Interview - Marc Bernegger (Maximon)

“The collateralised use of Bitcoin is becoming a major trend”

It's well known that Switzerland is a country populated by the crypto-curious: study results vary, but estimations of digital asset investor rates range from 11% to 23%, which ranks the nation amongst the highest in Europe.

Marc Bernegger is one of them, and has also contributed highly to democratising the concept in the country: after purchasing his first bitcoin in 2012, he launched several initiatives related to crypto, such as the Crypto Finance Group, later sold to Deutsche Börse. Marc's persona is interesting for anyone interested in Bitcoin: rare are the people as well connected as him and yet, he remains easily accessible. He can tell stories about the entire Crypto Valley—the territory hosting the most crypto foundations and companies in Europe, or perhaps the world, between Zug and Zurich—that he has seen being built. He met Ethereum founders before Ethereum was founded, and he also knows well the Tether tree, set up in Lugano, two hours by train from Zurich.

Nowadays, Marc Bernegger's main interest lies in the longevity domain, in which he invests through his fund Maximon.

On a rainy day in Zurich, Marc joined us in a hotel's cinema close to Zürich Hauptbahnhof, the main train station. CoinShares' The Node Magazine wanted to investigate the connections between Bitcoin and longevity.

The Node: Can you explain your journey into Bitcoin? 

Marc Bernegger: I was always interested in emerging technologies. I got my first computer with a modem when I was in high school, and started my first internet business in 1999 as a high school student. Back then, the internet was also something strange, unknown and unserious.

I was always intrigued to focus on new and emerging technologies. When I looked into what the future of money to exchange value could look like based on technology, I got in touch with the whitepaper of Satoshi Nakamoto for the first time in 2011 and was fascinated. But there were also other initiatives, like e-money and other things.

In 2012, when I did some more research, I decided to buy my first Bitcoin—less as an investment, naturally, because not too many people back then had already the anticipation of what evolved out of it. But that was, for me, the first real interaction. Meeting more and more people in this early Bitcoin community made me more and more convinced that it's more than just an interesting idea.

Why did you understand at that time that it could be a store of value instead of just a medium of exchange?

At that time, it was like digital cash based on the whitepaper—still one of the core ideas. As a tech entrepreneur who built and exited two internet companies where we digitized existing value chains, I saw how the digital revolution and TCP/IP protocol changed new ways of doing business. This paradigm shift was naturally also happening in banking and financial services.

When you look at the core of Bitcoin, limited supply and the increased demand over time, and understanding why gold in the monetary history of humans became a store of value over many thousand of years, it became more and more obvious. In a world which becomes more and more digitized, there also needs to be something digital—digital gold. By digitising store of value, Bitcoin had just the perfect infrastructure and concept behind it.

How was Bitcoin perceived in Switzerland at that time?

In the very early days, it was a very small community. I remember Niklas Nikolajsen, who founded Bitcoin Suisse, was literally the first person I had regular exchanges about the topic with, and Luzius Meisser, who started the Bitcoin Association. I think back in 2013, we already had an email thread where we thought about doing a Bitcoin ETF in Switzerland, a little bit ahead of the time.

One of the biggest triggers was when Ethereum launched out of Switzerland. Vitalik Buterin lived here, his office is still in Zug. That was maybe the kickoff where it became a business, because before we had two of the first Bitcoin Core developers who started in Zurich. There was already the technology and the mindset of a decentralized government here in Switzerland.

The trigger to really see the business potential came after the Bitcoin time frame, and naturally, then this term of the Crypto Valley Switzerland, the Crypto Nation Switzerland evolved. Especially around 2017-2019, Switzerland was like the epicenter of the whole industry. Unfortunately, I think that changed in recent years, but back then, Switzerland was maybe the leading jurisdiction.

Could you explain why Switzerland has been that open-minded to welcome crypto companies and crypto foundations?

There are a few reasons. When Ethereum looked into where to set up the foundation, they realized that in Switzerland with the foundation law and the decentralized infrastructure from a government and legal perspective, you have what you need for the regulatory framework to start a project. There were a few very smart lawyers who understood the potential—back then, it was just a few crazy geeks wanting to change the world.

