On my way to the Berlin Blockchain Week, I listened to a podcast with Tom Shaughnessy and a wall street veteran Jeff Dorman, who’s the Chief Investment Officer at Arca.
Amongst other things, they discussed the value of bitcoin and other cryptocurrencies. As we know, one of the most significant assumptions one might have with cryptocurrencies in general, is that it doesn’t have any value.
While there are many exciting reads on why bitcoin and other digital assets do have value (like this), I like how Jeff took a different approach here:
What I've learned over the years is that it's very hard to change someone's mind when they are dead set on something. It's easier to then attack something else that they do understand. So instead of trying to say that bitcoin does have intrinsic value, I'm going to the other way and challenging that nothing really has intrinsic value.
The argument against cryptocurrencies is that there is no value on its own, its only worth some because other people think it’s worth some. But then, the same thing can be said for a lot of different things, for like if you were buying Facebook equity 15 years ago, there was no intrinsic value. The intrinsic value for stocks literally means what are the assets less liabilities, and 90% of the stock market, both public and private; their assets don’t cover their liabilities, there isn’t actual shareholder value. The shareholder value is created through valuation techniques, things that value future cash flows. To value the future cash flows, you have to be speculative.
The intrinsic value itself doesn't really mean anything when the actual trading values in the market are many many multiples above where the intrinsic value is.
I’m going to add here that it has never been profitable to bet against technology and innovation, and I don't see any reason for it being now.
You can listen to the full podcast here: https://fiftyonepercent.podbean.com/e/dorman/
And I’d recommend following their research on digital assets:
Tom Shaughnessy https://www.delphidigital.io
Jeff Dorman https://medium.com/@jdorman81
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