Million Dollar Bitcoins

On July 17, 2017, John McAfee famously predicted that one bitcoin would be worth more than $500,000 within 5 years, or he would eat his "d**k on national television." That was one day after bitcoin had corrected to $1,800+ from a previous high of $3,018 on June 11. Notwithstanding the hyperbole, McAfee was, ahem, willing to put his money where his mouth was by announcing that he would literally take bets on his prediction, subject to a minimum bet size of $100,000 that would have to be deposited into escrow.

McAfee went on to predict that based on his doctorate in point-set-topology, the bitcoin price in three years would be $2,431,013. While McAfee's success as the founder of the famous anti-virus software company that bears his name speaks for itself, many people like JPMorgan CEO Jamie Dimon would summarily dismiss McAfee's views on the value of bitcoin - though Dimon's views on bitcoin can also be questioned given the mortal threat that Bitcoin and blockchain technology pose to the financial industry.

Recently, a respected hedge fund manager weighed in with his view of the future value of bitcoin. Mark Yusko, the Founder & Chief Investment Officer of Morgan Creek Capital Management, tweeted that in a best case scenario, bitcoin would have a long-term value of $1 million. He added that a base case, more conservative value would be $500,000. And by long-term, he means more than 10 years.

The debate over the value of bitcoin rages on. Just this June, billionaire Mark Cuban dismissed bitcoin as a bubble, but has now changed his view somewhat, comparing a purchase of bitcoin to things like collecting art, baseball cards or shoes. For him, buying bitcoin remains speculative and should be done only with money an investor can afford to lose. Cuban has also announced publicly that he is investing in 1confirmation, a fund that plans to raise $20 million to invest in blockchain-based companies.

Blockchain technology has the potential to radically transform our world. Whether the technology will ultimately be as disruptive as the internet was remains to be seen, but it is clear that investing in crypo assets has the potential to allow investors to achieve exponential and assymmetric returns relative to the risk they take. The challenge for investors is to identify the crypto assets that offer real value and will continue to thrive after the inevitable shakeout. The ones who can do that well are likely to achieve life-changing wealth.