The CEO of crypto venture capital firm CryptoOracle says Bitcoin doesn’t need institutions to take flight.
In a new interview on CNBC’s Power Lunch, Lou Kerner says he thinks institutions will eventually join the crypto movement en masse – but they will follow the pack instead of lead the way.
“I’ve always thought Bitcoin is not about institutions. Actually, it’s the antithesis of institutions. And these kinds of revolutions, whether it’s even going back to e-commerce on the internet. It wasn’t for five years after Amazon launched that Walmart launched [online sales].
So we don’t need institutions to come to this party for Bitcoin to break out again. People have been saying [Bitcoin needs institutions] for a long time. We’ve had a lot of legs higher without any institutional involvement. It’s coming. It’s like gravity. They’re going to be here, but they’re not going to lead the party. They’re going to be followers.”
Kerner says Bitcoin’s trademark volatility is partly due to the amount of leverage that derivatives exchanges like BitMEX are offering.
But in order for Bitcoin to rise to $100,000 or more, he says traders should expect extreme highs and lows.
“One of the things that exacerbates it is all the leverage that you have in crypto. BitMEX allowing people to get 100 to 1 leverage means people are getting stopped out every few ticks.
So that definitely compounds the effect of any downdraft… If Bitcoin’s going to be $100,000 or a million in five or 10 or 20 years, then all the up and downs that we’re seeing today is just noise.”
From his perspective, Kerner says the crypto industry at large continues to grow and attract big-name talent, with BTC establishing its main use case as a digital store of value.
“To me, the most exciting thing is just the brilliant people who are leaving jobs at Goldman Sachs or McKinsey or other amazing places that come and do this because they’re seeing the crypto light. They’re seeing a better world, and they’re seeing a better way of doing capitalism.
I think you’ve got to have a thesis as an investor… I actually do believe the analogy that it’s digital gold. I think it’s digital gold on the way up and it’s digital gold on the way down. Obviously, people believe that more and less during different times. But I think over the long haul, that’s going to be the play.”