According to the CEO of One River Asset Management, his company now holds Bitcoin worth “well over” $ 1 billion. He revealed that institutional interest in Bitcoin was “amazing” and noted that almost all of the major institutions in the US have discussions about the cryptocurrency. He believes that Bitcoin will be worth more than gold and be worth around $ 500,000.
One River Asset Management’s CEO is a bitcoin bull
One River Asset Management CEO and co-founder Eric Peters shared his thoughts on Bitcoin at length in an interview with Bloomberg last week. First, he announced that his asset management firm now holds Bitcoin “well over a billion dollars at this point.” He then discussed the case that institutional investors should currently own cryptocurrencies.
“We are in a unique time right now,” Peters began. It is the time, seen many times throughout history, when “Governments become extremely indebted, monetary policy becomes less effective, and ultimately governments… have to go into debt and start actually spending money. Typically, when they do, they are trying to get off the debt by lowering the currency in which they spend that debt. “The CEO added that” ultimately those who hold this currency lose their purchasing power “.
He went on to talk about crypto assets, stating that they are “really interesting in the sense that they are a new class of assets overall”. He noted that they “have some unique properties, some of which are similar to those found in gold, except that they are grossly undervalued compared to gold.”
In addition, Bitcoin and other cryptocurrencies have “technological properties” and “will look different tomorrow, next year, and in a decade to come”. This makes Bitcoin “unique to gold, because if gold looked the same two thousand or two thousand years ago, it will look the same two thousand and two billion years ago,” the One River manager said:
I think you have to be a real pessimist to believe that an emerging technology platform doesn’t get more interesting, useful and valuable.
He continued, “It is very rare that you find an asset that can benefit you from future upside moves [the technologies] while also mitigating the downside [monetary debasement] like that. “
Peters also made it clear that when investing, he always starts with the macro aspect as he has been a macro investor throughout his career. By technology, the CEO meant:
I’ve seen enough to know that tomorrow will look essentially better than today. When investing, knowing if tomorrow looks better, worse or the same is incredibly important. I think I’ve seen enough to understand that tomorrow will look better in these assets than today.
“We run into enormous debts. We let our central bank buy them … the scale is just so profound … in this environment, what kind of assets can you own, “he continued.
Peters listed a few plausible investment options: stocks, gold, and digital assets. He claimed that digital assets “are dramatically undervalued” compared to some of these other stores of value, which is why his company was “excited” about it, emphasizing that “it is just an undervalued asset for this macro backdrop”.
The One River CEO also praised Bitcoin’s firm offer. He stated, “It is unlike any other good I have seen in the world in the sense that there is no response of the offer to the price. If the value of Bitcoin were to increase five times, ten times or 100 times, no more bitcoin would be produced. There is really no other asset in the world that can say that. “
He also compared Bitcoin to gold. “I think it will be worth more than gold at some point because gold is not infinite. The supply of gold continues to grow, ”he stated. In contrast, there will only be 21 million bitcoins. The CEO explained:
If only it hit the market cap of all the gold in the world, it would hit something on the order of $ 500,000 per bitcoin.
“Right now it’s a $ 30,000 trade. So if you look at it from a trader’s perspective, there’s a tremendous upward convexity,” he affirmed.
Peters answered a question about how long it will take for Bitcoin to become more valuable than gold and said it was “policy dependent”. He could see it in a few years, when we “see some sort of next recession, followed by more issues and more Fed purchases.” Still, he pointed out that “one of the things about these assets … it doesn’t cost you anything to hold them. You have downside price risk, but no negative carry. “
The One River manager also discussed whether crypto assets will appeal to institutional investors if they persist alongside fiat money, or whether institutions need to see government or central bank acceptance or approval prior to entry.
After publicly announcing that his company had invested approximately $ 1 billion in Bitcoin, he said that “the number of institutions that filled my day with calls and inquiries about it is amazing”. He repeated that it is already happening “enormously”.
Peters anticipates the crypto asset class will “mature in a decade,” adding:
What happens is that almost every large, credible institution in the US is having discussions about it … Many of them call us to ask.
“They are intrigued by it,” he continued, emphasizing, “they should be because this is the first and last asset class that will appear in our lives.”
What the crypto landscape, including BTC, will be like a year from now, Peters said, “Prices will be higher.” Although he admits that volatility will continue, he assumes that it will decrease as the price level increases. He said that as prices go up, “quite frankly, new types of investors with stronger hands are drawn in. So I think there will be a lot of money going into these assets over the next year. “
He also believes that more regulations will be put in place to increase transparency for the entire crypto asset class, but regulators will not destroy the asset class as they understand that the future of finance will be digital.
Do you agree with the One River CEO on Bitcoin? Let us know in the comments below.
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