Managing Editor’s Note: On Tuesday, Harry wrote to you about the bitcoin craze and the recent contact he’s made with cryptocurrency expert Michael Terpin. Michael will be speaking at our fifth annual Irrational Economic Summit in October, in Nashville, Tennessee, so today we have a note straight from him.
From Michael Terpin, Co-Founder, and Chairman of BitAngels
As we melt into the last half of summer, it’s a good time to see how bitcoin and cryptocurrencies are faring in 2017, given that bitcoin was the top-performing asset class in six of the past seven years.
At the start of this year, CoinDesk (the largest business-to-business blog for the blockchain industry) asked me to write a piece with my predictions for 2017.
It did this because I’m a serial entrepreneur in marketing and technology, best known for founding the first Internet-based company news and financial disclosure newswire, Marketwire. I’ve prided myself on starting businesses early in important nascent markets (Web, 1993; social media, 2003; bitcoin/blockchain, 2013).
Along the way, I founded or co-founded the first bitcoin angel group (BitAngels, 2013), first cryptocurrency fund (Dapps Fund, 2014), first bitcoin syndicate on AngelList (2015), one of the first token creation incubators (bCommerce Labs, 2015), and I’m currently part of the investment committee at Alphabit Fund (2017), the first fully-regulated digital currency hedge fund.
I’ve also been running the largest PR and advisory firm in the blockchain sector, Transform Group, since 2013, and the first and largest global conference series for cryptocurrency and digital asset investors, CoinAgenda, since 2014. (Harry often complains how difficult it is to pin me down to catch up! Now you know why.)
Well, when I sat down to write this, bitcoin was up 190% for the year. And the overall market for “public blockchains” (the digital assets that are tradeable on cryptocurrency exchanges) is up more than 400% since January 1.
Bitcoin market insiders, like me, saw this coming, as last July was the second “halving” – a technical event that cut the supply of new bitcoins entering the market in half while demand has been consistent in its rise.
In case you didn’t already know, only 21 million bitcoins will be created over a 140-year period. Nearly 80% of them have already been produced!
But let’s look at my key predictions I made in January and how they’ve turned out so far…
The “1 percent” will take notice of the cryptocurrency markets.
Clearly, family offices have gotten into the game this year, investing more than $1 billion in new token crowdsales (commonly referred to as initial coin offerings or ICOs, even though in most cases, they’re not regarded as securities under existing U.S. law.)
We can easily track the overall market cap of public blockchains in real time via sites like CoinMarketCap and CoinCap.io. Since January 1, it’s risen from $20 million to $95 million (briefly eclipsing $110 million a month ago before some profit-taking kicked in).
Family offices got into the game as well.
At our most recent CoinAgenda Europe conference in Barcelona, billionaire Mike Novogratz, who made waves this year by revealing he had invested 10% of his wealth into cryptocurrency, had his family office’s digital fund manager, David J. Namdar, speak alongside David Drake of DFJ Capital, and Chance Barnett, co-founder of the equity crowdfunding site, Crowdfunder, and now the ICO accelerator, Coin Circle.
I’d say I nailed that prediction!
The price of bitcoin would surpass $2,200 (it was $998 when I made the call).
Clearly this has already happened.
I also noted it would be linked with the “war on cash,” and India, Venezuela, and other jurisdictions have not reversed course on this, leading many people globally to look at non-governmental forms of value exchange and storage.
Gold and silver prices are also up this year, but bitcoin and other digital currencies are up much more, in large part because they’re the only alternative safe haven investments that are digital and can be moved around the world in seconds, regardless of where one lives, as long as there’s an internet connection.
ICOs and other token distribution efforts will “continue, increase and diversify.”
This prediction was the one that was most fulfilled. Three years ago, there were only half a dozen significant (more than $1 million raised) token crowdsales. The largest one, Ethereum, raised $18 million at 30 cents per token (today’s price per token is $196, making it one of the best investments since bitcoin’s earliest days with a three-year return of 65,000%).
This year, there has been more than $1 billion raised in a little over six months, including $225 million by Tezos, $200 million by Eos, and $153 million by Bancor.
We’re beyond a bull market for ICOs right now. It’s more like a stampede, from which I predict a flight to quality with only the best teams and backers raising the vast majority of money in the second half of the year.
With some of the top-performing ICOs up (such as FirstBlood, Golem, Gnosis, Qtum, and SingularDTV) as much as 5,000% in less than a year, it’s no wonder that more money keeps pouring in.
Like most bull markets, this will continue until the first indication that a sell-off has begun. This almost happened earlier this month, when bitcoin dropped to $1,800 and the overall public blockchain market dropped 40%, but it has since recovered most of its retracing and appears to be ready for another run.
Starting in the fall, I’ll be writing a new series of informational white papers, newsletters, and seminars for Dent Research. So watch out for that. And I’m also speaking at this year’s Irrational Economic Summit, so please join us.
Disclosures: Michael Terpin is an active investor in digital currencies and assets, and has provided public relations and advisory services for more than 100 blockchain companies, including Bancor, Eos, Ethereum, Gnosis, Golem and Qtum. No companies mentioned in this article paid for their inclusion; they were included because they were relevant.