'If Pokémon cards can go up, I'm pretty sure Bitcoin will as well': Finder founder Fred Schebesta

From the Merge and Mt. Gox, to the halving, bear-market building and Aussies punching above their weight, Finder.com.au co-founder Fred Schebesta gives Stockhead his current bead on the crypto industry.

Hey, Fred. It’s been more than a year since Stockhead last caught up with you. How are things going and how are you feeling about Bitcoin and crypto right now?

Great thanks. And I’m still feeling very bullish about it, but it’s hard to look at Bitcoin and crypto on the small scale. I’m interested in it on a pretty zoomed-out, wide timeline.

I really think the May 2024 Bitcoin halving will be a very interesting time, so I’m keen to see what happens then. I think after this next 18 to 24 months, you’ll see some pretty good price appreciation.

Guessing you’re a big believer in Bitcoin’s four-year halving cycles as they relate to bull and bear markets?

Yeah. You know, we’re closing in towards that, though obviously not in’ 22 or ’23. But I think it’s just such a significant event. A major cutting of the supply is a very big deal. I think we’ll start to see, again, a much higher-priced Bitcoin, higher transaction fees, and then a bigger and bigger push towards stablecoins, and decentralised coins in some way, shape or form.

What about all the negative narratives affecting crypto and investor/trader mindsets this year? That is, the US Fed’s inflation combatting, the Mt.Gox Bitcoin release (when it happens)…

Yeah, they’re factors and there’s a lot of uncertainty right now – it’s all playing within a cycle where there’s good and bad news. I remember last time it was China banning crypto with the whole fear around Bitcoin mining potentially going to stop. Well, it didn’t eventuate and swathes of governments didn’t ban crypto. There are always good and bad narratives to build and large amounts of speculation, because it’s a very nascent and emerging industry.

I do think if the internet were to be developed again from scratch, you would have crypto installed from the start. We’re just slowly edging towards that integration, Web3 reality. And I think what you’ve got, as well, is with that exchange of value, you’ve got a new interesting market where it’s a 24/7 market.

A 24/7 market is right. And do you think it’s largely tied to the fate of the stock market?

Well I actually think what’s happening right now, which I think is very interesting, is it’s almost like Bitcoin is a proxy for the Nasdaq.

If Bitcoin and Ethereum move over the weekend, and the Nasdaq comes out on the Monday and moves, it’s almost like you know where tech is going to go, because crypto is almost a bit of a proxy right now for it. There are obviously other movements in crypto but it does feel like there’s some sort of beta correlation going on there.

‘The Merge will be a time of great volatility’

Are you still big on Ethereum and DeFi?

Absolutely. I think DeFi is here to stay, I think it’s amazing and it will continue on. I particularly think there’s going to be more rebirth and green shoots coming out after this CeFi contagion. [Fred is talking about the Terra LUNA-induced meltdown of various crypto-lending players such as Celsius, Voyager and BlockFi.]

I think those events will partly give rise to the rebirth of DeFi and CeFi, with green shoots really coming out of this. And new products as well. New standards and new innovations.

It’s like a when a bushfire goes through, and new growth appears on the other side of it. I feel like that’s where we’re at with DeFi and CeFi.

And how about Ethereum’s impending Merge?

Most of all, I think the Merge will be a time of great volatility.

It’s happening around September 16 and people are sort of watching and waiting right now. There’s a fair bit of uncertainty because the price of ETH went up dramatically, and then it pulled back heavily again.

Where do you think the uncertainty stems from, other than fluctuating price?

You’ve got different views between the miners, who want to stick with a proof-of-work mining protocol, and then what the rest of the people want with staking. And so you’re going to end up with two chains.

Right now, a massive amount of miners and pools are holding on to their Ethereum, and I think that’s because they know there’s going to be a vote against this merger, where Ethreum will then fork and you’ll have two chains. It’s how Ethereum Classic formed and so I think we’ll have something of a repeat of that.

Do you think the potential new PoW chain will carry some value?

There will definitely be some value. There will be people who’ll still continue to use it. But over time, what happens to it? Again, it could be a bit of an Ethereum Classic situation in terms of some value, some usage.

Plenty of crypto analysts on Twitter and YouTube seem to think The Merge upgrade will be a “sell-the-news” event with a potential dump? Thoughts?

Like I said, prepare for volatility. But really, the main thing I think will happen is, it’ll just go ahead and you’ll get two coins. And I think there’s a play in that. Like Bitcoin Cash. When Bitcoin forked and Bitcoin Cash formed, all the Bitcoin holders got the BCH token. I’m pretty sure all the Ethereum holders got Ethereum Classic as well.

