Yahoo Finance Q&A with Tekin Salimi on the State of the Cryptocurrency Industry
This past year has been defined by uncertainty. Ups and downs shook up daily life, crossing borders and permeating through the gamut of social institutions—from political to economic, no party or market was safe. Naturally, when accepted norms and structures of behavior begin to crack and crumble at their foundation, entrepreneurial and pioneering individuals search for solutions that lie outside the realm of convention. That’s one of the reasons cryptocurrency has experienced a major resurgence amidst the chaos, with Bitcoin growing tenfold in the span of the pandemic. To learn more about the current state of the industry and get a proper understanding of the power of crypto we caught up with Tekin Salimi, a corporate lawyer turned avid proponent of cryptocurrencies and blockchain technology. Being a thought leader in the developing space, and a general partner at Polychain Capital—a digital asset firm that focuses on the global adoption of cryptocurrencies—he breaks down the implications of cryptocurrency and provides insights into its future.
Yahoo!: What was it about Ethereum and other cryptocurrencies that first drew you in?
Tekin: The single biggest opportunity that stood out to me was the potential for blockchain technologies to disintermediate >99% of the financial services that we use today. More ambitiously, blockchains may even disrupt many of the peer-to-peer internet services that we all rely on and use daily. When I decided to quit my law job and enter the crypto industry full time, a motivating factor was my belief that the scale of the efficiencies this technology could bring to financial services over the next decade was an opportunity as big as the rise of the internet itself. Having been too young to really participate in the dot com boom of the early 2000s, I didn’t want to miss the chance to be at the ground floor of crypto’s ascent.
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Yahoo!: What is the biggest “sell” of Bitcoin in your opinion?
Tekin: The main value proposition of an asset like Bitcoin is serving as a secure store of value. Bitcoin started as a fringe technology appealing mostly to fringe communities, but in a post-COVID world the appeal of a secure store of value (and hedge against inflation) has certainly grown more mainstream. One daunting stat to consider is that nearly 20% of all USD in existence was created in 2020. And even today it doesn’t seem like there is a clear light at the end of the tunnel in the need for further monetary stimulus. In the current global macroeconomic setting, I believe that the appeal of Bitcoin will continue to grow precipitously along with other types of crypto assets.
Yahoo!: What do you think is the greatest challenge to get the general public on board with Bitcoin and cryptocurrency in general?
Tekin: One of the biggest impediments today is the sheer complexity that comes with buying cryptocurrencies for the average user; let alone the challenges of managing one’s wallet/private keys securely. There are a few coinciding trends that I believe will reduce the friction over the next 12-18 months. First, there are various new ETF vehicles launching on public stock exchanges that provide a direct way for retail investors to obtain exposure to Bitcoin, Ethereum and similar large cap cryptocurrencies through their brokerage accounts. Second, many of the largest fintech companies are increasingly providing cryptocurrency integration on their platforms, also making it easier for retail users to buy cryptocurrency directly. A few examples include: Cash App (US), Revolut (UK), Wealthesimple (Canada), and most recently Paypal (US). The combination of these trends will facilitate new inflows of capital into the crypto world.
Yahoo!: What recommendation would you give to someone who wants to get into cryptocurrency as an investor?
Tekin: The best first step before investing is to get educated on the space, and the underlying technologies of cryptocurrency. There are a number of freely accessible resources online. I would recommend tracking various industry experts and project founders on Twitter, Medium, Discord, etc. to better understand the current dialogues within the crypto ideasphere. By starting with research upfront, investors will be in a better position to differentiate the projects with novel technology, real developer communities, sustainable development roadmaps, etc. from the vaporware out there.
Yahoo!: What is your long term goal with your work in the crypto space?
Tekin: We are still in an early infrastructure development era in cryptocurrency. Many of the essential building blocks needed to develop and host next-generation applications on top of blockchains are still in research and development. So for the foreseeable future, the focus of my work will be identifying and investing in the underlying protocols and financial primitives that underpin future crypto applications. Also education plays a critical role in moving our industry forward. We work closely with key players such as institutional capital allocators, governments, policymakers, and other leaders in industry to help communicate the value proposition of blockchain technologies. One of my early contributions to education was through co-founding the Blockchain Association in 2018; the pre-eminent lobbyist group working closely with regulators on cryptocurrency industry issues within the US.
Given the accelerated pace of change in our space, it is particularly difficult to predict the landscape of this industry 10 years from now. Pending any major changes, the plan will continue to be focusing on investing, R&D and education.
