After witnessing the birth of the internet at technology-focused investment bank Hambrecht & Quist, JP Thieriot found bitcoin — the magic internet money — in his native Argentina.
Following the bust of the dot-com boom, Thieriot had the good fortune of investing in the Argentine cattle and land industries during the commodities supercycle of the 2000s.
"What happened is we ended up with a lot of American investor money in Argentina," Thieriot recalled in an interview. "Argentina then started to sour as it does most of the time, and we were having a real hard time getting our investors' money out of the country."
As he started to cast around for a solution, he encountered bitcoin, which was trading at around $8 at the time.
"I didn't have the conviction to take tens of millions of investor dollars that had committed to an investment in agriculture and cattle, and put it into bitcoin," he said. "Obviously, that would have been the best financial decision ever made."
In early 2013, a tech entrepreneur whom he had worked with flew to Argentina and gave him a talk about bitcoin as "the second coming of the internet."
"We spent three days in an apartment talking," Thieriot said, "and he convinced me sufficiently that I sold everything in Argentina for whatever the bid was at the moment."
From there, the duo started Bitreserve, which in 2015 was renamed Uphold, a crypto brokerage platform that aggregates prices from 15 liquidity venues.
"We are hooked into all the major exchanges," he said. "As a consequence, I think we aggregate greater liquidity and frankly better executions than any one exchange."
Bitcoin to $85,000 in the coming weeks
Bitcoin reached a new record high by surging past $66,000 on Wednesday.
While many analysts have attributed the price rally to the massive demand for and successful launch of the first futures-based bitcoin ETF, Thieriot thinks that the cryptocurrency's short-term trading outlook is intrinsically tied to the equities market.
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"If the equity market continues to climb, it creates the possibility for a blow-off top for bitcoin," he said. "Both of them are votes in the direction of saying 'we do not trust the central bankers to keep a lid on inflation.'"
Billionaire trader Paul Tudor Jones told CNBC on Wednesday that inflation is "probably the single biggest threat" to financial markets and society in general. The hedge fund titan also said that stocks could fall if the Fed tightens monetary policy. The so-called tapering process where the Fed begins to reduce its monthly pace of asset purchases could start in mid-November.
"If there's a sell-off in equities, it will probably commit bitcoin to be range-bound in the high $50ks and $60ks," Thieriot said. "If the equity market, as a response to the inflation story, continues its trend, then I think bitcoin will take the leap from the mid and high $60ks to $85,000 before the end of the year."
5 altcoins with enormous potential
So far, Uphold has listed just 36 cryptocurrencies, which Thieriot said is a result of the firm's listing committee's "selective criteria."
In choosing altcoins that offer "enormous potential," he looks for good projects that are backed by strong underlying technology. That's why he is a fan of layer-one protocols Solana (SOL) and Polkadot (DOT).
Solana is a decentralized blockchain that achieves consensus via a hybrid of proof-of-history and proof-of-stake models. It is one of the fastest and lowest-cost blockchains with over 400 projects spanning decentralized finance, non-fungible tokens, and Web3 in its ecosystem. The network claims to process over 50,000 transactions per second. Its SOL token skyrocketed 10,897% in the past year, according to CoinGecko.
Polkadot was created in 2016 by Ethereum co-founder Gavin Wood. The so-called "internet of blockchains" is a protocol that aims to enable different public and private blockchains to communicate with each other.
Polkadot said it will go through a key development in November where its parachains will link to external blockchains such as bitcoin and ethereum. The announcement turbocharged its native token, which surged 71% in the past month.
Thieriot also likes Helium (HNT), which draws on a decentralized network of individually owned hotspots to connect low-powered internet of things devices to the internet. These hotspots typically generate enough connection for low-powered devices such as air quality sensors, tracking sensors for scooters, and pet trackers to connect to the internet. Helium mining has taken off especially among retail investors.
"On a shared economy basis, if they are able to reconstruct global mobile phone infrastructure with a bunch of mining grassroots participants," he said, " I don't know what the upward bound is for that, but it would be huge."
He finds projects such as Sandbox (SAND), a decentralized community-owned virtual world that incorporates play-to-earn games and NFTs, equally fascinating.
"Sandbox is building a big metaverse and is selling meta real estate. We work with some gaming companies that have eight to 10 million monthly active users and their in-game economies are doing 15 million transactions a month," he said. "So if it catches on as a game or a pastime, then that potentiality is enormous."
He also shared a newly launched layer-one project called Casper Network (CSPR), which is an open-source proof-of-stake blockchain network that aims to primarily target enterprises and developers.
