I’ll try to summarize this 4-minute video, but let’s start with the main question we’re on everyone’s lips:
Is it too late to buy bitcoin?
Meltem Demirors’ answer to this question was straightforward; a big “NO”. She thinks it’s still early and we’re just starting.
Here is what she said:
It’s still very early and we’re just starting to see retail interest spike and a lot of the buying activity we’ve seen over the last few weeks has primarily been driven by retail investors. Institutional investors haven’t really had a way to get into the asset class. And as you look the launch of futures I think many people are really pricing in that institutional money coming in. But this recent run-up, so I think there will be a much bigger run coming in 2018; one or more products and more instruments (to) come to market. We have three products under our grayscale family – a Bitcoin Investment Trust that, as of today has $2.6 billion in assets under management starting at 300 million earlier this year. So just that growth alone has been a great indicator of the potential of this market.
Is bitcoin a bubble?
Meltem Demirors’ believes speculative investing is normal and it’s fueling the development of infrastructure.
So, what we are seeing is a lot of speculative investing and I think it’s normal amid new technology paradigms to see “bubbles” forming. We saw that in the early Internet. We saw that with steam locomotives, which were seen as a trend throughout history. But I think what’s fundamentally different here is we’re just getting started on this. Financial speculation is fueling the development of infrastructure. We’ve been investing in over 110 companies that are building infrastructure around digital currencies and all of those companies are raising money either by capitalizing themselves through ICOs or token offerings and they’re using that money to build all the infrastructure that fuesl this new financial system.
When the same question was asked to Robert Shiller, his answer started with the definition of “bubble”.
The Professor’s definition of a bubble is:
A bubble is a time when there is great excitement about an investment spurred by other stories of other people making a lot of money, and driven by envy. People go and buy things out of excitement; a gambling sort of mood develops – that’s a bubble.
And he continues:
So it sounds like objects in boxes but now, the thing is, a bubble isn’t necessarily totally wrong. It just goes too far. So yes, I think that Bitcoin has aspects of a bubble. And whether it has gone too far? Now it is just almost impossible to be sure about because we don’t really know what’s going to happen with these brand new instruments.
You can watch the video of the whole interview below: