“Bitcoin today is around $60 billion so I think it has the opportunity to replace gold as the dominant storer of value in which case it can go up a hundredfold from where it is today,” says Lou Kerner, a founding partner of Crypto Oracle Strategic. “This is just a better storer of value and if the world comes around to sharing that view and I think we’re on that path, then we are easily over 100,000 in three or four years I think in Bitcoin.”
What it’s evolved into today is a stored value. Today, the main stored value is gold, it’s a $9 trillion thing. Bitcoin today is around $60 billion so I think it has the opportunity to replace gold as the dominant storer of value in which case it can go up a hundredfold from where it is today. Even if it becomes a strong second it can go a long way. It’s just a better way to store your value.
I think we just got ahead of ourselves. That’s what happened. I have a word that I use to describe the tendency of markets to become bubbles and the word I use to describe that is capitalism. There’s something called Amara’s law which is the impact of all technological changes overestimated in the short run and underestimated in the long run.
Bitcoin and the broader kind of crypto category, which is this whole new computing platform of blockchain, cryptocurrency, smart contracts and such, that the disruption from that is going to greater than the disruption we saw from the internet. Bitcoin is kind of the early leader, kind of like the Yahoo of its day. While it’s a massive thing it’s not the thing.
If this is a thing and we really believe that in 20 years it will have created trillions of dollars in value similar to how the internet has, then we are at the very beginning today and it’s going to be here (way up) in 20 years. That’s my forecast. The great thing about making 20-year forecasts is that nobody knows you are going to be wrong for a long time. If it’s going to be here in 20 years the only thing we know for sure is that the path to getting there is going to be like this:
If you focus on where you are going to be in 20 years then all of this (up and down) is just noise. If this becomes a storer of value, and we think it is well on the path… Gold has had a 5,000-year run. It’s a great run. What else has lasted 5,000 years? This is just a better storer of value and if the world comes around to sharing that view and I think we’re on that path, then we are easily over 100,000 in three or four years I think in Bitcoin.
If you take a look at the history of currencies over time 100 percent of them up until 400 years ago went to zero. The truth is if you think about the dollar, it’s a Ponzi scheme. It’s fine, this is how governments work. Nobody thinks we are ever going to pay back the debt that we have. We are never going to pay back $20 trillion in debt. By the way, there’s going to be more tomorrow and more the day after.
The only way to maintain your purchasing power and the only thing that has held up has been gold. That’s how you store your value. Over time all currencies degrade and eventually they all go to zero. Today, $8 trillion is stored in gold, in value that people are saying I don’t want to hold the dollar. It’s part of a diversified portfolio generally. Silver is the second biggest storer of value at about $50 billion and Bitcoin today is $60 billion. So it’s really kind of take over second place from silver as a storer of value.
Bitcoin started off to be a digital currency. It can still potentially become one but the problem as really the first iteration of a decentralized entity that achieved scale there’s not a functional governance. So Bitcoin really struggles to evolve. It doesn’t need to evolve to be a storer of value, but it does need to evolve to be a digital currency. We think that there will be digital currencies.
We think that governments are going to issue their own digital currencies. But they will obviously be pegged to their regular currency and they will degrade over time. We think that pure digital non-government digital securities where you know how many dollars or whatever it is are going to be (is better). The problem is nobody knows how many dollars there are going to be tomorrow other than you know there are going to be more.