What prompts me to draft such a provocative title? It's the very real experience of going through the Internet boom (and bust) in digital advertising in the late 1990s/early aughts. So it begs a reflection on the great dotcom bubble to current events of today: drawing parallels with a very conservative ten year price outlook for Bitcoin from the next generation of wealth management sector, such as SwanBitcoin.
First, let’s recall the advertising dotcom bubble. My company at the time, NetTV, had just closed a $10 million C round three days before the bubble burst. (That’s $16.1 million in today's money.) At the time, digital advertising space was roughly on a run rate to hit $2 Billion per quarter with forecasts to be a $17 billion market in the near future. At the time of the dotcom crash, things felt dire and we dotcommers were utterly deflated.
A few years later, a funny thing happened while I was working in the Web2.0 world: we hit that $17 billion market size and quickly surpassed it, changing media buying and consuming habits as we knew them, forever. Today digital advertising is a $780 billion market representing a 40-50x growth over 20 years.
That brings us to today with Bitcoin.
When I watched the NFL playoff games last weekend, I couldn't help but notice the Intuit Turbo tax commercial where the main character went from millionaire to broke to millionaire to broke over the span of the 30 second spot. The punchline: Crypto is complicated. Implied meaning: leave it to the experts.
Considering the huge audience watching the NFL playoffs and the price of a 30 second spot, I view this as one of many bullish signs that cryptocurrency is quickly becoming mainstream in the public lexicon.
So you see where I’m going with this and why I’m drawing the parallels: only a few years ago I was very excited about BTC crossing the $10,000 mark again. While, as of this writing, it’s up a measly 14% year over year, today I see planning for $1 million Bitcoin as a very real probability.
The next generation wealth management services such as SwanBitcoin, Gemini, Genesis, and Alto IRA are laying the groundwork for investors to shift meaningful stakes of their portfolio to Bitcoin and other crypto assets.
Recently I attended a SwanBitcoin Private Webinar.
According to their projections, we’re looking at a 10 year price target of $1.2 million or a $24 trillion market cap, or a growth rate of 41% CAGR. Sounds like crazy dotcom numbers, right? Digging a bit deeper, perhaps not. Consider this: Bitcoin is poised to capture 50% of gold’s monetary value ($3 trillion) If you combine that with 20% of offshore assets and traditional fiat money, 5% of the bond market, and 3% other assets, we’re looking at $24 trillion. And that’s not counting the influx of first timers using Bitcoin as digital currency for transactions.
Now at this point, you may be thinking “hmm maybe I’ll further diversify my portfolio, invest 5-20% in BTC, and play the long game with this new asset class.”
There are quite a few next generation wealth management services popping up (with considerable VC money to prop them up) to facilitate this thinking: Swan Bitcoin, Unchained Capital, Alto IRA, and Gemini. These companies specialize in custodial, and function similarly to traditional wealth management firms with their offerings. (Another leading indicator that BTC and crypto is going mainstream.)
However, these firms tend to target high wealth individuals for the most part. Individual retail investors with smaller pocketbooks may feel more comfortable with self custody of their digital assets, which is more in the spirit of how crypto was created in the first place. If you do go the self custody route to give yourself more agency, you should also stay up to date on the latest tax implications and be prepared to pay your taxes on time, even if you're doing a wallet to wallet or peer to peer transaction.
While it’s still the wild west to some extent with crypto, whatever route you chose to pursue with investing in crypto, there’s a permanent record on the block chain, which can and likely will be tracked by interested parties, such as the IRS.
All the best,