On Sunday (30 December 2018), Lou Kerner, the founding partner of crypto venture capital firm CryptoOracle, said during an interview that Bitcoin "has an opportunity to actually replace gold as the dominant store of value, in which case it can go up more than a 100-fold from where it is today."
Kerner, who has an MBA from the Stanford Graduate School of Business and used to work as an equity analyst for Goldman Sachs & Merrill Lynch, has been in the crypto space since 2013. Then, in December 2017, he and James Haft co-founded CryptoOracle.
Kerner's comments came during an interview on Bloomberg TV (the "Bloomberg Daybreak: Australia" show).
Q: What are the prospects for Bitcoin in 2019?
A: "What it's evolved into today is a store of value, and today the main store of value is gold. It's an $8 trillion thing. Bitcoin today is around $60 billion. So, I think it has an opportunity to actually replace gold as the dominant store of value, in which case it can go up more than a 100-fold from where it is today. But even it becomes a strong second, I think it can go a long way. It's just a better way to store your value."
Q: What is the explanation for Bitcoin's price action this fall?
A: "I think we just got a head of ourselves. That's what happens. I have a word I use to describe the tendency of markets to become bubbles, crash, and become bubbles again, and the word I use to describe that is capitalism. There's something called Amara's Law [named After Roy Amara, an American researcher, scientist, and futurist who worked at the Stanford Research Institute in the 1970s], which is that the impact of all great technological changes [is] overestimated in the short run and underestimated in the long run. I think Bitcoin and the broader crypto category, which is this whole new computing platform of blockchain, cryptocurrency, smart contracts... the disruption from that is going to be greater than the disruption we saw from the internet. And Bitcoin is kind of the early leader, kind of like the Yahoo of its day, and while it's a massive thing, it's not the thing."
Q: A Bloomberg news article just came out saying that the days of $20,000 for Bitcoin are behind us. What do you say to that?
A: "If this becomes a store of value, and we think it's well on the path... Gold has had a 5000-year run. It's a great run. What else has lasted 5,000 years? This is just a better store of value. If the world comes around to sharing that view, and I think we are on that path, then we are easily over $100,000 in 3-4 years..."
Q: When you talk about store of value, you push this relative to gold and silver. Explain what you mean buy this.
A: "Well, if you look at the history of currencies over time, 100% of them, up until 400 years ago, went to zero. The truth is if you think about the dollar, it's a Ponzi scheme. And 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+ of debt, and by the way, there is going to be more tomorrow, and more the day after. So, the only way if you want to maintain your purchasing power, the only thing that's held up over time has been gold. That's how you store your value. Over time, all currencies degrade, and eventually they all go to zero. So, today, $8 trillion is stored in gold... silver is the second biggest store of value at about $50 billion. And Bitcoin today is $60 billion. So, it's really kind of taken over second place from silver as a store of value."
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