Bitcoin OG Willy Woo mentioned Bitcoin is the “good asset” for the subsequent 1,000 years, however says it gained’t overtake the US greenback and gold except it attracts considerably extra capital.
“The factor is, you dont get to alter the world except this financial asset — in my view, the right asset for the subsequent thousand of years — doesn’t get to do its job except capital flows in and will get sufficiently big to rival the US greenback,” the Bitcoin investor mentioned on the Baltic Honeybadger convention in Riga, Latvia, on Sunday.
Bitcoin’s market cap at the moment sits at $2.42 trillion, lower than 11% of gold’s $23 trillion market cap, whereas the US greenback cash provide sits at $21.9 trillion.
Bitcoin treasury companies increase adoption, however with dangers
Woo mentioned there are at the very least two obstacles stopping Bitcoin from towards turning into a world reserve asset.
While Bitcoin treasury companies are accelerating adoption, little is thought about how they construction their debt — a threat that would result in a Bitcoin treasury bubble burst.
“No one’s actually publicly appeared deeply into the debt structuring, so I completely suppose the weak ones will blow up, and folks can lose some huge cash,” Woo mentioned, including that altcoin treasuries at the moment are practising the identical playbook that would “create one other bubble.”
He expressed concern over how the Bitcoin treasury adoption will unfold ought to a big market correction or bear market ensue:
“What occurs to the bear market? Who’s swimming bare and what number of cash get slapped again out into the market?”
Bitcoin liable to nation-state meddling
Meanwhile, reliance on spot Bitcoin exchange-traded funds and pension funds for Bitcoin publicity — versus self-custody — may focus extra Bitcoin (BTC) inside arm’s attain of nation-states, growing the chance of a government-led rug-pull, he mentioned.
Woo famous that whereas Bitcoin is attracting flows, the traders with the “cash luggage” aren’t opting to self-custody.
Instead, they’re in search of publicity by spot Bitcoin ETFs or Bitcoin treasury firms like Strategy, Woo mentioned, including that pension funds are counting on institutional options like Coinbase Custody.
Related: Michael Saylor will not be sweating the rise of Ethereum treasury firms
While these Bitcoin on-ramps open the floodgates for extra capital, traders are taking over the chance of “being rugged at a nation-state stage,” Woo mentioned.
Woo was talking alongside different panelists together with Blockstream CEO Adam Back, host of What Bitcoin Did Danny Knowles, Bitcoin analyst Leon Wankum and Max Kei.
Kei, founder and CEO of Bitcoin self-custody platform Debifi, mentioned self-custodying Bitcoin will unfold progressively — from custodians like Coinbase to on a regular basis companies and at last to people.
“[The companies will] learn to self-custody, and they are going to do self-custody. Then there’s people inside these firms [who will] study that. And then successfully it is simply going to unfold out massively.”
Companies nonetheless essentially the most ‘logical’ place for Bitcoin adoption
Despite Woo’s issues about company Bitcoin adoption dangers, Back mentioned firms stay essentially the most logical start line for Bitcoin adoption.
Using Bitcoin’s anticipated future returns as a “hurdle price” for investments, he mentioned, “If an organization can’t beat Bitcoin, they need to shut up store and purchase Bitcoin.”
He added that firms with strong core companies can nonetheless thrive by integrating Bitcoin, stating that “It doesn’t must be a pure play.”
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