Bitcoin Ecosystem Investment at Current Price – $200 Range

The drop in bitcoin’s value naturally continued to be a theme through the Inside Bitcoins New York City conference especially on the investment panel. Despite the relatively low price of bitcoin, some investors are still very much involved in investing, whether short or long, in the currency. Some investors believe that the advent of Blockchain 2.0, or applications built upon the Blockchain, will bring value back to bitcoins and drive the price back up.

Matt Roszack, founding partner of Tally Capital, noted:

For first time, we have this technology that has this tracking stock. The flywheel of the currency has gone through its speculation so it is ho hum. The flywheel of the blockchain will reach critical mass and price of bitcoin will go back up. My dial is two thirds bitcoin and a third Blockchain ecosystem. I think it is important to invest in these enterpreneurs to get that flywheel turning.

Gil Luria of Wedbush Securities noted that there were three categories to invest in: the bitcoin currency, the bitcoin currency infrastructure, and Blockchain 2.0 application plays. He indicated that with the finite amount of resources to be invested, the best return would be investing in the latter two currencies.

Bitcoin is the fuel. What changed the world were automobiles and airplanes? Not gasoline. The value of bitcoin will go up the more applications there are. If you invested in all of the exchanges now, and one of them becomes the on-ramp for bitcoin in the US.. that could be worth 1000x original valuation. The bitcoin network itself is very healthy and can support a lot of capacity.

The various panelists had different perspectives on where to invest in the Bitcoin ecosystem.

Brendan O’Connor, CEO of Genesis Trading commented that since the company started investing in bitcoin in 2013, they have traded 8000+ bitcoins.

We do go in and out but we repeatedly go long. We specialize in the institutional community. We have traded with over 50 institutions that have serious interest in bitcoin. I think it is the most innovate technology to come to the payment space in 15 years.

Paul Veradittakit, Pantera Capital’s Vice President, contributed his company’s view on bitcoin:

We think of bitcoin as currency. We think of these exchanges as routers. We are definitely interested in exchanges and wallets but we are also interested in use cases, blockchain technology. If bitcoin takes off, that is great, but there are other areas as well.

Harry Yeh of Binary Financial added:

I believe in investing in bitcoin two thirds. Infrastructure is important as without it I wouldn’t be able to trade.

BitAngels Chairman Michael Terpin pointed out:

I don’t know if investing all in at 200 is good. The important thing is to look at pivot points. If it is all about the blockchain, then companies like ibm just think we can just create our own blockchain.

Roszack talked about being “Bitcoin is a tale of two cities.” The overcurrent is that the psychological overhang of the price of bitcoin and the inevitability of regulations. He added:

The undercurrent is a billion run rate of investment, human capital coming from JP Morgan and Facebook. Maybe bitcoin is just the kindling to get the flywheel of the blockchain going.

Tone Vays, Brave New Coin’s Head of Research, believes that economic catastrophe in the West, particularly in Europe, is going to explode Bitcoin adoption and price.

This time around I am looking at it from the economic space. To me the next catalyst is not going to be the [bitcoin] halving. It is going to be the banks are not opening on Monday.

Luria of Wedbush continues to have faith in bitcoin’s potential value. He described how there is more likelihood of the bitcoin price going back to the $1000 level than completely crashing. He believes there is a possibility where the digital currency could become very important to the global economy. Luria indicated:

There is a scenario out there where the working capital of international trade is the bitcoin.

O’Connor of Genesis Trading of course also still has a lot of faith in bitcoin, as it has first mover advantage and the more regulations are spelled out, the more comfortable institutional investors will get.

Roszak concluded:

It was innovative to be in bitcoin. Now you have to be innovative when you are in bitcoin

Tone Vays provided his view of the Blockchain based applications development –

I don’t want to upset my friends… but I am not as enthusiastic about Bitcoin 2.0. I have enough problems describing Bitcoin 1.0.

Pantera VP was also cautious regarding Blockchain 2.0 startups –

Until there is a usecase that takes off we will continue to look. It is going to take time so we are not looking at that right now.

In discussion of the capital crunch in the sector, Luria articulated the current financing environment:

There is plenty that will be built on bitcoin. The sale of units in these endeavors is part of the process of getting people involved to building the infrastructure. No one is building an alternative remittance platform. There isn’t a new inflow of capital. There is still capital available. It is just going at a slow rate. When coinbase goes public, then there will a lot of capital.

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