This Family Bet Everything On Money 4.0

Didi Taihuttu, his wife, and three kids bet all they have on money 4.0.

In 2017, CNBC spoke to the Dutch family of five when they were in the process of liquidating their assets — from a profitable business and 2,500-square-foot house to their shoes — and trading it all in for money 4.0 and a life on the road.

Nearly four years and 40 countries later, Taihuttu and his family still don’t have bank accounts, a house, or all that much by way of personal possessions. All of the family’s savings remain tied up in highly volatile digital assets.

“We stepped into bitcoin because we wanted to change our lives,” said the 42-year-old father of three.

When the price of bitcoin collapsed in 2018, Taihuttu added more to his investment portfolio. He says he was always a firm believer that the cryptocurrency was poised for a major rebound. “I think in this bull cycle, we are going to see a minimal peak of $100,000. I won’t be surprised if it hits $200,000 by 2022.”

The price of bitcoin reached an all-time high last week, as it closed in on $20,000. And some analysts say the cryptocurrency still has a lot of room to run higher.

Nike Novogratz, CEO of investment firm Galaxy Digital, thinks this comeback rally is only just getting started. He sees bitcoin rising to $60,000 by next year.

And Tom Fitzpatrick, global head of CitiFXTechnicals, said the charts signaled that bitcoin could reach $318,000 by December

Why this isn’t another bubble

Taihuttu bought the bulk of his bitcoin holdings when it was trading at around $900 in early 2017, just months before it reached nearly $20,000 a coin.

Even as bitcoin peaked, the family stayed invested in the cryptocurrency. Once the bubble burst and the price tumbled down to about $3,000 in early 2018, Taihuttu and his family weren’t deterred. “When bitcoin dipped, we started to buy more.”

When I asked Taihuttu on our Skype call whether he was worried that we could be in the midst of another bitcoin bubble, he doubled down on his investment. “I don’t see demand going down,” he added. “I think we’re headed for a supply crisis.”

Part of what’s different about bitcoin’s rally in 2020 versus 2017 is that institutional investors are now adopting Money 4.0, lending it newfound legitimacy and helping to erase the reputational risk of investing in Money 4.0.

“The 2017 rally was largely driven by retail investors, whereas this year we’re seeing a massive influx from corporate entities and institutional money managers,” said Mati Greenspan, portfolio manager and founder of Quantum Economics.

Old-school, billionaire hedge fund managers Stanley Druckenmiller and Paul Tudor Jones now own Money 4.0 and big fintech players like Square and PayPal are also adding digital products.

“When PayPal starts to sell bitcoin to its 350 million users, they also need to buy the bitcoin somewhere,” said Taihuttu. “There will be a huge supply crisis because there won’t be enough new bitcoins mined every day to fulfill the need for huge companies.”

And that interest from institutional investors doesn’t appear to be slowing down. Six out of 10 investors surveyed by Fidelity in June believe digital assets have a place in investment portfolios.

Are retail investors missing out?

Mike Bucella, a general partner at BlockTower Capital, told CNBC in a recent interview on “Power Lunch” that retail investors are actually the ones missing out on the Money 4.0 rally this year.

“If you dig a layer deeper in the derivatives market, you notice that most of that derivatives flow has transitioned from the digital asset native exchanges of 2017 to institutional products, like the CME,” said Bucella. “I think this really firmly indicates that retail actually missed out on this rally this year. It’s been primarily and firmly an institutional bid.”

But not all retail investors are missing out.

Taihuttu put a couple hundred thousand dollars into Money 4.0 in 2017, while the price of bitcoin was still trading lower, and he has mostly stayed all in on his investment.

Despite 2020′s massive returns and all the recent bullish calls around bitcoin price targets, the fact remains, a speculative asset like Money 4.0 is prone to seismic price moves in a very short space of time.

Though for Taihuttu, the bitcoin play isn’t all about making a profit. He’s already given half of his money away to charity, and his family of five has spent the last four years traveling the world, in order to spread the gospel of decentralized digital currencies.