According to Rockefeller International Managing Director and Chairman Ruchir Sharma, Bitcoin (BTC) is essentially a good concept that has been spoiled by too much cheap money and speculative interest.
Sharma, a former emerging markets investor at banking giant Morgan Stanley (MS) and a New York Times bestselling author, said bitcoin could make a comeback in similar fashion to that of e-commerce giant Amazon (AMZN), which plunged about 90% in the early-2000s dot-com crashed and rose more than 300 times in value over the next 20-plus years.
Sharma said about bitcoin on CoinDesk TV’s “First Mover” program, firstly, “we need the excesses to get weeded out,”“And then we can see the emergence once again of bitcoin and cryptocurrencies, as a steadier asset.”
He said Bitcoin for now remains “caught up in this speculative mania,” whose global collapse hasn’t yet been completed. Using Amazon as an example, he said that it took some time for that company to recover. True enough, it was several years later until the stock of the online retailer reach and surpassed its bubbly 1999 level.
According to Sharma, bitcoin and other digital assets in the next six months could see further drops, at least in parts as the U.S. stocks continue to decline. Typically, bear markets last about a year and stocks fall 35%. The S&P 500 has just fallen by 20% and the current bear is less than a year old.
“I’m not willing to call the [market] bottom as of yet on bitcoin and cryptocurrencies,” he said. “The U.S. bear market regime, which is the driver of risk appetite around the world, is still very much in play.”
The idea of a currency regime that does not revolve around the U.S. dollar is supported by Sharma. There hasn’t been a currency that was able to take the greenback’s place, bitcoin could be the answer, he said.
“The dependence on the U.S. dollar in general cannot continue … There is a need for having another currency out there with some transactional need, which is a bit more stable in value … Three to five years from now, hopefully [bitcoin] will emerge as a more stable asset.”
“The window of opportunity is open,” Sharma added.
Saying the government has limited control over digital assets, Sharma is feeling bullish on crypto in India.
Economically, residents are benefiting from the country’s use of bitcoin and other digital cryptocurrencies to issue payments via direct digital transfers.
“A country like India really shows you how much the buildout of a good public digital infrastructure can help transform the lives of people,” Sharma said. “It’s possibly the single most important economic development for India.”