Bitcoin fell on Friday because "everybody's panicking," but volatility in this market is actually quite normal, bitcoin bull Brian Kelly told CNBC on Friday.

The digital currency briefly dipped below $11,000 on Friday, down 44 percent from a record high hit at the start of the week.

"This is fear and greed," the founder of BK Capital Management said in an interview with "Power Lunch."

"What you had was some rumors that maybe Korea and Japan would be banning bitcoin again, and this happens very, very often. And so the herd panics, and the herd sells. And so far we've seen nothing of that, from what I can understand."