Danny Masters, a commodities trader turned CoinShares chairman, has been a bitcoin believer since 2014, having recognized early the top cryptocurrency's use cases as both a disrupter of gold and fiat money.
Masters, who in a former life led the energy trading desk at JPMorgan and whose funds are having a "strong year this year," told CNBC bitcoin is the play at the moment.
"I like bitcoin. I think we've seen a lot of liquidation, I think we've seen a lot of leverage come out of the market, which was probably a little too risky for some people to hold onto and that's come out."
In addition to bitcoin, the other play this year is "select projects" in the altcoin/ICO/ERC20 space, he said, pointing to "good developers and non-forkable/blockchain specific ideas, you can select tokens that have been beaten down and are quite attractive in this market."
Masters also suggested in the panel discussion on CNBC that it's a mistake to compare cryptos to other asset classes. Instead, he prefers to listen to industry veterans who have been around cryptocurrencies for the past five years and who "will give you a very, very different feel" than the research being put out by traditional Wall Street firms such as Bank of America.
He also made a tongue and cheek remark about Bank of America's grouping bitcoin among the "biggest asset bubbles in history," saying "he doesn't remember their bullish call on [bitcoin's] way up."
"Bitcoin is a very difficult market to analyze. There are metrics that don't exist in the markets that we traditionally know and love," Masters said.
When Masters first started trading cryptocurrencies, he noticed some parallels to when he first started trading commodities like oil, saying back at the turn of the century when he was "commodities-focused," he connected the dots for a forthcoming commodities rally, but he "didn't think we'd find the answer and the proof for many years to come."
He said that's a parallel to cryptocurrencies.
"I think the setup is there, the story is convincing and the technology is convincing. We may not know the proof for another 10 years."
And while oil and commodities have unique characteristics and experienced events that were game-changing and that opened up the price dynamics for that market, cryptocurrencies have their own story, too.
"The use cases for crypto are bitcoin is disrupting money and gold. Ethereum is disrupting the formation of capital. There are other protocols that are disrupting identity, identity provenance. And these things are really unproven yet but quite promising." -- Masters
Masters is behind the market's maiden bitcoin and Ethereum publicly traded notes, and now he's backing some ICOs.
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