Dan Morehead, CEO & Co-Chief Investment Officer of the Pantera Capital – an investment firm focused exclusively on blockchain tech and digital currencies, speaking at the Hong Kong Blockchain Week 2020 on his purview of the macro case for digital assets.
Morehead began his keynote by addressing the birth of the world’s first digital asset, Bitcoin, after the 2008 Financial Crisis. However, he noted that digital assets are more than Bitcoin as many protocols based on blockchain technology emerged and enabled new breakthroughs.
Ethereum’s smart contract feature and Polkadot cross-chain interoperability as well as other blockchain-based protocols have introduced a new way for us to transfer and store data in a decentralized manner.
Pantera Capital’s CEO then brought up the macro case for blockchain and digital assets. He pointed out the elephant in the room as reckless money printing policies of governments around the world continue to debase its own value.
“You can’t command that fiat currencies have, or more specifically, retain their value. The more you mess with them, the more purchasing power fiat currencies lose.”
The CEO then circled back to Bitcoin’s genesis block where it contained a hidden headline from The Times of London as Chancellor was on the brink of a second bailout for banks.
“The bailout was £50 billion, the US now prints $50 billion every four days,” Morehead noted. He also emphasized that it is going to have a major impact on the price of things whose quantity cannot be eased.
He further pressed on the severity of money printing as he quoted the fact that “The United States printed more money in June (of 2020) than the first two cenruties after its founding.”
Quantitative Easing is now driving up the prices of fixed-quantity things as proven by the cryptocurrencies have outperformed traditional assets in the 2020’s crisis.
Moreover, Morehead claimed that the blockchain payment sector has more than doubled during the crisis as people are looking for an alternative to transfer value without risking exposure to contamination. He also noted that the surge of recent developments in the Decentralized Finance (DeFi) sector also led to new demand and activity.
With digital asset’s bellwether like Bitcoin gaining more recognition, companies have now begun accumulating Bitcoin and adding it to their balance sheets as we have seen publicly listed firms such as Square and MicroStrategy have been exposed to the digital asset lately.
He also pointed out that the mid-cap alternative coins are likely to perform better than Bitcoin during the bull market which can lead us to believe that after large companies and institutions done accumulating Bitcoin, they will have their eyes on the so-called Altcoins next.
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