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US Global Investors CEO Predicts Bitcoin (BTC) Ready for Bull Cycle, Prefers Gold

Bitcoin BTC Price Analysis Gold 2019

Frank Holmes, CEO of US Global Investors and one of the more prominent natural resources capitalists in the country, called Bitcoin an alternative to gold, but stated that he preferred the physical store-of-value asset to its digital counterpart. In addition, he issued a stern warning to ‘millenial’ traders who have failed to do their homework on Bitcoin and precious metals such as gold.

Speaking in an interview with Kitco News on May 17, an organization that deals in precious metals trading, Holmes highlighted the fact that BTC and cryptocurrency wallets increased since 2018, despite the falling coin prices of last year’s crypto winter,

“What’s important during this whole year is that even though the price fell 80% to 90% depending on the coins, you had an increase of wallets out of people buying bitcoin, and that’s a sign that we’re ready for the next bull cycle. ”

In addition to increasing adoption, Holmes found the conditions of January 2018’s collapse to be somewhat favorable for a coming bear cycle. Compared to the traditional markets in 2008, which catalyzed one of the worst global recessions in history, the crypto markets of early 2018 were not overleveraging, which Holmes believes will allow them to recover more quickly,

“This [correction] can be a year, and we’re slowly climbing out of it, and [bitcoin] is becoming an alternative asset class like gold.”

Despite being receptive to a bullish cycle ahead for Bitcoin, Holmes reiterated that he prefers gold to BTC, stating that the latter is not a replacement for real-world precious metals. He also cautioned younger investors not to become too caught up in cryptocurrency, and to consider other asset classes, including as a way to contribute patriotically to the U.S.,

“[Millennials] should do their homework, they should open up a history book on why gold is so significant… why the great ‘love trade’, that if you love your country you should have gold in reserve. If you have a crisis, your paper money goes down in tremendous value. Gold is what bailed out Britain, getting it over to Canada, and then trading to get weapons from America, it was gold that did it.”

Holmes gave another prediction that the price of gold would rise with the easing of central banks around the globe, particularly in Europe, causing a decrease in value for fiat currencies that would push traders into precious metals. He highlighted the looming trade war between the United States and China that will ultimately lead to negative rates. He claimed the EU to have “massive” negative real interest rates with “no hope of them rising.” He further chastised EU governments for continuing to print money, and made the statement “you better buy gold, and you better back up the truck and have that minimum 10% golden rule.”

The geopolitical uncertainty brewing around U.S.-Chinese trade relations could further contribute to investment interest in cryptocurrency–similar to early April’s Brexit craze–as traditional economies and fiat currencies appear less certain.

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New Research Shows Bitcoin (BTC) Conversation Has Matured Dramatically

Bitcoin BTC Conversation 2019

The recent price rally for Bitcoin and cryptocurrency has a number of analysts and investors scratching their head and asking the question: what’s different between now and 2017?

While coin prices fell through the majority of last year, leading analysts to label 2018 a crypto winter, the market reached an all-time high in late 2017 following a massive bull rally for Bitcoin. Despite currently trading at under $8000, the price of BTC reached an all-time high of $19700 in the final weeks of December 2017. At the time, it appeared that Bitcoin was finally receiving the adoption and investor interest it deserved after nearly a decade on the market.

However, it quickly became apparent that market prices had outstripped valuation and usability, and the entire landscape of cryptocurrency collapsed with coin’s falling 80 percent or more over twelve months. In the aftermath of the price fall, analysts pointed to Fear Of Missing Out (FOMO), unrealistic expectations and greed as primary contributors to the spectacular boom and bust cycle for Bitcoin.

Bitcoin Conversation Evolving

Compared to eighteen months ago, alternative data provider Indexica believes that Bitcoin has matured as an asset since the last bull rally, and has published research supporting their claim. The group created a custom index processing the language contained in thousands of text documents related to cryptocurrency and Bitcoin, and found that the industry, as a whole, has matured greatly over the last several years.

