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One River Asset Management\u2019s CEO says his firm now holds bitcoin worth \u201cwell over\u201d $1 billion. He revealed that the institutional interest in bitcoin is \u201castounding,\u201d noting that almost all major institutions in the U.S. are having discussions about the cryptocurrency. He believes that bitcoin will be worth more than gold, placing its value at approximately $500K.<\/strong><\/p>\n The CEO and co-founder of One River Asset Management, Eric Peters, shared his view on bitcoin at length in an interview with Bloomberg last week. Firstly, he revealed that his asset management firm now holds bitcoin<\/a> \u201cwell in excess of a billion dollars at this point.\u201d He then discussed the case for institutional investors to own cryptocurrencies currently.<\/p>\n \u201cWe are in a unique period right now,\u201d Peters began. It is the period seen many times throughout history where \u201cgovernments become extremely indebted, monetary policy becomes less effective, and ultimately governments \u2026 need to issue lots of debt and begin actually spending. Typically, when they do that, they try to unburden themselves from the debt they\u2019re incurring by debasing the currency that they\u2019re issuing that debt in.\u201d The CEO added that \u201cultimately, those who hold that currency lose their spending power.\u201d<\/p>\n He proceeded to talk about crypto assets, stating that they \u201care really interesting in the sense that they\u2019re a new asset class altogether.\u201d He noted that they \u201chave some unique qualities, part of which resemble the qualities that you\u2019d find in gold except that they\u2019re wildly underpriced relative to gold.\u201d<\/p>\n Moreover, bitcoin and other cryptocurrencies have \u201ctechnology properties,\u201d and \u201cwill look different tomorrow, and next year, and in a decade to come.\u201d This makes bitcoin \u201cunique to gold because if gold has looked the same two thousand or two billion years ago, then it will look the same in two thousand and two billion years from now,\u201d the One River executive described, elaborating:<\/p>\n I think you have to be a real pessimist to think that an emerging technology platform doesn\u2019t become more interesting, more useful, more valuable.<\/p>\n<\/blockquote>\n He further detailed that \u201cIt\u2019s very rare that you find an asset that can kind of allow you to capitalize on future upside [the technologies] while also mitigating the downside [monetary debasement] like that.\u201d<\/p>\n Peters also clarified that he always starts with the macro aspect when it comes to investing as he has been a macro investor his entire career. With technology, the CEO opined:<\/p>\n I\u2019ve seen enough to know that, in essence, tomorrow is going to look better than today. When you\u2019re investing, that\u2019s incredibly important to know \u2014 does tomorrow look better, worse, or the same. I think I\u2019ve seen enough to just understand that tomorrow looks better than today in these assets.<\/p>\n<\/blockquote>\n \u201cWe\u2019re issuing enormous amounts of debt. We\u2019re having our central bank buy them \u2026 the scale of it is just so profound \u2026 so the question is, in that environment, what are the assets that you can own,\u201d he continued.<\/p>\n Peters proceeded to list some plausible investment options: equities, gold, and digital assets. He asserted that digital assets \u201care dramatically undervalued relative to some of these other stores of value,\u201d which is why his firm is \u201cexcited\u201d about this, emphasizing that \u201cIt\u2019s just an undervalued asset for that macro backdrop.\u201d<\/p>\n The One River CEO also praised bitcoin\u2019s fixed supply. He stated: \u201cIt\u2019s unlike any asset that I\u2019ve seen in the world in the sense that there\u2019s no supply response to the price. If bitcoin went up five times in value, or 10 times, or 100 times, there wouldn\u2019t be more bitcoin produced. You can\u2019t say that about really any other asset in the world.\u201d<\/p>\n He also compared bitcoin to gold. \u201cI think it will be worth more than gold at some point because gold is not infinite. Gold continues to increase in terms of supply,\u201d he noted. In contrast, there will only be 21 million bitcoins. The CEO elaborated:<\/p>\n If it were just to go up to the market cap of all the gold in the world, it would go up to something in the order of $500,000 per bitcoin.<\/p>\n<\/blockquote>\n \u201cRight now, it\u2019s trading at let\u2019s say $30,000, so if you look at it from a trader\u2019s perspective there\u2019s enormous convexity to the upside,\u201d he affirmed.<\/p>\n Answering a question about how long it will take for bitcoin to become more valuable than gold, Peters said that it is \u201cpolicy dependent.\u201d He could see it happening in a number of years if we see \u201csome type of next recession that is followed by even more issuance and more buying from the fed.\u201d Nonetheless, he pointed out that \u201cone of the things about these assets is \u2026 it doesn\u2019t cost you anything to hold them. You have the price risk to the downside but you don\u2019t have a negative carry.\u201d<\/p>\n The One River executive also discussed whether crypto assets will appeal to institutional investors if they continue to exist alongside fiat money or whether institutions need to see some kind of government or central bank acceptance or endorsement before jumping in.<\/p>\n After he publicly revealed that his firm had invested about a billion dollars in bitcoin, he said that \u201cthe number of institutions that have been filling my day with calls and inquiries about this is astounding.\u201d He reiterated that it is already happening \u201cenormously.\u201d<\/p>\n Peters expects the crypto asset class will \u201cmature in a decade from now,\u201d adding:<\/p>\n What\u2019s happening is almost every big, credible institution in the U.S. is having discussions about this \u2026 Many of them are calling us to ask.<\/p>\n<\/blockquote>\n \u201cThey\u2019re fascinated by this,\u201d he further shared, emphasizing that \u201cthey should be because this is the first and last asset class that will appear in our lifetime.\u201d<\/p>\nOne River Asset Management\u2019s CEO Is a Bitcoin Bull<\/h2>\n
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