„I’ve been giving the same price forecast for 10 years“ – Bitcoin Suisse founder Niklas Nikolajsen
The company Bitcoin Suisse has taken on a pioneering role when it comes to establishing Bitcoin in Switzerland and beyond. In the meantime, however, it is no longer just about Bitcoin, but about various digital assets and related services. From custody to staking to tokenisation, Bitcoin Suisse is increasingly becoming a multifaceted crypto-financial services provider. The company’s impressive growth trajectory has its origins in Niklas Nikolajsen. The Danish early adopter had Bitcoin Formula already recognised the potential behind Bitcoin in 2011 and subsequently founded Bitcoin Suisse in 2013. In the interview, he revealed to us whether Bitcoin will soon be used as an everyday means of payment, whether DeFi protocols will turn the banking world upside down and where he sees the Bitcoin price at the end of 2021.
Everywhere, including here, you read that institutional investors are pushing into the crypto market. Can you also observe this development among your clients in recent weeks and months?
Yes, the narrative about the influx of institutional investors is slowly coming true. At the end of 2017, at the peak of the Bitcoin hype, there was already a lot of interest from institutions. However, in the months that followed, in the bear market of 2018, this interest disappeared.
In December 2017, there were reports that even Goldman Sachs wanted to establish a crypto trading desk. Meanwhile, along with the falling market capitalisation, the interest of institutional investors also declined. It simply has to be said that the crypto market was too small in 2018/2019 from the perspective of institutions like JPMorgan and co. There was also no real use case for cryptocurrencies, other than as a store of value. With DeFi, however, new, experimental use cases came and continue to come up. But even these are not yet ready for the market today.
After the May 2020 halving, the situation changed. One could pretty well anticipate that Bitcoin would make a jump. However, the fact that the price rise happened so quickly surprised even us. The fact that institutions like MicroStrategy jumped in with large allocations was also incredible. Since halving, the market has been in a different world – crypto assets are now at a market capitalisation of one trillion US dollars. But it takes more than that; it takes working use cases for institutions to stay in the market for the long term.
Bitcoin Suisse has partnered with Wordline, the largest digital payment processor in Europe. Do you think that one day Bitcoin will really be used as a currency to pay for everyday things?
Or will Bitcoin stick to its narrative as digital gold – in the sense of an asset, but less as a currency?
That depends entirely on whether the transactions happen on-chain or off-chain. It is obvious: as a global means of payment, the base layer is too slow. The proverbial coffee purchase can be made on secondary solutions like the Lightning network, but not on the blockchain. However, if Lightning catches on, it is definitely possible that Bitcoin will mature into a currency. True, Lightning is not entirely „trustless“, as transactions are not immediately mapped on the blockchain. But it is a huge step forward from the current system. However, the market will decide which blockchain system will ultimately prevail. And that is a good thing.
There is hardly any interest left on bonds, especially government bonds. European government bonds in particular are practically without exception trading in negative territory. Can the staking of cryptocurrencies become an alternative in the future to generate regular interest income?
I don’t think the interest rate would be at zero per cent if there were no central bank intervention. In other words: We would never do a loan agreement where you lend me 1,000 euros and I give you back 900 euros in five years. Negative interest rates are something deeply unnatural. So we have to think, where does negative interest come from? If you look around, you find that the biggest debtors in the world are nation states. Although staking models are already alternatives, I don’t think they are ready to replace bonds as an alternative source of interest income.