Switzerland is a direct democracy and decentralized system with direct democracy votes, this is maybe to a certain extent what blockchain in a digitized way wants to achieve. Many people say Switzerland is, even maybe annoying, a little bit like the old fashioned footprint or example of how blockchain would structure a government or a country.

The liberal libertarian approach is also part of the history in Switzerland. We never had aristocratic leaders, never had kings or queens. It was always more like a foundation by the people till today. That's maybe also by design endorsing some of these blockchain-based business models.

It's been over a decade since you first purchased Bitcoin. What do you think of it today?

Many things have changed. People are always referring to the price, and the price is to a certain extent a validation of the value and the impact. But unrelated to the price, what was a crazy idea of a few futuristic technologists—maybe not even realizing how far this impact could go—has now become mainstream.

We have the biggest institutions, the most powerful individuals looking at Bitcoin as something which is maybe digital gold or a digital long term store of value. This is fascinating. Avoiding all the noise on social media where some people who came many years later claim they already knew what's going to happen—even some of the earliest Bitcoin people are, to a certain extent, surprised to see that this crazy idea really became reality.

If you really think through, this non-governmental backed, technology, computer-driven approach of a long term store of value is something which is needed in a digital world, especially now moving maybe in an accelerated phase with AI and everything. It will be interesting if Bitcoin is ultimately also challenging the existing fiat and government-backed monetary system, because that was originally one of the elements. Maybe only in a far, far future, and now literally just 15 years later, we see some of these crazy ideas become reality.

What do you think of the rest of the industry? Would you consider yourself a Bitcoin maximalist?

That's a good question. In the beginning, there was not even the term because there was nothing but Bitcoin. I met all the Ethereum founders before they even started and was fascinated by the idea to build something additional. But for me, it was always something different, not the next Bitcoin, but really something different.

I follow naturally what happens besides Bitcoin, but from a Bitcoin maximalist perspective, it's unrelated to a certain extent. Which doesn't mean it's not relevant. But to be honest, just from a very pragmatic perspective, I don't see too many real world use cases till today where everything after Bitcoin really had an impact on everyday life.

If you go on the street and talk to people, unrelated to the price and where they're trading or speculating, what really impacts the life of people—I don't see many things after Bitcoin which really have a tangible outcome. This automatically leads to the conclusion that besides Bitcoin today, I don't see many interesting fields where I would like to spend my time on.

But that might change. Maybe it takes more time. Maybe it's just something unrelated to the idea of Bitcoin, because this blockchain-based approach could have interesting use cases, but maybe they should be unrelated to tokens and speculation and really more focused on technology. Unfortunately, that's maybe the most disadvantaged element of crypto—that it's always related to money and trading and speculation and less about technology.

Among your other interest fields, you shifted to longevity. What does longevity mean to you?

For me, it's ultimately increasing the quality of life. That's first: better health. Not ultimately live 4,000 years, which is more like science fiction. But naturally, I think we will all live far longer than you would expect. Ultimately, it's really about the quality of life, which also starts today—not just when you're already old and sick.

For me, it's similar to my other entrepreneurial activities. In 1999, my first internet business, then Bitcoin a few years later. Longevity was also something I've been personally following since 2009 when I met Aubrey de Grey at a conference. He's a bit like the godfather of longevity. Already back then, he talked about the first human who will live for a thousand years is already born, which literally left many people leaving the room.

I was fascinated and approached him, and via him realized that many of these crazy ideas in the last few years have become more and more tangible. When we sold Crypto Finance Group together with my partner and co-founder, we both had this common shared interest in longevity and decided to fully focus on that. After literally ten years of internet and then ten years of  Bitcoin, I'm now starting my third topic with longevity since five years now.

Early on, crypto was often compared to scams, and it can be the same with longevity startups. How should we find the most interesting cases with longevity? What are the most surprising or interesting fields to look at?

You're completely right. Honestly, with the internet, it was also the same. When you started in 1999, it was really drug trafficking, porn, all these unserious things. With Bitcoin, actually the same. With longevity, you have a lot of snake oil—everybody can use the term longevity, it's not based on any foundation.

