Permalink to Strategist Unfazed by Bitcoin Yo-Yo, Says $1.6 Trillion in BTC Transactions Over Two Years Is Bullish

Blockchain Capital general partner Spencer Bogart is expecting Bitcoin to bounce back.

In an interview with Bloomberg’s Taylor Riggs and Haidi Stroud-Watts, Bogart charts the political climate and defines key factors that he believes will influence Bitcoin’s sideways price action.

“Overall I think China has definitely been driving some of the price action over the past couple of months. But I think it’s challenging to read between the lines on what China is doing. We’ve seen some favorable moves in terms of Xi Jinping’s move to blockchain the whole country and put it as a strategic priority.

Then we’ve also seen some moves like Bitcoin miners were once put on a list of industries to be eliminated from the country. It’s been removed from that list — so a slightly friendlier stance in that respect. So while we’ve seen some crackdown on some of the smaller and shadier crypto exchanges, some of the larger ones seem to be getting a bit more credibility within the country.”

Regardless of China’s moves and President Xi’s blockchain strategy, Bogart believes Bitcoin isn’t tethered to his policies.

“I don’t think that Bitcoin’s future is in any way dependent on what China does. So I think it’s helpful to zoom out, get away from some of the near-term headlines, because I think in general, any kind of short-term trading strategy around Bitcoin is the wrong one. 

I think the question that people need to be asking is, is Bitcoin going to be more successful over the next five years than it is today. I think if we look at all of the underlying trends here, they’re all very constructive. Bitcoin has gone from being a joke, just a few years ago, to processing $1-3 billion worth of transactions daily.

If we look back over the past two years, Bitcoin has processed more than $1.6 trillion of transactions. So whether it’s that or some of the startups that we’re seeing that are growing at incredible clips, particularly a lot of the onramps, companies like Coinbase and Kraken, we’re seeing a lot of positive growth across the industry as a whole.”

While Bogart sees the challenges that regulators can present to entrepreneurs and innovators who are trying to expand markets and grow infrastructure for blockchain-based assets, he doesn’t believe that Bitcoin faces the same roadblocks as an initiative like Libra or that its success necessarily hinges on regulatory clarity.

“I think it’s a bolder bet or a riskier bet to say Bitcoin will be less successful over the next five years than the past five years. All the trends suggest otherwise. Whether it’s the value of transactions processed that I just discussed or whether it’s actually looking at what do people think of Bitcoin.

We run a survey. We ran one in fall 2017 in the middle of a raging bull market. We ran another one in spring 2019. So this is actually done by Harris Poll. It surveys more than 2,000 American adults, and we use it to gauge the general population’s awareness, perception, familiarity, conviction and propensity to purchase. And what we saw is, over that 18-month period, from fall 2017 to spring 2019, despite a significant market decline, the metrics were up across the board.

So people are learning more about Bitcoin. They have more conviction in its future, and I would guess that there are going to be more purchasers going forward.”

Bogart expects the price of Bitcoin to go up “over any reasonable time horizon.”

“We don’t make any investments or bets on a weekly or a monthly basis, but certainly over the next three years, we’re very constructive on the price of Bitcoin. One thing that’s coming up in a few months is the halving, so to speak. This is Bitcoin’s third halving. This is the rate of new issuance when it falls in half every four years. And so in May 2020 of next year, we have the next halving. So the rate of new issuance falls. It’s a little bit less selling pressure, and I think that’s overall constructive on price.”