‘Bitcoin is holding up very well’

Back when you spoke with us last time, you said you’d be the guy buying up cryptos in the next bear market… is that the case now?

I think the main thing I want to mention with regard to anyone buying or selling at the moment, is that conditions are still a bit unclear. I think there’s a lot of uncertainty right now and we could still see another leg down.

And that’s because of some of the things we’ve mentioned – inflation, rising interest rates, unemployment and things like that. But there is still a lot of exuberance, and for now Bitcoin is still holding up very well.

Have you got a “bottoming out” target for Bitcoin?

That’s just a very tough one. I thought we were going to see 17 [US$17k] again. But we seem to be holding pretty strong.

What about the Mt. Gox fears… how much stock do you put in that?

Again, it’s hard to know for sure. I think it could see quite a bit of liquidity come on the market – there was a wallet about a week ago that sold 10,000 Bitcoin linked to the Mt. Gox hack, for instance. But we don’t have all the information on this yet.

But overall, Bitcoin is holding up amid quite an uncertain time. So we could be at the bottom… or it’s somewhere nearer to around 17. It’s just very, very hard to tell right now.

How about your bull-case prediction then?

I think when the market shifts, and expectations start getting a bit more positive that things are going to get better, that’s when I think you’ll see a very big change and a very strong crypto market again.

A lot of people are building a lot of amazing things right now. You’ve got still huge amounts of construction and problem-solving going on. Huge, huge amounts of money have been raised, crypto is still growing, and the technology’s improving.

Nothing’s changed in that sense. In fact, it’s probably become more intense in terms of building. And that’s a very bullish sign in a big macro sense. So I’m bullish on the space – very bullish.

Finder’s 6.01% staking yield offer

Speaking of building… what’s Finder got in terms of updates?

Yeah, we’re launching a whole bunch of new coins, that you’ll be able to trade through the Finder app. It’s something like 70 more coins.

Are you seeing some growth in user base with the app?

Oh yeah, people keep coming in. And Finder is absolutely about servicing those who are completely new to crypto. We keep it very basic, the features are very simple to use, so new-to-crypto is our market.

And also, we’ve just raised our yield-earning rate to 6.01% for the next two months. [Note: it’s a bonus 2% on top of the standard 4.01% for those holding more than 5,000 of the stablecoin TAUD in Finder Earn.]

That’s staking for passive yield, right?

That’s right, it’s our Earn product. We’ve got some other products in the works coming as well. Some peer-to-peer crypto transfer products. And we’ve been helping to incubate the NFT gaming platform Balthazar, too, which is doing really well with a second round of funding.

Are you bullish on NFT gaming, then?

Yeah, I really think gaming is a natural fit between crypto to crypto. Games already have in-game currencies, but what crypto gaming does is it decentralises it and allows people to own and take control of assets in games and tokens.

It’s a very interesting and disruptive model, especially for the players, who put in hundred of hours into these games who can then have something of value to show for their efforts. I think it’s a big factor.

Aussies punch above their weight in global crypto space

We’ll let you go in a sec, Fred, but just quickly, do you have any particular feelings about the crypto scene in Australia and where it’s at? Do you think the regulatory rumblings from the Albo government sound positive at all?

I think it’s a very hard task for them to wrap their heads around and it’s going to take time. It’s very easy to just sweep in and regulate something and kill it. And because it’s an industry that’s going to create a lot of jobs, they won’t want to do that. I think you really want to fuel innovation as a government.

But I don’t see a lot of movement on regulations happening quickly, and that’s okay. It’s a good time to build.

As for crypto in Australia, there’s a LOT of innovation here. Australia is punching well above its weight. There are cool games being built… and I think Animoca Brands, which is huge, is actually an Australian-founded company – it was on the ASX for a while. Synthetix is Australian founded, did very well and still carries on. There are a lot of cool new projects developing here.

Any parting thoughts?

Just that, marketwise, it’s tough to tell which way it’s heading in the short term. But I am long-term very bullish. Always. Particularly for Bitcoin, and that’s because scarcity is becoming even harder and harder to achieve in this world. And I think that’s why, you know, Pokémon cards are going crazy right now. The price for some of those are through the roof. Hundreds of thousands of dollars.

So if Pokémon cards can go up, I’m pretty sure Bitcoin will as well.

The views, information, or opinions expressed in the interview in this article are solely those of the interviewee and do not represent the views of Stockhead.

Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article.