Last year, Silicon Valley billionaire venture capital investor and Bitcoin bull, Tim Draper made the headlines thanks to his bold prediction that by 2020 the flagship cryptocurrency will soar to $250,000. Today, despite the continuing bear market, Draper is doubling down on that forecast, even though he admits he is not sure how exactly Bitcoin will get there.
This is a typo!!!! pic.twitter.com/4PlGuME57U
— Al Solano (@GetRichOrDie) April 13, 2018
Oops! I predicted $250k in 2022. My tweet last night was missing a zero. $250k is the number!
— Tim Draper (@TimDraper) April 13, 2018
Back in 2014, Tim Draper has bought 30,000 Bitcoin in a U.S. Marshals auction in 2014. That amount of cryptocurrency is currently worth about $119 million. If his prediction turns out to be correct, Tim Draper can expect his Bitcoin holdings to be valued at $7.5 billion by 2022.
“Bitcoin is a currency that is accepted everywhere without any government friction or interference, a stored value solution that doesn’t require a holder to keep a room full of metals and art, and a frictionless currency that can move automatically based on a contract, without the usual drag that comes from regulations and accounting rules,” he wrote in January, adding that the Bitcoin revolution is only just beginning.
In an exclusive interview with ForkLog Tim Draper reveals how he came to those numbers, also he shares his opinion on privacy oriented cryptocurrencies and names some of his most successful investments so far.
ForkLog: So, when can we expect the end of the bear market?
Tim Draper: My only prediction is for $250k by 2022 or 2023. How it gets there and how it gets hyped up and dumped on in the meantime is tougher for me to predict.
ForkLog: Come the next bull run, will it be as overwhelming as it was in the end of 2017?
Tim Draper: I suspect that the next bull run in Bitcoin will be long and sustained as Bitcoin becomes a consistent and substantial piece of people’s commercial lives.
ForkLog: What fundamental factors do mostly affect the Bitcoin price today?
Tim Draper: It is the market. Of course there is some manipulation by banks and others who want to see its demise, but there has to be a new reason to buy bitcoin before it starts humming again. It might have to do with the Lightning Network and OpenNode allowing us all to freely and easily buy and sell with it.
ForkLog: Does the continuing growth of Lightning Network, which means a lot of transactions are happening off-chain, affect the price?
Tim Draper: Yes. Eventually there will be more and more demand for Bitcoin. I suspect Lightning and OpenNode together will allow us to do a lot more with Bitcoin, driving demand up.
ForkLog: What about the stock market, how does it correlate with Bitcoin price?
Tim Draper: I have not seen any correlation, but it is interesting that whenever a country has a financial crisis, Bitcoin soars. Cyprus, Greece, etc. So a bear market might be very good for Bitcoin. People will be looking for an alternative to political currency like Dollars and Pesos when they have a crisis of confidence. A bull market can also be good for bitcoin, because when people have a lot of spending money, they often are willing to try new things.
ForkLog: Speaking about the institutional investors, they are obviously listening pretty carefully to regulators. And regulators could be a little bit unhappy with all those latest efforts aimed at making Bitcoin more anonymous than it is today (Confidential Transactions, CoinJoin etc). What’s your take on this?
Tim Draper: I actually believe that any anonymity around crypto will ultimately become transparent. I believe we are going into a phase where transparency and globalism are going to thrive, while secrecy and heavy-handed government regulations will dissolve.
ForkLog: How do you see the future of the so called privacy coins, Monero, Zcash etc? Your opinion on the projects like Grin and Beam?
Tim Draper: Again, the privacy coins are eventually going to be transparent. They are hard to keep secret being on a permanent and impervious blockchain. Grin and Beam look very promising. Grin in particular has an enthusiastic following. We had an event for Grin at Draper University’s Hero City, and it was standing room only.
ForkLog: You have repeatedly said that by 2022 Bitcoin will be about $250,000. How exactly you came to these numbers, any secret formula that we don’t know about?
Tim Draper: I think you can figure it out too. Nothing secret. $250k points to about $5 trillion in bitcoin. That represents about a 5% market share of global currency. I suspect that there will be some market share taken up by other currencies, and there will still be some Luddites trying to hold on to political “fiat” currency.
ForkLog: With so many manipulations in crypto space, some statements regarding future Bitcoin price can sound a bit misleading. In a perfect society, does a public person has to be held accountable for wrong or false statements?
Tim Draper: I am a believer in freedom. Freedom of speech covers both sides of this coin. If someone is lying, people can call him on it. If someone is consistently telling the truth, free speech gives him more influence. If it is an opinion or forecast, I leave it to the reader to listen and think for himself.
ForkLog: Yourself and your son Adam are known as early prominent venture investors in crypto space. However, in the past few months we have more often seen people like Mike Novogratz, or companies like Barry Silbert’s DCG making the headlines. What projects have you supported recently?
Tim Draper: Quite a few: Handshake, Keep, Gun, OpenNode, Credo, DataWallet.
ForkLog: What criteria do you stick to when choosing a start-up to invest in?
Tim Draper: Market size and dynamics. Technology differentiation. And most importantly, dedication, drive, intelligence, enthusiasm of the people.
ForkLog: Can you pick up any particular company or project from your portfolio and say, well, this was my best investment so far?
Tim Draper: In crypto, it looks like Tezos might be a big win. Bitcoin itself has been a good performer. Coinbase, Ledger…. Outside of crypto, it would be Skype, Baidu, Hotmail, Tesla, Robinhood, Carta, PTC, and many others.
ForkLog: Speaking more generally, what unique challenges do companies in crypto space face compared to more traditional markets?
Tim Draper: Crypto is decentralized and global. Crypto companies have to be ready to go to the most competitive countries to operate from. But then again, so do all companies. it is just more obvious with crypto.
ForkLog: What do you you think is needed to avoid controversies like the ongoing QuadrigaCX case?
Tim Draper: I think it all comes down to the people running the currency and their motivations. I also think that this problem will certainly be resolved with the next versions of the Ledger, so holding value in confidence will be less of an issue.
ForkLog: You recently said that “In five years, if you try to use fiat currency they will laugh at you.” Still, when we see how painful are Bitcoin ETF efforts, and the SEC taking it many months to take a decision on one pretty small question, a major turnaround, to be honest, seems unlikely. So why do you think this will happen?
Tim Draper: Because I think the SEC, while slow, will also come to the right conclusions and we in America will be able to use the currencies in all the ways they can in Japan, Malta, or Gibraltar today.
Tim Draper was interviewed by Andrew Asmakov
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