Cryptocurrency denial – it’s just a stage of grief | Digital Asia
- Cryptocurrencies to be mainstream within the next eight years
- Advice is to keep 5% of your wealth as cryptocurrency
HERVÉ Larren (pic, above), Global Crypto Ventures co-founder, a cryptocurrency mining company, has a theory about cryptocurrency sceptics. “People are basically going through the five stages of grief,” he wryly observed.
“The first is the denial: I do not believe that’s ever going to work,” he ticked off. “Past a billion dollars then you get into the anger – oh, it’s for money laundering, it’s for bad people and we need if it cannot collapse by itself that we need to lobby the government for it to collapse it.”
The third phase is “bargaining”: “Okay, fine, I love blockchain but I don’t still don’t like Bitcoin.”
The fourth will be “depression” when banks collapse and point the finger at everyone else until nothing else can be done. “Finally it is the acceptance phase,” he concluded.
Cryptocurrency to be mainstream “within the next 8 years”
Larren had been invited to Kuala Lumpur by Wei Chuan Beng, the Malaysian YPO deputy chapter chairperson. The YPO is a global network of young chief executives with approximately 26,000 members in more than 130 countries. The title of the talk was “Old Money versus New Money”, alluding to the differences between conventional fiat currency and the new frontier of crypto-currencies.
One point Larren wanted to emphasise was that he believed that it would take approximately fifteen years for cryptocurrency to be mainstream, using as his basis how credit cards took 50 years to become accepted and currency took 400 years.
“Now we are in year number eight and there’s a hundred percent brand awareness on the word Bitcoin and cryptocurrency,” he pointed out. “We believe that within the next eight years there’s going to be massive upsurge in cryptocurrencies as a form of payment.”
Larren likens the current state of cryptocurrencies and blockchain with what was seen with the Internet at the end of late 1994, with a potential of faster growth because of the improvements in communication.
“The market cap of Bitcoin for example is (currently) less than two hundred billion dollars. The internet bubble at its height 17 years ago was 6.7 trillion dollars and that was really (just) a US phenomenon.” He estimates that the value of cryptocurrencies will eventually rise ten-fold in the next five to 10 years and hold a market value of about two trillion dollars. “When it arrives, it’s going to arrive very quickly.”
To illustrate his point, Larren highlighted various investors who seemed to change their mind as they shifted through the “phases”. “It started with Jamie Dimon at JP Morgan who called it a fraud and then after that saying he regrets that he called it a fraud,” he explained. “You know, Jamie Dimon (now) has 5,000 people working on blockchain technology so he understands perfectly what (where he) is going.”
Another criticism of cryptocurrency is that it has no central regulation, but Larren sees it as a positive. “(Bitcoin) has been based on the failure of centralised governments. Now there’s a 193 currencies in the world, (and) the bottom 30 currencies have collapsed,” he said.
He clarified that the underlying reliability of cryptocurrencies was because it is validated by users on the network performing complex calculations. “We believe more in mathematics than we believe in some random person that has disappointed us in the past.”
However, he doesn’t believe that cryptocurrency will completely supplant fiat currency but instead will complement whatever is available. “I see currencies as a form of languages,” stressed Larren, clarifying that even as the world moves to e-payments, much of it. “You would have your cryptocurrency wallet and you might have 12 different crypto currencies in it.”
New money for the young
Whatever the future brings, it looks like it will be carried by the young. Wei (pic, above) said that he knows of people working in a blockchain accelerator in Singapore who are being paid in Etherium, a type of cryptocurrency.
“These 26-year olds that (represent) a group of people who are so comfortable when dealing with cryptocurrencies.”
His children have New Year’s resolution this year “This year I want to start learning how to invest in cryptocurrency.”
People should keep 5% of their wealth as cryptocurrency because it will eventually pay off. “This is the average that I’ve seen innovative wealth managers suggest to allocate your net worth,” Larren emphasised.
Wei himself is similarly bullish about the future of cryptocurrencies. While he accepts there is volatility in the short-term, the real gains are to be made for those who are patient. “If you want to only trade this for like the next two hours, it’s a super high risk. For two years, it is super safe.”
Wei says that the youth of the today don’t even bother getting credit cards, and are willing to use cryptocurrencies to make payments. “A whole generation will potentially bypass the credit card.”
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