After reaching All-Time Highs at the end of 2017, Bitcoin and practically the rest of the altcoins have suffered one of the worst episodes of their short life, losing almost 80% of their capitalization. This type of volatility has made cryptocurrencies a compelling case to study, giving rise to several conversations and analyses.
Laura Shin, host of Unchained, had the opportunity to interview different experts regarding the infamous “crypto winter.” In an episode of her podcast, Arthur Hayes, CEO of BitMEX and Alexis Ohanian, Co-founder of Reddit shared their views with an audience that was able to contrast the difference in criteria between the two.
Will Bitcoin Succeed?
Arthur Hayes gave a relatively skeptical opinion of the current situation in the crypto market. The CEO of BitMEX is still not sure whether in the future Bitcoin will succeed in becoming a globally accepted asset:
“Apple has more cash on its balance sheet than the whole value of the industry that we’re talking about. So, it’s insignificant in terms of where it is today. Could it become a bona fide asset class in the next 10 years? Maybe. The jury is out on whether or not Bitcoin is actually secure over the long run. It’s had a decade, which is pretty good, but it’s still an experiment. So, the jury is out, but it’s looking like it could be a new way of raising capital and sending value around the world.”
Mr Ohanian, however, is much more optimistic about crypto currencies. He commented that important uses are already being seen internationally and despite recognizing the risk currently involved crypto trading, he has enough confidence in the market to invest approximately 10% of his entire fortune:
“I do think, as a store of value, Bitcoin has been – and this is particularly for people outside of this country – a tremendous resource. And we’re already seeing, even anecdotally, money getting moved out of countries on thumb drives where gold is literally being confiscated from people as they make their way out. As an example, a friend of mine tweeted a few weeks ago, out of Venezuela, they were able to get that currency, the currency they had stored digitally in Bitcoin, out, and safe …
As an asset class, I aim for about 10% of my net worth in crypto. And my bet, simply being that, if this future that we hope for technologically pans out, this will be a really material investment – but it’s still tremendously risky.”
What is Needed to Achieve Global Adoption?
As for adoption, Hayes focuses more on the monetary aspect than on the other uses of crypto. From his perspective, it all boils down to “Can you make money trading it?”
“Institutions need to look at Bitcoin or Bitcoin trading… It’s really about, ‘How much money can you make?’ What’s the volatility? What are the volumes? We’ve come off about 70% in terms of the price this year. Volatility’s down massively. Exchanges are firing people. It’s a very volume-driven business, and if there’s no volume, and there’s no excitement, then the institutions won’t get involved. But at the end of the day, it’s ‘Can you make money trading it?’ And if the answer is ‘yes,’ they’ll find a way to do it.”
In contrast, Alexis Ohanian, who is also co-founder of Initialized Capital, believes that to achieve mass adoption, the industry must focus on providing a better user experience that will offer more attractive alternatives to the traditional fiat system:
“Users will gravitate towards the better user experience. The thing that is better, the thing that is cheaper, the thing that is faster … I think what we’re going to see in the next 10 years is going to look a lot more like traditional finance – just done better, cheaper, faster – than the utopian crypto future.”