A Mega-Millionaire Shares His Thoughts on Cryptos

bitcoin-mega-millionaire

I first met Barry Silbert, CEO of Digital Currency Group, five years ago at a small breakfast meeting in New York. At the time, bitcoin was a fringe libertarian movement with a market cap under $1 billion, and only a handful of cryptos existed.

As the attendant group of hedge funders and venture capitalists conversed over eggs Benedict and coffee, a silence fell over the room as Silbert made this proclamation:

“I have invested nearly all of my net worth in bitcoin, and I believe this is the biggest technological breakthrough of our lifetimes.”

Silbert wasn’t kidding. The price of bitcoin that year dropped to a low of $14. Five years later, Forbes estimates his net worth between $400 million to $500 million.

Although most of the breakfast attendees in 2013 were skeptical of Silbert’s bitcoin optimism, I left thinking crypto wouldn’t be just a fringe movement forever and put digital currencies squarely on my investment radar.

Volatility for Cryptos

Fast-forward to February 2018.

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This week, bitcoin prices plunged below $6,000 as the “risk-off” trade in stocks accelerated the selling in the crypto markets.

In just two months, the price of the bellwether digital currency has dropped nearly 70% from its early December high near $20,000.

Fear, uncertainty and doubt — collectively known as “FUD” — reign supreme. Regulators in China are (once again) cracking down on crypto speculation by closing all domestic exchanges.

And the financial media has seized on the opportunity to declare the end of bitcoin, publishing yet another round of crypto obituaries.

Even New York Times columnist Paul Krugman, who warned investors to stay away from bitcoin at $97 in 2013, engaged in a little “cryptofruede” this week:

If I’ve learned anything in the past five years, it’s to listen to Barry Silbert, an investor in cryptos whose net worth is estimated between $400 million to $500 million.

The truth of the matter is, volatility is par for the crypto course. In its nine years of existence, bitcoin has witnessed some extreme drawdowns. There was an 85% correction in January 2015, and a few others over 60%.

But the biggest of them all was the colossal 93% drawdown in 2011. (For the record, I was not involved in this.)

With so much negativity around the recent price drop, the average investor would believe that crypto projects are being shelved as institutional investors start having second thoughts about entering the space.

Nothing could be further from the truth. The cryptosphere is alive and well my friends.

The Crypto Summit

That’s the impression I had after attending the Yahoo Finance presents All Markets Summit: Crypto in New York on Wednesday, where a standing-room-only crowd gained exclusive access to a collection of the top crypto thought leaders and industry mavens.

There was Adam Ludwin, CEO of Chain, a company already partnered with Citibank and Visa to create new, more secure databases for money. He believes that all global assets will someday be tokenized and run on public blockchains.

Then there was Peter Smith, CEO of Blockchain, a web-based platform that is already transacting more volume than PayPal. He pointed out that crypto is necessary to combat the “all-time high in centralized political and economic power.”

Umar Farooq, head of blockchain at JPMorgan (yes, that role exists!), claimed that “blockchain will have a radical impact on some of our businesses.”

And Commodity Futures Trading Commission (CFTC) Commissioner Brian Quintenz highlighted a recent development where government officials asked the CFTC and the Securities and Exchange Commission to develop an appropriate regulatory regime. “We don’t want to say ‘no’ to innovation.”

Finally, there was none other than Barry Silbert. Five years after that fortuitous breakfast meeting, here he was at the Crypto Summit announcing a new “Digital Large-Cap Fund” to invest in the top digital assets by market cap.

If I’ve learned anything in the past five years, it’s to listen to Barry Silbert, an investor in cryptos whose net worth is estimated between $400 million to $500 million.

The real icing on the cake, however, came when Silbert proclaimed:

At some point within the next 12 to 24 months, you’re going to see a tidal wave of capital come into this asset class from asset managers all over the world. If you watch CNBC, you’d think everyone and their mom invested in this, but it hasn’t happened yet.

If I’ve learned anything in the past five years, it’s to listen to Barry Silbert.

Regards,

Ian King

Editor, Banyan Hill Publishing

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  • Jesus Asencio

    la wall stret es un buena bolsa de valosre para que los ladriondes no sigan ronado con 7807 y mayo6 con 21 dias d trabjo y dejarme sin cuienta coriente

  • terrymollner

    Folks, the reason cryptos fluctuate wildly is because there is no unit of measurement that is tied to anything real. Yes, national currencies fluctuate also, but they are backed by people with governments that can tax them. Cryptos are not backed by anything. They are purely demand systems. If all on Earth own some gold and all want to sell on the same day, the price of gold will go down but the value of the currencies used to make the exchanges will not be effected. If all on Earth own Bitcoins and all want to sell on the same day, the value of the “currency” will quickly go to zero. What is needed is an honest global crypto currency. It would have four parts. 1) for every credit there would be an equal debit, 2) no one can create debits or credits out of thin air as central banks do, 3) the value of its unit of measurement would be tied to a dominant national currency in the past, such as the value of the US Dollar on December 31, 2017. This can’t be changed. 4) each quarter the value of the unit of measurement would increase by the US Core Inflation Rate (or a better measure if we can find one) by agreement of all who use the currency. It doesn’t have to even be used but just be an honest measuring stick with transactions in national currencies. But what would be best is to create a crypto using it. This will make it the best store of value on Earth and also available at anytime and from anywhere in the world. If your friend Barry Silbert likes this idea, have him contact me, Terry Mollner, 413-563-3700. There are few things that would be better for Earth right now than an honest global currency.

  • Frank Z.

    A very unstable currency. if you can call it that. How can anybody invest in someting that is so unstable.
    I see some (or a lot) of simularities to the ancient Tulip-bulb currency of the 1800s. Totally something uncomprehensibly, IMHO.