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Hey, hey, welcome back to the Bitcoin Matrix, where critical thinkers meet.

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I'm your host, Cedric Youngelman. Before we dive in, if you get value from the show,

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Campnakamoto.com, Code Matrix.

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These are companies I personally use and believe in.

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Links and codes for all of them are in the show notes.

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Today's guest is Matt Hogan, Chief Investment Officer at Bitwise Asset Management,

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one of the 11-spot Bitcoin ETF issuers with over $10 billion under management.

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He's the institutional explainer that family offices, RIAs, and pension consultants

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actually read when they're sizing their Bitcoin allocation.

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And now, let's enter the Bitcoin matrix for episode 276 with Matt Hogan.

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Matt Hogan is the Chief Investment Officer at Bitwise Asset Management, one of the 11-spot

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Bitcoin ETF issuers, $10 billion in assets under management. He's the co-author of Crypto Assets,

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and he's the person family offices, RIAs, and pension consultants actually read when they're

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sizing their Bitcoin allocation. Matt, welcome to the Bitcoin Matrix, where critical thinkers meet.

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How are you? I am doing well, and I'm so excited to be on the show.

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Thanks for inviting me.

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Yeah, I'm super excited to get into it.

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There's a lot of angles here I want to cover from the ETFs and the adoption and where we

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are, but I really want to start with the macro picture in 2026.

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Debt, deficits, the dollar, treasury market stress that just keeps showing up and plumbing

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nobody's talking about, and geopolitical environment that just won't stabilize.

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When you and the team look at the world this year, what sort of the dominant signal you're

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you're looking to or trading off of? How is geopolitical chaos affecting Bitcoin adoption?

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Yeah, well, let's break that into two things. So there's sort of kinetic geopolitical chaos,

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like we're seeing in Iran. And then there is the slow building monetary chaos of debt debasement

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and sort of the trap that the Fed is in. And they're both really important lenses. We think

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about them both. I'll do the kinetic side first. So, you know, I've always described Bitcoin. When

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you invest in Bitcoin, you're making two investments at once. You're buying something

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that is an established store of value. And then you get what I've described as an out-of-the-money

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call option on it becoming a currency that's used in international commerce. So to break those down,

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the store value thesis, digital gold is well-established. That's a huge market, right?

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Gold is $30 trillion. Bitcoin could get to well north of a million dollars, maybe a couple million

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dollars just by being digital gold. And I think it's well on that way. So that's the core way we

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underwrite Bitcoin. But then it was originally designed as peer-to-peer cash. And I think there's

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a good argument to be made that the world, which is increasingly fractured and conveniently divided

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between US and yuan-based dollar rails, and those rails are being weaponized, may at some point want

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an apolitical currency for transactions. So why do I bring that up? If you think of that aspect of

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Bitcoin as an out-of-the-money call option, then things like kinetic war in places like Iran

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increase the volatility of the global monetary order. So in a normal environment, Bitcoin wouldn't

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get a seat at the table because things are sort of in stasis and they're working. But when the

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world gets scrambled, that opens up space for an apolitical currency to find a role in the world.

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And you even saw that in Iran, where they threatened to toll ships using Bitcoin, right?

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That wouldn't happen in normal times. But just like they're more overtakes in F1 when it's raining,

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when the world is in chaos, it opens up a little bit of space. The volatility increases the value

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of that option. So from my view, sort of as we move into a more fractured world, less of a

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unipolar world. And as we see geopolitical chaos, it's actually been a catalyst to Bitcoin. And you

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could see that it rallied when the Iran conflict started and all other risk assets traded off.

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So that's one piece of it. We think about that. We think that's a meaningful catalyst. And we

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think if there's more geopolitical conflict, we think it will benefit Bitcoin. The other half is

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what you're talking about, which is this slow simmering destruction of traditional fiat

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currencies, right? We recently passed this grim milestone of US GDP and US debt crossing in the

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wrong way. You know, debt payments are now almost a trillion dollars for the US every year. I think

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the world is waking up to the fact that maybe this fiat era that we've been in since we went off the

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gold standard maybe is starting to break down and decay in a meaningful fraction. And the way you see

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this appearing in sort of flows as you look at sophisticated investors like Harvard, their two

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largest liquid positions in the most written 13F were Bitcoin and gold. What does that tell you?

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It tells you they're worried about debasement. And if Harvard is worried about debasement,

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then an increasing number of people are worried about debasement. So when I look at these two

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trends, rising geopolitical tension, rising concern about the levels of debt, their long-term

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secular bull pushes for Bitcoin. That doesn't mean we go straight up. It just means the bias

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is up. And I think that's the market that we're in right now.

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Wow. To me, it's so interesting to hear you lean into the kinetic angle. I think about sort of

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maybe an institutional adoption. And I think about just sort of maybe that topic, maybe scaring them

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just about new things. And I think it's very brave, but it's very logical to lean into it

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and see and show how Bitcoin could benefit there and not run away from it or sort of say,

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oh, well, this year's out. We're going to have to sell this next year. But Lynn Alden recently

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joined Bitwise's advisory board. For listeners who've heard her on the show before, her thesis

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is that fiscal dominance and treasury market dynamics are the underlining story of the decade.

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What does her presence at Bitwise change about how the firm thinks?

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Lynn is a friend of the firm like many. I don't know the formal relationship, but she's a close friend of the firm. I think the thing that's fascinating about Lynn is the view that's been expressed has been consistent for so many years, right? Nothing stops this train. I'm not sure when Lynn first said that, but it was many years ago.

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And I think at that point it was outside of the mainstream.

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And the thing that happened is that every time a new page in global news flips over that statement is still true And so we gotten to the point where I think the rest of the world is recognizing that sort of worked its way into the

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mainstream. And these are because it's right. And these are the way that ideas sort of penetrate

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mainstream thinking and influence people. So look, there are a lot of people that are making the case

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for Bitcoin from different angles. I just made a case from a kinetic view. Lynn has led the case

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from a macro view. I think the more and more of these voices that we bring into the ecosystem,

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it just cumulatively convinces more people that maybe they need some exposure to this important

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asset. Yeah. So before maybe we go more into the framework, what kind of made you a Bitcoiner?

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What was maybe the conversation or thinker or piece you came across?

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Yeah.

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You know, the funny thing about Bitcoin, I think it's less true now, but it was certainly

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true, you know, eight or nine or 10 or 15 years ago, is that what you really needed

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was someone that you trusted and knew to tell you to take a look at it seriously.

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I think the reason many people rejected it in 2012 or 2013 is they only thought about

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it for a second.

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They're like, oh, this new thing, it's probably a joke.

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So actually, I mean, the real answer is not, I wish it were like Wences or someone.

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It's not.

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It's a woman named Kathleen Moriarty.

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She was the lawyer on the first ETF, and I came from the ETF industry.

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I was the CEO of ETF.com, had a whole career there.

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And I had huge respect for Kathleen because she literally created ETFs.

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She was the lawyer on SPY, which stayed the largest fund in the world.

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And in 2013, the Winklevoss twins filed for a Bitcoin ETF, and we invited them to our conference because I ran the largest conference in the world.

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And we sort of invited them because they were celebrities and we thought it would be interesting to have them there.

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But at the conference, I can remember this clear as day.

