New York — On November 28th, Eximchain team members Hope Liu, Juan Huertas, and David Kelly attended the Consensus Invest conference in New York. The event brought together investors and participants from throughout the blockchain and cryptocurrency space to discuss the future of the industry and learn about the emerging “crypto” asset class.
The one-day conference was jam-packed with interesting sessions and discussions, but here are the biggest takeaways and most important insights as observed by Eximchain:
1) Bullish on Bitcoin
The overwhelming sentiment at Consensus Invest was that the bitcoin rally is just getting started. In numerous panels, analysts explained why they expect the bitcoin price to keep rising well into 2018 and beyond. Some key factors mentioned were the relatively low levels of adoption thus far and the enthusiasm young people have shown for the currency. However, the most commonly cited rationale was that institutional investors are going to drive up the price significantly. Wall Street has yet to invest in bitcoin in a meaningful way, but companies such as the CME Group are offering products to make this participation possible. As these products come on line, many expect the price of bitcoin to surge.
Despite the rampant to-the-moonism, a few of the analysts at the conference were less optimistic. Robin Wigglesworth of the Financial Times compared bitcoin to “trading sardines,” a reference to a sardine bubble in California. Wigglesworth said, “I want to invest in something with real value.”
2) Cautiously Bullish on New Crypto Projects
In addition to the bullish sentiment around bitcoin, the conference speakers expressed optimism for emerging tokens and projects as well. However, the analysts all mentioned how difficult it can be to find good projects from among the growing number of newly issued tokens and whitepapers.
The speakers emphasized that they always consider the following when evaluating a new project:
· Does the project really require a token?
· How strong is the team?
· Is there a viable use case?
3) Explaining Cryptocurrency through Metaphors
Many speakers made use of creative metaphors to explain cryptocurrency to the uninitiated. Here are a few of our favorites:
· Cryptocurrencies are like Metals
Michael Novogratz of Galaxy Investment Partners said that cryptocurrencies are like metals, each with their own specific characteristics and uses. Some tokens might be better for a certain purpose than others, much like how copper is better at conducting electricity than other metals. “Currency” can be a rather weak comparison for tokens because most people today only use one fiat currency in their daily lives. However, it is likely that in the future a number of key tokens will be used for specific purposes and that people will hold several of these coins at a time.
· Bitcoin is a Platypus
Spencer Bogart of Blockchain Capital compared bitcoin to a platypus. Bitcoin is an amalgamation of many different components just as a platypus is seemingly made up of many different animal parts. Currency, payments mechanism, digital gold, digital programmable asset, bitcoin contains many different features that have never before been combined. Bogart warned listeners not to mistake these claims for fraud as many scientists did when they first discovered the platypus and instead accept that a new beast has been discovered.
· Tokens are like the Domain Name (.com) Market
Tuur Demeester of Adamant Research said that the value distribution among tokens could one day be similar to the varying demand for different top level domains such as .com, .net, and .org. Demeester explained that the .com domain took precedence because it was less associated with fraud than other options. Although there are likely to be many cryptocurrencies available in the future, Demeester suggested that a hierarchy will be established based on usage and public perception.
4) Emerging Issues in the Space
In addition to discussing market dynamics and metaphors, a few sessions addressed emerging issues in cryptocurrency, the most prominent of which were custodianship and regulation.
Custodianship refers to the storage and protection of cryptocurrency. Many firms offer this service, but the actual mechanisms and practices vary greatly. A person looking to store their cryptocurrency could choose to do so in a secure vault hidden in the Swiss mountains or on a handheld hardware device. One could choose to retain control of their private keys or hand them over to the custodian for safekeeping. Ted Rogers, the President of Xapo, remarked that this divergence reflects the growing state of the industry and the diverse needs of clients in the space. Best practices are likely to emerge, but until then, custodianship is an important issue to watch.
Regulation is another key issue that many speakers highlighted. Regulatory changes have the power to dramatically change market dynamics and current practices, as seen in China, and the broad consensus among speakers is that the US will release new regulatory guidelines in 2018. Although few ventured to make specific predictions, a number of analysts mentioned that US regulatory agencies are watching the space closely and that the decisions and guidelines they release will have huge effects on the overall market.
5) What to Expect in 2018
2017 was a landmark year for blockchain and cryptocurrency and few of the Consensus Invest speakers predict 2018 will be any different. Many speakers expect token prices to rise and for new coins to gain more traction. The crypto community is expected to grow as adoption increases and Wall Street gets involved. A few commentators pointed to challenges ahead, including regulatory changes, security breaches, and technical issues. Overall, the general sentiment is that blockchain and crypto will continue to be a wild ride in 2018 with many surprises in store who are watching.
What do you think will happen next? Take our 2018 survey here.