According to their findings, professional discourse around Bitcoin has continued to grow throughout 2019, marking a key price indicator for the currency’s rally since the start of April. As outlined by Bloomberg, Indexica’s findings show three main drivers for growth:  “a more complex conversation surrounding Bitcoin, fewer concerns about fraud and a shift in the tense of how Bitcoin is talked about from the past to the future.”

‘Complexity of Bitcoin’–defined as a measure of the quality of discourse surrounding the asset–made up the majority (24 percent) of the conversation related to BTC. Indexica attributes the increased quality of discussion to the growing pool of academics and professional investors now populating the space of cryptocurrency, moving beyond the niche technology market it represented just a few years ago.

Bloomberg cites the entrance of Fidelity Investments getting into the cryptocurrency game for institutional investors as one strong indicator that the marketplace for Bitcoin has changed dramatically over the last eighteen months. In addition, Wall Street investment bank JP Morgan Chase has also given a vote of confidence to the utility of digital assets, by creating the in-house JPMCoin.

Interestingly, Indexica’s study also found that the tense of conversation surrounding cryptocurrency has changed within the last month. Futurity of Bitcoin, which logged 15 percent of the indexed conversation, gives an indication that discussions are geared towards the future of BTC–as opposed to what has already transpired. SInce the start of April, the future for Bitcoin and the crypto markets has been a dominant topic of conversation, providing another indicator on the direction of the industry.  

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JP Morgan Analyst: Bitcoin (BTC) Trading Above Intrinsic Value

JP Morgan Bitcoin BTC Price 2019

Analysts at Wall Street investment bank J.P. Morgan Chase believe that the price of Bitcoin has soared above its intrinsic value throughout 2019’s rally.

According to new details emerging from the banking giant, JPM strategists are claiming that Bitcoin is trading above what they consider to be the digital assets intrinsic value, giving investors some pause as to whether the market will heed such a metric. Similar to the argument for gold and precious metals, Bitcoin and cryptocurrency has struggled with the tug-of-war concept over what constitutes ‘intrinsic value.’ For the folks on Wall Street–regardless of continued price movement–the price of BTC has seemingly outstripped what it offers in terms of industry value.

Bloomberg was the first to report the JPM news on May 20, making the claim that BTC is possibly entering a similar period of trading that accompanied the bullish rally to end 2017. Similar to current market conditions, the JPM analysts found BTC to have surged well beyond its intrinsic value by the time the price began to collapse in December 2017.

Three month climb for Bitcoin (BTC). Image courtesy of CoinMarketCap

According to JPM strategist Nikolaos Panigirtzoglou in a note to investors on May 17, Bitcoin should be considered as a commodity, thereby allowing cost of production calculations using the estimates of mining electricity and hardware costs as a factor in valuation.

Panigirtzoglou wrote,

“Over the past few days, the actual price has moved sharply over marginal cost. This divergence between actual and intrinsic values carries some echoes of the spike higher in late 2017, and at the time this divergence was resolved mostly by a reduction in actual prices.”

Despite pounding the table over Bitcoin exceeding its calculated intrinsic worth, the strategists at JPM  caution that valuation can be a subjective quality, particularly through the lens of retail investors and market behavior.

“Defining an intrinsic or fair value for any cryptocurrency is clearly challenging. Indeed, views range from some researchers arguing that it has no fundamental value, to others estimating fair values well in excess of current prices.”

Previous years would have brought about investor skepticism towards the views of JP Morgan Chase in relation to cryptocurrency, given CEO Jamie Dimon’s acerbic comments towards Bitcoin. However, the investment bank has had a change of heart in the industry of cryptocurrency digital assets, with the development of the JPM Coin. While the currency is likely to be a private blockchain contained to the in-house banking network and clientele, it stands as a vote of confidence for both Bitcoin and the broader crypto markets that Wall Street is willing to hedge its bets in the technology.