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She took me aside and said, Matt, this Bitcoin thing is much more interesting than you think.

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You should think about it seriously.

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And it was really just this one person that I had massive respect for, that I didn't expect to have that serious of you, who really had me look at it very closely.

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I had the benefit before that of having Spencer Bogart on my team at ETF.com.

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He became the first Wall Street analyst covering Bitcoin.

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He's now a partner at Blockchain Capital.

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He's an incredible thinker in the space.

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So I had been thinking about Bitcoin for a few years, but it was really Kathleen, that one person who said, just pause, take a breath, spend a few days actually studying this.

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That was enough because once you once you peel below that reflexive rejection, you see sort of the inevitability of the space Bitcoin has in the world.

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and that's really what brought me in.

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Obviously, it aligned with a lot of the ways I think,

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but it was really this one person

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who made me stop, pause, and dig in

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and I owe her a great credit.

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Yeah, that's super interesting.

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I mean, it's one of the reasons I brought up

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sort of how you're so brave

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to lean into the real issues of the day

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is because I think you are that person

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for a lot of people

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that conveys a lot of sort of credibility,

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not because of the institutional label,

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because of how you speak about things

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and how articulate you are from a certain angle.

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I love the ETF thing too.

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I did a conversation with Eric Balchunas about John Bogle.

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I think ETF investors or people that allocate ETFs are very interesting.

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I'm not talking about people who sign into the 2067 plan

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and just give, you know,

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but people that are really interested in ETFs and follow that market,

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there seems to be some sort of synergy or marriage

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or deep correlation with Bitcoin?

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And I wanted to hear your thoughts.

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Yeah, that's the other thing that I think really prepared me for it

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is, look, I had been involved in ETFs since the early 2000s.

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And at the time, ETFs were this renegade technology.

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I know today they're the apple pie of investing.

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You mentioned the 2067 Target Date Fund.

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They're how everyone invests.

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But in 2002, 2003, they were the disruptive force

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that were distrusted by the market.

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So people called them EFTs. People called them weapons of mass destruction. There were actually congressional hearings about ETFs destroying the American dream and calls for people to shut them down. They were really disliked by the traditional market. And those of us who loved ETFs looked at them and they were like, look, it's a faster, cheaper, more tax efficient, more fair technology. It's going to win.

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And so the reason you see this huge overlap between the ETF industry and the Bitcoin community is because the ETF industry in the early 2000s, right, pre-Bitcoin, saw disruptive technology that was hated by the mainstream but had fundamental advantages, despite all the odds that all the smart people stacked against it, just come to dominate and become a $20, $30 trillion market.

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So we've seen this disruption before. So when we looked at Bitcoin, this is part of why I felt comfortable leaving ETFs and moving to Bitwise eight years ago to focus full time on crypto.

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I had seen something that people disliked, that there were congressional hearings about, that folks like Jamie Dimon were saying would never happen, become not just successful, but dominant.

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And I think once you've seen that, you can pattern match. So I do think there are a lot of historical analogs.

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I know that's hard for people to sort of accept today because ETFs are so mainstream.

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But look, I think if you fast forward 20 years from now, crypto will be completely mainstream.

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Most people will own Bitcoin.

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It will be a huge part of the global economy.

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And everyone will sort of look back and chuckle that we had, you know, Charlie Munger comparing it to whatever he compared it to.

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I think we've seen this journey before.

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So I was ready to accept Bitcoin's path, I think, maybe because of the lessons I learned in ETFs.

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Yeah. The Winklevoss twins are interesting because they struck kind of, you know, not many people have billion dollar ideas twice and the conviction to sort of stick with it.

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I mean, they took stock in Facebook with their settlement rather than just all cash.

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And they put a lot of that into Bitcoin and held for quite a while and built a vertical on top of it.

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ETFs interesting I it's fascinating like Vanguard was against ETFs in the beginning and

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think Charles Boba himself now they're the largest sort of manager and yeah and so it's

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and you started I guess bitwise eight years ago so it must have been frustrating and the amount

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of patience you must have had to live in the future for that long because even GBTC I don't

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know if that was around when you started bitwise but it kind of laid the blueprint you could kind

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of see that it would be inevitable and probably made sense. So two, a couple of questions here.

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One, maybe you could frame up why does an ETF make sense for large institutional allocators?

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Yeah, absolutely. And yeah, it was frustrating to always be waiting for the world to catch up to

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the future you see. But that's just the case of being in an innovative area. Why do ETFs make

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sense for large institutional people? There are a bunch of reasons. One is that they're really cheap.

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So, you know, RETF is 20 basis points, 0.2% per year, and that includes custody, tax, audit,

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trading, reporting. You have to be a very large institution managing a very lot of money to get

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that kind of deal with a custodian, right? So just on a pure cost basis, at this point, at these

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prices, the ETF is often the cheapest way for people to get full institutional quality exposure

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to Bitcoin. That's a big piece of it. The second big piece of it is that when you buy Bitcoin,

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whether it through an ETF or if you did direct institutional custody you don just buy it you own it And what does that mean That means that you have to continue to due diligence custodians

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You have to continue to due diligence audit firms.

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You have to continue to protect the Bitcoin and stay up to date with the latest markets.

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If there are developments like, God forbid, another major fork, you know, Bitwise has lived through major forks in assets before.

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you have to know how to handle that. And so I think having an ETF, particularly with a manager

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who's been in the market for eight years or so and has lived through these things, gives you a lot of

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comfort on the owning. So both on a cost basis and then on an ongoing management basis, it's easier,

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often cheaper. And then it's just the easiest thing for these institutions to do. They own lots

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of ETFs. They could just add one more. They don't self-custody a lot of assets. That's not something

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that a pension does.

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So this is a new muscle

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they'd have to underwrite and trust.

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And look, ETFs have won in every market,

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stocks, bonds, real estate, commodities, etc.

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It's a phenomenally effective wrapper

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for institutions.

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So I'm not surprised

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that they've been so successful

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in Bitcoin as well.

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Firefish is non-custodial

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Bitcoin-backed lending.

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That means when you borrow

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against your stack,

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00:18:01,809 --> 00:18:04,929
Your keys stay in multi-sig the whole time.

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You're not handing your Bitcoin to a custodian.

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00:18:08,689 --> 00:18:10,689
You're not trusting a counterparty.

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You're not waking up to bankruptcy news.

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It's just collateralized Bitcoin lending the way self-custodians built it.

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00:18:19,449 --> 00:18:21,529
Firefish.io Code Matrix.

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00:18:22,029 --> 00:18:25,849
Stamp Seed is the most analog object in your Bitcoin stack.

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00:18:26,369 --> 00:18:30,049
No batteries, no firmware, no third-party trust.

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00:18:30,049 --> 00:18:35,709
Just a titanium DIY kit that lets you hammer your seaboard into solid metal.

217
00:18:36,489 --> 00:18:38,829
Fire resistant, waterproof, crush proof.

218
00:18:39,529 --> 00:18:44,409
The simplest, dumbest, most reliable backup for the most important sense you'll ever own.

219
00:18:45,229 --> 00:18:48,529
StampSea.com, code NATIONS for 15% off.

220
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Club Orange is the location-based social network built for the Bitcoin community.

