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- Jake Ryan is the Chief Investment Officer of the Tradecraft Capital crypto asset hedge fund.
- Ryan believes bitcoin will have a market cap of $ 5 trillion by 2023 and $ 20 trillion by 2030.
- He also shares two emerging areas of the crypto-asset market that he is bullish on.
- Visit Insider’s Business section for more stories.
After spending the first 20 years of his career in software development, Jake Ryan had no difficulty getting around the world of cryptocurrency and blockchain technology.
Still, it took him over seven years since Bitcoin’s inception in January 2009 to make its first direct purchase of digital currency at around $ 480 each in 2016.
What convinced him to finally take the plunge was not the utopian vision of bitcoin shared by many ardent fans of the tech world, but the antifragile nature of digital currency.
There have been many times bitcoin could have died, Ryan said, pointing to the dramatic demise of Tokyo-based crypto exchange Mt. Gox in 2014 as an example. Once the world’s largest exchange, Mt. Gox was targeted by hackers and lost hundreds of multi-million dollar bitcoins at the time.
Unsurprisingly, the price of bitcoin plunged with the incident, leading to Mt. Gox filed for bankruptcy.
The closure of the Silk Road black market in 2013 and 2014 was another time bitcoin was on the brink of extinction. All transactions on the online platform, which sold illegal drugs, were done using bitcoin to ensure the anonymity of buyers and sellers.
In November last year, the U.S. government seized over $ 1 billion in Silk Road-related bitcoins, but the digital currency’s entanglement with illegal activity has not interfered with its relentless rise to 20,000. dollars in December.
“This was the fourth or fifth time I’ve said to myself, wow, this is going to survive,” Ryan said. “Its decentralized architecture is what allows it to do that. And for me, that’s when it really became investable.”
Bitcoin’s market cap could reach $ 5 trillion by 2023
Ryan, who serves as an advisor to at least five venture-backed startups, has been a
angel investor
since May 2014.
As he deepened into blockchain technologies and began investing in crypto startups, he began to consider the idea of combining his passions and skills to form a crypto asset hedge fund.
In 2018, he created Tradecraft Capital, which focuses on investing in liquid coins and tokens, including bitcoin and ethereum.
Of all the crypto assets Ryan invests in, he finds bitcoin to be the most unique and has had what he describes as “a pristine design.”
“We have a Satoshi Nakamoto nickname, but we really don’t know who started it. It started to exist,” he said. “Anyone who knew this in a free market approach could have mined Bitcoin and got it. It hasn’t been priced for a long time. Ultimately, the market set the price for the discovery.”
Bitcoin is scarce not only because of its limited supply of $ 21 million, but also because it is backed by a set of incentives that encourage holders to survive, he said.
Over time, as the monetary value of bitcoin increases with increasing acceptance from businesses and institutional investors, Ryan believes digital currency will reach a network value or market cap of $ 5 trillion by 2023. and $ 20 trillion by 2030.
Two emerging areas of the crypto-asset market
Despite its savage volatility, bitcoin was still hovering above $ 47,000 as of noon Friday. For investors looking to capitalize on emerging but riskier opportunities in the crypto-asset landscape, Ryan shares two themes he is optimistic about.
One of them is built around smart contract platforms and stand-alone protocols.
“Everything about allowing people to build smart contracts and deploy them, and people to build stand-alone protocols,” he said, “that’s where the value is going to increase. in the future”.
This theme includes sub-areas such as decentralized finance, which refers to financial activities such as trading, lending, and interest accounts that take place outside the traditional financial system.
With the recent craze for non-fungible tokens, which are part of DeFi, the decentralized financial space has generated considerable interest.
Billionaire Mark Cuban told the Defiant Podcast in a recent interview that DeFi reminded him of the internet’s beginnings in the mid-90s. The Nasdaq-listed Decentralized Funding Index, which tracks DeFi-focused blockchain tokens, has soared by more than 547% over the past year.
The other theme that drives Ryan’s portfolio is governance and who has the right to govern, manage and update blockchains.
An example under the theme is governance tokens, which are tokens created by developers that allow token holders to help decide on protocols, products, or new features.
“You can think of governance tokens almost like a new version of equity. Equity is the right to cash flow after expenses are paid,” he said. “Governance tokens are similar and completely different, but can have qualities that allow them to accumulate value for reasons similar to why equity increases in value.”
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