After reaching as high as $8250 in the early morning hours of Asian trading, the price of BTC has slipped below $8k on May 20. As of writing, Bitcoin is hovering around $7700, with sellers starting the trading week by forcing the currency into a correction following the weekend rally. Fundstrat’s Tom Lee previously listed thirteen reasons why the crypto winter is over, giving his belief that the markets are entering a bullish phase even in light of last week’s price correction.

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First Brexit, Now Trade Wars: Global Politics Driving Bitcoin (BTC) Investors

Bitcoin BTC Cryptocurrency Trade War 2019

In April, after more than a year of falling prices, Bitcoin and the crypto markets took off on a bullish rally. While the initial price jump has been tied to a massive 21,000 BTC buy, geopolitical overtones at the time concerning Brexit contributed to the wave of investment interest.

During the same week that Bitcoin and cryptocurrency experienced its first bullish rally since the beginning of 2018, British Parliament and Prime Minister Theresa May were embroiled in a debate on how to handle their exit from the European Union. While once a seemingly impossible though, the U.K. appeared to be drawing near a ‘No-Deal’ Brexit, which would have brought about an abrupt and immediate cease in trade and relations with the European Union.

In anticipation for such an event, currency speculators were predicting a collapse in the British Pound and drop-off for the Euro, driven by the economic turmoil and halting trade between the two entities. Parliament swooped in during the first week of April to prevent a No-Deal Brexit, and the entire event was brought to anti-climatic end mid-month with Brexit being delayed to the end of October 2019.

However, the economic uncertainty kicked up in the wake of Brexit was enough to draw vast swathes of the investment landscape to cryptocurrency as a possible alternative to government fiat and the traditional markets that relied upon their currency. Similar interest in cryptocurrency has continued to be generated throughout May, as the fallout from U.S. and Chinese trade negotiations creates a murky global landscape.

The ‘trade war’ brewing from President Donald Trump’s handling of U.S.-Chinese relations has the investment class once again looking at cryptocurrency as a potential means for economic viability. The bullish turn for Bitcoin is no doubt related to the market cycle of a severe bearish period coming to an end, but the geopolitical implications of global economics have changed over the last eighteen months.

Whereas cryptocurrency was previously viewed too volatile to participate in, institutional investors are turning to the possibility of Bitcoin as a substitute store of value and alternative to the traditional markets. In addition, the entire industry has been vetted and supported by the entrance of social media giant Facebook and Wall Street stronghold J.P. Morgan Chase.

The vote of confidence for cryptocurrency is in; now it remains to be seen how the industry can move past the FOMO and price speculation that led to January 2018’s massive collapse in valuation. It’s possible that the looming global recession for the world’s markets–after 12 years of bullish prices–could force the hand of investors and cryptocurrency. But given the economic uncertainty being generated by both a looming trade war and a delayed Brexit, it could be only a matter of time before crypto takes a more central stage as a currency and digital asset.

Either way, the valuation for cryptocurrency appears tied up in larger factors than retail price speculation.

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Coinbase Eyeing $50 Million Acquisition of Bitcoin (BTC) Custody Provider Xapo

Coinbase Xapo Acquisition Bitcoin Cryptocurrency

Just days after Coinbase CEO Brian Armstrong revealed his company managing more than $1 billion in cryptocurrency assets through their custodial service, reports are surfacing that the exchange is negotiating an acquisition of Xapo.

According to sources familiar with the deal, the Block reported on May 16 that Coinbase is advanced talks to purchase the custodial service of Xapo for $50 million in an effort to further their position as the premier institution for cryptocurrency custody. The article also claims that Coinbase is in close competition with Fidelity Digital Assets to acquire the custodial service, with the latter viewing Xapo as a strong entry-point into the industry.

While the negotiation is far from concluded, Xapo would represent a substantial prize for either organization to acquire. Xapo is reported to have over 700,000 BTC under custody, worth $5.5 billion. According to the Block,

Xapo’s core product is cold storage vault custody of bitcoin, with rumors that the company holds as much as $5.5 billion of assets under custody (AUC) at the current $BTC price near $8,000, reflecting ~700K bitcoin under custody. Xapo custodies 226,000 BTC that are part of Grayscale Bitcoin Trust.

