Business Markets

Titans of Industry Are Swaying Towards Crypto

January 20, 2018


Titans of Industry Are Swaying Towards Crypto

Over the past year, the subject of cryptocurrency has garnered a lot of press, speculation, and controversy. Despite all other ongoing developments in the world — politics, sports, and extreme weather — blockchain technology and cryptocurrencies like Bitcoin, Ripple, Ethereum, and Credo have still managed to take their place, front and center, in the discussion about the future of our economy. A plethora of headlines referencing crypto have graced the news with milestone after milestone. The cryptocurrencies continue to reach new highs, shattering previous valuations. With all of this attention in blogs, tabloids and news, a robust debate wages with tech and finance giants taking strong positions on either side.

As awareness of blockchain technologies, cryptocurrencies, and their potential to change the way we operate in the world have come into the limelight, the competition to become the preeminent expert in the space has become hotter between financial and tech titans. In the world of finance, some financial analysts have been dismissing cryptocurrencies as a fad. [CNBC ]. While in the world of tech, many prominent entrepreneurs and innovators are endorsing and supporting cryptocurrencies as the biggest disruption since the advent of the internet.

Widespread media attention has increased public scrutiny. Crypto has infiltrated the masses, with television news coverage and constant debate on social media sites like Facebook and Twitter. Some thought leaders say Bitcoin, Ethereum, Dash, Credo and other cryptos are the future of finance. Conversely, others disregard these technologies as nothing but a bubble. A recent Bloomberg article provides a closer look into the thoughts of prominent investors and icons on both the bull and bear side of the market.

On Twitter, Ross Gerber, CEO, Co-Founder and Investor at Gerber Kawasaki Wealth and Investment Management says, “What people like Buffett and S Korea will learn. Bitcoin is not a currency. It’s a movement. It’s so much bigger than ‘money’ It’s a rejection of sovereignty”. -Ross Gerber @GerberKawasaki.

Bears and Bulls have taken strong stances on both sides. Through all of this, cryptocurrency continues to develop as an industry and blockchain tech continues to reform and reshape the ways in which our lives unfold.

First I will cover extreme negative views on the market, and how they have changed.

Second I will describe how people in the middle are interested in the potential of blockchain tech going forward. Third and lastly, I will talk about the super bulls who believe it could revolutionize the financial industry as we know it. Despite the feuding and contrasting opinions of everyone mentioned above, the market is coming around to the notion that crypto will blossom — or at least has the potential to blossom — into a new digital economy and industry.

The Bears Smell Honey

Early on in the fall, Jamie Dimon publicly stated that “Bitcoin is a fraud” and warned that he would “fire any trader that bought and sold thecryptocurrency.” His comments were highly publicized and echoed by the voices of other naysayers.

Jim Rogers, veteran investor and Columbia Business School graduate, wrote last year on Bitcoin that, “it looks and smells like all the bubbles I have seen throughout history ….messing around with bubbles is risky. Better to just stay away. ‘I have missed it, whatever it is,’ Rogers said.” (Marketwatch on Jim Rodgers)

Photo Credit: Market Watch, “Jim Rogers Says Bitcoin Looks and Smells like a Bubble” 

“I think this [crypto] is going to be the biggest bubble of our lifetimes by a long shot,” stated another naysayer, Former Fortress hedge fund manager Michael Novogratz at a CoinDesk bitcoin conference. Even though this investor early on publicly proclaimed the entire industry to be a bubble, he has decided to participate in the boom by creating a crypto hedge fund. What this shows is that even bears like Novogratz are eager to participate and capitalize on the price swings in the market, further solidifying its existence.

Another bear, Howard Marks, claimed that “it’s a pyramid scheme,” that could only end badly once regulators crack down on the matter. After drastic vertical gains, both Dimon and Marks claimed that the only direction the market could go was down.

But as the market has changed, so have the opinions of industry titans.

Very recently, Jamie Dimon reversed his opinions on the matter of cryptocurrency. Dimon changed his stance from a previously staunch bearish position, by stating:

“I regret making [those comments],” Dimon said. “The blockchain is real. You can have crypto yen and dollars and stuff like that.” — Jamie on Bitcoin’s Value

Image Credit: CNBC

Industry giants are being forced to recognize — and in some cases accept — the tidal waves of change confronting their industry.

Some thought-leaders believe the future of central banks lies in bitcoin. Ravi Menon, Managing director Monetary Authority of Singapore noted that, “one cannot rule out central banks themselves issuing digital currencies some day.”

