The company Bitcoin Suisse plays a pioneering role when it comes to establishing Bitcoin in Switzerland and beyond. In the meantime, however, it is no longer just about Bitcoin, but about various digital assets and related services. From custody to staking to tokenization, Bitcoin Suisse is increasingly becoming a multifaceted crypto financial services provider. The company's impressive growth trajectory takes its origins from Niklas Nikolajsen. The Danish early adopter had already recognized the potential behind Bitcoin in 2011 and subsequently founded Bitcoin Suisse in 2013.
Everywhere you read that institutional investors are pushing into the crypto market. Can you also observe this development among your customers in recent weeks and months?
Yes, slowly the influx of institutional investors is increasing. There was already a lot of interest from institutions at the end of 2017, at the peak of the Bitcoin hype. However, in the following months, in the bear market of 2018, this interest disappeared.
After halving in May 2020, the situation changed. One could pretty well anticipate that Bitcoin would make a jump. However, the fact that the price increase happened so quickly surprised even us. Also, that institutions like MicroStrategy jumped on with large allocations was incredible. Since halving, the market has been in a different world - crypto assets are now at a market cap of $1 trillion. But it takes more than that; it takes working use cases to keep institutions in the market for the long haul.
There is hardly any interest left on bonds, especially government bonds. European government bonds, in particular, are trading in negative territory virtually without exception. Can cryptocurrency staking become an alternative to generate regular interest income in the future?
I don't think the interest rate would be zero percent if there were no central bank intervention. In other words: We would never do a loan deal where you lend me 1,000 euros and I give you back 900 euros in five years. Negative interest rates are something deeply unnatural. So we have to think, where does negative interest come from? If you look around, you find that the biggest debtors in the world are nation states. Although staking models are already alternatives, I don't think they're ready to replace bonds as an alternative source of interest income.
After all, the beauty of staking is its low counterparty risk. But assets like collateralized crypto loans will also be ripe for the financial markets one day. At that point, they will certainly be a high-yield alternative to government bonds and could even replace them at some point. But that will take time.
And where does Bitcoin Suisse see itself in this changing market environment?
Bitcoin Suisse wants to create a gateway to the decentralized financial world for its clients. As a regulated Swiss financial intermediary in the licensing phase for the Swiss and Liechtenstein banking license, this may sound like a contradiction, but the license allows us to open up a new product universe for our clients. This includes, for example, asset tokens (securities), stablecoins, or even derivatives. This allows us to compete with the offerings of certain crypto exchanges and provide our clients with an even broader range of services.
There are more and more investment companies issuing Bitcoin securities such as Bitcoin Exchange Traded Products (ETP) for the traditional securities account. Don't you see a contradiction there in exchanging a superior carrier medium, ergo the token on the blockchain, for a certificated securities securitization?
Bitcoin Suisse also intends to launch financial products like ETPs. What they are testing is ultimately using the existing financial infrastructure to further market Bitcoin. In the long run, that doesn't make sense. But in the short term, the crypto market can only benefit from regulated financial products like ETFs. After all, buying BTC and co. on Exchanges is still quite complicated. Grayscale, for example, has done Bitcoin a great service by making the market much more attractive to traditional investors. But whether Grayscale will still exist in ten years? I don't know.
Finally, the question: where do you see the Bitcoin price at the end of 2021?
I've been giving the same price prediction for ten years: the highest Bitcoin price is not in the past, but in the future. The current all-time high is $42,000. Will we surpass that in 2021? No question. Will we beat it by a mile? Absolutely! I think it won't be long before we significantly surpass US$42,000. Will we see bitcoin in six figures? Yes! But no one can say how long that will take. Markets can behave very irrationally for a long time. However, the current Bitcoin bull run is far from over. At the latest after the next halving, when the inflation rate is only 0.6 percent, institutions will buy up all newly mined BTC. Simple economics are playing out here: A limited supply meets an ever-increasing demand.
To make a long story short: At the end of 2021, I expect at least $60,000 and in 2022, six figures.