Xapo is also helmed by serial entrepreneur and staunch Bitcoin supporter Wences Cesares. Cesares, hailing from Argentina, is one of the more historic figures in the industry of cryptocurrency, earning the moniker “Patient Zero” as the original influencer for cryptocurrency in Silicon Valley.

The anonymous sources seem to believe that Coinbase is edging out Fidelity Digital Assets in the bid for Xapo. The Block claims that Fidelity Investments has been making an effort over the last year in bridging their traditional investment services with cryptocurrency and blockchain, since bringing in Tom Jessop as head of corporate business development in 2018, who holds experience in blockchain startups. Xapo represents a massive amount of leverage for the company to springboard into the industry of cryptocurrency, by targeting high-value institutional investors looking for custodial services.

However, with Coinbase currently in the front-running for purchasing Xapo, the U.S. based exchange is signaling its business model moving forward that will diversify beyond collecting trading fees. Given the cyclic nature of cryptocurrency and the extreme volatility the markets have exhibited thus far, Coinbase could find more steady ground by becoming a premier custodial provider for Bitcoin and other prominent cryptocurrencies,

“The addition of several billion of AUC would be a huge shot in the arm for Coinbase. Under Xapo’s current business model, customers are not charged for storing their bitcoin. Rather, they generate revenue by enabling over-the-counter (OTC) trades for customers using the bitcoin under custody.”

Since its founding in 2012, Xapo has raised $40 million in funding, with David Marcus and Winklevoss Capital included among its list of prominent investors. Adding Xapo would contribute to the list of recent deals Coinbase has been making, including the acquisition of Earn within the past year, which has been reformed into the educational portal Coinbase Earn.

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Mark Mobius Supports Bitcoin (BTC) After Previously Calling Cryptocurrency A “Fraud”

Mark Mobius Bitcoin 2019

One of the most recognizable figures in investing has had a change of heart in his opinion towards Bitcoin and cryptocurrency.

Mark Mobius, cofounder of Mobius Capital Partners, recently spoke in a Bloomberg podcast where he claimed that Bitcoin will be “alive and well” into the future. Despite his current positive attitude towards Bitcoin, Mobius delivered a scathing critique of BTC in May 2018, when he called the currency a fraud.

Now, with the price of Bitcoin achieving relative highs and plotting a scorching path of price gains, the long-time investors has come to believe that cryptocurrency will offer utility to consumers not currently provided through fiat,

“There’s definitely a desire among people around the world to be able to transfer money easily and confidentially. I believe bitcoin and other currencies of that type are going to be alive and well.”

While Mobius may concede a future that includes Bitcoin and cryptocurrency, he has yet to invest personally in any of the digital assets. Mobius told Bloomberg,

“Whether I would invest in it is not a question. You have incredible volatility and, at the end of the day, you can’t chase one individual group or one organization that will keep track of what is going on.”

The 82 year-old investor also took the opportunity to spread some caution on cryptocurrency, telling traders to be careful. Mobius pointed to the massive and high-profile collapse of cryptocurrency exchange Mt. Gox in 2014 as an example of the risks involved in crypto, which saw users lose hundreds of millions in BTC stolen from the exchange.

Mati Greenspan, senior market analyst for eToro and regular cryptocurrency commentator, was an early advocate of the shifting attitude towards cryptocurrency in Wall Street and established financial institutions. In a note to clients, Greenspan wrote,

“Many of those who are heavily entrenched in the old financial system are unsurprisingly unswayed by the benefits of crypto, but that’s changing rapidly. The volatility is one of the most attractive qualities of crypto from an asset managers perspective.

The idea of asymmetric risk allows us to use this unique and uncorrelated asset class to greatly increase our return on risk in any otherwise well-diversified portfolio. Just as I, in my portfolio, am holding about 3.5% in emerging markets, I believe that one day soon asset managers around the world will diversify with crypto.”

