Episode 83: Bitcoin vs. Gold: Digital Currencies as an Asset Class with Michael Sonnenshein

The last ten years have seen so much said and done in the cryptocurrency space, and yet the future of bitcoin is still somewhat unclear. For Michael Sonnenshein however, bitcoin and the crypto market still offer the freedom and possibilities that have long been espoused as their greatest values. He joins us today to talk about his role at Grayscale Investments, how Grayscale fits into the larger Digital Currency Group family and how he envisions the wide-open future possibilities for bitcoin. We discuss some basics for the bitcoin conversation and Michael does a sterling job of setting out the lay of the land at present. From there, we turn to the role of Grayscale in dealing with bitcoin which can also be bought directly. Michael then takes the opportunity to compare bitcoin and gold; showing how they overlap and then bitcoin improves on the benefits that gold investments have historically provided. The last part of the conversation is spent addressing the safety of bitcoin and how time is showing its resistance to shocks and is earning bitcoin its place among other highly trusted assets. For all this and more fascinating insights into a big part of the future, join us on the Rational Reminder today!

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Key Points From This Episode:

• Michael’s description of Digital Currency Group. [0:03:28.4]
• A basic explanation of bitcoin and what defines a digital currency. [0:08:09.2]
• What will happen when the maximum amount of bitcoin has been mined? [0:11:29.0]
• Affecting the value of bitcoin through the altering of its decimal places. [0:14:04.2]
• The usefulness of Grayscale when it is possible to buy bitcoin directly. [0:15:21.4]
• How bitcoin differs from and improves on gold investments. [0:19:11.7]
• How digital currency fits in portfolio management and who it really suits. [0:21:30.0]
• Thinking about the expected returns question in regards to digital currencies. [0:23:30.3]
• The high amount of institutional investments through Grayscale and deciding on allocation. [0:29:00.5]
• Bitcoin’s response to shocks and its rising reputation as a place of safety. [0:33:36.7]
• Why Michael is worried by impatience in regards to digital currencies. [0:34:42.5]
• How bitcoin can impact under-resourced populations through it non-reliance on infrastructure. [0:36:49.3]
• How Michael defines success for Grayscale and himself moving forward. [0:39:07.0]
• And much more!

Tweetables:

“Today, Grayscale is the largest digital currency asset manager globally and has about two and a half billion dollars of assets under management.” — @Sonnenshein [0:05:56]

“Bitcoin is certainly the most well-known and probably the longest running digital currency that exists today.” — @Sonnenshein [0:08:25]

“Bitcoin is a verifiably scarce asset. Meaning that, there were no bitcoin when the protocol was first created and there will only ever be 21 million bitcoin ever put into existence.” — @Sonnenshein [0:10:10]

“The Grayscale family of products really addresses some of those challenges where investors can gain exposure to digital currency, but they don’t need to figure out where to buy it, how to transfer it, how to hold it or how to safe keep it.” — @Sonnenshein [0:17:04]

Links From Today’s Episode:

Michael Sonnenshein on Twitter — https://twitter.com/Sonnenshein

Michael Sonnenshein on LinkedIn — https://www.linkedin.com/in/michaelsonnenshein

Grayscale Investments — https://grayscale.co/

Digital Currency Group — https://dcg.co/

iShares — https://www.ishares.com/us

Vanguard — https://investor.vanguard.com/

JP Morgan — https://www.jpmorgan.com/

Emory University — http://www.emory.edu/home/index.html

Leonard N. Stern School of Business — https://www.stern.nyu.edu/

Berkshire Hathaway — https://www.berkshirehathaway.com/

SoftBank — https://www.softbank.jp/en/

Ethereum Classic — https://www.fxstreet.com/cryptocurrencies/news/ethereum-classic-market-update-etc-usd-5-rally-retests-10-resistance-on-monday-202001270623