Digital currencies ‘will be the name of the game going forward:’ Capital2Market President

Yahoo Finance’s Alexis Christoforous and Keith Bliss, Capital2Market President, discuss bitcoin outlook amid stimulus discussions.

Video Transcript

ALEXIS CHRISTOFOROUS: Let's stick with the markets now and bring in Keith Bliss. He is president of Capital2Market. Keith, always good to see you. I want to start with-- not with equities. I want to start with Bitcoin and the rise that we have been seeing. I know it's on your watchlist. What do you make of it, and have you started to invest in that space?

KEITH BLISS: I have invested in this space. Let me take it in reverse. I have invested in this space and not only Bitcoin, but also Ethereum and a couple of other alt coins. Sadly, when Janet Yellen said that she thought that Bitcoin and the other cryptocurrencies were still used by money launderers as a means for evading the law, I punted out of my Bitcoin. So I've missed this run-up.

But more importantly, I think what you're seeing in the marketplace is exactly why the white paper was written in the first place 12 years ago. I mean, when you see governments just printing money wantonly for a variety of reasons-- and I realize that we've been in the throes of a pandemic the last 12 to 15 months.

But the US actually contemplating adding on another $1.9 trillion in debt as a relief package, that just continues to debase the currency, continues to let investors and economists around the globe know that the paper currency is virtually worthless at this point in time. And therefore, digital currencies with a finite supply like Bitcoin, with an immutable transaction record that cannot be manipulated will be the name of the game going forward.

And furthermore with Tesla's announcement yesterday, or two days ago rather, that really accelerated the move in Bitcoin, you're now seeing-- continue to see companies of all stripes really accept that as a method of payment and store of value. And I think you'll continue to see that with not only Bitcoin, but Ethereum and some of the other larger coins out there.

ALEXIS CHRISTOFOROUS: So you think that we can actually see Bitcoin go mainstream in terms of consumer transactions, not just as another asset class for investors.

KEITH BLISS: Yeah, I do. And that was the main purpose of the creation of the technology, was, again, to give that immutable record keeping for transactions using a digital currency through the usage of transmittal of the economic value between the digital currency and a good or service of some point you're able to track exactly what the good or service is worth, while allowing increases or decreases in that value without the impact of governments just printing money and therefore debasing the currency. That was the whole notion of it.

And I think, you know, as technology continues to reduce the friction for merchants, as well as consumers, to use alternative forms of transmission of value and bartering of currency for a good or service as digital wallets become more mainstream, as companies figure out what they do with the digital currency when they actually receive it for payment for their good or service, you will see it be more mainstream.

I don't believe, by the way, like a lot of people believe, that Fiat currencies like the US dollar or the euro or the Chinese Yuan will go away. There'll still be an exchange mechanism there. But as people become more comfortable with the usage of digital currencies and how they can buy goods and services across a variety of merchants, and you also have the payment mechanisms, the technology in place, the transfer mechanisms, the money transmittal mechanisms that play into digital currencies, as well as Fiat currencies, then you will see it become more mainstream.

The only caveat I will say in my thesis [INAUDIBLE] variety of ways to manage their own economic outlook and their budgets. They won't have that ability in a truly digital currency world. So I'm sure they will either fight back, regulate it, try to regulate it, or get involved in other ways. And that may staunch the growth of it.

ALEXIS CHRISTOFOROUS: Yeah, speaking of payments in the payment industry, we're going to be speaking with the GM of ShopPay, which is Shopify's payment-- digital payment platform right now. We're going to speak with them a little later on. Going to talk to them about whether or not they would entertain handling Bitcoin.

But I want to talk to you about equities since we got you here, Keith, and take a look at the cannabis sector a little more closely. You heard Jared talking about Canopy Growth, now saying they expect to be profitable by 2022. What's your exposure to that space and your outlook?

KEITH BLISS: Well, actually, I've dealt with some cannabis companies from growers all the way to CBD producers and distributors on the backend throughout the value chain around cannabis. And I started doing business and running some projects for them, going all the way back to 2018.

And of course, back then, it was very limited in what you could do because we did not have a national law around cannabis, either on the non-psychoactive or the psychoactive piece of it, of course. So it was limited to state types of projects, whether we were in California or Oregon, or one of the other states that had fully legalized it.

What you're seeing, though, across what the-- what I'll call the mega cap cannabis companies, like [INAUDIBLE], like Canopy Growth, is, this was predicted with a Joe Biden win and, of course, with the Senate taking control, the Democrats actually owning the House, the Senate, and now the White House. The stage has been set for some sort of national cannabis legislation to go through.

And that's where we're seeing the run-up in these stocks. And I think it will continue. And by the way, I think you will see a national legislation around not only CBD products, which we saw initially with the Farm Bill of 2018, allowing that to go through across all 50 states, as long as there was less than 0.3% THC in the product, but now I think you will see something not only on the medicinal side for the psychoactive portion of cannabis, meaning marijuana, in the states.

You'll see it, not only for medicinal, but you also see it for recreational across the 50 states. And of course, that plays right in to a company like Canopy Growth, where they have been acquiring real assets in the United States in anticipation of this happening. And I think with a Joe Biden presidency, again, and the Democrats controlling the House and the Senate, you're going to see that sooner rather than later.

ALEXIS CHRISTOFOROUS: Hey, Keith, before I let you go, real quick, talk to me about volatility because I've seen the CBOE index, that volatility index, come down. It was at 37 at the end of January. It's somewhere around 20, 22 right now. We're having some quiet days here. Do you think volatility is going to return any time soon?

KEITH BLISS: Well I don't think it's going to spike back up to the 37, 38, or even 40 range anytime soon. And this is typical when you're coming towards the tail end of an earnings season, when people are really digesting what they've heard from the companies and remodeling what they see for the next 12 months. Listen, I think we're stuck in a band for the VIX between 20 and 40. But I don't think-- again, we won't see 40 anytime soon.

But remember, the VIX moves in the opposite direction of the markets. And as long as the equity markets, the cash markets remain rather frothy and trading near their all-time highs, you're going to see the VIX continue to have pressure for it to come down. Volatility is with us, though, and you're seeing it in a variety of ways and will continue to be and will remain with us, primarily because the old way of us analyzing the market seems to have gone away, especially with the creation of a variety of channels for people to access the market, which I think is a good thing, by the way. But you really can't examine it in the old models, so we will have volatility stick with us for a while.

ALEXIS CHRISTOFOROUS: All right. Keith Bliss, president of Capital2Market, thanks for being with us.