'Gold Is so Gone' as Bitcoin Is a Better Store of Value: Tim Draper

Billionaire venture capitalist Tim Draper has predicted that OpenNode, a multi-layered, Lightning Network (LN)-enabled Bitcoin (BTC) payment processing platform, will be widely adopted in the foreseeable future.

Draper, an electrical engineering graduate from Stanford University, believes the Bitcoin network will be able to compete with more established payment gateways, including those established by the VISA network.

When questioned about whether people are more focused on developing products during the bear market (in a recent interview conducted by CryptoWendy), Draper confirmed that many companies have been building various crypto-related solutions in order to make it easier “to move Bitcoin around.”

Commenting on when mass adoption of cryptocurrencies will occur, Draper said a lot of people are already using them right now. However, he explained Bitcoin’s market value has not yet been established which is why the pseudonymous cryptocurrency’s price has been fluctuating quite a lot.

Responding to a question about whether he thinks altcoins make good investments, Draper noted that “the ones that are going to be around for a long time, [they’re already] rising to the top” (in terms of market capitalization. He added that this is something ”we’re seeing right now and there are some [altcoins] out there that are still going through the process of being developed. They’re going to have a big impact on the world’s [economy.]”

It’s Important To Know The People Behind Cryptocurrency Projects

He continued:

A lot of success in crypto … if you want to put your money to work … [we should look at] who’s behind the [various] cryptocurrencies. If we do that, we’ll be holding on to the right currency when the time comes.

Commenting on the business model adopted by crypto entrepreneurs, Draper confirmed most of the digital asset and blockchain companies were startups. He acknowledged the Bitcoin and the Ethereum (ETH) networks are established platforms, however the majority of crypto projects are still in their early stages of development.

Tezos And Bancor Were “Huge Offerings”

Going on to mention that when his firm, Draper Associates, supported the launch of Tezos (XTZ) and Bancor (BNT), those were “huge offerings.” 

He went on to point out that the “great entrepreneurs of the world are those that rise to the occasion. When the chips are down, they continue to” stay focused and work on their projects.

While comparing Bitcoin to the rest of altcoins, Draper remarked that “gold is so gone.” He noted: 

What would you use gold for when you can store value with Bitcoin? It’s complete nonsense. But I’m sure a lot of people still use it and they think of the gold standard as like the good coin. But I look at it, and I say, you’re comparing Bitcoin to gold?

According to Draper’s assessment, people will eventually begin spending their Bitcoin holdings when its fair value has been established. He also confirmed that he’s sticking to his $250,000 Bitcoin price prediction by 2022-2023 and that this is not unrealistic as the world’s most dominant cryptocurrency would still only account for 5% of the world’s GDP at this price.

Bitfinex Wants to Offer 100x Leverage For Crypto Derivatives Trading

Michael LaVere
  • Bitfinex will offer 100x leverage trading for cryptocurrency derivatives
  • According to the exchange's CTO, the hedging product is "ready for prime time"

Cryptocurrency exchange Bitfinex revealed it wants to offer derivatives products with up to 100x leverage for cryptocurrency traders. 

Hedging On Cryptocurrency Derivatives

Chief Technology Officer Paolo Ardoino told The Block on June 25 that the cryptocurrency exchange was ready to ship a 100x leverage product for certain users. According to the post, the project has been under development for some time and is “now ready for prime time.” 

The product was referenced in last month’s whitepaper published by Bitfinex for its $1 billion private token sale of LEO, stating

“Qualified Bitfinex account holders will be able to trade a new hedging product through a derivatives wallet.”

The whitepaper originally claimed that the new hedging mechanism would be released by the end of June, a timetable that fits with Ardoino’s “ready for prime time” statement. 

Ardoino confirmed that only “verified” customers will be allowed access to the product, given the risks involved in such highly leveraged trades. 

The CTO also took to Twitter to quell user concerns over Bitfinex’s existing 3.3x margin trading. Ardoino explained 100x leverage will be “optional,” and that their current leveraged trading products will be unaffected by the release. 

Big Risk, Big Reward

Bitfinex is looking to compete with rival exchange BitMEX, who already offers 100x leverage through its bitcoin perpetual swap contract. However, Bitfinex claims its product is designed as a legitimate hedging tool for clients, rather than a gambling mechanism. 

Max Boonen, CEO of trading firm B2C2, believes the product will only appeal to retail hedgers, as large investors will shy away from the risks involved in 100x trading. 

According to Boonen, 

“There’s nothing wrong inherently about 100x. But as a commercial hedger you want lower leverage margin. The larger investor wouldn’t want to take the risk of 100X, typically. They don’t want to go balls to the wall.”

The cryptocurrency derivatives market has been heating up. Last week bitcoin-bull Mike Novogratz’s Galaxy Digital announced plans to offer cryptocurrency options contracts.

Binance has also reportedly been exploring futures trading. On June 24, Binance CEO Changpeng Zhao tweeted the exchange had executed its first margin liquidation for a BTC short.