I continue our special bitcoin podcast series by welcoming Ari Paul, CIO of BlockTower Capital to the show to discuss how bitcoin is traded and the market outlook for the cryptocurrency amidst its growing acceptance and long awaited legitimization by the government, financial services industry and most importantly, investors.
Store of Value vs. Technology — What Will it Be?
Ari and I begin our discussion by taking a walk down memory lane, if you will, by looking back at the crypto space over the last decade or so. Ari began his career in the traditional finance space and describes his introduction to bitcoin and the moment in 2016, when he realized its magnitude, categorizing it as the best asymmetric trade of his lifetime. Today, Ari explains why he still believes in the power of bitcoin and how he thinks about the upside today, versus back in 2016. He also highlights two potential scenarios he sees the cryptocurrency moving towards: store of value versus technology and what both scenarios could mean for the future.
We discuss the mechanics of trading bitcoin by first discussing the technology behind cryptocurrency, i.e., cryptography, and the vital role trust must play between the investor and the given cryptography technology. As normalization of bitcoin continues to increase, the mechanics for trading bitcoin still has a little ways to go. While investors are not able to log into their brokerage account and purchase bitcoin the same way they would a traditional asset, Ari believes we will eventually see this over the next decade. Ari highlights the important role counter party aggressiveness plays in the difference between a stock exchange versus a crypto currency exchange, as well as what investors should look for when evaluating crypto trading platforms and how this should differ between individual investors and institutional investors.