Crypto Interviews: Crypto-enthusiast who publicly called the bubble at the right time
In this brand new interview series we explore the ins and outs of the crypto scene with a range of guests. Uncovering new exciting crypto projects, speculating on where the market is heading and looking into where new technological innovations like blockchain technology can really add value. Today we will speak with someone who publicly called the bubble at the right time.
“In general I think this bear market is healthy. FOMO is never a good ‘killer app'”
Second out in Crypto interviews we have spoken with “DK”. And this is how he describes himself on Twitter:
“Entrepreneur, Fund Manager, Ex-Consultant and Hobby Ice Hockey Player. Child of the Sun. Any opinions personal, never investment advice, sometimes parody”
DK publicly called the bubble at the right time
Before we start the interview we think it’s worth sharing that back in November 2017 he wrote a well worth reading article about the looming burst of the crypto bubble and the eventual crash of the market (link to Medium post where he publicly called the bubble just before it was about to happen).
So yeah he was right, when he publicly called the bubble at the right time. Obviously he wasn’t the only one to thought a crash was coming. But he describes it all very well. The FOMO, the need for regulations, the crazy valuations based on nothing, and of course the greed from all sides chasing a profit. Where the profits were made from the next guy chasing his profit.
So it will be interesting to hear his thoughts about the future. Can we move past the crypto bubble and eventually come out with a stronger blockchain and cryptocurrency offering?
What are you most looking forward to see in the crypto space 2019?
Less hype, less “long bitcoin, short the bankers”, less successful scamming, more regulation and hopefully less FOMO-inducing from so-called OGs. But that’s probably a pipe dream. I’d love to see a fully fledged blockchain application that we actually use daily emerge.
Which industry do you think could benefit the most of blockchain?
Banking. Yes, that is counterintuitive, but I actually think the clearest and most obviously profitable application of blockchain technology is a centralised blockchain with an oligopolistic structure run by several large banks and stock exchanges, potentially even including other large companies.
“Hacking Apple is one thing. Hacking Apple, Bank of America and Goldman Sachs at the same time is quite another”
This blockchain would not need a native token as its hosts would have enough incentives to run it and could be used to slowly replace settlement of financial instruments. It would retain the advantages of the current system (ie you can still sue your counterparty if they make a mistake). And there is still every possibility to reverse a transaction made by mistake so that government/regulatory control can be retained. But it would be likely more secure. Hacking Apple is one thing. But hacking Apple, Bank of America and Goldman Sachs at the same time is quite another. Most importantly enabling instant settlement and do away with the need for clearing houses.
This removes a large systemic risk and saves the banks lot’s of money. Cannot think of a more clear cut killer app for blockchain.
Nota bene: Bitcoin/Ethereum do not qualify for this. Institutions already trust these counter-parties, there is no necessary additional decentralisation and it has almost no benefits. On the contrary you’d lose the advantages of the current system listed above.
Are there any really bad examples of where cryptocurrencies are being implemented?
Any and all token that bear no security-like rights (debt, profit participation, voting) or are securities but were not marketed as such. Any and all token that are not necessary to incentivise a decentralised network of miners/stakers. That means roughly 95% of all existing cryptocurrencies.
Furthermore there is a terrible practice widely spread among crypto “hedge funds“. I have seen several documents directed at investors recently and they often show a track record gross of fees. I.e before deducting their fees. What is worse is that many are set up as liquid structures with redemption/subscriptions quarterly. But they are marking illiquid ICO investments at cost.
That means an investor redeeming today gets to transfer the loss on that position (as markets tanked in between) onto remaining investors. Worse, investors buying in now would buy that position at a price that may have been good 12 months ago but now amounts to an almost certain loss. These kind of poor practices should stop.
So you publicly called the bubble at the right time. But what’s your thoughts on the future?
I publish my thoughts on price for bitcoin whenever I think it needs updating and you can find all my work here: (Medium) In general I think this bear market is healthy. FOMO is never a good “killer app”. And I truly detest the way in which scammers were able to separate people with little financial education from their money due to greed and FOMO.
“I hope it goes much deeper so that the people who I believe had poor intentions from the start actually hurt a bit more”.
Lets hope this is a “cleansing” event and I hope it goes much deeper so that the people who I believe had poor intentions from the start actually hurt a bit more. If crypto re-emerges it has a real chance to be much cleaner. That being said, as I said in my last price piece. I am neutral as for new positions. Lot’s more detail in that article. None of what I write is advice.
Big thanks to DK for sharing his thoughts. I think most us can agree that it very quickly became a bit unhealthy back in 2017. With the ICO mania, blockchain technology was added to everything. And speculation and greed was at an all time high. So a ‘cleansing’ process was inevitable.
DK was bang on target when he publicly called the bubble at the right time. Lets see what the future holds. It’s hard to predict what might happen in the future, but hopefully cryptocurrencies might come out better after it all.
Crypto interviews: Read our previous interview with Brad Michelson who’s the Director of Marketing at crypto startup BlockFi here.