Bubbles, Bitcoin and What’s Next

FTX’s Jonathan Cheesman and Coinshares’ Danny Masters predict that bitcoin will be bigger than gold, and institutional money will continue to flood in thanks to accommodative monetary policy.

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Jonathan Cheesman and Danny Masters; Source: Ian Walton for Blockworks

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key takeaways

  • Cheesman: “I think there’s a real arrogance around the way traditional finance has tried to kind of belittle crypto”
  • Masters: Once we have CBDCs, “everything has to be tokenized — absolutely everything.”

Digital Asset Summit 2021, London — When it comes to how digital assets like bitcoin will disrupt traditional financial systems, we are just at the beginning, said the closing speakers at Blockworks’ Digital Asset Summit in London

Jonathan Cheesman, head of over-the-counter and institutional sales at FTX, and Danny Masters, executive chairman of CoinShares Group, took the stage for the final keynote address on Tuesday afternoon to discuss market bubbles, industry trends and what the space might look like in the future. 

Cheesman, who spent 15 years on Wall Street before “catching the crypto bug,” as he said, in 2016, thinks that there is a long way to go in terms of institutional adoption and understanding of cryptocurrencies. 

“I think there’s a real arrogance around the way traditional finance has tried to kind of belittle crypto,” Cheesman said. “One thing’s really clear in crypto, and that’s that having an open mind is really important.”

Jonathan Cheesman
Jonathan Cheesman; Source: Ian Walton for Blockworks

A lot of this distrust of the industry has to do with infrastructure, Cheesman said. Today, digital assets do not fit within traditional financial infrastructure systems very well, but one day they will. 

“Eventually, the two will be compatible, but by the time that that’s happened, the price is just going to be a lot, lot higher,” he said. “So there’s a real price incentive to be adaptive rather than prescriptive.” 

Even as the traditional financial world continues to largely exist outside the digital asset space, crypto has already fundamentally changed human behavior, Masters said.  

“It does feel to me like there’s been a bit of a generational rotation that has happened,” Masters said. “This new generation of wealthy people don’t want a Bentley or a Chanel bag, they want an etherrock or cryptopunk,” he added, referring to the popular non-fungible tokens that can go for hundreds of thousands of dollars.

Danny Masters: "Bitcoin will be bigger than gold"
Danny Masters; Source: Ian Walton for Blockworks

Given how younger generations have been impacted by the current financial landscape, especially following the pandemic, it is no wonder we have seen a shift toward crypto, Cheesman pointed out. 

“It seems like there was an inevitability in the generational attitude where millennials were kind of getting screwed by baby boomers in asset prices,” he said.

“Bitcoin will be bigger than gold”

In terms of what is to come for the industry, both crypto-enthusiasts agreed that central bank digital currencies (CBDC) have the potential to significantly speed up the adoption process.  

“CBDCs are going to boost this digitization bucket enormously,” Masters said. “Once you’ve got three or four trillion dollars in crypto and three or four trillion dollars in CBDCs, that’s the watershed. Then everything has to be tokenized — absolutely everything — and then it all starts to fall down that cascade. I’m not sure it’s going to happen, but I think it’s likely.”

Cheesman agreed. It’s only a matter of time before crypto solidifies its space as a top asset class, he said.

Jonathan Cheesman and Danny Masters
Source: Ian Walton for Blockworks

“I think that Bitcoin will be bigger than gold,” Cheesman said. “And I also think that in three to five years, the way that we think about FAANG, we won’t be thinking about public companies, we’ll be thinking about networks.”


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