Fidelity's survey of 411 institutions' attitudes toward investing in digital assets on May 2 found that 22% of organizations have participated, 47% plan to participate, and 31% remain on the sidelines.
It is not difficult to find that in 2019, institutional capital has become a hot topic in the field of digital currency, and they are also considered to be a driving force for the digital currency industry to a new level.
But in terms of digital currency, different capitals and investors have produced a clear analysis. For example, Buffett defines digital currency as speculation. What is the reason? How does China’s traditional capital view investment in the blockchain sector?
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On May 24th, the “Digital Asset Investment Closed Seminar and Digital Assets Trading Champion League Offline Startup Meeting” hosted by Fin-bee, a digital asset management platform, was held in Hangzhou. Xie Feng, Chairman of Liyuan Venture Capital, Yuan Wei, Executive Director of Shuimu Tsinghua TBC, CEO of Capital3, Anzhong, and Jialuyu, the four investors of Starwood Capital, conducted in-depth discussions on the topic of "Buffett or Musk, how to deal with digital assets."
The following content is organized by Babbitt.
Question 1: Buffett believes that Bitcoin is a speculative asset. This is not a very positive attitude. Everyone is entering the blockchain field from traditional finance. How do you think about this point of view?
Yuan Wei : I think different people have different evaluation criteria for the same investment target: some people think that digital currency is investment, and some people think it is speculation. For example, artificial intelligence projects as investment opportunities in the primary market, everyone thinks that investment, but do not understand artificial intelligence or even think it is a scam, it will be considered speculation, in 2016-2016, artificial intelligence is also a stage of hot.
We look at Buffett's many speeches and books. He has his own criteria. His funds are long-term funds. The funds determine that he can bid on a longer-term perspective. The digital currency is speculative in his view.
On the other hand, he only guarantees that his investment in assets will increase, and he does not guarantee that all value-added assets will be invested. As he said, he only voted for him. Either he doesn't understand, or he pretends not to understand, maybe he bought it personally, and everyone doesn't know.
There is another problem with Buffett and Berkshire: There may not be a lot of supervision and custody in the market itself, which makes it difficult for traditional funds to participate in the form of funds. Large funds are doing digital money in their own form. investment. In retrospect, Token funds are generally 6 months and 12 months, and our 3 years are long-term. But in front of Berkshire, we are also short-term. From this perspective, we feel that investing in bitcoin is not speculation but investment. For a fund of 6 months or 12 months, Bitcoin is an investment. But for some high-frequency, fast-forward and fast-moving projects, including "IXO", we feel a bit speculative. But for short-term funds, it is investment.
So this thing is entirely the money you have, and the measure you have to invest in the project. They determine whether the target of the investment is investment or speculation.
Xie Feng: Investment is still speculative. The traditional saying is that you are a financial investment or a value investment. Value investment must be very close to the industry, and promote investment in social technology, and have the subject matter, investment and income based on the value of the target. Financial investment is to make money with money, the investment cycle is short, and opportunism is more obvious than industrial value investment. Of course, it is not correct to say that financial investment is speculative. It is only relatively speaking that I have long been engaged in the venture capital industry. If it is more accurate, it should be more practical to define investment or speculation on various investment strategies.
The current digital currency is still relatively negatively affected by China, but from the perspective of the People's Bank of China and commercial banks, they are still in contact with industry experts in blockchain and digital currency. From the application point of view, they have also done a good job in technology. Prepare in advance. I think that the most difficult thing to overcome in digital currency promotion is the sovereignty of money. One of the core weapons that the United States dominates the world is the dollar currency. We want digital currency to hope that it has no borders, but from a national perspective, sovereignty is very important. For now, some countries may be very strict.
Despite the difficulties of digital currency, I feel that it is coming sooner or later to invest in digital assets. I am looking forward to it.
Anzhong: I think investment and speculation are problems that have been arguing in the investment community for many years. Even different people doing the same thing may have the difference between investment and speculation. What is the most typical speculation, the answer is gambling, guess the size. Although gambling is speculative, opening a casino is not a speculation, it is already an investment. A public fund manager to buy corn futures may be an investment, but a sophomore to buy corn futures may be speculative.
