Jesse Powell, CEO of one of the biggest Bitcoin exchanges, shared his views on safe haven assets, what would give investors bigger returns, and the future of cryptocurrencies.
Bitcoin is on the rise and is here to stay. The Winklevoss Bitcoin ETF may have not been approved, but the cryptocurrency, along with the other digital currencies, continues.
Jesse Powell is CEO of Kraken, the second biggest Bitcoin exchange in the world, and is lauded as one of the biggest names in bitcoin and blockchain technology by Yahoo! Finance. He is a big name in the industry, so we asked him about a few things. In the interview below, read on to see Powell’s views on safe haven assets and what would give investors bigger returns. He also speaks about the different cryptocurrencies and the future.
Investing News Network: How does Kraken work?
Jesse Powell: We are a stock exchange for deliverable crypto assets and we do 10 cryptocurrencies: bitcoin, litecoin, and we’re adding more and more tokens every day. Obviously, there are over 700 token out there so we’re trying to be relatively picky about the ones that we add and only exposing our clients to the ones that we think have actual merit. I would say approximately 90 percent of those 700 aren’t worth looking at–they’re pump and dump scams or experimental stuff that doesn’t really have a real project behind it.
INN: Kraken recently acquired Cryptowatch. What advantage does Cryptowatch give Kraken?
JP: It has helped us in a couple of ways. It immediately gives us better charts than we already had, so it’s a big improvement there for our clients. And then our trading interface as well, it’s an improvement that people have been asking for a long time.
INN: Do you have a criteria you follow on picking these cryptocurrencies?
JP: We meet and talk with core development team, we look at their white paper, their development roadmap. We look at the source code of the project, and look at the community interest. Those add up to our assessment of what we think the long-term potential of the coin is and its survival and revenue potential for the company… is it something that’s going to be actively traded or that will only be rarely traded by a few people.
INN: What are the top three that are most actively traded?
JP: Bitcoin, Ethereum and probably monero third.
INN: In your opinion, what is a better safe haven asset: cryptocurrency or traditional assets like gold and silver?
JP: Personally, I favor Bitcoin because it’s a lot easier to hold it, and it’s a lot easier to transfer it. You don’t have to be worried about discovery of a meteor that’s loaded with gold. The supply is definitely finite and predictable. So for many reasons, I feel like people call Bitcoin digital gold but it’s really better than gold in many ways.
INN: What about cryptocurrencies versus investing in blockchain companies or the Bitcoin Investment Trust — what would give an investor bigger returns?
JP: I think the bitcoin investment trust is basically just investing in Bitcoin, and I think the vehicle that holds Bitcoin is traded over the counter. I’d say that’s almost equivalent to just buying Bitcoin but obviously if you can just buy bitcoin that’s always better to hold it yourself than to trust somebody else and risk with the trust.
But as far as whether to invest in Bitcoin or a blockchain company, it’s really hard to say. I guess it could depend on when you get it. I would say, if you bought into bitcoin at the end of 2013, beginning in 2014 when Bitcoin first hit its all-time high, you might have been right to invest in the company at that point because Bitcoin kind of stagnated or lost value over the next three years. So let’s say long term, like a 10 year timeline — I would say it is probably better to invest in Bitcoin rather than a blockchain company.
The blockchain companies that are out there today are — I think most are still developing proof of concepts. I think that the incumbent traditional system is so deeply entrenched and so bureaucratic that it could be a very long time before any of these projects actually come to fruition. You can be locked up for a while in your investment and one great thing about bitcoin is that its liquid, 24/7. If you go to any market any day of the week, any hour of the day, and trade it or sell it to some guy on the street for cash. I like Bitcoin a lot for those reasons. I think most of the blockchain companies are going to take a long time to give investors a return.
INN: What does the future of cryptocurrencies look like?
JP: I think it’s very bright. I think we’re going to see an explosion of new crypto assets emerging in 2017. I think the ecosystem as a whole is going to continue to grow, and there are other ETFs in the pipeline both in the United States, and in the UK, and in other major markets. I think we’ll see something by the end of the year that’s publicly traded.
I think from there we will see a huge influx of cash into the space, the investor base will grow much wider. You have a lot more interested parties involved and I think we will start to see a shift in the regulations to really try to come up with an optimal regulation around Bitcoin, which will further bolster the stage.
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Securities Disclosure: I, Pia Rivera, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Interviews conducted by the Investing News Network are edited for clarity. The Investing News Network does not guarantee the accuracy or thoroughness of the information reported. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.