Bitcoin’s future price has been the subject of enormous speculation everywhere from cocktail parties to the floor of the New York Stock Exchange. Some mega-bulls, like venture capitalist Tim Draper, predict the value will rocket to $250,000 in as little as four years. Skeptics, like Joe Davis, strategy chief at Vanguard Investments, say there’s a “decent probability” it goes to zero.
Is Bitcoin’s fate really all or nothing—go big or go broke?
Michael Sonnenshein, managing director of Grayscale Investments, one of the world’s biggest cryptocurrency asset managers and a sponsor of eight digital currency trusts for investors, thinks so. Sonnenshein dropped by Fortune’s offices to share his outlook on Balancing The Ledger, a new show about the intersection of technology and finance. His view: There is no middle ground.
“As we begin to look at assets like Bitcoin and the unbelievable adversity it’s faced over the last 10 years, every day that Bitcoin doesn’t go away, every day that Bitcoin overcomes a new challenge, for me that makes me feel that Bitcoin will do either one of two things,” Sonnenshein told the show’s cohosts, Fortune senior writers Jen Wieczner and Robert Hackett.
“It will either survive and become all these amazing things that we think it can be, which will cause its price to be a lot higher,” Sonnenshein said. “Or it is possible something else may come along that will displace it and Bitcoin goes to zero. It likely will have a binary outcome.”
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Sonnenshein’s personal view, as a cryptocurrency booster, is obvious, although he declined to provide any of his own price targets. (Sonnenshein’s employer, Grayscale, is a subsidiary of Digital Currency Group, one of the biggest cryptocurrency investors around.)
His reasoning goes like this: If Bitcoin’s developers can continue innovating and improving on the technology, making it more useful and desirable, then its value should rise. This is not a foregone conclusion, by any means. But it’s the foundation for Sonnenshein’s investment thesis.
“You have to think about Bitcoin, again, as an open source protocol,” Sonnenshein said.
“Any other currency that comes along that allows for another feature—another attribute that maybe Bitcoin doesn’t have—as an open source protocol, [Bitcoin] is able to accommodate, to integrate, to add that aspect into it,” Sonnenshein said. “So I hope and continue to believe that as new features are added into Bitcoin and other digital currencies, they can continue to thrive and grow and not be displaced.”
Maybe Bitcoin will become the Internet’s “native currency,” as Twitter and Square CEO Jack Dorsey recently put it. Or maybe the whole thing will blow up in a ball of smoke. Your guess is as good as anyone else’s.
At the moment, Bitcoin’s price has taken a downturn on news that the Department of Justice has opened an investigation into possibly nefarious market manipulation by cryptocurrency traders. But given the cryptocurrency’s volatility, who knows how long that will last?