Reddit Co-Founder: Investing in Cryptocurrencies Should Be a Long-Term Commitment

Alexis Ohanian, the co-founder of Reddit, has said that digital asset investors should not be discouraged by the prolonged crypto bear market - as he thinks it has helped in significantly reducing the number of speculative traders and investors.

Ohanian, a history graduate from the University of Virginia and Coinbase investor, told Yahoo Finance:

This is the Crypto Winter, no doubt. But a friend of mine, Brian Armstrong — who’s the CEO of Coinbase — said, ‘This is the spring of crypto innovation.'

"Some Of The Smartest People" Now Working On Crypto Projects 

Ohanian explained that this means cryptocurrency prices are currently “depressed”, however most of the speculators may have finally exited the digital asset ecosystem. This, according to Ohanian is “great” because the people that are left are now are involved in “building” real-world solutions. He remarked:

They’re actually building the infrastructure that it’s going to take to really make this happen.

Ohanian also revealed:

Some of the smartest people I know in tech are still working on solving these problems. They’re building companies that are built on blockchain.

Expressing views similar to other prominent business leaders and entrepreneurs, Ohanian believes:

The hype [around cryptocurrencies and blockchain] is gone. The fervor is gone. But I think that’s a good thing for all of us who have been in this [from the technology’s early stages of development].

Investing In Coinbase Back In 2011

Ohanian also pointed out that he was a “seed investor in Coinbase back in 2011, back when it was a pipe dream of devoted engineers.” He mentioned that JPMorgan, the largest bank in the US, and other established established financial institutions are starting to enter the crypto space. According to Ohanian, the introduction of the JPMorgan coin suggests that “there is real innovation that is happening now that all the wild speculation is gone. And that’s a good thing.”

Acknowledging that the extended bear market may be tough to endure for many crypto industry participants, Ohanian recommended taking a long view when investing in digital assets. He said: .

The [prolonged bear market] is painful. But if you were investing ... in [crypto] in the first place, you really should have been thinking long-term. That’s just generally good advice for any kind of investing, but especially something so nascent as crypto.

Comparing Crypto Adoption To The Growth Of The Internet

In October 2018, Ohanian, a best-selling author, had compared the current state of crypto technology to that of the growth and adoption of the internet. The Reddit co-founder had noted at that time that the present state of blockchain-based platforms is similar to how the internet was during the early 1990s. However, Ohanian had also said last year that crypto technology was improving and that the initial coin offering (ICO) craze of 2017 had gone away. He remarked (in late 2018):

Now is a good time because it's scattered all the hucksters and scenesters.

Bitcoin Trading at $600 Premium in India as Potential Ban Looms

Bitcoin (BTC) is currently trading at a roughly $600 premium in India, according to the market price available on the rupee-based exchange BitBns.com.

At the time of writing, bitcoin trades for just under 8 lakh rupees, or 800,000 INR, which is nearly $11,500 - significantly more than the going dollar price of $10,860.

This extreme price premium can be attributed to the difficulty of buying crypto in the country. As of last year, all regulated Indian banks and financial institutions have been banned from transacting in, and offering services related to crypto.

But the environment could soon become even more hostile.

CryptoGlobe reported in late April that a government working group made up of Indian tax, consumer protection, and general economic ministries had recommended a complete ban on even transacting or owning cryptoassets, much less integrating them into the mainstream, legal economy.

Bitcoin Demand Strong in India?

BitBns, one of the few operational rupee-denominated exchanges remaining, has apparently been able to skirt the increasingly draconian environment by allowing users to conduct their own P2P market, facilitated by the website, in order to buy and sell in Indian rupees. Other popular Indian exchanges, like Coindelta, have been forced to shut down.

The high premium may suggest a healthy demand in India for bitcoin and other cryptoassets, as Indians without international banking connections are forced to use the local currency to buy crypto. Data from crypto analytics website Coin.dance show that another popular crypto-fiat P2P platform, LocalBitcoins, has seen a sharp uptick in Indian trading volume since March-April.

indialocalbitcoins.png(source: Coin.dance)

CryptoGlobe reported last month that volumes were not affected by, and even increased in spite of, the threat of a crypto ban.

Indian Government Measures

One recent instance in particular shows just how far the Indian government seems to be going to control the Indian economy.

In late 2016, the national government suddenly and without warning even to its own ministries, declared that all 500- and 1,000-rupee banknotes currently in circulation were null and void - in an action that is known in India as “Demonetization.” These notes represented more than half of the physical money then in circulation in the country.

While the stated aims of the action were to root out corruption and “black money” from the economy, Demonetization has often been panned as a disastrous failure that cost 1% of the country’s GDP, a loss of 1.5 million jobs, and hurt the poor most of all.