Castle Island founder Nic Carter shared his views on important topics including MicroStrategy’s Bitcoin strategy, Ethereum’s evolving role in the crypto ecosystem, and the possibility of a US strategic Bitcoin reserve under the Trump administration in a recent interview.
Carter said MicroStrategy has innovatively used the fixed-income markets to issue debt and buy Bitcoin, allowing the company to capture a 2x premium over the net asset value (NAV) of its Bitcoin holdings. The strategy, championed by Michael Saylor, has provided a path for institutional investors who can’t buy Bitcoin directly or through ETFs. But Carter warned investors about the risks associated with MicroStrategy’s premium, cautioning that its stock price could diverge from Bitcoin’s trajectory in the event of a sell-off.
Carter noted that Ethereum plays a key role as the cornerstone of the decentralized finance (DeFi) ecosystem, hosting the majority of the total value locked (TVL) in DeFi applications. Ethereum remains the dominant platform for stablecoins and NFTs and has promising prospects for continued growth. “Ethereum has an opportunity here after following Bitcoin for a long time,” Carter said.
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Carter expressed skepticism about the possibility of a US strategic Bitcoin reserve, dismissing the likelihood of Congress supporting such a move. He argued that switching the US financial system from the dollar to a Bitcoin-backed standard would undermine global trust in the dollar as a reserve currency. While smaller countries like Bhutan and El Salvador have adopted Bitcoin as part of their financial strategies, Carter argued that the US should avoid signaling a shift away from the dollar as the issuer of the global reserve currency.
However, he also acknowledged the market’s optimism regarding Bitcoin, which recently reached a record high of $108,000. Carter warned that speculative rhetoric such as strategic reserves could lead to market disappointment and corrections if these expectations are not met.
Carter predicts that Bitcoin could reach a market value equivalent to gold in the long term, with each Bitcoin priced at $900,000. While he remains optimistic about the sector’s growth, he urged caution against speculative rhetoric overstating the impact of Bitcoin’s short-term price movements.
*This is not investment advice.