What's important is that you have to somehow focus on science. That's maybe a difference to other industries. There's science behind very boring biology, stem cells. You can't just make some things up, and ideally you can somehow measure and track it and prove it. There it becomes blurry, starting from supplements and longevity treatments, what really has an impact, not just today but long term?

You also have to sell your products and services. If it's just pure science, you won't build a successful company. But you always have to look at what's the outcome and ideally you can measure and track it. This is becoming more and more a necessity in the industry. Five, ten years ago it was just a nice topic to talk about—live longer and healthier and forever—but now it's at the stage where everybody expects some tangible results.

I know that Brian Armstrong, the CEO of Coinbase, also invested into a longevity startup. Is there a connection between early successful crypto investors and this longevity thesis?

You have Vitalik Buterin supporting a lot of initiatives. You have a few early Bitcoin and crypto people being very active in the field, and also a lot of crypto money going into longevity research.

One of the common elements is maybe not too different than in my case, some of the earliest Bitcoin people are just interested in questioning the status quo. Maybe also building companies or investing in companies in very early phases which really have moonshot disruptive potential.

What Bitcoin was 15 years ago—naturally you have other exciting topics: robotics, space, AI. Maybe that's already at a different stage, but longevity still will be the ultimate frontier and dream. You can have all the bitcoin and all the things you can buy, but as soon as you get sick, everything loses value. Naturally health is more valuable than everything you can buy—health is the new wealth.

Especially if you have a certain level of wealth, then ultimately you will fully focus on your health and ideally extend your health and life because you want to enjoy your life as long as possible, maybe also together with your family and kids and grandkids. Many people and studies show they would give away the majority of all their money if they could just have a longer, healthier life.

Is there a connection or convergence between long term durable currencies like Bitcoin or gold, and durable and healthy human beings?

It's a good question. Ultimately it's about sustainability, long term perspective. If you only live on a short term speculation or short term lifestyle, that's okay, but naturally it has some influence on the long term effect.

With longevity and with Bitcoin, you have short term developments, but the core is still having a long term impact. It has this long term sustainable perspective. Unrelated to gold nuggets from asteroids coming to Earth and destroying the price of gold, Bitcoin has a mathematical limitation in the supply.

I wouldn't say we are now going for immortality, that's still a different field and topic, but naturally to have a sustainable long term perspective on your life is maybe going into the same direction. It has the same ethos as many of the long term Bitcoin believers.

What is the most overlooked investment thesis right now according to you, in crypto or in the longevity field?

In crypto, as soon as you reach the stage where Bitcoin becomes a trusted long term store of value, it will be used as collateral and an asset you can literally use to build your house and build generational wealth on it, without selling it.

That's already happening, but it's still in its infancy. Why should anybody today, if you believe in the long term value of Bitcoin, sell their Bitcoin just because you buy something else? This is becoming a big demand, especially for the next generation—that they can stick to their belief that they want to keep their Bitcoin but still use it to cover their short term expenses.

This collateralized use of Bitcoin is becoming a huge mega trend. Nothing completely new, but still in a very early stage. It's essential because this will generate an even more fixed or increased demand—you have more and more people who are really hodling forever.

In longevity, the convergence of moonshot approaches that need 10-15 years to what you can already do today. We will see so many indications, ultimately by using AI, of what works and what doesn't. Development times will shrink dramatically—not only for longevity, but in health and drug development in general. A huge increase in speed.

All these models which anticipate it will take 15-20 years until we move from sick care to preventive care health system, they by far underestimate the acceleration of developments in the coming years. This is something for longevity and health-related fields where we see tremendous increase in speed, which naturally also changes the metrics of how you generate money in the status quo.

All these big players should ideally already tune what they move on the other side—from sick care to preventive care—even if to a certain extent destroying their existing business model.

Self-custody or ETF?

It's a mix. When you are in Bitcoin since the early days, you will always have self-custody, because that's how you got into it and it's still one of the foundations of Bitcoin especially.

But on the other side, from collateral and all kinds of traditional use cases, you also need part of it at least on your traditional old fashioned bank account. So I would say it's a mix.