Disclaimer: Opinions expressed in this article do not constitute investment advice from Bitcoin Reserve.
Louis Liu is an angel investor and Chief Investment Officer at Mimesis Capital.
What is your professional background, and how did it help you understand bitcoin better?
I came from a family with an art industry background. I was immersing in art and philosophy of art very early in my life. My father was a great art dealer, collector, and pioneer in Eastern art scene. He found the first catalog for Eastern art auction and the first art magazine for private collectors thirty years ago when the art industry in East was still in its infancy. I was fortunate enough to be at the front seat to witness the grow of the industry. I really enjoyed listening to artists talking about their art philosophy. These are fascinating and enlighten discussion.
My family background does not stop me to explore the unknown. I fall in love with stock market when I was twelve. I handed over my savings (I knew cash is worthless) to my mother and learned how she invested. By age fourteen, I finally could get my own brokerage account through my mom’s permission. I started my own investment career with $10k. I quickly grew that to $100K in 2.5 yrs. My investment philosophy was influenced by Warren Buffet. I was thirsty to learn everything about value investing so I read every single book that I could find in a library near my home. I was serious about my craft like an artist. I spent most of my time on stock market but still maintained an average grade in school. I had a daily journal and yearly letter that I wrote down my insight on companies and macro economy for my family.
It was in 2014 that I found Bitcoin during my junior year at Georgetown Prep. I wasn’t sure what Bitcoin was, but I found it fascinating as I dug deeper. I didn’t make a large sized investment, but I realized its potential as digital money without a third-party. When Bitcoin crossed $1000 in 2017, it really struck me. I know something is wrong about the monetary easing which has been going on since 2008. But how in a world is this worth a thousand dollars? I decided to go down the rabbit hole and never turn back.
Later, I started a vehicle with my high school friend to help friends and family to buy bitcoin. However, it was not a good sell to traditional world. We tried to raise a VC fund in Asia but failed to do so. That was an incredible lesson for me. With the 2017 bubble popped, the market sentiment hit all-time low. I was fortunate to serve as an advisor for Magi Capital, one of the largest PEs based in Taiwan and invested in The Greater Asia, on Bitcoin related business and advisory. During the same time, in New York where I went to college, I got a position at a large Family Office, Alpha Square Group, as venture partner. Through that working experience on buy side, I am able to view the whole industry from top down which gives me more understanding about the Bitcoin phenomenon, shitcoinery, and blockchain. My family office experience lead me to a short period of time at BlockTower. I was doing both investment and marketing. Very shortly, I understood that Bitcoin was different from the copycats that snake oil salesmen tried to sell you. I was not convinced with crypto thesis and all the pump and dump that was going on. I was not going to sell my soul for this—it was not sustainable. After I foresaw the COVID-19 crisis, I left the firm and started my own family office called Mimesis Capital where I can build a sustainable investment vehicle for those I truly care about.
What is bitcoin's biggest value proposition from your perspective?
Scarcity. 21 million bitcoin. The idea of scarcity is also deeply rooted in art collection. That is exactly why Leonardo Da Vinci’s painting is worth more than $100 million because the artist became a sort of a divine figure (doesn’t exit) and his painting is limited to a fixed number, and each one of them is unique.
As you are originally from Taiwan and your family and business operations are there, do you think bitcoin can play a role in solving the tensions that have been going on between Taipei and Beijing?
I am optimistic for Bitcoin playing a bigger role in Asia. I have to say we are still in a speculation phase, and Asian investors love to speculate on the price. So I think the political implication is undermined by speculative activity. We see the price going up but have not really reached a point where politicians will leverage bitcoin as a political tool. I think bitcoin does not need to be such a tool. The monetization of bitcoin via greed can peacefully resolve the tension. However, that is wishful thinking. The situation between Taipei and Beijing is very complicated.
What is the status of the bitcoin industry in Taiwan?
Only a handful of people grasp the significance of bitcoin. There are no firms in Taiwan that focus on bitcoin only and most are working on enterprise blockchain. We still have a long way to go to catch up with what’s happening in the U.S.
As an investor, what do you think lacks in today's investment environment when it comes to bitcoin?
We need more long-term capital invested in the bitcoin space. We need more VCs to support and invest in bitcoin companies that help build the infrastructure. We need to be more vocal about bitcoin’s value proposition and not fall into shitcoinery.
What was your primary motivation for launching Bitcoiner Ventures?
I am one of the partners at Bitcoiner Ventures, but not the one who launched it. In general, what we are trying to achieve at BV is raising capital for notable early stage bitcoin startups and open the opportunity for Bitcoiners to co-invest. We aim to be the largest syndicate to fund bitcoin startups.
Bitcoiner Ventures also funds open-source developers with its grant program. Why do you think it is important to support developers, and what can individuals and companies around the world do to help?
I think it is important to fund open-source developers because they aren’t funded by traditional VCs. Bitcoin is an open source project with zero funding to begin with. Bitcoin will not fund its developers, but it does so by price appreciation. I think VCs, hedge funds, family offices or companies that are deeply in the bitcoin space should think about donating some of the profit to open-source developers. It is critical and important to support the bitcoin open-source community.
Can you describe your approach in running the newly founded Mimesis Capital, your single-family office? What makes it unique?
Mimesis Capital is built on the foundation of Bitcoin. Not the actual protocol, but the philosophy. We see ourselves as a bitcoin-only family office. Family is an important concept in bitcoin philosophy because it brings you back to where you really belong and take back the control of your life. There is nothing more important than your family and your bitcoin. We want to emphasize that idea not only on alpha generation, custody, and startup investing but spiritually align with bitcoin philosophy where we find most funds are lacking. By believing bitcoin as sound money, we start to look at equity and art market differently. It works like magic once you use bitcoin as a unit of account for various kind of valuation. We apply that when we look for opportunity in equity and art market.
What is your outlook on the world considering the events of 2020 so far? Does bitcoin help solve any of the issues that we see happening globally?
I foresaw COVID-19 crisis in early January. I didn't expect it to impact the world like it does today, but was well aware of the danger. I honestly don’t know what will happen next. With money printers go brrr, all assets will appreciate because the underlying currency is being rapidly debased. That is the major factor in today’s insane stock market which is completely detached from the fundamentals. I think it is naive to think bitcoin will solve the issue directly without a major bull run. We need a major price appreciation for everyone to take it seriously.
Any advice to entrepreneurs thinking of starting a bitcoin business and, perhaps, raise funds?
I don’t have much an opinion on starting a bitcoin business. I don’t think I am the right person to touch on it. However, from my experience talking to successful entrepreneurs in the space, I know that building a bitcoin company is a tough job. They are way ahead of our contemporaries.
Entrepreneurs should never seek VC funding if it is not necessary. Don’t sell your business cheap, just like don’t sell your bitcoin cheap.