I am getting a lot of questions again right now about Bitcoin.
When I last checked in on Bitcoin on this blog back in April, they were changing hands at $4,900 and I chose to make Bitcoins the topic of my first Lindzanity podcast. I was getting bullish on the price for the first time in a while and I wanted Farbood Nivi, founder of portfolio company Coinmine to talk about the opportunities.
This morning Bitcoins are trading at $11,500, so the timing of the episode was great.
A little context…yesterday the iPhone turned 12 and people lined up for the ‘appless’ first iPhone for over a month.
Three years after the launch of the iPhone, Bitcoins were changing hands at 20 cents.
I first heard about Bitcoins in 2010 (in Tel Aviv) when Yoni Assia, founder of Etoro, told me to buy some. His company Etoro owned $100,000 worth and I chose to invest in Etoro. Thank goodness I did.
In 2013, I probably made my best Bitcoin call on this blog with a post titled ‘Meaty Trends – Trust, Security and Bitcoins‘. The reasons I got bullish are just as evident today. From the post:
If you have never seen a perfect long-term trend set up for a new set of markets, I give you yesterday’s Union Square Ventures investment in Coinbase.
On one end of the trend…Union Square has a good track record of investing in things that are too early to understand for most, but become mainstream. They invest many millions of dollars in platforms and ideas that have traction, but many hurdles on their way to mainstream.
On the other end of the trend is Warren Buffett. Warren can be late. He can buy troubled companies or great companies late in their growth cycle like $IBM. At the same time that Fred Wilson is confirming ‘game on’ with the Bitcoin trend and all that Bitcoin means (trust, currency, security, technology), Warren can ignore and hoard railroads and banks. As a recent example, I am sure Warren had never heard of Twitter in 2007, scoffed at in in 2010, and signed up for Twitter last week. For those calling a top on Twitter because of Warren Buffett, prepared to be wrong. The trend is just now maturing.
In yesterday’s WSJ, Warren was quoted on Bitcoin:
Still, the budding currency is far off from going mainstream. Investor Warren Buffett professed Saturday to knowing nothing about Bitcoin when asked about it during Berkshire Hathaway’s annual meeting.
“I’ll put it this way, of our $49 billion we haven’t moved any of it to Bitcoin,” he said.
Fred is taking a lot of risk. That’s his job. But, as a risk taker myself, I like to see this type of setup. Not too early for Fred, but way too early for Warren Buffett.
The only thing that has changed since this 2013 blog post is that Fred Wilson and Union Squares have banked some coin and Warren Buffett has dug in further about how worthless Bitcoin is.
We still remain in the meaty part of this trend which is not too early for Fred (I would add Chris Dixon, Marc Andreesen, Farbood, etc) but way too early for Warren Buffett.
In 2017, as I sensed the froth developing in the crypto markets I wrote ‘Are Bitcoins The Perfect Tulips‘. the year 2017 was indeed a mania for crypto and the crash that followed was epic.
We are now coming out of that crash.
I am bullish on Bitcoin as we enter the second half of 2020, but I am expressing it differently than most. I do own some Bitcoins, but my exposure to Bitcoin and crypto is mostly through investments that include Etoro, Robinhood, Civic and Coinmine. Personally I have invested in a fund called Multicoin Capital because beyond owning some Bitcoin (and some Ethereum at the moment), I do not have the time or technical chops to compete in the space.
Here is a great chart that puts the entirety of the Bitcoin price move in a perspective that makes me more confident in the idea that Bitcoins may be the perfect tulip:
If I were a Bitcoin bear, Joe’s quarterly price chart of Bitcoin should have me frightened. It may not just be a perfect tulip, it may be a more perfect Facebook and Amazon.