While the crypto markets have experienced a small contraction on the day, broader forces appear at work driving interest to the industry. As pointed out by Mobius, growing conflict between the United States and China in a looming trade war has investors feeling shaky about the traditional markets. Just as Brexit previously drove capital into cryptocurrency before it’s October-delay, tensions between the U.S. and China have made crypto an alternative source of investment.

In addition, the high profile development of coins by social media giant Facebook and J.P. Morgan Chase has led to a legitimizing effect of cryptocurrency. While the technology was previously thought of as niche, Bitcoin and cryptocurrency is heading in the direction of a mainstream product.

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U.S. Presidential Candidate Andrew Yang Talks Bitcoin (BTC), Crypto Regulations

Andrew Yang Bitcoin Cryptocurrency

U.S. Presidential hopeful Andrew Yang recently spoke at CoinDesk’s Consensus 2019 event, where he shared his thoughts on Bitcoin and the government’s role in cryptocurrency regulations.

According to reports by those at the event, Yang came across well to the audience and even joked about the possibility of creating a ‘YangCoin.’ The overall takeaway seems to be that the potential next president of the United States is positioning himself as ‘crypto-friendly’ and recognizes the need for the U.S. government to do more in terms of clarifying the rules and regulations towards cryptocurrency.

Compared to the current and last administration, cryptocurrency continues to languish in a gray zone, with most Congressional members still treating the currency as no more than a tool for miscreants and illicit transactions. Look no further than the convoluted tax code for cryptocurrency, which treats investing in digital assets more akin to stocks than highly exchangeable currencies.

Yang and his campaign have previously issued a more lenient proposal towards cryptocurrency. In April, the presidential candidate made the promise to enact, “clear guidelines in the digital asset world so that businesses and individuals can invest and innovate in the area without fear of a regulatory shift.” Speaking at the Consensus event, Yang doubled down on his commitment to clarifying cryptocurrency regulations and finding a way to develop a working relationship between the government and the industry of crypto that avoided stifling innovation.

According to Yang, the current landscape of government regulations is increasingly unfair to those developing new technology, such as cryptocurrency,

“If you’re a builder it’s just ‘look, tell me what the landscape’s going to look like and we’ll figure it out from there’ but no one knows what the landscape will look like.”

CoinDesk reports that Yang gave an on the record interview with the website following his stage appearance, where he continued to reiterate his support for better government relations with cryptocurrency. Yang stated to not own any cryptocurrencies out right, but did say that he was invested in some funds with crypto holdings.

When asked about the the current practice of regulator’s focusing on enforcement as opposed to guidance, Yang had this to say,

“If you’re a builder it’s just ‘look, tell me what the landscape’s going to look like and we’ll figure it out from there’ but no one knows what the landscape will look like.”

Yang also called blockchain one of the “key technologies” to look forward to if he manages to take office following the next presidential election, telling event-goers,

“The work you’re doing is difficult…but it is the future. If I’m in the White House oh boy are we going to have some fun.”

Yang’s comments come at a time when the crypto markets appear to be experiencing a second wind. After the crypto winter of 2018, coin price across the board are up double digits or more, with Facebook, J.P. Morgan Chase and a number of high profile corporations planning to pursue digital asset projects in the coming year.

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Brian Armstrong Says Coinbase Custody Managing $1 Billion in Cryptocurrency

Brian Armstrong Coinbase Custody Billion

Brian Armstrong, CEO of Coinbase, recently shared that his company’s custodian service is managing over $1 billion in cryptocurrency assets.

Speaking at Consensus, the Coinbase CEO revealed that the custodial portion of his U.S.-based exchange had received over $1 billion in cryptocurrency, marking a milestone development for the management of institutional and large capital investors. The comments were first reported by CoinDesk on May 15, as apart of the overall on-stage discussion that was recorded during the event.