221
00:18:54,508 --> 00:18:58,649
You open the app, see who's near you, what meetups are happening,

222
00:18:58,649 --> 00:19:02,089
which merchants in your city actually accept Bitcoin.

223
00:19:02,508 --> 00:19:07,269
If you've ever wanted to meet the people behind the orange-pilled accounts you follow,

224
00:19:07,789 --> 00:19:09,248
this app is your map.

225
00:19:09,969 --> 00:19:13,569
Download Club Orange today in the App Store or Google Play.

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00:19:17,109 --> 00:19:22,149
I wonder, especially now with in-kind transactions,

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what the sort of multi-generational relationship between Bitcoin and self-custody and Bitcoin in ETFs will be like?

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I wonder if you've thought about that.

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Yeah, absolutely.

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Well, first, I'll tell you a surprising statistic from ETF history, which is, you know, the gold ETF launched in 2004.

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And at the time when it launched, everyone was like, oh, this is terrible.

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It kills self-custody of gold.

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people were worried about it harming the gold bar in coin market. And actually what the data shows

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is that the number of people holding physical gold has expanded like 10, 20, 30x since the ETF

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launched. Because while many people hold the ETF, it broadened the market of people who are

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interacting with gold. And so the number of people who decide to self-custody increased as well.

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I think that is happening in Bitcoin ETFs as well. Bitcoin ETFs are broadening the market of people

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who interact with Bitcoin and some fraction of those will self-custody. And that is great.

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The thing you're pointing to is something that I really am committed to seeing in the ETF space,

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which is because you can now in-kind into and increasingly in-kind out of ETFs,

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it's possible for you to take Bitcoin that's held in self-custody today. And we've had clients who

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do this and bring it into an ETF wrapper. There are various reasons to do that. Maybe you want the

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institutional custody. Maybe you want to gift it. That's very hard to do with self-custody Bitcoin,

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very easy to do with Bitcoin ETF shares. Maybe you want to pass it down. That may be easier in an ETF

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wrapper. But then the other half of that that's really important to me as a Bitcoiner is I would

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love it to be the case that you could in kind out of the ETF if you wanted to self-custody.

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we're working on that process right now theoretically you can do it at large dollar

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amounts that's the way these things work when the in-kinding started you really had to be at like

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a hundred million dollars which is just out of reach for most people that's come down into maybe

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the five to ten million dollar range I would love to drive that down to a dollar and then the same

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thing on the other side being able to in kind out I don't know that we'll be able to get there but I

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think we'll be able to get there eventually. That would make ETFs a beautiful part of this ecosystem.

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They would make it easy to hold if you wanted to in a regulated format, but they would allow you

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self-custody. That's the long-term dream, at least for me. Yeah, that'd be very interesting

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over multi-generations as different generations or participants in each generation. You might have

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two children. They might each have different desires, this sort of thing. And it's just

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fascinating watching sort of the financialization of Bitcoin. So it's been over two years since the

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spot Bitcoin ETFs got approved. And you had made a prescient comment, you know, sort of

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maybe early on in all this, that sort of years two and three could be bigger than year one,

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and year one was huge. So how is this sort of playing out? And maybe what's been the quiet,

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you know, story of the past two years, like maybe who actually bought and how does that buyer mix

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different from the Bitcoin buyer pre ETFs? Yeah, absolutely. I mean, first of all, record flows.

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You know, this is not new news, but the first year of flows, $36 billion was the most successful ETF

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launch of all time, not by a little, but by a factor of six, which is to say just to because I

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don't think people recognize how extraordinary this is. In the history of all ETFs, the most

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successful ETF prior to the Bitcoin ETF raised $6 billion in its first year. And then the ETF

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The Bitcoin ETFs did $36 billion.

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Amongst 8,000 plus ETF launches from firms like BlackRock and Vanguard covering the S&P 500 and international stocks and all bonds, Bitcoin 6xed.

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It's just extraordinary.

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So huge, massive inflows.

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The second year inflows were strong.

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Third-year inflows, I think, are going to be very strong because we've just seen in the past, let's say, six months, the ability for folks like Merrill Lynch and Morgan Stanley and Wells Fargo and other big platforms to buy the ETFs.

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So I think those flows are really going to scale up.

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The buyers that have come in through ETFs that didn't exist before in scale are really financial advisors and family offices and some parts of the institutional stack, particularly hedge funds.

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There are various reasons that those three groups find it easier to do the ETF than they did to buy on like Coinbase or buy direct and self-custody.

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ETFs are what they interact with.

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But that share of the flow, I think, will grow over time.

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It's maybe been about half or maybe 40% or so.

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I think it'll eventually be 60% or 70%.

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Those are the dominant users of ETFs in most markets and I think will be in crypto.

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I guess the $6 billion in the first year was probably gold.

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Gold was the second biggest.

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It did $3 billion.

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The biggest were the Qs, the NASDAQ 100 Qs back in 99.

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Yeah, in the heat of the internet bubble.

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So one of the sort of the analogies we all play around with is sort of the, you know, Bitcoin adoption might go faster than the Internet because it's built on the Internet.

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And I also wonder how much of the greater adoption is really just inflation in dollar terms There probably a little part of it I mean there been It definitely part of it

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It's definitely part of it.

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But even if you inflation adjust, it's still the most successful ever.

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It's not six times.

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It's maybe two or two or three times.

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Still huge.

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Yeah.

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And still growing at this phenomenal rate, even through what doesn't seem like a very bullish macro environment.

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Or a very bullish Bitcoin environment.

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Remember, we haven't seen like a 2017 melt up in Bitcoin.

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What we've seen is the market has roughly doubled since the Bitcoin ETF launched or gone up 60 percent.

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But that's pretty pedestrian returns.

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And, you know, a really interesting thing that we've seen is that not much money flew out from the October high to the February low.

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Bitcoin retraced 50 percent.

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We only had a few billion dollars of outflows.

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That didn't surprise me.

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But I think that surprised a lot of people that the buyers were such diamond hands in these ETF markets.

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So you mentioned we haven't had a 2017 melt up.

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I don't know if you think we definitely will have one.

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It definitely is not the right word, but it's something that you kind of see in the future.

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And I asked that question with gold.

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gold went up like 50 60 percent in a short period of time uh which is a 10 trillion dollars though

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in terms of actual the asset class which i think speaks still that that bitcoin could go on a crazy

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run but yeah times are different we just grind more you know up uh the way we kind of have the

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thing people forget about that gold bull run which took place in the in 2025 right particularly

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is the second half, is that actually it was at the end of a grind. So the gold bull market started

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in 2022, actually, when the US seized Russia's treasury assets after the start of the Russia-Ukraine

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war. That caused central bank buying in gold to rise by 150% on reported terms and probably like

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300% or 400% on real terms, because a lot of it doesn't get reported, particularly from China.

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And gold went up a little bit in 2022.

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But then that central bank buying persisted in 23 and gold went up a little bit more.

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And in 24, gold went up a little bit more.

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And then in 25, it persisted again.

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It didn't increase.

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It just sat at about 150% above baseline.

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It sort of sat.

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But it was only in 2025 that we had that melt up.

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And that tells you something.

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What it tells you is that the gold market had residual supply that was willing to sell to central banks.

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And they sold in 22 and they sold in 23 and they sold in 24.

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And then in 25, they ran out of gold to sell.

