As Bitcoin’s price marched towards $8,500 Tuesday afternoon, an early investor in the space weighed in about its potential to run even higher.
Reddit co-founder Alexis Ohanian appeared on CNBC and explained why he remains a Bitcoin bull. While many in the space are enamored with cryptocurrency and tokens, such as Bitcoin and Ethereum, Ohanian said that he’s more focused on the infrastructural aspects of the space.
Ohanian’s early role
Ohanian’s intrigue with cryptos dates back to Coinbase’s beginnings. In fact, the VC firm he co-founded, Initialized Capital, was one of the first investors in the exchange.
Since then, Ohanian has been one of many Bitcoin observers who have made price predictions about Bitcoin. For example, earlier this year, Ohanian said:
“At the end of the year, Bitcoin will be at $20,000, and Ethereum will be at $1,500.”
On Tuesday, he said he sticks by that prediction, and jokingly said that he stands by the fact that people “can call him out” if they think he’s wrong.
All about the infrastructure
In speaking to CNBC, Ohanian noted that at Initialized Capital, the focus is not solely on speculating on the short and near term prices of cryptos like Bitcoin. Instead, it was about looking at the underlying technology.
“The reason we were one of the first investors in Coinbase is because we believe in the underlying technology. If Blockchain worked, and this notion of decentralized currency worked, then there would be a need for someone to handle the fiat to crypto transfer, and we thought Coinbase would be the winner, and so far they’ve proven that out.”
He added that the firm wanted to “bet on the picks and shovels,” of the space, saying:
“Because we are a VC firm, we are looking for old school, equity investments. We haven’t participated in ICOs and token sales because we want to own equity in companies. We believe there will continue to be a ton of wild speculation in the actual coin world and coin arena.”
Not sexy, but worth a look
When most people think of the crypto space, they are drawn to the coins. Between FOMA, or fear of missing out, and the hype around using digital currencies instead of fiat money to make purchases, the lure to the cryptos is significant.
Perhaps overlooked by many is that in order for these tokens to be most useful, they must be supported by the best infrastructures. Ohanian and his team at Initialized Capital boast recognizing this. He said:
“We’re looking for the people who are building the robust, but unsexy infrastructure. [They] probably won’t make headlines anytime soon, but [they’re] very quietly going to build the infrastructure that all these things are going to ultimately need to work.”
As volatile as it’s been, Ohanian sees Bitcoin’s price continuing to go up over the long term. The reason relates to more people looking for alternatives to fiat as a store of value.
Concerns include failed states that are suffering from currency fluctuations, Ohanian noted.
Such issues make “having a digital store of value like Bitcoin something that is desirable because you don’t have to worry about withdrawing it from a bank, or the value disappearing.”