Bitcoin OG Willy Woo said Bitcoin is the “perfect asset” for the next 1,000 years, but says it won’t overtake the US dollar and gold unless it attracts significantly more capital.
“The thing is, you dont get to change the world unless this monetary asset — in my opinion, the perfect asset for the next thousand of years — does not get to do its job unless capital flows in and gets big enough to rival the US dollar,” the Bitcoin investor said at the Baltic Honeybadger conference in Riga, Latvia, on Sunday.
Bitcoin’s market cap currently sits at $2.42 trillion, less than 11% of gold’s $23 trillion market cap, while the US dollar money supply sits at $21.9 trillion.
Bitcoin treasury firms boost adoption, but with risks
Woo said there are at least two obstacles preventing Bitcoin from toward becoming a world reserve asset.
While Bitcoin treasury firms are accelerating adoption, little is known about how they structure their debt — a risk that could lead to a Bitcoin treasury bubble burst.
“No one’s really publicly looked deeply into the debt structuring, so I absolutely think the weak ones will blow up, and people can lose a lot of money,” Woo said, adding that altcoin treasuries are now practicing the same playbook that could “create another bubble.”
He expressed concern over how the Bitcoin treasury adoption will unfold should a significant market correction or bear market ensue:
“What happens to the bear market? Who’s swimming naked and how many coins get slapped back out into the market?”
Bitcoin at risk of nation-state meddling
Meanwhile, reliance on spot Bitcoin exchange-traded funds and pension funds for Bitcoin exposure — as opposed to self-custody — could concentrate more Bitcoin (BTC) within arm’s reach of nation-states, increasing the risk of a government-led rug-pull, he said.
Woo noted that while Bitcoin is attracting flows, the investors with the “money bags” aren’t opting to self-custody.
Instead, they are seeking exposure through spot Bitcoin ETFs or Bitcoin treasury companies like Strategy, Woo said, adding that pension funds are relying on institutional solutions like Coinbase Custody.
Related: Michael Saylor is not sweating the rise of Ethereum treasury companies
While these Bitcoin on-ramps open the floodgates for more capital, investors are taking on the risk of “being rugged at a nation-state level,” Woo said.
Woo was speaking alongside other panelists including Blockstream CEO Adam Back, host of What Bitcoin Did Danny Knowles, Bitcoin analyst Leon Wankum and Max Kei.
Kei, founder and CEO of Bitcoin self-custody platform Debifi, said self-custodying Bitcoin will spread progressively — from custodians like Coinbase to everyday businesses and finally to individuals.
“[The companies will] learn how to self-custody, and they’re going to do self-custody. Then there’s individuals within these companies [who will] learn about that. And then effectively it’s just going to spread out massively.”
Companies still the most ‘logical’ place for Bitcoin adoption
Despite Woo’s concerns about corporate Bitcoin adoption risks, Back said companies remain the most logical starting point for Bitcoin adoption.
Using Bitcoin’s expected future returns as a “hurdle rate” for investments, he said, “If a company can’t beat Bitcoin, they should close up shop and buy Bitcoin.”
He added that companies with solid core businesses can still thrive by integrating Bitcoin, stating that “It doesn’t have to be a pure play.”
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