BlockTower Capital CEO: '5X More Development' in Crypto Industry this Year vs 2017

  • Aril Paul, the CEO of digital asset investment firm, BlockTower Capital, recenty said that he sees a "long-term buying opportunity" given current cryptocurrency prices. 
  • Paul believes that crypto platforms need to become more user-friendly to achieve mainstream adoption.

Ari Paul, the chief information officer and managing partner at BlockTower Capital, a digital asset investment firm, recently said “we’re in the trough of disillusionment right now” - in response to a question regarding the current state of the cryptoasset and blockchain industry.

Paul, in an interview with Forbes, explained that “with the internet, ... in 1993 or 1994 ... Everyone thought the world we have today was just a few years away ... that we'd have massive retail sales over the Internet, that we'd have high-quality streaming video” and other advanced types of communications technologies that are only now available to us in 2018.

However, Paul emphasized that we must have realistic expectations as:

That [kind of progress] takes a lot longer than people expect … valuations [begin to] get way above the present. [But then] people realize the thing they thought was six months or eighteen months away is maybe three or five or ten years away. And then you typically get a crash and disillusionment.

Notably, Paul’s views and reasoning behind why cryptocurrency prices have dropped considerably are similar to those expressed by Marshsall Hayner, the CEO of Metal Pay, a fully operational payments app with support for cryptocurrency payments in 34 US states.

Need For User-Friendly Interfaces And Applications

In an exclusive interview with CryptoGlobe, Hayner noted that the drop in the prices of major cryptocurrencies including bitcoin (BTC) and ethereum (ETH) may be due to valuations (led by the “ICO bubble) “outpacing development.” Expressing views somewhat similar to Hayner, Paul believes “user interfaces” for cryptocurrency platforms must be improved - before the crypto industry can achieve mainstream adoption.

Paul gave the following example regarding how to make user interfaces more intuitive and user-friendly:

Right now, if I want to send someone cryptocurrency, I generally need to copy and paste their public address. That address is an arcane series of letters and numbers. That's a very scary process — because, typically, those transfers are irreversible, and a relatively minor mistake could be catastrophic.

Indeed, digital currency transactions are irreversible and the “arcane” sequence of alphanumeric symbols that make up a cryptocurrency address, in addition to the technical nature of using crypto-related applications (block explorers, wallets) may appear confusing to people who may not be so tech-savvy.

Interestingly, when asked what he thinks will be “the first truly indispensable use” of crypto-related technology, Paul remarked:

I think it's already here: Censorship and seizure resistant money. WikiLeaks was accepting donations in bitcoin back in 2011. People are making use of cryptocurrency in Venezuela, Zimbabwe, and around the world — they're just very few in number currently. But, to those who use it, it's already indispensable.

In response to a question about whether he sees a “buying opportunity” with crypto prices declining sharply, Paul, a former portfolio manager at the University of Chicago, said:

My answer to this has changed, almost quarter by quarter, over the last year. Right now, I would say with strong conviction that it's a long-term buying opportunity. I say long-term, but I'm not calling a specific bottom or price. But I would definitely say it's a long-term buying opportunity. I think we're in the trough of disillusionment.

According to Paul:

[Crypto-related] technology is advancing incredibly quickly. The amount of development on both the engineering side, as well as the product facing side, is tremendous. it's progressing at a pace, I think, more than 5X of last year.

Chinese Yuan 'Inversely Correlated' with Bitcoin, Amidst US-China Trade Wars

Since January 2018, China and the US have been involved in an intense trade war in which both countries have significantly increased tariffs on imported goods and services.

Due partly to the rising tension between the two countries, the Chinese yuan (CNY) has been losing value against the USD. During the same time period, the price of bitcoin (BTC) and other major cryptoassets has been surging.

As noted by the South China Morning Post (SCMP), the value of BTC, the world’s most dominant cryptocurrency, increased by 26.5% to $7,878 during the time period from May 5 to May 17. Notably, US President Donald Trump had announced on May 5 that he would further increase tariffs on goods imported from mainland China.

Chinese Yuan Weakens as Nation’s Government Responds to Increased Tariffs

The SCMP pointed out that the yuan dropped to its lowest level since the past six months after the Chinese government responded to Trump administration’s decision to impose higher tariffs on China.

Commenting on the price fluctuations of both the yuan and bitcoin, Garrick Hileman, a Macroeconomics Researcher at London School of Economics (LSE) and Head of Research at Blockchain.com, remarked:

We are observing a strong inverse correlation between the [Renminbi] RMB’s value and bitcoin, meaning that recent RMB declines over trade tensions have been closely matched by increases in the value of bitcoin.

“Correlation Does Not Necessarily Equal Causation”

Hileman also mentioned that we “cannot be 100% certain” that the bitcoin price has been increasing due to heightened concerns regarding trade tensions and the corresponding decline in the value of the yuan. The blockchain researcher stated:

Trade tensions and declines in the RMB’s exchange rate as correlation does not necessarily equal causation.

Hileman, who earned his Phd from LSE, revealed:

This is not the first time we’ve seen significant increases in the value of bitcoin taking place alongside yuan concerns.

He added that there’s “growing recognition of bitcoin as ‘digital gold’ and it being used as a hedge against various macroeconomic risks.”

“This Year, the Narrative Is Bitcoin, Bitcoin, Bitcoin”

According to the SCMP, bitcoin’s price may have surged recently due to the generally positive remarks made about it at the Consensus 2019 conference.

Meltem Demirors, the Chief Strategy Officer at CoinShares, a crypto treasury management firm, has also confirmed recently that the narrative this year has been mostly about Bitcoin. Demirors revealed that both institutions and retail investors are “feeling good” and are “more confident” about the long-term potential of Bitcoin and the evolving ecosystem that supports it.