Discussing the Future of Crypto at BCI Summit
Recently, our CFO Kyle Fry, and our Corporate Development Associate Neil Harounian, attended the BCI Summit in New York. They heard from notable executives from across the world of crypto, who spoke on topics ranging from valuation and diversification to hedging and security.
It was interesting to hear leading experts speak about the current state of crypto and to get their take on the fluctuating market. While there was no one right answer, we heard suggestions based on the BCH fork battle and the idea that investors who invested in crypto around this time last year are now selling in order to minimize their losses or break even.
We had the opportunity to hear about a previous panel where Jay Clayton, SEC Chairman, spoke on crypto’s future and ETFs. He drove home the point that there will be no ETF approval of crypto until there is no longer market manipulation and an adequate custody solution has been found. Those two issues he felt were most important in order for the SEC to be comfortable allowing an ETF with an underlying digital currency to advance.
In the same panel as Clayton was Josh Stein, CEO of Harbor. His company recently announced tokenizations of real estate, and he spoke on the opportunity for real assets and private securities to be tokenized.
After seeing 75% of his tokenization in real estate, he feels there is a big opportunity for other assets to do the same, such as medical devices and art. He posits that art can be tokenized in two ways: for the right to display art, like in a museum and the right to the art’s appreciation in value, for investors.
One of the most fascinating sessions we attended was hosted by Bill Barhydt, Founder & CEO of Abra, who has a background working for behemoths like Goldman Sachs, the CIA and NASA. He discussed how he’s created synthetic versions of the US dollar among other currencies, including Bitcoin, and has found a way to legally operate in 200 countries.
Mr. Barhydt plans to turn Abra into what he calls a “Crypto Bank,” explained simply as a peer-to-peer version of PayPal. Basically, when a mobile money service holds money it is stored at a bank. With Abra, there will be no bank. Your smartphone becomes the bank using blockchain technology. The user experience stays the same, but this change legally enables their company to work on an international scale, something that hasn’t been done successfully before. Since Abra is not holding any customer funds, where their users are located becomes irrelevant to the legal operation of their business. Fascinating!
Some additional points of interest from the Summit included gauging the future of crypto based on the past. One way the panellists spoke on this was by discussing the history of gold.
Gold was once seen as a strong asset by generations before us, yet now only about 0.8% of diversified portfolios include gold. We discussed the correlation of Bitcoin with the overall equity market and considered whether it can be seen as a ‘flight to safety’ if markets enter into a correction. As we’ve seen, when markets correct everything compresses at first (even gold, as seen in the 2008 recession). But, once people realize the store of value in bitcoin and crypto, you will see that ‘flight to safety’ in crypto markets, as we saw in gold a decade ago.
Overall, we enjoyed the opportunity to discuss future trends and current goings-on in the crypto realm with our peers. It is always a pleasure to hear from panellists and learn what is happening in the world of crypto beyond our network. We look forward to the next one! Will we see you there?