‘We often forget just how big the world is,’ says crypto CEO

For the average Canadian, it may be difficult to understand exactly what makes Bitcoin valuable.

The spectacular price surges over the years, especially the past few, offer very compelling proof to the traders and speculators. But true value investors who follow the likes of Warren Buffett and Ray Dalio will want to get at the fundamental nature of Bitcoin and what it offers – which is exactly what Shone Anstey is all too happy to explain to anyone who’ll listen.

“Bitcoin really represents a new financial shift of the world towards digitized finances and a virtual reality,” says Anstey, CEO of LQwD Fintech. LQwD has developed software infrastructure to support growth and usage of the Lightning Network, a technology that promises to increase the speed of bitcoin transactions from just seven per second to millions a second.

“Bitcoin is the native trust layer for the internet,” Anstey says. “The stakes are high for where it's going to go.”

Bitcoin: the next revolution of the internet

Anstey sees himself as being in a privileged position. As veteran of the technology industry who’s been totally immersed in the internet for 25 years, he is able to see Bitcoin as just an extension of the internet, a revolutionary first-use case of technology in the embryonic stages, like how email was in the ‘90s.

He argues that bitcoin will be the key to unlocking the next phase of the internet’s exponential growth. In 1998, he says, people estimated the value of the internet at US$180 billion, with many wondering aloud whether it would even exist in 10 years. By 2004, when Google went public, the web was valued at around US$3 trillion; by 2020, estimates were at $10 trillion. Today, he says the value of the internet is measured in the hundreds of trillions.

And while it may seem obvious, people might not appreciate the role of the internet in enabling and spurring Bitcoin adoption. While Anstey says North America has displayed web penetration in the high 80% or low 90% range, some parts of the developing world may see less than 50% penetration, which makes them more beholden to their traditional cash-based systems that rely on banks and other financial institutions.

“When you break it down, bitcoin is a trust protocol. It solved the long-standing computer problem of how to create trust on the internet without a third-party intermediary for money,” Anstey said. “You can start to see how bitcoin can be worth a lot more than the US$1-trillion market cap it is today, because it fundamentally changes the plumbing of how the internet and money works.”

Canada’s potential as a bitcoin destination

As the birthplace of the world’s first bitcoin ETF, Canada certainly has a vital role in driving money into the bitcoin space. Anstey says the country’s well-regarded regulatory system and capital markets have been the seedbed for adventurous enterprises such as junior mining companies, which makes it more open to crypto exchanges and bitcoin-related companies, including LQwD. It also provides the perfect blend of risk appetite and market structure to enable adoption of bitcoin through more familiar vehicles.

“We’ve seen broader acceptance by the Ontario Securities Commission, the British Columbia Securities Commission, and all these regulatory bodies, which is exciting to see,” he says. “Some of these banks and other big players in the industry will probably financialize more of the bitcoin offering. That will make it easier for advisors to give their client’s portfolio some exposure based on the kind of risk their client can take.”

For investors as well as financial firms that employ advisors, he says regulatory clarity will go a long way. It will help clear up financial institutions’ many lingering questions around custody of bitcoin, or what they can do with accounts that contain the cryptocurrency. On the self-directed investors’ side, Anstey says more and more exchanges are being recognized and licensed by securities regulators – Bitbuy and Netcoin have already gotten those approvals – making it easier for them to diversify into the bitcoin market.

Even with more guidance and developments from regulators, financial institutions may be held back by the sheer volatility in bitcoin’s performance. But Anstey is quick to point out that volatility is relative: it might be too hot for North Americans who deal in dollars, but for someone who lives in Turkey or Lebanon, where the national currencies are plummeting at devastating pace, bitcoin could be a life-saving alternative.

“Bitcoin isn’t like the dot-com rally of 20 years ago, which was a North American phenomenon,” he says. “Bitcoin and the whole movement toward crypto is a global phenom, and we often forget just how big the world is.”