Crypto Q&A

We regularly get questions from readers, as well as from viewers of our monthly webinars. Here are some recent ones.

Question: “With crypto markets selling off recently, are you still bullish on blockchain?”

Answer: The short answer is, Yes. But I offer that with the caveat that you should be wary of asking a barber if you need a haircut. Most of the time he’s going to tell you that you do.

The longer answers is that I’ve made a deliberate shift in my career, based on the belief that this technology is going to be at least as impactful as the internet. That’s my view. And so yes, I am as bullish as I’ve ever been on this technology.

As for cryptocurrency prices, those are a function of markets—and human fear and greed. That’s not unique to Bitcoin (BTC-USD) or cryptocurrencies or blockchain. It happens in every single asset class. It’s a normal part of the growth of any asset, and so recent price weakness has not deterred me one bit. Obviously, I feel a lot better when Bitcoin is at $20,000 than when it’s at $6,000. But in terms of entry points, I feel more comfortable getting into a brand-new, fast-growing ecosystem that has sold off 70%—there may be more value there than one would find in the same technology after it’s gone up 100% or 200%. So yes, I’m still very positive on this sector.

Question: “Do you still think 90% of Initial Coin Offerings (ICO’s) will go to zero? Do you believe the ICO market is dead?”

Answer: I’ve said publicly that I believe 90% of ICOs will go to zero, and I think that’s a fair estimation. But to be clear: that is not a knock on ICOs. It’s just simple math from venture capital. I view ICO’s as start-ups—very early stage start-ups, or even seed-stage. Some ICOs may only have a white paper behind them, which merely outlines a concept.

In the venture capital world, 90% of the ideas don’t work out, and even if they may be good ideas, they might be too early, or management can’t execute. A 90% failure rate is a very normal venture capital type of ratio. So yes, I still stand by that.

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Disclaimer:

Blockchain technology and cryptocurrencies are subject to several risks which should be considered when evaluating an investment that provides exposure to this sector. The Rex BKCM ...

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