Two Reasons Why Bitcoin Differs From Google, Amazon, & Facebook Networks
One of Bitcoin (BTC)’s most outspoken and highest-profile cheerleaders, Stone Ridge Asset Management founder Ross L. Stevens, has written to shareholders in his company to talk up the most popular cryptocurrency – and its role in the company’s future, drawing parallels to investors backing companies like Amazon, Google and Facebook in the firms’ early days.
Stevens claimed that “from a valuation framework perspective,” he believed Bitcoin “should be viewed identically to those network business models – the value of the network growing with the number of users.”
His firm has been buying BTC as part of its operations, making a USD 115m investment in the token last year. It has also been teaming up with partners who use their balance sheets to purchase the token. Stevens’ ally Michael Saylor, the co-founder of MicroStategy, recently offered to share his BTC-buying “roadmap” to other company-runners, including the likes of Elon Musk.
And this BTC evangelism is apparently contagious. Stevens made his latest claims about the token in a letter to shareholders hosted by MicroStrategy. Here, Stevens equated investing in network business models with BTC investment, adding a caveat that there were two major differences.
The first of these, he wrote, was that “money is primordially more important in a way even the most hilarious on-demand cat
videos, or same-day delivery of any product we want, will ever be – there is no comparison.”
Secondly, he added, try as they might, regulators would never be able to “turn off” the Bitcoin network.
“Bitcoin lacks the possibility of antitrust enforcement. Ever. No matter how big and no matter how valuable it gets. Nor can Bitcoin ever be globally confiscated. Yes, individual countries can attempt to confiscate Bitcoin and, over time, some may try. […] However, just like the internet can be censored in certain countries, but cannot be turned off, Bitcoin can be (attempted to be) confiscated in a country, but cannot be turned off.”
Stevens added in the letter – something of eulogy to the virtues of BTC – that a range of factors will lead all generations to adopt bitcoin.
He explained that “United States Government-Paper-Money (USGPM)” (the dollar) was in a downward depreciation spiral while the rise of bitcoin was now inevitable.
“The power of the insight – that only point-to-point USGPM depreciation matters, not volatility – will lead, I believe, to an explosion in bitcoin-driven financial innovation, including bitcoin-denominated life insurance for the 30-50-year-old crowd, and bitcoin-denominated annuities for the 50-70-year-old-crowd.”
As reported, America’s Massachusetts Mutual Life Insurance (also known as MassMutual) has purchased a USD 5m minority equity stake in NYDIG, a Stone Ridge-run subsidiary firm that provides crypto services to institutional investors.
Stevens also moved to allay fears about the environmental damage caused by crypto mining, claiming that the electricity usage involved in BTC mining was “worth it,” writing,
“Bitcoin mining is the only profitable use of energy in human history that does not need to be located near human settlement to operate. The long-term implications of this are world-changing. [...] The world has never had a profitable use of energy that is location independent.”
As of May 2019, Stone Ridge Asset Management had USD 15.88bn in assets under management, according to Wallmine data.
At the time of writing (17:18 UTC), BTC trades at USD 32,603 and is up by almost 5% in a day and 24% in a week. The price rallied by 70% in a month and 330% in a year.
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