How bitcoin really operates
Fears over a regulatory crackdown have sent bitcoin prices into a downward spiral. The cryptocurrency is down nearly 50% since its more recent peak, but Pantero CEO Dan Morehead, the founder of the first bitcoin investment firm, on Thursday said the disrupter will overcome volatility.
“This is a multi-decade thing, it’s like the internet. In the early 90s you didn’t know about Snapchat or all these Uber-type applications. That’s what bitcoin is like. It’s the final piece of the internet protocol puzzle,” Morehead told FOX Business’ Maria Bartiromo on “Mornings with Maria.”
The cryptocurrency has been met with great skepticism from the world’s top bankers over how the virtual currency actually works. Unlike new money in a conventional financial system, bitcoin is not backed by any government or central bank. However, Morehead pointed out how it can be more valuable than traditional currencies.
“You can actually just email money for free. It’s really powerful,” he said. “So if you want to send money from here to the U.K. you have no idea what [exchange] rate they are going to charge you, you have no idea how many pounds are going to pop out the other end and it’s going to take a couple of days and cost you $45. With bitcoin it’s instantaneous and for free.”
Morehead added it will be used to buy goods, such as coffee, in the next 10 to 15 years.
Bitcoin currently trades around $60 billion a day and accounts for about a third of the cryptocurrency market, according to Morehead.
The Cboe and Chicago Mercantile Exchange (CME), launched bitcoin futures trading last December, adding more credibility to the cryptocurrency.
Likewise, Morehead predicts more institutions will get involved in bitcoin trading.
“[Goldman Sachs] is now clearing bitcoin futures and I think in the next four or five months you’re going to see big Wall Street firms starting to trade bitcoin. Once that happens you’re going to have other firms like State Street announce they are going to custody bitcoin and within 18 months I think it’s going to be just a normal thing,” he said.