Some experts espouse the value of Bitcoin by pointing out that it is still much less valuable than gold. I believe this means means that there is room for growth. Gold sits at a nearly 13 trillion dollar market cap, while bitcoin and crypto hovers around 500 million, meaning there is a huge amount of room for growth. As the bears of the market begin to realize that this industry is in its infancy, and learn more about blockchain as a technology, their oppositional opinions appear to soften. They too believe that crypto has not yet reached the point where complete regulation is present, even though it will be very difficult to regulate something that is decentralized. However, as the industry progresses into the new year, regulations are already routinely being proposed as well as existing ones continuing to take effect. Recently, France took steps towards regulation with The French minister of the economy, Bruno Le Maire, announcing “the creation of a working group to develop cryptocurrency regulations…Le Maire proposed a discussion on bitcoin regulation at a G-20 summit in 2018.”

Overall, some of cryptos staunchest supporters are beginning to reverse and revise their opinions on the matter. Even many of the banks and financial institutions that initially opposed crypto are now beginning to create funds to trade crypto in hopes of reaping some of the profits. Banks in the end, have to focus on how to make money.

The Optimist

Somewhere in between the most negative voices, and before the most positive voices, you have the voices of those who sit in the middle — people like Mark Zuckerberg who I believe are cautiously watching, observing, learning about the market as it grows.

Mark Zuckerberg posted a status at the start of the new year.

In it he discussed many things: including, the political climate, the connectedness of people, and of course his opinions on centralization and decentralization. A topic which crypto is beginning to address.

In a New Year’s post describing his vision and expectations for 2018, Zuckerberg focused heavily on the centralization versus decentralization debate. He also expressed interest in learning more about blockchain.

“For example, one of the most interesting questions in technology right now is about centralization vs decentralization. A lot of us got into technology because we believe it can be a decentralizing force that puts more power in people’s hands. …

There are important counter-trends to this — like encryption and cryptocurrency — that take power from centralized systems and put it back into people’s hands.”

Zuck’s New Years Status

Techcrunch Discusses Zuck post

PC: India Today

I believe that Zuckerberg’s status on the matter reveals his interest in cryptocurrency, and his belief it has the potential to be one of the most promising growth industries this year.

It’s an interesting debate: one that pits the old ways of historically centralized banks against the newer views of decentralized tech companies and currencies. The question Zuckerberg poses is where tech will go this year and into the future: Tech used to stand for decentralization but now people are beginning to view it as centralized, as a relatively small number of gigantic companies like Salesforce, Amazon, Google and Facebook create campuses across the United States.

A counter trend and something that rebels against this is crypto. Zuckerberg explains that crypto has the potential to get us back towards the decentralized roots from which the internet began.

Zuckerberg expresses interest, recognition, and a positive outlook on crypto. Perhaps he feels this is the year that validates its existence in the financial markets. I believe the core ideas he references, about decentralization, supporting and fueling the existence of cryptocurrency are the same ideas that allowed powerful tech companies to emerge and exist in the new digital economy: “[decentralization] allowed tech companies to prosper but that they may now be drifting away from their decentralized roots and technologies like crypto may be a way for them to get back to that decentralization and give power back to the people he writes that he believes crypto could be “a decentralizing force that puts more power in people’s hands.” Although these principals once allowed tech companies to prosper, they may now be drifting away from their decentralized roots and technologies like crypto may be a way for them to get back to that decentralization and give power back to the people.

Financially empowering the people is one of the goals for the creators of crypto. It broadens the banking system into the digital realm. In doing that, Crypto provides more financial and currency choice than Americans have now, which is great for a capitalistic society.

In speaking in an interview about his philanthropy efforts on Bloomberg in 2014, Bill Gates explains his ideas regarding bringing digital currency to Africa: “Moderator: ‘One thing I do not have to tell you is that the poor have been unbanked as long as there have been banks. The difference is that now they have access to cell phones. The difference now is the digital wave. This makes me think, believe it or not, of Bitcoin:”

NBC NewsWire | Getty Images, Bill Gates

Hearing this, Gates responds: “The Bitcoin technology is key. You can add to it or you could build a similar technology” spoke gates in the interview, adding “Bitcoin is exciting because it shows how cheap it can be,” he told Erik Schatzker during a Bloomberg TV’s Smart Street show interview yesterday. “Bitcoin is better than currency in that you don’t have to be physically in the same place and, of course, for large transactions, currency can get pretty inconvenient.”

Peter Thiel, Co-Founder of PayPal, explains this quote when he publicly stated his stance on crypto: “PayPal had these goals of creating a new currency. We failed at that, and we just created a new payment system. I think Bitcoin has succeeded on the level of a new currency, but the payment system is somewhat lacking. It’s very hard to use, and that’s the big challenge on the Bitcoin side.” [Source: Cryptocoinnews] Earlier this year, Peter Thiel made major bets in cryptocurrency space, investing nearly 20 million into Bitcoin.

