I clipped out some surprising nuggets of wisdom from @barronsonline recent roundtable with a few big institutional panelists.
🧵👇
Panelists
• @dan_pantera, founder/CEO Pantera Capital
• @lisashalett, chief investment officer @ Morgan Stanley Wealth Mgmt
• Alkesh Shah, head of digital asset strategy @ Bank of America
• @eswarsprasad, economist @ Cornell, author of the book The Future of Money
Here we go...
Dan Morehead (Pantera):
"But the demise of Terra doesn’t say anything about the broader promise of stablecoins or blockchains. Pets.com’s failure didn’t mean that the internet was stupid. It meant that one business model didn’t work."
Alkesh Shah (BofA):
"This asset class is correlated with risk assets like tech, and that sector has corrected due factors like rising interest rates and inflation. For us to see a crypto winter, we would need to see people leaving...
... the ecosystem—less institutional and corporate engagement, less developer activity. Instead, we’re seeing the opposite, with more institutional, corporate, and developer activity. Our view is, it’s not a crypto winter. It’s a consolidation period for a risk asset."
Dan Morehead (Pantera):
"ESG has three letters in it. Definitely, environment is one of the letters. But there’s an S and a G. Bitcoin and other blockchains are delivering value in social & governance to billions of people. You have to weigh that against the environmental ...
... costs. It’s way too easy [for corporate and institutional investors] to say, 'oh, [at 0.5% global energy consumption], Bitcoin’s an ESG killer', when people have all kinds of other things in their portfolios. Aluminum production takes 3% of all the world’s electricity...
... while gold is the ultimate trifecta in ESG horribleness. It’s strip-mined in the world’s worst kleptocracies, using cyanide leaching techniques. Unless a company has divested from gold, it’s super hard to say that Bitcoin is in the negative."
Eswar Prasad (Economist @ Cornell, Author "The Future of Money")
"It’s hard to make the case against holding, say, 2% to 3% of your portfolio in crypto, because even if the value of those assets goes to zero, you’re not out very much, while the upside could be enormous"
Alkesh Shah (BofA):
"Mining can help spur renewable-energy investment. With renewables, there are periods of time with significant excess energy. If you can monetize that excess energy and fund further investment, you will actually do more renewables projects.
...
Since mining can be turned on and off in under 60 seconds, it's a hugely profitable business for a utility. There's s a scenario in which every utility wanting to do renewables has a mining arm, because it's something that will help balance the grid and not waste as much energy."
Dan Morehead (Pantera):
"Gold doesn’t have much intrinsic value, either. It is used for dental fillings and some welding in satellites, or whatever. But the main use of gold is just to own it. It has been working for 5,000 years. People trust it, and it’s not that volatile.
...
... I think digital gold, Bitcoin, will be similar to that. It’s going to take decades to get it there."
Alkesh Shah (BofA):
"Think about Ethereum like an operating system for applications, projects, stablecoins, NFTs. In the past, when you had an OS like Windows, a company owned it and collected royalties from PC makers.
...
... With Ethereum, 70% of the transaction fees will be used to burn tokens, kind of like share buybacks, and 30% will go to stakers—people who own the tokens and use them to help secure the network."
DM:
"Ultimately, we'll have cooperatively owned & governed versions of the data monopolies like FB. It will take 10 years. But with decentralized governance, decisions that are better for society will be made. It's one of the most obvious trends I've seen in my 35 year career."
Lisa Shalett (Morgan Stanley):
"A lot of investors don’t even comprehend the elements of a Bitcoin transaction. If you’re buying on an exchange, where is it going to be custodied? Who’s going to have access to it? Who are you actually trading against?
...
... The vast majority of people transacting on exchanges today couldn’t answer even one of those questions."
fin. (a few quotes were slightly modified for length/clarity)
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Original article: barrons.com/articles/bitcoin-crypto-blockchain-investing-51653676116
Read the unrolled version of this thread here: typefully.com/Vic_Vinegar_GMI/aUTnqDg