Armstrong was asked by Wall Street Journal reporter and panel moderator Paul Vigna about the involvement of institutional investment in the industry of cryptocurrency, particularly keying in on Coinbase Custody. The CEO replied,

“We launched our custody 12 months ago, we’ve just crossed $1 billion AUM or institutions, 70 institutions have signed up, adding about $150 million AUM a month, so, to a large degree that has been a success.”

While some investors and analysts have viewed Coinbase’s custody program as a vault of sorts for the safe-keeping of cryptocurrency, Armstrong claims that investors are asking for much more. In a show of confidence for both industry adoption and education, institutional investors in Coinbase Custody have asked for an expansion in staking and voting services. According to Armstrong,

“They want to be staking and voting, doing governance on-chain. I think that will grow rapidly.”

Staking represents a dividend of sorts for Proof of Stake cryptocurrencies such as Cardano. Investors are issued payouts in proportion to the number of coins they are willing to pledge towards network resources, providing an incentive for keeping coins in a wallet as opposed to exchanges.

However, the natural question becomes how can large capital investors participate in staking, thereby gaining the benefits of interest on their coins, while still receiving the protective features of custodian programs. Coinbase is looking to support this industry development and more, by offering staking features and those related to on-chain voting and governance. Armstrong also revealed that Bitcoin remains the top asset for Coinbase Custody and institutional investors, but claims that interest in other currencies has been on the rise.

While the crypto markets are responding favorably to 2019’s market swing, the panelists as Consensus still think it will be a number of years before the massive hedge funds come into play. According to Union Square Ventures partner Fred Wilson, who joined Armstrong on stage,

“The token funds and venture funds will make up the first two big institutional funds. For them [traditional institutions] to take their chips and go all in, I don’t see that in the next year or two.”

He further added,

“When people read in the Wall Street Journal that institutions are coming to crypto they think Goldman is coming, but in reality, maybe 100 token funds in the U.S. and 100 in Asia are all in so far.”

Nonetheless, Armstrong offered a surprising figure that 60 percent of all trading volume on Coinbase Pro–a more involved version of the user-friendly application–comes from institutions, giving a broad look at the current landscape of investment into cryptocurrency.

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Shark Tank’s Kevin O’Leary Calls Bitcoin (BTC) ‘Garbage’

Shark Tank Kevin O'Leary Bitcoin

One of Shark Tank’s most prominent investors has taken aim at Bitcoin and cryptocurrency.

Kevin O’Leary, who also goes by the nickname ‘Mr. Wonderful’ on the show, recently appeared on CNBC’s Squawk Box and gave his negative opinion of Bitcoin. O’Leary told the host that Bitcoin is neither a valuable asset or a currency, but rather constituted a “digital game.” He also called BTC “worthless,” explaining that its difficult for institutional investors to trade in the asset as receivers want some guarantee of value,

“To me, it’s garbage, because you can’t get in and out of it in large amounts.”

Despite Bitcoin frequently being compared to digital gold, O’Leary–who is the chairman of O’Shares ETFs–furthers the argument that the digital asset lacks intrinsic value. While gold and other precious metal stores of value may suffer from the same argument that their price is largely a social construct, O’Leary finds particular fault in Bitcoin. O’Leary gave the example of his failed attempt in using BTC to purchase Swiss real estate. According to O’Leary, sellers are wary of accepting Bitcoin without having a guarantee that ultimately amounts to being tied back to the U.S. Dollar.

He continued,

“Let’s say you want to buy a piece of real estate for $10 million in Switzerland. They want a guarantee that the value comes back to the U.S. currency. You have to somehow hedge the risk of bitcoin. That means it’s not a real currency. That means the receiver is not willing to take the risk of the volatility it has. It’s worthless.”

In spite of Bitcoin being up over 100 percent since the start of 2019, ‘Mr. Wonderful’ still finds fault in cryptocurrency as a worthwhile digital asset to invest in. O’Leary also told his show hosts that he had previously invested in cryptocurrency as a “challenge” while teaching a course at Harvard University in 2017. The Shark Tank VC only put in a small amount, but watched as his investment shrunk 70 percent with the falling market,

“I bought all the crypto crap. I put $100 in. It’s now worth $30. That’s a 70% loss.”

