In an interview held on July 26th with Business Insider, Jeffrey Wernick, an independent investor spoke about “what do people usually get wrong about Bitcoin[BTC] or cryptocurrency”. Jeffrey Wernick is an early Bitcoin investor and one of the advisory members of Qtum and Data Wallet.
According to Jeffrey, most people have misunderstood the concept of Bitcoin or cryptocurrency because it is mostly described as a form of payment and not as a store of money. The main reason for this confusion is because people who are now investing in these digital assets were not present in the year 2009 or 2010 when it all began, he added.
He states that people who got into it now are only looking for an alternative model for making money and do not care about its initial philosophical framework that made people want to adopt Bitcoin in the first place.
“There was a small universe of people that actively worked to keep it alive by continuing to mine and continuing to buy and they were doing it because of the concept that they believed in, and that it’s a people’s money.”
He further adds that since Bitcoin was created in 2009, it has outperformed every form of currency even with the governments hostile towards it, facing such adversities and yet, staying on its feet. The valuation it has today is remarkable.
Wernick believes that in over 5 years, investors can accumulate a lot of wealth than in any other form of investment. The financial system works in such a way that it only rewards the borrowers and punishes the saver.
He also quotes:
“I calculated that if I wanted to buy like a trophy property in Manhattan, that the cost of capital advantage that – like Blackstone has to me, I would have to generate 30% more in cash flows in the building to just – to be able to compensate for my cost of capital disadvantage relative to Blackstone.”
According to him, so much wealth is concentrated because only a small group of individuals can access that cost of capital which means that they can succeed in purchasing any asset without having to worry about the competition.
Finally, while speaking about cryptocurrency investment, he added:
“The people who move first will make more money than those that move second, who’ll make more money than those that move third, and eventually when crypto is broadly adopted, then people start using it as an exchange, and it will no longer be volatile in pricing, it’ll be stable in pricing.”