Mark Yusko, CEO and CIO of Morgan Creek Capital Management and Morgan Creek Digital, and notorious bitcoin bull discussed his outlook for cryptocurrencies during an appearance on Benzinga’s PreMarket Prep show this week.
The Grayscale Bitcoin Trust (OTCQX:GBTC) is up 118.8% year-to-date in 2020, but Yusko said he sees even more upside ahead for bitcoin.
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“Clearly bitcoin crushed the S&P in 2019, it has crushed the S&P again this year. This is an asset that most people don’t understand,” Yusko said.
“What people just haven’t come to grips with is that bitcoin is the first use case of the operating system of the internet of everything.”
Long-Term Value Of Bitcoin: Yusko compared bitcoin to iOS and Android operating systems for smartphones.
“When everything in the world is connected in the future, it will all run on blockchain. Bitcoin is the gas, it’s the fuel for that network expansion,” Yusko said.
Yusko said back when the internet was first getting started, many people didn’t understand what it was or how it would eventually change the world. He said bitcoin needs to hit an inflection point in mainstream usage to unlock its true power.
“What bitcoin is is money or value over internet protocol, and it will do to financial services the same thing that the internet did to the media. All the asset value in traditional media now exists in streaming companies and tech companies,” Yusko said.
How To Invest: For investors looking to get into bitcoin as it’s making its big run, Yusko discussed the safest ways to own the cryptocurrency.
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“To own exposure to blockchain, it’s really mostly in the private markets now,” Yusko said. “The safest, easiest way to buy [bitcoin] is to buy the ticker GBTC or the ticker ABTC.”
GBTC is the Grayscale Bitcoin Trust, which owns and stores bitcoin offline in a closed-end fund. Yusko said the biggest risk to the GBTC is that it trades at a premium to the underlying price of the bitcoin it owns, creating downside risk if the SEC ever approves a bitcoin ETF to list on a major U.S. exchange.
ABTC is a swiss-listed fund that doesn’t have the same premium problem as GBTC.
Yusko said investors can also own bitcoin directly through companies like Coinbase or the Square Inc (NYSE:SQ) Cash App. He also recommended Advanced Micro Devices, Inc. (NASDAQ:AMD) and NVIDIA Corporation (NASDAQ:NVDA) as plays on Ethereum and bitcoin mining.
Blockchain ETFs: Yusko wouldn’t recommend the blockchain ETFs Reality Shares Nasdaq NexGen Economy ETF (NASDAQ:BLCN) and Amplify Transformational Data Sharing ETF (NYSE:BLOK).
“The blockchain ETFs are not really that great because there’s not that many companies that are directly involved in blockchain and particularly in crypto, so the problem with those things is they’re highly correlated to the S&P because they own Microsoft and Intel,” Yusko said.
“They’re not horrible things to own, but they’re not as directly correlated to the growth.”
Watch to the full interview with Mark in the clip below, or listen to the podcast here
PreMarket Prep is a daily trading show hosted by prop trader Dennis Dick and former floor trader Joel Elconin. You can watch PreMarket Prep live every day from 8-9 a.m. ET Benzinga's YouTube channel, and the podcast is on Spotify, iTunes, Google Play, Soundcloud, Stitcher and Tunein.