The past year has been an exciting one for cryptocurrencies and Ben Weiss can’t wait to see what happens next.
Mr. Weiss is the COO of CoinFlip, providers of more than 2,000 Bitcoin ATMs across the United States. He said plenty has changed since his company was founded in 2015. Back then Bitcoin adherents were mostly confined to the early adopters who were mainly tech-knowledgeable millennials, but now they are more representative of the population as a whole. That has allowed the demand for Bitcoin ATMs to soar, so much that there is as healthy demand in the Dakotas and Hawaii. Most of CoinFlip’s customers are buying, not selling, while a few are using it for remittances.
The recent announcement of a Bitcoin ETF is very important for the industry’s development, Mr. Weiss said. While the 2017 price run was largely driven by retail investors, this one is more an institutional play. By making Bitcoin accessible and safe in vehicles such as ETFs which the investment community is comfortable using, and allowing that to work with Roth IRAs and 401Ks it contributes to a comprehensive financial system that will enable the sector to row.
“I think an ETF is important for inclusion and getting everyone a chance to buy Bitcoin,” Mr. Weiss said. “It’s also part of why I love Bitcoin because I think it’s the first financial thing where everyone has a chance to participate in it.”
The United States normally sets the tone for financial markets but it risks missing out on the defining financial play for the next generation, Mr. Weiss suggested. While American regulators are known for taking a very methodical approach to finance, they risk leaving the country behind as regions work to become cryptocurrency and DeFi hubs.
“The US is 100 per cent behind and it’s unfortunate,” Mr. Weiss said. “Think about if the Internet didn’t have its home here how different the country would look versus if it did. The next Amazon, the next Apple, it’s going to be a crypto company. As of now that company’s not going to be based in the US it’s probably going to be based somewhere in Asia.”
Making the country amenable to crypto and DeFi is in the country’s national interest, Mr. Weiss suggested. Tracing transactions which originate there will be easier than watching those from elsewhere. Add in 50 states each with their own approach and that will only confuse business and send it elsewhere.
Mr. Weiss welcomes regulation as he believes it will make more people feel safer about transacting with it. That wariness is still being fed by the misconceptions of people who are unfamiliar with its workings, including recently appointed regulators who should know better. This deters people from benefiting from one development which could improve their financial health
“How else in this country in the past 10 or 15 years if you weren’t born with anything could you make money as easily as in Bitcoin,” he asked.
When you can buy real estate without having to attach your name to the transaction why would you use a Bitcoin ATM where the average transaction is $500? Why use cryptocurrency with immutable tracking capability?
“Bitcoin’s a really stupid way to launder money,” Mr. Weiss said.
Other jurisdictions seem to get this better and are making the play to become one of the main hubs for the decentralized economy. Much innovation is happening in Asia, and the Cayman Islands’ Virtual Assets Service Providers passed in 2020 positions it as a welcoming place.
While these regions are indeed taking positive steps, the inaction stateside is making them look even better, Mr. Weiss said. That uncertainty will drive innovation elsewhere. It is further fed by opinions like the ones recently expressed by Janet Yellen, who furthered the myth that Bitcoin is a significant money laundering source. That has been proven wrong by industry research by Chainalysis.
“Messages like this make entrepreneurs nervous,” Mr. Weiss said. “I mean this person is going to lead the Treasury.”
Mr. Weiss said he is excited about the potential of decentralized finance to create a parallel financial system. While NFTs at their current heights are likely to be a bubble, the underlying technology’s ability to improve systems for health records, financial disbursement, identity establishment and maintenance and, yes, art sales, is clear.
“A lot of times these bubbles proceed all the great tech stuff,” Mr. Weiss said. “There was the tech bubble in 2001 but we still got Amazon out of it and all these great companies. Just because the NFTs are a bubble doesn’t mean the NFT tech is useless.”
While Bitcoin is a value store in the West, it can drive innovation in emerging markets where the absence of entrenched systems cannot stop innovation, Mr. Weiss said. Africa in many ways has a more conducive environment to foster its adoption, as the average person is more comfortable using their phone to conduct finance.
“This isn’t the 1920s where those in control held the physical assets,” Mr. Weiss said. “Now whoever has the best infrastructure will win. Good jurisdictions will get 90 per cent of the best talent.”