Bitcoin is either the best or worst asset class every year. ZebPay CEO Rahul Pagidipati explains why

Bitcoin has been either the best performing asset class or one of the worst in any given year, offering investors outsized returns at the cost of extreme volatility. That binary performance is not a flaw but a defining feature of the cryptocurrency, according to ZebPay CEO Rahul Pagidipati.As Indian family offices, high-net-worth investors and fund houses increasingly seek exposure to digital assets, Pagidipati argues that Bitcoin is moving beyond its image as a trading instrument. He sees it evolving into the next store-of-value asset after gold, real estate and stocks, though he cautions investors against putting all their money into it.Edited excerpts from a chat on the sidelines of India Blockchain Week:Has the pace of crypto adoption in India increased over the past couple of years?Rahul Pagidipati: Definitely. I wouldn’t say the trader community has increased, but the investor community certainly has. We now see high-net-worth individuals, family offices and fund houses asking detailed questions about how they can hedge and participate in crypto—not just in their trading portfolios, but also on their balance sheets.They are trying to understand the governance framework around crypto. They know that we have been doing this for 12 years. I have customers who initially came in asking for Bitcoin and now ask whether there is another asset with similar strength, utility, governance and infrastructure that can support artificial intelligence, real-world assets or payment systems.People also want to understand stablecoins and whether their use cases are real. Initially, stablecoins were mainly used to gain access to Bitcoin. Today, they can be used to store value, facilitate cross-border transactions and provide exposure to digital assets within regulatory limits.It is not that customers do not understand crypto. They want to know how they can use it and what level of exposure is appropriate.What are investors looking to hedge against: equities, inflation or something else?Rahul Pagidipati: Equities and inflation. Equity returns are still decent, at around 10% to 12% for many investors, but the cost of everything is also rising. Bitcoin has historically performed better than inflation, although it has had significant ups and downs.How do you see Bitcoin’s role evolving in India?Rahul Pagidipati: India’s store-of-value assets have traditionally been gold and real estate. For people older than my generation, those were considered safe assets. Stocks were viewed as risky. Around my generation, stocks began to be seen as a safer asset, particularly when held through mutual funds.The progression has been from gold to real estate and then stocks. I believe the next major store-of-value asset could be Bitcoin.For my grandparents, the answer would have been gold. For my parents, it would have been real estate. For me, it is stocks. For my son, it could be digital assets. Each generation thinks about store-of-value assets differently.This is also a question of perspective. Indians who have travelled abroad and experienced other markets are more open to owning global assets. Those who return to India influence the people and businesses around them.Over the next 10 to 20 years, Bitcoin could become a more widely accepted asset. It is similar to the way people viewed stocks in the 1990s. They considered stocks risky. They were riskier, but perhaps not as risky as people believed.Do you think Bitcoin can outperform stocks over the next 15 to 20 years?Rahul Pagidipati: Yes. I do not just think so—I know so.Real estate is probably riskier than gold but offers higher returns. Stocks are riskier than real estate but offer higher returns. Bitcoin is riskier than stocks but also offers higher returns. The question is how you measure risk and reward.The Sharpe ratio is one way to evaluate risk-adjusted returns. Bitcoin has an exceptionally strong risk-to-reward ratio. It looks risky, but it is volatile. It took me many years to understand that volatility is not the same as risk. Many people see volatility as a problem. It is actually a feature, not a bug.Most people do not want that kind of volatility. But people who do want it are often traders. My view is that ZebPay should focus much more on long-term investing. If you buy small amounts and invest over time, you may do better. If you trade, you often lose because you buy high and sell low.When we compare Bitcoin’s performance with other asset classes in the long run, what interesting data do you see?Rahul Pagidipati: If you look at all asset classes such as real estate, small caps, emerging markets, AAA bonds, stocks and cash across a time horizon of 16 years, Bitcoin is either in first place or last place. It is rarely in between.People imagine that the perfect investment should simply keep going up. But that does not exist. Everyone would like 25% annualised returns without drawdowns, but high returns come with volatility.Bitcoin has been the best performing investment…