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And there was a supply shock where the central banks were still buying, but the sellers were exhausted.

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And that's where you get that parabolic move.

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I actually think that that will happen in Bitcoin eventually,

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because you have this institutional demand that's come in and is buying tens of billions of dollars

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of Bitcoin. And so far, people have been willing to sell. And they're still, to some degree,

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willing to sell. But I have a view that this institutional bid is going to persist for

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five, 10 years. I think it's going to accelerate, actually, as these platforms

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get more comfortable around Bitcoin. And so I actually think it's just a matter of time.

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I think gold tells the story, which is it's not like demand spiked in 2025. Demand was persistent.

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It's actually that supply ran out of gold to sell. And I think that will eventually happen in Bitcoin.

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I do think we'll eventually get to melt up. I don't know when that will happen.

339
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But I think if we see this persistent institutional demand, I think the story we saw in gold will repeat itself in Bitcoin, actually.

340
00:28:51,663 --> 00:29:10,463
Hmm. That's interesting. Well, maybe we'll talk about these other two related forces. The post 2024, 2025 Washington policy reset, it was still kind of coming out of it. Do you think the market kind of understands what's happening in Washington right now?

341
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Look, I think it got excited about the initial policy reset. You certainly saw that around the election where we spiked from the 70s to 100K pretty much immediately. And like anything, I think it probably overestimated the short term impact and underestimates the long term impact. Right. So we're following that traditional sort of trough of disillusionment or whatever.

342
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It's really remarkable the degree of change, right?

343
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I don't think people who weren't in crypto really reflect on how bad it was.

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So the new people entering Bitcoin don't recognize how bad it was during the Gensler era.

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It was hard for even big companies like Bitwise to get bank accounts.

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Like, imagine that world.

347
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Imagine having millions of dollars and going to a bank and then telling you, no, we don't want your money.

348
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That was a real lived experience for many crypto firms.

349
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And virtually every crypto firm faced lawsuits or subpoenas from the SEC.

350
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It was just exquisitely toxic.

351
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And now it's extraordinarily accommodative.

352
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The SEC is pro-crypto.

353
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The OCC is pro-crypto.

354
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The CFTC is pro-crypto.

355
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We're getting crypto bills passed.

356
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So my view is that the market did initially recognize the difference, but it doesn't necessarily

357
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understand that Washington takes a long time to change.

358
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And we're going to feel the impact of this regulatory shift, not over five months, but over five years.

359
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But it's really a different environment.

360
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I can't emphasize how toxic it was and how normal it feels now.

361
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I think it's really important.

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The other thing I'll say, which is maybe not obvious to people, is that the improved regulatory environment will make crypto safer.

363
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and there'll be fewer blowups of the life of FTX or the ICO scams that set us back so much

364
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in crypto over the years. We're going to have fewer of those because we have an engaged regulator

365
00:31:12,863 --> 00:31:19,403
who is willing to work with high quality actors instead of just pushing everything to unmonitored

366
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offshore environments where craziness happens. And that means not no blowups in crypto. I don't

367
00:31:25,303 --> 00:31:29,043
think that will be the case, but fewer of those types of low ups in the future than we've had in

368
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the past. Did Bitwise really have banking issues? So when Bitwise was first founded, actually,

369
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back in 2017, it was very hard to get a bank account as a as a crypto company. So literally

370
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imagine having the world's best VCs give you millions of dollars and going to banks and then

371
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saying, we don't want your money. That was a lived experience. And then during the Silicon Valley

372
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bank, Silvergate bank, Signature Bank sort of fiasco where the government almost forced

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crypto related banks to shut down.

374
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It was very challenging to find banks that were willing to do business with crypto firms.

375
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Obviously, Bitwise and others negotiated it.

376
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But I do worry about I think there are probably a number of smaller crypto companies that

377
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couldn't negotiate that level of banking distrust. I do think regulators deliberately shut down

378
00:32:26,043 --> 00:32:32,243
Silvergate Bank and made signature very difficult. And if you're another bank and you see that

379
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activity, do you really want to put your bank at risk? So yeah, it was a lot of work by the

380
00:32:38,763 --> 00:32:43,143
ops team to make sure there were not just a functioning bank, but a number of backups

381
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in case those functioning banks faced limits during that period.

382
00:32:47,963 --> 00:32:49,823
Yeah, it was mind-blowing.

383
00:32:50,743 --> 00:32:55,703
You know, I just think of banking like a utility, like water, right?

384
00:32:55,803 --> 00:32:57,603
Like, imagine you can't get water to your house.

385
00:32:57,683 --> 00:32:58,183
What do you do?

386
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It's just like a crazy world that we lived in during that period.

387
00:33:03,423 --> 00:33:08,303
You mentioned one of your orange-pilling moments was Kathleen Moriarty, I think,

388
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and sort of how her background, her resume, her experience was very sort of level-setting.

389
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grounding and gave sort of credibility.

390
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And I imagine most people when they interact with you kind of have that

391
00:33:18,523 --> 00:33:21,683
experience as well to have you had the lived experience. Well,

392
00:33:21,737 --> 00:33:27,277
maybe you're at a family event or friends or barbecue and during silver gate or one of these

393
00:33:27,277 --> 00:33:33,337
unfortunate events where someone's like oh talk to matt he's the crazy bitcoin guy or crazy crypto

394
00:33:33,337 --> 00:33:41,077
guy do you kind of have that at all all the time all the time yes yeah and uh you know the old thing

395
00:33:41,077 --> 00:33:47,037
they say um about being that guy in the family that likes crypto is that when the market is down

396
00:33:47,037 --> 00:33:51,917
it's your fault and when the market is up it's whoever listened to you and bought that it's it's

397
00:33:51,917 --> 00:33:58,397
their uh their smart decision um that's just the reality of it uh most of the time i have enough

398
00:33:58,397 --> 00:34:03,757
energy to walk them through and you have to be rational about about the crypto market there's a

399
00:34:03,757 --> 00:34:10,237
lot of risks it's very volatile but i think um the the funny thing is that the critics are usually

400
00:34:10,237 --> 00:34:17,917
more irrational than even the the high flying uh crypto fans and so yes i've had that experience

401
00:34:17,917 --> 00:34:23,837
quite a bit uh although i will say you know when i left etf.com to move into into bitwise

402
00:34:24,637 --> 00:34:29,037
uh i was worried that the response was going to be more negative than it was

403
00:34:29,677 --> 00:34:34,317
um you know toward your end there's a lot of overlap between the etf and crypto community

404
00:34:34,317 --> 00:34:39,117
and i would say that i thought the response would be 70 30 negative and it turned out to be about 70

405
00:34:39,117 --> 00:34:46,277
30 positive. So there's more support for Bitcoin than maybe the mainstream media lets you know.

