long-term holders keep increasing-- you put all those things together, and it looks like Bitcoin is definitely going to continue forward and make a new high. And many feel it's above 100,000, and I do too.

KARINA MITCHELL: Yeah, that is a very bullish estimate. So it used to be then, as Bitcoin goes, so does the rest of the crypto market. We've seen that sort of change a little bit and seen Ethereum also sort of take off. Where do you see that going? I'm struck by one statistic that stood out in my mind. If you invested at the start of January of last year a thousand dollars in Bitcoin, you would have returned with $1,600. If you-- if you invested that same $1,000, you would have gotten more than $5,000 if you stayed in Ethereum.

GEORGE TUNG: I would say the biggest surprise of 2021 is the evolution and growth of the network protocols such as Ethereum. And that's because DeFi and now NFTs are simply exploding. DeFi is a new way for people to borrow and lend and trade in a decentralized manner outside of the centralized system. And NFTs, of course, is embraced by now celebrities and brands, and both are exploding.

And here's an interesting statistic. At the beginning of 2021, the total value locked into DeFi projects on Ethereum was under $20 billion. And at the end of 2021, that exploded almost 10 times as high. So the growth has been tremendous with Ethereum, but not only Ethereum. Many other network protocols like Ethereum, Ethereum competitors-- for example, Binance Smart Chain, Terra, Solana, Polygon-- they're all exploding as well. So I do believe that these network protocols, or a.k.a. L1s, will continue to have tremendous movement and upside in 2022.

KARINA MITCHELL: Definitely a lot of names that we will be hearing much more of this year, I'm sure. Thank you so much. We will leave it there. George Tung from-- thank you so much for your time, sir.