Peter Thiel Invests 20 Million

“Bitcoin is mineable like gold, it’s hard to mine, it’s actually harder to mine than gold. And so in that sense it’s more constrained,” Thiel was recorded saying in October 2017.

PC: Coindesk

While Peter Thiel appears bullish in his statements, he acknowledges there is still a lot of room for growth in the space with ability of holders to actually use Bitcoin. All three of these titans of industry, Zuckerberg, Gates and Theil, appear in their comments to be bullish on the existence of crypto and its function in society. Given the opinions of all of these investors, I feel crypto has the potential to not just grow and expand this year. Moreso, I feel it has the potential to grow and reform the global economy on the whole for the better. It is more than a means to make money, it is an engine for social change.

The Super Bull

Andreas M. Antonopoulos, Vitalik Buterin and Don Tapscott are super bullish on the power of cryptocurrency to level and reform the economic playing field. They see it as a means to empowering billions of individuals without an access to banking. A catalyst for social change:

Vitalik tweeted that people are getting lost in the pursuit of riches, and forgetting that cryptocurrencies are about reforming the financial structure of society.

As Antonopoulos said in a talk at Pebble Beach, California on November 1st, 2017,

“Paypal has service in 19 countries…the last time I checked there were 194.

Banking is available to maybe maybe 4 billion people. 2.5 billion people around the world have no access to financial services whatsoever… Bitcoin and these technologies are about the OTHER 6 Billion.” (Talk Link, )

As Antonopoulos points out, there are some large systemic flaws in our current economic system. As a result, a new decentralized system was built by and for the people.

It’s a radical concept that many people are buying into — literally in the case of cryptocurrencies. The wave of energy fueling Bitcoin and crypto represents a lot of energy and belief in the changing of a system with many flaws: “As problems such as climate change require coordinated global attention, Antonopoulos says this governance model has reached a point where it no longer scales to benefit the greatest number of people.”

(Bitcoin and the Power of Decentralization , Follow us: @FinancialReview on Twitter | financialreview on Facebook)

PC: Biography

Antonopoulos’ wider conclusion is that the global financial market is broken, and the government that supports it, is perhaps beyond repair. An overhaul of the current structure is in order. This sentiment is widespread and popular in the crypto-community.

A spirit of revolution and innovation which fuels these innovators, just as it was responsible for fueling some of the most impressive companies of the 21st century. All of them began with an idea, a solution, or an improvement to everyday life. From that, the seeds of Facebook, Google, Uber, Linkedin, and Bitcoin were born. In many ways, this is exactly what BitBounce is doing with solving email spam. We want to revolutionize the way you interact with email and allow you to gain currency in the process. This business model is a nice improvement on the way email has worked for decades, and one that benefits the email company and consumer financially.

Many in the community would say that now is the time for an improvement and overhaul of the current financial system with improvements that come both from a technical and a sociological perspective. At the heart of crypto lies the birth of a new global economy based on trust and transparency. For a long time, Andreas continued to add information, make speeches, and conjectures about the potential of the crypto industry, without having made any real money in the space. His loyalty and interest in the industry resulted in many rallying to defend him, and even go so far as to crowd raise $1 million for him when it was announced that he had no actual personal cash assets from all his work.

There’s no more deserving person in crypto to receive donations than Andreas Antonopoulos. He’s been one of the first influencers and largest voices for many in the industry, through positivity, authenticity, and selflessness. The $1.5 million (and counting) in donations he received showed the positivity and kindness present in the crypto community.

He is perhaps one of the most bullish and active scholars in the space.

This act of kindness on the part of many strangers in the crypto community gets to the core of what the new economy could be about: a bank and a set of currencies built by the people and for the people. The creation of a new global economy that empowers those who do not have access to equal opportunity compared to those who do have access to banks and financial instruments. A world where the vast wealth disparity across opposing nations and opposite social groups starts to become more even.

Equality is a concept that Andreas believes in heavily, which is perhaps one reason why he is so bullish on cryptocurrency. This same sentiment has been echoed by Bill Gates in his comments on philanthropy.

Overall there are a few major takeaways from these comments: over the last quarter, the bears have reformed their negative view to accept that digital currency could have a place in the global economy. Secondly, CEOs and founders of some of the largest companies in the world — Facebook, Microsoft, and PayPal — are solidly interested in exploring the applications of blockchain technology going forward. Finally, the industry biggest proponents and inventors are less interested in earning money, and much more interested in the long term possibility for cryptocurrencies to reform society.

If the people want it, and use it, crypto will be here to stay.

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