O’Leary then went on to caution current investors to avoid succumbing to FOMO, particularly in light of the recent price hike for Bitcoin. While the currency may be pushing a relative high for the year, with analysts shifting to a bullish outlook in price for cryptocurrency, O’Leary thinks the price is to volatile to guarantee any worthwhile or long-term projection,

“People should understand today the hot digital is bitcoin. Tomorrow it could be whatever.”

O’Leary is not the first high-profile investor to take aim at Bitcoin since the price rally started in April. As reported by EWN, Charlie Munger–long-time Berkshire Hathaway partner to Bitcoin critic Warren Buffett–compared cryptocurrency investors to the biblical figure Judas Iscariot.

Despite the backlash, the price of Bitcoin has continued to reach new heights since the start of the year. Following on a bullish rally in April, the price of BTC went exponential over the weekend, gaining $1500 in the span of days.

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Billionaire Mike Novogratz: Bitcoin Store of Value “Not Going to Change the World”

Mike Novogratz Bitcoin Web 3.0 2019

Billionaire investor and long-time Bitcoin bull Mike Novogratz shared some interesting views on the current state and future of the leading cryptocurrency by market capitalization.

While Novogratz has been an overwhelming proponent of Bitcoin and cryptocurrency, recently predicting that BTC would reach $20,000 by the end of 2020, he believes that the coin is reaching the end of its potential as a store of value. Speaking at ConsenSys’ Ethereal Summit May 11 on a panel titled, “The Herd is Still Coming!,” Novogratz explained that Bitcoin largely functions as a digital store of value and has managed to build on its competition by the being the first cryptocurrency to market, saying “it came first.”

As far as the potential for new development or innovation as a store of value, Novogratz claims that the coin is “kind of finished” in terms of maximizing that specific use case. Novogratz then made the common analogy of Bitcoin as a digital for of gold, claiming that both serve as a store of value for investors but largely function as social constructs. Similar to investors buying Bitcoin, gold continues to hold and change in value based off the expectations of its social surrounding, as opposed to exhibiting truly intrinsic worth.

Despite being historically bullish on BTC and cryptocurrency, Novogratz concluded that Bitcoin was unlikely to change the world. Following up on his comparison of Bitcoin as a store of value, and being a limitation of the currency’s use, the former Wall Street exec claimed that BTC is  “not going to change the world.” Instead, Novogratz highlighted ‘Web 3.0’ as the most likely technology to institute dramatic change, stating “it has potential to change the world.”

Some community members have found fault in Novogratz’s take on Bitcoin’s limited use, and for relying on the tired comparison to gold. However, the billionaire investor’s comments appear to be more in support of ‘Web 3.0’ as opposed to an indictment of Bitcoin. He also coached the limitations of Bitcoin in a broader criticism towards the extensive altcoin market.

Novogratz explained that the vast market of altcoins will have to “prove themselves out,” as viable solutions and providers of utility, as opposed to being carbon-copy coins that generate undeserved billion-dollar market capitalizations. While Bitcoin may have reached its limit as a digital store of value, the broader altcoin market has yet to prove much in terms of usefulness. According to Novogratz,

“If you really think bitcoin is gonna win this store of value, everything else needs to be used for something.”

In April, Novogratz took aim at Litecoin in a series of tweets questioning the investment interest in LTC over Bitcoin,

“Gold has an $8.5 trillion dollar market cap. Silver is $15bn That is .17%.  $BTC has a $90bn mkt cap. $ltc is $5.7bn which is 6.4% of $BTC. Silver is at least useful for industrial production.  $ltc is a glorified test net for $btc. I don’t get this rally. Sell $ltc buy $btc.”

The price of Bitcoin has continued to climb throughout the weekend, trading at $7100 as of writing.

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