406
00:34:46,917 --> 00:34:54,737
Yeah. So maybe what about wealth advisors? What approximate percentage of wealth advisors can even

407
00:34:54,737 --> 00:35:00,077
discuss Bitcoin with their clients yet? It's improved a lot. So at this point,

408
00:35:00,077 --> 00:35:06,637
now that Morgan Stanley and Wells Fargo and Merrill Lynch have all greenlit Bitcoin exposure

409
00:35:06,637 --> 00:35:12,097
for their clients. It's the majority, but it's not everyone. There's probably 20%,

410
00:35:12,097 --> 00:35:19,157
25% of the wealth advisory market that is still strictly closed to Bitcoin. But compared to where

411
00:35:19,157 --> 00:35:26,397
it was even a year ago, I would say that less than half of the market was open. And two years ago,

412
00:35:26,397 --> 00:35:32,997
it was like 10% of the market. So it's expanded dramatically. An important thing to recognize,

413
00:35:32,997 --> 00:35:39,237
though, is that that doesn't mean flows happen immediately. You know, that analogy with Kathleen

414
00:35:39,237 --> 00:35:45,417
Moriarty, it's not like I put 10% of my portfolio in Bitcoin after I met with her, right? You started

415
00:35:45,417 --> 00:35:49,717
studying it. I've said this before, but for a while, our average client did eight meetings with

416
00:35:49,717 --> 00:35:55,277
us before they allocated. If you think about the market just opened, let's say six months ago,

417
00:35:55,277 --> 00:36:00,737
and we meet with people quarterly, they're on meeting too, right? So the flows you'll see from

418
00:36:00,737 --> 00:36:07,637
those people are six quarters away. And that's just the process. And it's easy for Bitcoiners

419
00:36:07,637 --> 00:36:12,277
to say you should get it immediately. But we all forget that very few of us, some people did,

420
00:36:12,717 --> 00:36:17,037
but very few of us read our first media report on Bitcoin and then smashed the buy button.

421
00:36:17,497 --> 00:36:21,277
We all wanted to do our work and they're doing their work. They're just busy. So it takes them

422
00:36:21,277 --> 00:36:26,097
a while. Yeah. Like you mentioned, we have the supply side and the distribution side with the

423
00:36:26,097 --> 00:36:30,277
wealth advisors. But just because they're allowed to discuss Bitcoin with their clients doesn't

424
00:36:30,277 --> 00:36:34,457
mean they know how to or what to say. And it doesn't mean their clients are asking. But the

425
00:36:34,457 --> 00:36:42,577
pipes are open. What about how do you guys feel about competing with BlackRock? Is that, you know,

426
00:36:42,577 --> 00:36:49,577
what's sort of your take there? I love it. Yeah, absolutely love it. So is it frustrating that

427
00:36:49,577 --> 00:36:55,377
Bitwise was in the market for six years, and then BlackRock came in and swooped up huge amounts of

428
00:36:55,377 --> 00:37:01,957
assets. Of course it is. But my firm's assets are up, I think, 10 to 15x since BlackRock came into

429
00:37:01,957 --> 00:37:08,337
the market because they widen the pie dramatically, right? So they bring so much credibility to the

430
00:37:08,337 --> 00:37:14,617
space and they have conversations and we have conversations that we get a piece of that and

431
00:37:14,617 --> 00:37:20,017
they get a large piece of that. And they're such a high quality firm that I love competing with

432
00:37:20,017 --> 00:37:24,277
them. I know that they win a lot of time because they have brand, but they really are growing the

433
00:37:24,277 --> 00:37:29,917
high significantly. The other thing that I think about, you know, one risk to Bitcoin is that we see

434
00:37:29,917 --> 00:37:35,757
the pro-crypto regulatory environment in Washington shift to an anti-crypto regulatory environment

435
00:37:35,757 --> 00:37:41,357
in a future administration. I think the fact that BlackRock is in the market and their most

436
00:37:41,357 --> 00:37:47,877
profitable ETF is their Bitcoin ETF reduces the probability of that shift, right? So you want

437
00:37:47,877 --> 00:37:54,557
high quality firms that believe in Bitcoin on your side with weight to sort of make sure that

438
00:37:54,557 --> 00:38:02,357
we don't swing too far in the event of a future election to an anti-crypto moment. And so for that

439
00:38:02,357 --> 00:38:07,217
reason, I also really welcome them. So I love competing with them. I get frustrated sometimes,

440
00:38:07,217 --> 00:38:13,397
but we're growing the pie. And so they're our friends and I'm glad they're in the market.

441
00:38:13,877 --> 00:38:17,697
Well, you guys did put out the best commercial with the most interesting man in the world. That

442
00:38:17,697 --> 00:38:18,297
That was awesome.

443
00:38:18,737 --> 00:38:19,977
That was so fun.

444
00:38:20,097 --> 00:38:21,697
He was incredible to me.

445
00:38:23,977 --> 00:38:26,197
If you've ever needed liquidity,

446
00:38:26,677 --> 00:38:28,577
but didn't want to sell your Bitcoin

447
00:38:28,577 --> 00:38:30,497
and trigger a taxable event,

448
00:38:31,137 --> 00:38:32,537
Firefish is the answer.

449
00:38:33,257 --> 00:38:35,817
Non-custodial Bitcoin-backed loans.

450
00:38:36,417 --> 00:38:39,437
Your keys stay in multi-sick the whole time.

451
00:38:40,077 --> 00:38:42,937
You access dollars without selling a single stat.

452
00:38:43,497 --> 00:38:45,057
Don't sell your Bitcoin.

453
00:38:45,537 --> 00:38:46,317
Live off it.

454
00:38:46,317 --> 00:38:47,977
Firefish.io.

455
00:38:47,977 --> 00:38:49,037
Code Matrix.

456
00:38:49,757 --> 00:38:53,717
Stamp Seed is the most analog object in your Bitcoin stack.

457
00:38:54,377 --> 00:38:57,897
No batteries, no firmware, no third-party trust.

458
00:38:58,397 --> 00:39:03,537
Just a titanium DIY kit that lets you hammer your seed words into solid metal.

459
00:39:04,317 --> 00:39:06,657
Fire-resistant, waterproof, crush-proof.

460
00:39:07,077 --> 00:39:12,237
The simplest, dumbest, most reliable backup for the most important scents you'll ever own.

461
00:39:12,237 --> 00:39:19,437
stampseed.com code matrix for 15% off bitcoin gets kind of lonely when you only know people

462
00:39:19,437 --> 00:39:24,937
through a screen club orange is the location-based social network that fixes that

463
00:39:24,937 --> 00:39:31,057
find the orange hill people in your city the meetups the merchants the conversations that

464
00:39:31,057 --> 00:39:36,397
don't fit on a tweet download club orange today in the app store or google play

465
00:39:36,397 --> 00:39:41,397
It was an amazing experience to watch him.

466
00:39:41,997 --> 00:39:44,677
You know, he's a relatively elderly gentleman

467
00:39:44,677 --> 00:39:46,157
at this point.

468
00:39:46,157 --> 00:39:48,177
And when you meet with them in normal times,

469
00:39:48,177 --> 00:39:49,237
that's what it feels like.

470
00:39:49,237 --> 00:39:50,897
But when the cameras change

471
00:39:50,897 --> 00:39:52,877
and he shoots his cufflinks out,

472
00:39:52,877 --> 00:40:08,246
he becomes the most interesting man in the world He has this magnetic personality It was just an incredible event That was really fun Yeah and what was it like to have the reception to that commercial You know that was great As a startup you have to do something to make your name

473
00:40:08,246 --> 00:40:09,886
and build your brand in the space.

474
00:40:10,266 --> 00:40:14,546
And I think that was an effective way of bringing Bitwise out.