Aside from the difference between investment and speculation, in fact, a traditional financial industry practitioners have entered the blockchain finance field, and there are many obstacles in existence. Just say two, for example, first, how big is the volume? The market for mines is now $10 billion a year, and the Chinese pet supplies market alone will probably cost between RMB 3,000 and RMB 400 billion per year in five years. Therefore, traditional funds have to face great risks when they enter emerging markets. At that time, traditional Chinese banks were reluctant to do online banking, and they did not necessarily make big money. However, if the bank’s reputation is to be damaged, he does not need to take this risk. For another example, secondly, the issue of supervision, we think about it. In the past two years, most people who actually made money in the currency through various business models have not circumvented the four words of regulatory arbitrage. If you use a lot of things, not the currency, but the renminbi, it is very difficult to do.
When faced with supervision, we must learn the Alipay that has grown into the big brother of the Internet industry. At the beginning, Alipay also faced various compliance issues, but they not only came over, but also came out and made great achievements. I feel that when there is no supervision or inadequate supervision, we must do what we think is right based on our understanding of the industry and our national policies. As long as you are doing the right thing, serving everyone, I believe in the country. Regulatory policies will also serve you and create a better market.
Jia Tianyu : Actually, regarding speculation and investment, I personally feel that the difference in essence is not particularly large, but a question of how to define it. I used to chat with a well-known angel investor, and he said, never miss a chance to speculate. After you talk to people in the primary market, you will find that those who make angel investments may be speculative at the moment of investing, but the latter project will continue to grow and become real. Investment behavior.
For example, in China's stock market, the system needs to be improved, and information disclosure is not transparent. Under such circumstances, do you say that stock trading is investment or speculation? For example, in the currency circle, in fact, it is difficult for you to define the two, the same is speculation, you may be investing in BTC, and speculation may be speculation.
For individual investors, I support them to try some investment with a slightly speculative nature. For institutional investors, we must first consider whether it is compliance, and secondly consider whether risks and benefits are equal.
Question 2: There are also many organizations in the digital currency field. What do you think of the direction of the organization?
Jia Tianyu: For traditional financial institutions, they are actually very willing to try new technologies and solutions, but the attempt may only stay at the stage of proc of concept (poc). Really used in actual production, or mainstream technology, programs are often the best technology that has been verified, not the latest.
We invested in a blockchain company for 16 years, not to say that it is a blockchain company, but because of the underlying technology considerations. We are now communicating with Chinese banks, brokers, funds, and insurance companies. They are very happy to try blockchain technology, just that the time is not so fast. Still need a cycle.
Anzhong: I personally are very optimistic about virtual assets, especially bitcoin. The reason I am optimistic about it is that I am optimistic about the blockchain technology, and Bitcoin, as a representative of the blockchain technology, will have certain value in the future.
I believe that traditional financial institutions must also see the value of this field. The value of this field is based on the development of blockchain technology itself, and blockchain as a technology will inevitably play an increasingly important role in human society. The question asked by the moderator, if placed 20 years ago, is "How do you see traditional financial institutions investing in emerging Internet companies?" For example, when financial institutions start investing in Yahoo and Netscape, they should be asked similar questions. However, we must always remember that financial institutions are the most conservative and most radical. Conservative is that they place great emphasis on compliance pressure. Radical is that as long as there is enough profit in this place, they will definitely come.
Therefore, as long as the blockchain technology continues to improve, there will be more and more traditional financial institutions coming in.
Yuan Wei: Why can the American giants enter the market? Because supervision is relatively clear on this matter, except for Bitcoin and Ethereum, all "IXO" is characterized by Security Token. Once this line is drawn, other financial institutions know how to enter.
The US's regulatory system is much better than other countries. Just follow the SEC and it has nothing new to come out. How does China embrace? The currency is very sensitive, mainly because there is not enough qualitative, definition and supervision to refer to. At present, this set of traditional finance is still learning, how is the cryptocurrency qualitative? How to supervise, maybe the time has not yet arrived.
