- Jake Ryan is the chief investment officer of the crypto-asset hedge fund Tradecraft Capital.
- Ryan thinks bitcoin will have a market capitalization of $ 5 trillion by 2023 and $ 20 trillion by 2030.
- He also shares two emerging areas of the crypto-asset market on which he is positive.
- Visit the Insider Business Department for more stories.
After spending the first 20 years of his career in software development, Jake Ryan had no trouble turning his head in the world of cryptocurrency and blockchain technology.
However, it has taken him more than seven years since the creation of bitcoin in January 2009 made his first direct purchase of the digital currency at around $ 480 a piece in 2016.
What convinced him to finally make the leap was not the utopian vision for bitcoin shared by many ardent fans in the technological world, but the antifragile nature of the digital currency.
There were many times that bitcoin could have died, Ryan said, pointing to the spectacular downfall of the Tokyo-based crypto exchange Mt. Gox in 2014 as an example. Once the world’s largest stock exchange, Mt. Gox was targeted by hackers and lost hundreds of millions of bitcoins at the time.
It is not surprising that bitcoin’s price plunged with the incident, leading to Mt. Gox filed for bankruptcy.
The strike of the Silk Road black market in 2013 and 2014 was another time when bitcoin faltered on the brink of extinction. All transactions on the online platform, which sold illegal drugs, were done with bitcoin to ensure the anonymity of buyers and sellers.
In November last year, the US government seized more than $ 1 billion of bitcoin linked to Silk Road, but the entanglement of the digital currency with illegal activities did not complicate the relentless rise of $ 20,000 in December.
“It was the fourth or fifth time I wanted to, wow, it’s going to survive,” Ryan said. “Its decentralized architecture allows it. And for me it then became really investable.”
The market capitalization of Bitcoin could reach $ 5 billion by 2023
Ryan, who serves as an advisor to at least five business-backed businesses, was a
angel investor
since May 2014.
As he delved deeper into blockchain technologies and began investing in investments in crypto-enterprises, he began to consider the idea of combining his passions and skills to form a crypto-asset hedge fund.
In 2018, he launched Tradecraft Capital, which focuses on investing in liquid coins and tokens, including bitcoin and ethereum.
Of all the cryptocurrencies in which Ryan invests, he finds bitcoin the most unique and he said he had an ‘impeccable concept’.
“We have a monk Satoshi Nakamoto, but we really do not know who started it. It was exploited,” he said. “Anyone who knew about it in a free market approach could exploit Bitcoin and get it. It did not have a price for a long time. In the end, the market determined price discovery.”
Bitcoin is scarce, not only because of the limited supply of 21 million, but also because it is supported by a number of incentives that encourage holders to ensure its survival, he said.
Over time, as the money value of bitcoin increases due to the increasing acceptance of corporations and institutional investors, Ryan believes that the digital currency will achieve a network value or market capitalization of $ 5 trillion by 2023 and $ 20 trillion by 2030.
Two emerging areas of the crypto-asset market
Despite its wild volatility, bitcoin has continued to rise above $ 47,000 since Friday afternoon. For investors looking to capitalize on emerging but more risky opportunities in the crypto-asset landscape, Ryan shares two themes he is positive about.
One of them is built around smart contract platforms and autonomous protocols.
“Everything that has to do with allowing people to build smart contracts and deploy them, and people out there who build autonomous protocols,” he said, “is where the value is going to build in the future.”
This theme includes subsections such as decentralized financing, which refers to financial activities such as trading, lending and interest accounts that take place outside the traditional financial system.
With the recent craze over non-fungible signs, which are part of DeFi, the decentralized financing space has garnered a staggering amount of interest.
Billionaire Mark Cuban said in a recent interview with the Defiant Podcast that DeFi reminds him of the early days of the internet in the mid-90s. The Nasdaq-listed decentralized finance index, which tracks the blockchain tokens on DeFi, has risen more than 547% in the past year.
The other theme that drives Ryan’s portfolio is management and who has the rights to manage, manage and update blocks.
An example under the theme is management tokens, these are tokens created by developers that allow token holders to help decide on protocols, products or new features.
“You can think of management tokens almost like a new version of equity. Equity is the right to cash flow after expenses are paid,” he said. “Management tokens are similar and completely different, but may have characteristics that allow them to earn value for similar reasons why equity builds value.”