475
00:40:14,626 --> 00:40:17,526
It was also important to us that that wasn't a Bitwise commercial.

476
00:40:17,526 --> 00:40:20,506
First and foremost, it was about Bitcoin, right?

477
00:40:20,566 --> 00:40:21,586
We're part of this community.

478
00:40:21,826 --> 00:40:24,246
So we didn't say what's interesting Bitwise.

479
00:40:24,246 --> 00:40:26,266
It was what's interesting is Bitcoin.

480
00:40:27,266 --> 00:40:29,846
And yeah, it was just great to be able to do that.

481
00:40:29,906 --> 00:40:32,106
But you get to do some fun things in your career.

482
00:40:32,226 --> 00:40:33,466
That was one of the fun things.

483
00:40:33,846 --> 00:40:36,046
And yeah, really, really special moment.

484
00:40:36,886 --> 00:40:37,786
Yeah, that's awesome.

485
00:40:38,446 --> 00:40:43,606
When you're sitting across from, say, an advisor who has institutional clients or a family

486
00:40:43,606 --> 00:40:49,326
office and they have zero Bitcoin in it, what's the conversation and what's the right

487
00:40:49,326 --> 00:40:51,146
starting point you recommend?

488
00:40:51,146 --> 00:40:56,786
end? Yeah, well, there are three ways to get them interested in Bitcoin. And you sort of have to

489
00:40:56,786 --> 00:41:01,246
figure out who you're talking to, because they'll have different views. And maybe I'll walk you

490
00:41:01,246 --> 00:41:06,666
through those three ways. There's one group where you can make just a sort of Jack Bogle argument,

491
00:41:07,206 --> 00:41:14,066
which is to say, look, Bitcoin's a $2 trillion asset. Equities are $110 trillion. That means you

492
00:41:14,066 --> 00:41:20,126
should be about 1.8%, 1.9% Bitcoin if you're neutral. If you're at zero, you're off market.

493
00:41:20,126 --> 00:41:39,326
Look, Schwab is talking about 7% Bitcoin. Fidelity is saying 10%. My personal portfolio is like a third. You don't have to do that. Let's just get to neutral. If you want to be underweight, maybe you're at 1%. And so there's an audience that really believes in diversification. And if you know that that's the type of advisor, that's an angle you can go.

494
00:41:39,966 --> 00:41:50,046
There's another audience that really loves portfolio construction, and they're into sharp ratios and drawdowns and how to improve the risk adjusted returns of your portfolio.

495
00:41:50,046 --> 00:42:06,346
And the amazing thing about Bitcoin is you can walk through studies that show that over any three year period in history, every single three year period in history, every whatever that is, a thousand X days, Bitcoin has improved your risk adjusted returns.

496
00:42:06,346 --> 00:42:09,826
And even a small allocation has done so without increasing your volatility.

497
00:42:10,646 --> 00:42:21,666
And that you can you can have a great sort of science based conversation that says if you strip Bitcoin of all the emotional baggage and just look at it as an asset, you want it in your portfolio.

498
00:42:21,666 --> 00:42:28,766
Not 30 percent. That's for Yahoo's like me. But at handfuls of percent, you can really have a risk.

499
00:42:28,766 --> 00:42:34,446
And then there's the third group where they're very interested in asymmetric returns.

500
00:42:34,866 --> 00:42:39,786
And they're looking for things that can really provide upside to the rest of a portfolio that's relatively conservative.

501
00:42:40,666 --> 00:42:47,866
And there you can walk them through, like, I love to walk them through why I think Bitcoin will get to $1.4 million by 2035.

502
00:42:48,786 --> 00:42:54,886
And there's some very facts-based reasons with some very modest assumptions that get you to those kinds of numbers.

503
00:42:54,886 --> 00:42:59,846
And so if they're an asymmetric return kind of group, then you have to target them.

504
00:43:00,346 --> 00:43:06,906
Sometimes you pick the wrong lane and you think they're an asymmetric group and they're actually this Jack Bogle style investor.

505
00:43:07,266 --> 00:43:10,646
But we sort of have different approaches for each kind of institution.

506
00:43:11,366 --> 00:43:16,586
And usually one of those three things at least opens the aperture to get them to start to consider it.

507
00:43:17,486 --> 00:43:23,206
Oh, wow. It's really interesting to hear the kind of the approach and just sort of helps us on to still our own messages.

508
00:43:23,206 --> 00:43:48,086
What about quantum computing then? I want to hear your take because one, I'm sure maybe people throw it at you in these meetings, but it keeps showing up as the existential threat to Bitcoin headline. Every six months, a new paper or a new IBM milestone. So from the Bitcoin, from the Bitwise lens, is quantum a real risk to Bitcoin, a manageable upgrade problem or just a distraction?

509
00:43:48,086 --> 00:44:14,726
Yeah, it's a manageable upgrade problem. I think of it like any other problem, which is if you focus on it, you can resolve it. If you take the challenging steps, you can resolve it. I don't think Bitcoin should bury its head in the sand. I think quantum is real and will eventually get here. And while it doesn't threaten the core of Bitcoin, it does put things like Satoshi's wallets and other old wallets at risk that could disrupt the market.

510
00:44:14,726 --> 00:44:24,366
We should address those. We should give people a pathway that they can see in the future that will let them escape that quantum risk or at least mitigate its impact.

511
00:44:25,246 --> 00:44:30,546
So, you know, it's like having high cholesterol. If you ignore it, it'll kill you. But if you treat it, you'll probably be fine.

512
00:44:30,706 --> 00:44:36,146
I think this is the same thing with quantum. It definitely comes up in conversations.

513
00:44:36,926 --> 00:44:40,126
And we like to walk people through a few things.

514
00:44:40,846 --> 00:44:45,866
So one, we like to walk through why it doesn't threaten the core of Bitcoin, the consensus mechanism.

515
00:44:46,246 --> 00:44:52,066
It threatens a portion of Bitcoin, because I think the popular conception is that quantum will just destroy Bitcoin writ large.

516
00:44:52,066 --> 00:45:00,026
And that's not the case. It will expose a large number of old wallets and a lot of Bitcoin to theft.

517
00:45:00,406 --> 00:45:08,986
And then we like to show them high quality reports by leading voices in Bitcoin that show that there is a pathway to deal with this.

518
00:45:08,986 --> 00:45:12,666
So SF Presidio, to call it one example, has a great report on this.

519
00:45:13,446 --> 00:45:22,886
And I think people come to understand that once you view the problem, understand the problem, and if the core devs address the problem, then we will get past it.

520
00:45:22,946 --> 00:45:25,546
But it does slow down institutional allocations.

521
00:45:26,066 --> 00:45:28,086
I do want to emphasize that.

522
00:45:28,166 --> 00:45:37,286
There are institutions that would allocate but for quantum risk, and they want to see more action from the community to have a clear roadmap for dealing with it.

523
00:45:37,286 --> 00:45:44,326
I think we've made a lot of progress in the last six months to getting to that roadmap, but we still have some way to go.

524
00:45:44,406 --> 00:45:46,586
And I do think it's weighing on the market.

525
00:45:48,526 --> 00:45:52,086
I always wonder, because you deal with this, like you're almost a professional messenger.

526
00:45:52,246 --> 00:45:53,346
You are a professional messenger.