In addition, the market volume is too small is also one of the reasons. Adding up to one trillion yuan, the trading volume of the stock market in the past is a trillion yuan. Then there is that if we go to study, the mainland can learn from Hong Kong or Singapore, and they are still very advanced.
Xie Feng: Every new investment species must come out based on the fact that it can make a lot of people make money, so that it will heat up in the market and promote product development and market rules. Bitcoin is quietly allowing many unseen young people to quickly gain huge profits. The complicated attitude of everyone entering the market has also promoted the unprecedented prosperity of the digital assets field in the past few years. On the other hand, with regard to the technology and business logic behind digital currency, we generally recognize the great value of blockchain technology and distributed business models in the driving factors of future human society development. So the organization's layout is justified.
Question 3: What is the investment standard for the layout of digital assets?
Anzhong: Two aspects, one is investment funds and the other is investment projects.
There are two requirements for investment funds. First, the liquidity is better. Second, you have to give me an expectation. According to your operation, the means should be able to protect the original, or the maximum retracement. These two things can be done, people are reliable, we are willing to give him money to run. So far, we have looked at the asset management platform and the quantitative team in the blockchain field. They are still very different from the traditional ones. I believe that there will be considerable development.
The investment project is very entangled for us, and the equity investment in the traditional field is not expensive. But the money that we cast, we don't know where it will be spent, and we don't know if this idea can be done better. As an example, the traditional Internet, an Ali who came out and a college graduate said that they want to operate on the electricity business, we will prefer the former. But in the blockchain field, some people say that there is a good Idea, we will say that this idea has done related work? If no one has ever done it, who can do it well? I don't know, this is the most embarrassing place. Therefore, we look at the project to see two points. First, the idea of the project itself depends on the technology as close as possible. Second, look at the team's past experience, the stronger the execution, the better.
Jia Tianyu: All the gameplay in the traditional field will be repeated in the field of digital currency, quantification, pledge and debt issuance in the financial sector. For example, Hang Seng started as a trading system, and now companies in the digital currency field are doing this. I am optimistic about people who have done traditional finance to do this, especially those who do this with a strong technical background. We will also continue to focus on technology-driven innovation projects.
Yuan Wei: For blockchain investment, we have been dividing the two lines of legal currency and Token. The legal currency is protected by the legal system and is relatively guaranteed. The use of Token to invest in IxO is often a challenge of integrity. From the perspective of investment, people are the first factor, and French currency investment is a listing opportunity in the future. From the Token level, the better returns are the early public chains and exchanges. It is almost impossible to make money by doing ecological applications.
Next, we will tend to invest in the hedge fund by means of partial equity, to quantify the team's LP and help with management. Yield is a factor to consider, but transparency is the key to our consideration. I will give you the money to manage, you need to see the flow of the currency, the rate of return, etc., and the loss must know how it is lost.
For the project, we will look at the data industry. It is a digital asset. It is relatively easy to combine with the blockchain. A large number of projects bound to offline entities will be far from the blockchain. Including food traceability, it is more like a government, not a private enterprise can do.
Question 4: In a sentence, summarize your views on the blockchain?
Xie Feng: It must be the direction. How to get it now depends on the practitioners to do it first. A new industry that is less than a certain scale will only have certain rules to be formulated by the government at a certain stage.
Yuan Wei: We are looking forward to a little faster regulation. If asset management is not regulated, how can we prove it innocently? The industry needs to be sunny. But in fact, it will come slower, and therefore there will be a gap, and there will be Alipay, an Internet financial product.
Anzhong: Everyone has seen the rise of Alipay and Tenpay in the Internet era and their coordinated growth with regulation. It is hoped that the blockchain practitioners will not forget their original intentions, embrace supervision, and make the blockchain a milestone in the process of human development, making China the world leader in blockchain technology.
Jia Tianyu: In the case of compliance, I look forward to three points. First, the blockchain will reconstruct the things in the traditional financial field. Second, the gameplay in the traditional financial sector will reappear in the blockchain field. Third, the game of digital assets will be more diverse and more fun than traditional finance.