Former Celebrity Venture Capitalist Shares Her Crypto Investment Thesis Amid Market Turbulence
With interest rates pushing 30-year highs and the Federal Reserve indicating rate increases in March, investors are seeing red and struggling to remain optimistic. Bitcoin fell below 50% of its most recent all-time high last week, and investors are all wondering when (or if) we can expect a recovery.
We sat down with Tatiana Koffman, the financial advisor responsible for heading investments for the likes of The Chainsmokers and Linkin Park, for her thoughts.
Koffman believes that, above all else, investment strategy should be immune to cyclical volatility. As such, she allocates her investments consistently into a few predetermined categories and turns a blind eye to market upheavals. Financial rails, such as exchanges, wallets, and cross-chain bridges, are one example. These are the applications most likely to withstand business-cycle changes and become multi-cycle investments.
She also asserts that Bitcoin is on track to becoming a $1M asset over the next five years. While a 20x climb from today might sound too good to be true, this venture capitalist maintains that there is plenty more capital to flow into the world’s leading cryptocurrency.
On the other hand, she warns that most liquid crypto assets are overvalued even at today’s discount prices. Price action reflects the hype and narrative surrounding a project, rather than its users or underlying technology. This just means that you have to take short-term positions on strong-narrative tokens during the dips and remember to get out on time.
“Don’t buy into the religion of crypto. This market is still speculative, and major corrections are coming,” emphasized the UCLA lecturer.
Koffman is best known for her weekly newsletter catered to new and seasoned investors, MythOfMoney.com, as well as her crypto column in Forbes. Koffman started her career as a celebrity venture capitalist for Linkin Park and The Chainsmokers.
Despite recent volatility, billionaires and hedge fund managers continue to allocate to Bitcoin. Bill Miller recently went on record stating that over 50% of his net worth is currently in cryptocurrencies. Only time will tell if Bitcoin will recover or if investors are in for a prolonged bear market.