527
00:45:53,586 --> 00:46:02,286
And so, you know, you kind of have like sort of the tried and true questions and you kind of, you know, about store value and the economy and you can even talk about war.

528
00:46:02,566 --> 00:46:05,686
And I could see how this could be unsettling for any investor of any asset.

529
00:46:05,686 --> 00:46:06,546
That's why I bring it up.

530
00:46:06,546 --> 00:46:07,966
It's not Bitcoin specific.

531
00:46:08,446 --> 00:46:11,166
But I even wonder, like, do maybe people throw you curveballs?

532
00:46:11,226 --> 00:46:16,406
Like, I heard these guys are mean online or crypto people are into Lambos.

533
00:46:16,666 --> 00:46:19,106
You know, these, you know, do you get kind of things like that?

534
00:46:19,366 --> 00:46:21,306
You definitely get things like that.

535
00:46:22,526 --> 00:46:26,046
You get, yeah, you definitely get things like that.

536
00:46:26,126 --> 00:46:27,526
You get concerns about valuation.

537
00:46:27,746 --> 00:46:29,266
You get questions about money laundering.

538
00:46:29,386 --> 00:46:30,966
You get questions about criminal use.

539
00:46:30,966 --> 00:46:45,275
The good things about money laundering and criminal use you can point to statistics and data and points to show how that strongly diminished Those are solvable problems The reputational things Look that just a piece

540
00:46:45,435 --> 00:46:49,575
I mean, that's just a piece of it. I often tell people there'll be a point where Bitcoin is boring.

541
00:46:50,055 --> 00:46:54,175
Like for my kids or grandkids, Bitcoin would be boring. The returns will be very small.

542
00:46:54,255 --> 00:46:57,815
It'll be very volatile. It'll be owned by sovereign wealth funds and it'll be dull.

543
00:46:57,815 --> 00:47:03,175
you can wait to buy it then that's fine but you'll be paying millions of dollars a coin

544
00:47:03,175 --> 00:47:10,255
there's no you know there's no upside without risk and so there are elements of the bitcoin world

545
00:47:10,255 --> 00:47:15,675
that i don't there's elements of the crypto world you go to a crypto conference like 40 percent of

546
00:47:15,675 --> 00:47:19,995
the booths make you uncomfortable right you're like is this really what we're aligned with

547
00:47:19,995 --> 00:47:31,975
But underneath all that, there's this fundamental thing, which is that this is a massively disruptive technology that brings a hugely valuable new service to the world.

548
00:47:32,335 --> 00:47:38,755
The ability to store wealth without relying on any government or a bank and then move it around the world at the speed of light.

549
00:47:39,315 --> 00:47:42,555
And ultimately, that is what wins out.

550
00:47:43,055 --> 00:47:46,955
So, you know, people can make their choice on where they want to be.

551
00:47:47,075 --> 00:47:48,795
I think you just have to be frank about it.

552
00:47:48,795 --> 00:47:52,575
but it's been winning out for the last 15 years.

553
00:47:52,675 --> 00:47:57,475
You think crypto is crazy now, like go back 15 years ago,

554
00:47:57,635 --> 00:47:59,115
10 years ago, it was a lot crazier.

555
00:48:00,635 --> 00:48:03,235
That's part of the upside, I think, on any asset.

556
00:48:03,995 --> 00:48:04,075
Yeah.

557
00:48:05,015 --> 00:48:08,815
Ever sort of pontificate on maybe what the next event

558
00:48:08,815 --> 00:48:10,335
could sort of set things off?

559
00:48:11,095 --> 00:48:13,195
You know, I don't think it's going to necessarily be something

560
00:48:13,195 --> 00:48:15,575
like a sovereign adoption of the United States

561
00:48:15,575 --> 00:48:17,695
coming out and buying a bunch of Bitcoin.

562
00:48:18,595 --> 00:48:20,715
Corporate treasuries and the ETF rails

563
00:48:20,715 --> 00:48:23,375
are buying more than newly minted Bitcoin per day.

564
00:48:23,875 --> 00:48:24,555
Maybe that's steady,

565
00:48:24,615 --> 00:48:27,415
but maybe that's not sort of the Kindle.

566
00:48:28,135 --> 00:48:29,255
I'm talking about future Kindle.

567
00:48:29,335 --> 00:48:30,475
That's sort of maybe unpredictable,

568
00:48:30,475 --> 00:48:33,735
but you would think there's going to be some event

569
00:48:33,735 --> 00:48:36,655
we look back to like with Iran

570
00:48:36,655 --> 00:48:38,415
trying to charge tolls in Bitcoin.

571
00:48:38,735 --> 00:48:40,715
I don't think America is going to let that happen right now,

572
00:48:40,815 --> 00:48:41,915
but I don't know.

573
00:48:41,955 --> 00:48:42,375
Do you think,

574
00:48:42,515 --> 00:48:44,675
what do you think could be a future event

575
00:48:44,675 --> 00:48:46,795
that might just set things off

576
00:48:46,795 --> 00:48:49,135
if we're just having fun and riffing on that kind of thing.

577
00:48:49,695 --> 00:48:50,655
Yeah, I love that.

578
00:48:51,335 --> 00:48:53,135
Yeah, so you have these steady forces,

579
00:48:53,395 --> 00:48:55,535
this rising tide of institutional adoption,

580
00:48:56,215 --> 00:48:58,135
passage of time, demographics,

581
00:48:58,575 --> 00:49:00,195
which I think is a big rising tide

582
00:49:00,195 --> 00:49:01,675
that people overlook, right?

583
00:49:02,635 --> 00:49:05,115
Think about Robbie Michnick at BlackRock.

584
00:49:05,935 --> 00:49:08,755
10 years ago, he was a young guy working in crypto.

585
00:49:09,615 --> 00:49:11,555
Now he's a major force in BlackRock.

586
00:49:11,695 --> 00:49:13,315
I've seen this in the ETF industry, right?

587
00:49:13,315 --> 00:49:19,455
Many of my friends who were early in ETFs in 2002 are now running major asset managers, right?

588
00:49:19,535 --> 00:49:22,295
And so, of course, those asset managers are ETF focused.

589
00:49:22,815 --> 00:49:24,475
The same thing is going to happen in crypto.

590
00:49:24,635 --> 00:49:26,275
So you have these general rising tides.

591
00:49:26,995 --> 00:49:39,555
In terms of spark catalysts, look, I do think on a small term basis, things like the Clarity Act are a spark catalyst that people probably don't estimate sort of cementing the regulatory infrastructure.

592
00:49:39,555 --> 00:49:46,475
I do think international commerce in Bitcoin is something that's not understood by the market.

593
00:49:46,675 --> 00:49:49,615
I think the market is focused on Bitcoin as a store of value.

594
00:49:50,095 --> 00:49:59,015
And there is this real probability in my mind that we'll want an apolitical currency in the near future just because the world is getting so crazy.

595
00:50:00,035 --> 00:50:04,675
And people are going to force that into Bitcoin.

596
00:50:04,775 --> 00:50:06,475
Bitcoin is the only thing that can do that.

597
00:50:06,475 --> 00:50:10,215
And it now kind of has the liquidity to sustain that.

598
00:50:10,655 --> 00:50:10,755
Right.

599
00:50:10,795 --> 00:50:12,255
It maybe didn't a few years ago.

