Bitcoin Could Hit $500k in 5 Years, Says Private Equity Crypto Firm

21 September 2021

in DOT

Reading Time: 4 mins read

Dan Tapiero founded 10T, a crypto-focussed private equity firm.
10T has invested $650 million in 11 crypto firms, including Kraken and Ledger.
Tapiero revealed his investing strategy, and told us he sees bitcoin hitting $500,000 within 5 years.

Dan Tapiero likes to draw parallels between the current cryptocurrency market and the late-’90s dot-com boom.

“It feels like Amazon ’95, or eBay ’96,” the 53-year-old told Insider in a recent interview. “It’s a very vibrant space, so I hatched a plan to build a portfolio of companies and gain broader exposure.”

Tapiero launched his crypto-focused private equity firm, 10T, in January this year. In just nine months, 10T raised $750 million in investment and invested 80% of that to build a portfolio of 11 crypto companies.

“At first I thought it would take 12 to 18 months to deploy that capital,” Tapiero said. “We’ve poured over $650 million into this ecosystem; I don’t think anyone else has invested as much, but we’ve done it because we feel that there’s an opportunity there.”

Tapiero’s 30-year career as a traditional global macro specialist saw him work alongside two particularly high-profile hedge fund managers: Steve Cohen and Alan Howard.

Both have recently pivoted towards crypto. Cohen has personally invested in the crypto quant-trading firm Radkl, while Howard is “bullish” on bitcoin and is one of 10T’s largest backers, according to Tapiero.

10T invests in the digital asset ecosystem rather than individual cryptocurrencies, and Tapiero shared several predictions about that wider market with Insider — including the inspiration for his firm’s name.

“10T stands for the goal of $10 trillion in 10 years,” he said. “But we made that prediction when the digital asset ecosystem was worth just $300 billion in mid-2019.”

“It’s now already worth $2 trillion,” he added. “I’m starting to think I’ll have to revise up my forecasts.”

Bitcoin to $500,000

Like Ark Invest’s chief executive Cathie Wood, Tapiero believes that bitcoin could hit a valuation of half a million dollars within five years.

“I’m very bullish on bitcoin,” he told Insider. “The current market capitalization is $1 trillion, I don’t see any reason why it can’t hit $4 trillion or $5 trillion within a few years, and that gets you to $400,000 or $500,000.”

Tapiero said that he bases these bullish price and market capitalization predictions on a sense that crypto will soon become integral to the global financial system.

“Bitcoin itself is an invention akin to the combustion engine or the discovery of electricity,” he said. “There’s real math and science behind it — two parties can trust and transact without an intermediary, that’s a world-changing invention.”

“It could potentially be the value layer for the entire internet,” he added. “That’s got to be worth at least a few trillion dollars.”

Polkadot Price Likely to Crash xx% Despite Recent Protocol Upgrade

30 July 2024

Here’s Why UNI and Polkadot (DOT) Holders Are Flocking To Rollblock

28 July 2024

Tapiero also said that he believes ether could eventually hit $20,000 — but told Insider that his faith in the overall market is so strong that he doesn’t spend much time worrying about individual cryptocurrencies.

[crypto-donation-box]

“I don’t want to make a call about outperformance,” he told Insider. “Everything in this space is so exponential in its growth that you just HODL (hold on for dear life) and come back in 5 years.”

Crypto and private equity

10T has invested in 11 cryptocurrency firms, with the American exchange Kraken and the French hardware wallet manufacturer Ledger SAS among the most high-profile. Tapiero told Insider that his firm has also deployed capital into the brokerage eToro, the blockchain lending startup Figure, and the futures and options exchange Deribit.

Private equity firms raise funds from institutional investors and high-net-worth individuals, and then invest in mid-market companies with the goal of generating steady long-term returns.

At first glance, that business model differs significantly from crypto investing, where high volatility is a defining feature. Bitcoin, for example, has fluctuated this year, with prices doubling from $32,000 to $64,000 before sliding back towards the $45,000 level.

But Tapiero is confident that his firm’s strategy — buying into crypto firms, rather than individual coins — will yield suitable returns without exposing investors to too much uncertainty.

“I don’t want to outperform bitcoin, or ether, or venture capital firms,” he told Insider. “I want this portfolio to go up 5x to 10x in the next few years, without the volatility you have in the crypto space.”

“If you own the businesses, you get the benefits without the volatility,” Tapiero added. “When bitcoin and ethereum last crashed, a basket of these companies still retained its value.”

For now, 10T appears to be one of the first movers amongst private equity firms targeting the crypto market. Tapiero offered up a bullish prediction for his fund’s overall performance.

“Kraken, Ledger, eToro, Figure, Deribit, it’s quite a list of companies,” he said. “I’m confident that in the next four or five years that portfolio will go up by multiples.”

“As far as I know, we are the first private equity fund to focus on late-stage companies in the digital asset ecosystem,” he added. “But I left the traditional investing world because there wasn’t any alpha compared to the 1990s — eventually, more people will follow suit and invest in crypto.”

Credit: Source link