Four experts told us their long-term predictions for bitcoin — and the most crucial information that crypto novices need to know
Bitcoin is rapidly gaining popularity but many observers are concerned about its volatility.
Insider spoke to four crypto experts to understand what the future holds.
The experts also shared the most crucial information that beginners should know before investing.
See more stories on Insider’s business page.
Bitcoin is rapidly gaining popularity as many look to the cryptocurrency as a valid medium of exchange or storehold.
But the digital unit of currency has its drawbacks. Its volatility is widely recognized among many, which has led investors, including Warren Buffet, to criticize it and other cryptocurrencies as “risky” and “worthless.” And now, with the recent rollout of China’s digital currency, discussions about bitcoin’s vulnerability are gaining momentum.
Insider spoke to four experts in the crypto industry about their future predictions.
Brock Pierce, the former ‘Mighty Ducks’ star turned crypto titan
When asked where he sees bitcoin in 10 years' time, Pierce seemed bullish while also taking a swipe at the US government’s fiscal decisions.
He said: “After seeing the growth of btc in the last 6 months (Mkt cap exceeding $1T) I’m very optimistic about the future growth of this technology. Our government’s poor monetary choices (overprinting, excessive spending, etc…) only work in Bitcoin’s favor — and from what we’ve seen in the last year, there’s no sign of slowing down.”
For Pierce, the crypto landscape has drastically changed since its inception. But according to him, a major attraction of the cryptocurrency is the fact that “every transaction that has ever occurred is put on an open - public ledger making fraudulent applications nearly impossible”. This is why he added, “if you haven’t done research on bitcoin or Blockchain technology — I would urge you to do so!”
James Ledbetter, editor, and publisher of the fintech newsletter, FIN
As fears loom over the effect of China’s newly launched digital yuan on bitcoin, Ledbetter said: “In general, the development of Central Bank Digital Currencies (CBDCs) can be viewed as an encroachment on bitcoin’s territory. If the digital yuan gains wide acceptance, it may discourage some people in China and elsewhere from investing in bitcoin.”
With a new wave of young people investing in the cryptocurrency, he added: “It scares me if people are getting into the bitcoin market because consciously or unconsciously they think it will never go down.”
This is among some of the reasons why people “should never invest more in any given asset than you can afford to lose,” Ledbetter added.
Joey Krug, co-chief investment officer at Pantera Capital
The reason why young people are investing in bitcoin is down to the fact that in general, younger people tend to hold assets farther out on the risk curve than other groups, says Krug.
Young people see the government printing trillions in fiscal stimulus, threatening to rapidly debase the US dollar, Krug explained. Meanwhile, they have an increasingly strong sense that opportunities for socio-economic advancement are becoming fewer and harder to come by. “The result is that far more young people today own bitcoin than they own gold. That trend is not going to reverse,” he added.
Krug laid out three key areas for novices to pay attention to: He said: “First, remember that bitcoin could go down 70% or more. Second, know that it could go up many multiples of that. Third — and in light of #1 and #2 — figure out an investment size that will allow you to hold bitcoin without driving yourself crazy or losing sleep over each short-term price swing.
He added that “if you buy too much relative to your other assets, you will inevitably panic and sell when it does go down. Bitcoin investing is a long game, and it isn’t for the faint of heart.”
Lucy Gazmararian, founder and managing partner at Token Bay Capital
“Today bitcoin is increasingly being viewed as ‘digital gold’ due to its scarcity value as there will only ever be 21 million bitcoins in existence,” according to Gazmararian.
In terms of how she thinks bitcoin will be faring in five-ten years' time, it’s conceivable that it could become the world’s reserve asset, she said. “There are early signs of this happening today with corporates around the world beginning to add bitcoin to their balance sheets.”
She added that money is set to become “a far more complex payment instrument than it’s ever been before,” with the onset of digital currencies.
This is because, in her view, the future looks as though central bank digital currencies, cryptocurrencies, and other digital representations of value will interoperate seamlessly within our digital economy.
When asked about the essential information potential investors should know, Gazmararian highlighted two key points. “Develop your own view on this new technology and get clear on why you are holding it,” she explained.
She also believes “there are distinct operational risks associated with holding bitcoin “as it’s a purely virtual currency and can be stolen from your digital wallet if your private key gets into the hands of a nefarious actor.”
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Thanks to crypto curbs, India missing out on multiple $50-100B listed firms, says Binance CEO
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“Banks refusing to work with crypto are like bookstores refusing to work with the Internet,” Changpeng Zhao , the founder and chief executive of the world’s largest bitcoin exchange, Binance , tweeted on May 7. The comment came amid ICICI Bank and other major banks cutting off banking and payment gateway services to crypto platforms in India . In an interview with ET’s Apoorva Mittal, Zhao says lack of understanding among Indian regulators and regulatory inconsistency are potentially taking away multiple multi-billion-dollar companies from India. Edited excerpts:It’s just not a smart thing to do. It may come from fear or lack of understanding of cryptocurrencies. Some countries are pushing for innovation in the industry and others are resisting. The guys who are resisting it may protect some of their legacy institutions for a short period of time, but they’ll get destroyed in the long term because of the technological innovation in industries like decentralised finance (a blockchain-based form of finance that does not rely on central financial intermediaries like banks and brokerage).No matter what the reason is, if you cut off access to new technology you unnecessarily slow down the development of that technology in that region. For instance, probably more than 50% of the innovation in decentralised finance is coming from the US right now because they have very positive and clear regulations for cryptocurrencies. India probably has an equal or maybe higher number of engineers compared to the US, but not much innovation there.We can help them in a limited way. We can’t get them banking access. We do try to increase understanding of cryptocurrencies among both regular people and also regulators. However, we did not have many discussions with the regulators in India. We also try to improve the regulatory environment in other parts of the world.People don’t know what they don’t have. India is probably missing out on multiple $50-100 billion listed companies because of the restrictive environment. In the US, over the next five to 10 years, we’re probably gonna see at least a dozen companies valued at $100 billion-plus (crypto exchange Coinbase was valued at $100 billion on its debut on Nasdaq ). Those are huge parts of the economy. It would be like missing Google or a Facebook type of organisation that you could have today. It will also have a cascading effect on other industries that depend on financial services and make these industries dependent on global service providers instead.We have a fairly large anti-fraud and compliance department same as any banking and traditional ecommerce company. With blockchain, there’s actually additional benefit. Most blockchains are transparent, meaning that you can track transactions over time. So, it’s actually easier to track some bad actors. We use blockchain analysis tools and many other tools specifically for this purpose. On Binance, such activities are less than 0.01%.