Tim Draper remains strongly bullish on DeFi and Bitcoin, although in his opinion the regulations are not yet able to provide certainty
Tim Draper, a well-known venture capitalist and investor in Bitcoin, publicly stated two years ago that BTC would reach $250,000 by 2022. Yet while Bitcoin continues to attract the interest of more and more players, Draper revealed to Cointelegraph that such a prediction may have been overly cautious:
„I think it will certainly reach that price level. But many people think that $250,000 was a bit too conservative a prediction.“
Draper also discussed the impact of the COVID-19 pandemic on the blockchain sector, noting that tokenisation will play an important role in solving global logistics and real estate problems. In addition, Draper shared his thoughts on decentralized finance, or DeFi, arguing that he would like to „decentralize the venture capitalist profession“ in the future.
Cointelegraph: What do you think about the impact of the pandemic on the blockchain world?
Tim Draper: Several things have happened since the beginning of the pandemic. Some say it is accelerating the development and adoption of new technologies. People are stuck in their own homes and wonder, „Why not try VR for telemedicine or distance education? Some of the projects that our community has been supporting for a long time have gained a lot of attention during the pandemic, because people could not leave their homes.
In addition, the US government printed $13 trillion, immediately diluting the dollar value by 20 or 30%. This was a real shock to the system. People then began to ask: „Well, wait, where do I put my money? Do I put it in gold or do I put it in Bitcoin, which is a very good reserve of value?“. A lot of people decided to transfer their money to BTC.
Another point to make is that millions of people will die as a result of this pandemic, but 135 million could starve to death because of the government’s reaction. Generalized lockdowns have blocked several supply chains worldwide, and as a result people are hungry.
But every time there is a crisis, there is a great opportunity to do something extraordinary. During the last financial crisis, for example, Satoshi Nakamoto invented Bitcoin. And I think that when we will be able to implement the blockchain better, we will be able to use Bitcoin in a dollar-equivalent way.
CT: Right now the world is in the middle of a very serious crisis. What technological innovation will help humanity come out of it stronger?
TD: Tokenisation will advance. We see it in real estate, in logistics and in all the markets where valuables have to be moved from one side to the other. These objects can be transferred through the Internet: in the case of real estate, you could buy a part of a house, or you could token the property and own a piece of it without having to buy the whole thing.
Tokenisation is also a great way to track the movement of goods. I think we will make huge strides forward in the logistics sector.
CT: Another phenomenon we are observing is the rise of DeFi. Do you think that Decentralised Finance is just a bubble or will it increase the adoption of crypto?
TD: I think the DeFi phenomenon couldn’t not happen. For a long time people who own Bitcoins or other cryptos have been standing still watching their growth rate, instead of using those funds. But every investor wants his money to be constantly used.
Basically, I want to decentralize the venture capitalist business: I raise funds only in Bitcoin, I invest only in Bitcoin, entrepreneurs pay their employees and suppliers all in Bitcoin. All the accounting of this system is on-chain. My relationship with the entrepreneur and my investors is fixed by a smart contract, so that if the project goes well the revenues can be distributed in many different Bitcoin wallets. I think this will happen eventually, but at the moment the accounting side is not ready yet. We are still facing the first cases of using DeFi, but in the long term accounting, taxes… everything will be done using Bitcoin!
DeFi will then become a bridge to „ReFi“ where „King“ stands for „Retail“: we will use crypto as the main currency for all our purchases. It will become a part like any other of the world economy. I think this will include Bitcoin along with four or five other cryptocurrencies.
In conclusion, I think that the fiat coins will slowly disappear: the governments that want to launch some centralized crypto anchored to the own currency are frustrating our efforts. The purpose of all this is to make that the currency is not tied up to the politics. We cannot inflate debts and we cannot act as Argentina has done for 100 years.
We must operate fairly on all fronts. This is the beauty of cryptocurrencies, governments will never be able to replicate it with a fiat currency.
CT: Are you still sticking to your forecast that Bitcoin will reach $250,000 by 2022?
TD: Yes, Bitcoin will reach $250,000 by 2022 or early 2023. That $250,000 is a forecast based on the fact that BTC will reach a 5% share of the currency market. I think this is an easily achievable level, especially since more and more women are starting to use Bitcoin, and they control 80% of retail spending. It’s really interesting: before there was only 1 woman in 15 Bitcoin wallet holders, but the numbers are changing. When women start using wallets, they will realize that it is very simple. So, yes, I think BTC will definitely reach that level, but a lot of people even think that my prediction was a bit too cautious.