Some people know about investing; some people know investors. David Drake knows both.
Through his private family office LDJ Capital he has invested in dozens of companies and investment funds. In his investments, Mr. Drake has partnered with scores of the top family offices across the globe.
In this exclusive interview with The Epoch Times, he tells us not only why he invests in bitcoin and cryptocurrencies, but also why he believes other high net worth investors and big institutions will make the market triple in 2018.
Epoch Times: How did you get into bitcoin?
David Drake: Bitcoin is Occupy Wall Street getting their revenge. This is the technology to say “screw you regulators and Wall Street for the financial crisis and making a lot of money. Here is a decentralized solution that is outside your reach.”
This year we have seen a lot of trading and speculation but that was never the intention of bitcoin. It was intended as a payment mechanism and to store your wealth, like the gold standard of today.
I wanted to buy and hold, not to trade. When bitcoin fell from 1200 to 300 in 2013 and 2014, I refused to sell — I held on to it for dear life.
Epoch Times: Do you still believe in bitcoin? What about the scaling issues?
Mr. Drake: I still believe in bitcoin. I like the limited supply; the more demand the higher the price will go. I’m a long-term holder.
The scaling can be solved by the lightning network. But to diversify my own risk, I have bitcoin and Bitcoin Cash.
Epoch Times: How do you see the trends for crypto developing for 2018?
Mr. Drake: This year we have seen small foreign exchange traders and hedge funds move into the market, as well as the mass market through Coinbase, and Wall Street through the futures.
Bitcoin and crypto were created to solve problems and now this message gets murky because Wall Street just wants to make money, and there is a lot of noise created by the media.
In 2018, we are going to see 20 percent to 30 percent ups and downs a couple of times a month. It’s like a yo-yo, and we are going to see a lot of that. Because the market is not as big as you may think.
Epoch Times: You have dealt with institutional investors your whole life; when will the big money move in?
Mr. Drake: We have meetings with family offices every other day.
They will be taking their time, because they have to understand crypto. In this space, there has to be an ‘aha moment’, and that takes time. The family offices are hard to reach and they don’t want to look foolish.
But eventually, they will move in during the first six months of next year and allocate more of their money into liquid crypto coins as well as Initial Coin Offerings.
I expect the SEC to give more guidance, and I want them to give more guidance, because there are too many unknowns.
Bigger institutions will be entering the space in the next 3-4 months. I think we are going to see 3-4 pension funds, endowment funds, coming in the spring.
For them, custody and insurance has been a big issue. It has been solved but it’s not commercialized yet.
In the next three months, you are going to see custody and insurance offered for institutions. Then they will move in in the spring and they going to cut bigger checks.
They are going to invest in hedge funds like our LDJ Capital Crypto fund, which we are launching in January. So they are going to buy coins indirectly to solve insurance and custody. We have the solutions.
Toward the fall of this year, there are going to be a lot them entering the space and the market is going to double or triple, and we are going to reach a couple of trillions of market cap.
It’s different from one guy putting $1,000 into Coinbase, or a pension fund putting in a billion dollars.
The big funds, they can only buy a few coins — the most liquid ones like Bitcoin and Ethereum. Next year is going to be like 1995, with Ebay getting started and Amazon taking off.
This is like the dotcom revolution, but this will be the bitcoin revolution—bitcoin with a small b.
Catch David Drake speak at the Bitcoin SuperConference in Dallas in February. Click here to register.