Friday, October 6, 2023
Insights: Michael Terpin: Why I Still Believe in Bitcoin
In our Insights and Opinions section, we occasionally feature editorials and opinions from our readers. Today's contribution is from Michael Terpin, a blockchain and AI investor who has been active in the Los Angeles technology world for a long time.
Insights: Michael Terpin: Why I Still Believe in Bitcoin
Ten years ago, I wrote a column for this publication called “Will Bitcoin Spark a Wave as Big as the Internet.” I was fresh from the first Bitcoin Foundation conference with my head filled with potential for what this nascent technology could bring (it was then valued at $120 per bitcoin, a huge jump over its $4 price in 2012 or its five-cent value in 2010). In the intervening decade, I went all in, stopped investing, advising and marketing companies who were not in the crypto space, as I saw so much opportunity for this sector to outperform all others. Those early years were heady, as I met the industry leaders at that conference and almost immediately starting working with them. I started BitAngels, the first angel group for investors in crypto projects. I helped market a little project called Ethereum launch in January 2014. By the time December of 2017 had passed, bitcoin was nearing $20,000 a token, more than 100x where it lingered for most of 2015.
The mainstream media has been stuck on a broken-record narrative of “tulip mania” when the prices go up and “run for the hills” when the asset class becomes overvalued and declines sharply in value. I’ve spent much of the past decade helping investors navigate these risks, including explaining it to them in my thesis on “The Four Seasons of Bitcoin,” where I demonstrate that there are relatively predictable and trackable cycles around bitcoin and crypto, just as there are cycles that recur in the stock market and real estate. Thus far, the cycles have been shorter (four-year for bitcoin, based on the four-year halving schedule, where every four years the amount of new bitcoin gets cut in half, causing a supply squeeze that takes another year or so to play out). In the last cycle of 2021 (after the doom and gloom crowd said that bitcoin was dead in 2019 when it dipped down into the low $3,000’s), the bull market of “bitcoin summer” brought us up to more than $60,000 – twice.
Then, surprise, another crash. It’s remarkable how predictable these cycles are. The frenzy lets fraudulent activity like MTGox (2013 bull market), me-too ICOs and rug pulls in 2017, and the unrepented overleveraging of the 2021 bull that led to the rapid collapse in 2022 of Three Arrows Capital, Terra Luna, Celsius, and FTX. This is then the media and your grandmother tell you to stay away, but it’s always been the best time to buy. Bitcoin is up more than 60 percent this year and we are still eight months away from the bitcoin halving, where the real appreciation begins for the new cycle. I have gone out on a limb to widely predict that bitcoin (currently lingering around $26k) will pass $40,000 by the April halving (perhaps higher if the BlackRock ETF passes in March, which is the final date for the SEC to decide). I believe the trends show that the height of the new bull market will finally pass that magical number of $100,000 per bitcoin (nearly 4x what it is today). If you want to read my entire paper on The Four Seasons of Bitcoin, you can download it for free here.
I am still focused on building in the bear market and preparing for the next bull cycle. And as crypto expands into the broader phenomenon called “Web3” (which includes the metaverse, “Film3” and some aspects of AI), it’s clear that Los Angeles has an outsized role to play. As such, I moved my annual CoinAgenda conference, which I held nine years in a row in Las Vegas to Los Angeles, where we will be a part of Santa Monica Blockchain Week. It’s a high-end event with some of the top names in the world of crypto speaking and presenting. For more information, please check out www.coinagenda.com and use the SoCalTech discount code SCT500 to get $500 off.
Michael Terpin is CEO of Transform Ventures, a blockchain and AI venture studio, whose portfolio includes OpenCarbon, an AI-powered, enterprise blockchain carbon credit marketplace; and First Block, a blockchain financial and news distribution platform. Terpin is also a partner in Alpha Transform Ventures, which he founded with former NASDAQ chief strategy officer Enzo Villani, as a $100 mm AUM series of digital asset funds. He previously co-founded the Dapps Fund in March, 2014, one of the earliest digital asset venture funds.