Michael discusses the existing centralized banking system and how there is a large degree of hidden risk involved. Cryptocurrencies are different in that they do not require the trust of third parties. Individuals are free to trade directly without permission or intermediaries.
Bitcoin has been around since 2009. There are now additional cryptocurrencies that have seen considerable growth in the past year. The entire sector has moved 30 billion in market cap to around 150 billion today. There is a lot of potential being seen by innovators in the space.
The west is more invested in maintaining the existing fiat system while China and other countries are interested and open to the potential of these new technologies.
Mr. Pole discusses initial coin offerings (ICO’s) and how they are similar to stock offerings. They are a method of raising capital that does not require a middleman, and there are some regulatory concerns.
Michael thinks that we will experience increasing demand destruction as a result of continued low-interest rates. Cryptocurrencies are a very tiny part of the overall economy, and he believes they are far from bubbles. He points out that gold has been on a big bull run when compared to foreign currencies.
Cryptocurrencies are a fast moving market and these markets never close. There has and will be corrections as cryptocurrencies remain relatively volatile. Blockchain technology will increasingly disrupt existing financial and business models.