One River Asset Managementâ€™s CEO says his firm now holds bitcoin worth â€œwell overâ€ $1 billion. He revealed that the institutional interest in bitcoin is â€œastounding,â€ noting that almost all major institutions in the U.S. are having discussions about the cryptocurrency. He believes that bitcoin will be worth more than gold, placing its value at approximately $500K.
One River Asset Managementâ€™s CEO Is a Bitcoin Bull
The CEO and co-founder of One River Asset Management, Eric Peters, shared his view on bitcoin at length in an interview with Bloomberg last week. Firstly, he revealed that his asset management firm now holds bitcoin â€œwell in excess of a billion dollars at this point.â€ He then discussed the case for institutional investors to own cryptocurrencies currently.
â€œWe are in a unique period right now,â€ Peters began. It is the period seen many times throughout history where â€œgovernments become extremely indebted, monetary policy becomes less effective, and ultimately governments â€¦ need to issue lots of debt and begin actually spending. Typically, when they do that, they try to unburden themselves from the debt theyâ€™re incurring by debasing the currency that theyâ€™re issuing that debt in.â€ The CEO added that â€œultimately, those who hold that currency lose their spending power.â€
He proceeded to talk about crypto assets, stating that they â€œare really interesting in the sense that theyâ€™re a new asset class altogether.â€ He noted that they â€œhave some unique qualities, part of which resemble the qualities that youâ€™d find in gold except that theyâ€™re wildly underpriced relative to gold.â€
Moreover, bitcoin and other cryptocurrencies have â€œtechnology properties,â€ and â€œwill look different tomorrow, and next year, and in a decade to come.â€ This makes bitcoin â€œunique to gold because if gold has looked the same two thousand or two billion years ago, then it will look the same in two thousand and two billion years from now,â€ the One River executive described, elaborating:
He further detailed that â€œItâ€™s very rare that you find an asset that can kind of allow you to capitalize on future upside [the technologies] while also mitigating the downside [monetary debasement] like that.â€
Peters also clarified that he always starts with the macro aspect when it comes to investing as he has been a macro investor his entire career. With technology, the CEO opined:
â€œWeâ€™re issuing enormous amounts of debt. Weâ€™re having our central bank buy them â€¦ the scale of it is just so profound â€¦ so the question is, in that environment, what are the assets that you can own,â€ he continued.
Peters proceeded to list some plausible investment options: equities, gold, and digital assets. He asserted that digital assets â€œare dramatically undervalued relative to some of these other stores of value,â€ which is why his firm is â€œexcitedâ€ about this, emphasizing that â€œItâ€™s just an undervalued asset for that macro backdrop.â€
The One River CEO also praised bitcoinâ€™s fixed supply. He stated: â€œItâ€™s unlike any asset that Iâ€™ve seen in the world in the sense that thereâ€™s no supply response to the price. If bitcoin went up five times in value, or 10 times, or 100 times, there wouldnâ€™t be more bitcoin produced. You canâ€™t say that about really any other asset in the world.â€
He also compared bitcoin to gold. â€œI think it will be worth more than gold at some point because gold is not infinite. Gold continues to increase in terms of supply,â€ he noted. In contrast, there will only be 21 million bitcoins. The CEO elaborated:
â€œRight now, itâ€™s trading at letâ€™s say $30,000, so if you look at it from a traderâ€™s perspective thereâ€™s enormous convexity to the upside,â€ he affirmed.
Answering a question about how long it will take for bitcoin to become more valuable than gold, Peters said that it is â€œpolicy dependent.â€ He could see it happening in a number of years if we see â€œsome type of next recession that is followed by even more issuance and more buying from the fed.â€ Nonetheless, he pointed out that â€œone of the things about these assets is â€¦ it doesnâ€™t cost you anything to hold them. You have the price risk to the downside but you donâ€™t have a negative carry.â€
The One River executive also discussed whether crypto assets will appeal to institutional investors if they continue to exist alongside fiat money or whether institutions need to see some kind of government or central bank acceptance or endorsement before jumping in.
After he publicly revealed that his firm had invested about a billion dollars in bitcoin, he said that â€œthe number of institutions that have been filling my day with calls and inquiries about this is astounding.â€ He reiterated that it is already happening â€œenormously.â€
Peters expects the crypto asset class will â€œmature in a decade from now,â€ adding:
â€œTheyâ€™re fascinated by this,â€ he further shared, emphasizing that â€œthey should be because this is the first and last asset class that will appear in our lifetime.â€
As for how the crypto landscape, including BTC, will look like a year from now, Peters said, â€œPrices will be higher.â€ While admitting that there will continue to be volatility, he believes that it will decrease the higher the prices are. He explained that as the prices rise, â€œyouâ€™re drawing in new types of investors, with stronger hands, quite frankly â€¦ so I think that over the next year, a lot of money will be drawn into these assets.â€
He also believes that more regulations will come out in an effort to increase transparency for the whole crypto asset class but the regulators will not destroy the asset class because they understand that the future of finance will be digital.
Do you agree with One Riverâ€™s CEO about bitcoin? Let us know in the comments section below.
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