600
00:50:12,375 --> 00:50:16,255
Now it has the regulated liquidities to really fit that role.

601
00:50:16,715 --> 00:50:18,055
So I think that could be a surprise.

602
00:50:18,175 --> 00:50:19,675
I think Iran was a surprise.

603
00:50:20,195 --> 00:50:22,975
But once you open the door, maybe it won't happen next month.

604
00:50:22,995 --> 00:50:31,035
But could it happen in the next two years that you start to see like some oil settle in Bitcoin or some other international payments in Bitcoin?

605
00:50:31,175 --> 00:50:32,315
I think that's a possibility.

606
00:50:32,315 --> 00:50:38,835
And I do think sovereign is something that people have discounted to zero, which is not zero.

607
00:50:39,495 --> 00:50:41,415
I'll make a specific case there.

608
00:50:42,855 --> 00:50:45,135
The Czech Central Bank just came out.

609
00:50:45,655 --> 00:50:47,195
They did a nice study of Bitcoin.

610
00:50:47,435 --> 00:50:52,275
They found that it really would boost their overall portfolio, but they're not yet allocating.

611
00:50:52,415 --> 00:50:56,995
They're doing a test portfolio with a million dollars, and they're going to monitor it for two years.

612
00:50:56,995 --> 00:51:23,655
And the reason is they're not sure that the characteristics of Bitcoin will persist into the future. They've been volatile over the years. Will it have the same correlation and volatility in the future? But they're not close to it. Right. They studied it. They decided to do a test program. They move much slower than anyone else in crypto. They're going to study this test program for two years, but they're going to study the test program for two years.

613
00:51:23,655 --> 00:51:28,135
And in two years time, they very well may add Bitcoin to their sovereign mix.

614
00:51:28,795 --> 00:51:32,175
And so I think it's maybe a slower timeline than people expect.

615
00:51:32,455 --> 00:51:40,835
But I think we could get like a couple more sovereigns in the next two years and then 10 sovereigns in the next four years and then wake up.

616
00:51:40,995 --> 00:51:43,835
And it's basically everyone in six to 10 years.

617
00:51:43,835 --> 00:51:46,855
And I think that that could be a surprise catalyst for people, too.

618
00:51:47,575 --> 00:51:49,055
Yeah, you bring up demographics.

619
00:51:49,055 --> 00:51:53,435
And I think it's such a like you said, such an underestimated part of the equation.

620
00:51:53,655 --> 00:52:01,535
you know, growing up, you maybe, you don't like what's on TV. You don't like the commercials,

621
00:52:01,855 --> 00:52:06,855
the shows. We'll wait till we grow up and look at this. You're making commercials and I got a

622
00:52:06,855 --> 00:52:12,355
channel on YouTube. You know, you could just do things. And as people grow up, one, the boomers

623
00:52:12,355 --> 00:52:16,555
are probably going to hand down a lot of wealth. That's going to get, maybe they'll dwindle some of

624
00:52:16,555 --> 00:52:21,755
it, but whatever gets handed down will be converted probably into Bitcoin and things of, you know,

625
00:52:21,755 --> 00:52:27,835
a different nature than they currently reside in. And then the decision makers grow up and they can

626
00:52:27,835 --> 00:52:34,795
change things too. It's such a big thing that I really think people don't anticipate. If you even

627
00:52:34,795 --> 00:52:41,175
think about a lot of people got into Bitcoin for the first time in 2017, 2018, if those people were

628
00:52:41,175 --> 00:52:49,595
26 and they were working at Citigroup, they were a junior associate and now they're 36 and they're

629
00:52:49,595 --> 00:52:54,515
managing director. And in five more years, there'll be 41 and there'll be a senior executive.

630
00:52:55,295 --> 00:52:59,435
And they've just, they're just Bitcoin native. They've been in this space all the time. It's not

631
00:52:59,435 --> 00:53:05,735
unusual to them. It's just part of the firmament. And I, I really think this is like a giant long

632
00:53:05,735 --> 00:53:22,444
term catalyst that people don as Jamie Dimon not going to be running JP Morgan forever In 15 years that bank will be run by someone who grown up with Bitcoin knows it and loves it it like this is just inevitable right i think it just going to happen and even jamie diamond an

633
00:53:22,444 --> 00:53:26,704
authorized participant that's right he's come around he's coming around money on the picks and

634
00:53:26,704 --> 00:53:31,544
shovels so you know everyone's getting in the game everyone bends the need of bitcoin this has been

635
00:53:31,544 --> 00:53:38,144
so dope if i who there's anyone in the world you could orange pill who would it be oh man i would

636
00:53:38,144 --> 00:53:46,704
have said Jamie Dimon, I think he'd be really valuable. I don't know. That's a great question.

637
00:53:49,584 --> 00:53:53,664
You probably talked about this with Eric Balchunas, but to go back in time,

638
00:53:54,104 --> 00:53:59,244
both Eric and I think that there's actually overlaps between the crypto Bitcoin ethos and

639
00:53:59,244 --> 00:54:05,364
what Vanguard did. And I'm not saying we could convince Jack Bogle, the founder of Vanguard,

640
00:54:05,364 --> 00:54:08,944
to be a Bitcoiner, but I sure would have loved to have that conversation with him.

641
00:54:09,544 --> 00:54:14,824
He seemed open-minded enough over long periods of time to see it.

642
00:54:14,964 --> 00:54:16,064
That's exactly right.

643
00:54:16,644 --> 00:54:17,904
That's exactly right.

644
00:54:18,124 --> 00:54:20,844
Also, Vanguard is like a DAO, basically.

645
00:54:21,104 --> 00:54:22,204
It's owned by its shareholders.

646
00:54:22,424 --> 00:54:23,684
It's not a traditional company.

647
00:54:24,024 --> 00:54:25,604
It's a really interesting experiment.

648
00:54:25,604 --> 00:54:25,964
Yeah.

649
00:54:26,484 --> 00:54:28,264
So maybe that's going backwards.

650
00:54:28,904 --> 00:54:30,084
Look, I love...

651
00:54:30,084 --> 00:54:30,264
Yeah.

652
00:54:30,504 --> 00:54:34,704
He fell down like a really weird personal rabbit hole that became a worldwide

653
00:54:34,704 --> 00:54:39,524
phenomenon in a lot of ways. Yeah. Yeah. And to go back to the thing we talked about,

654
00:54:39,884 --> 00:54:46,224
people hated index funds. They were like Wall Street Journal op-eds saying they're anti-American.

655
00:54:47,424 --> 00:54:53,644
And yet now they're half the market. This just happens over and over again. But look,

656
00:54:53,644 --> 00:54:57,664
one of my, I get to talk to increasingly interesting people. Who do I want to orange

657
00:54:57,664 --> 00:55:04,464
pill? I want to keep moving up the stack. So I want to talk to a lot of sovereign wealth

658
00:55:04,464 --> 00:55:10,484
funds. I want to talk to a lot of central bankers. I think the world is better on Bitcoin. So the

659
00:55:10,484 --> 00:55:17,064
more people I can I can bring into this space. That's what I want to do. Yeah, Jack Bogle is

660
00:55:17,064 --> 00:55:20,744
really interesting because he's he seems like someone you want to be around. He seemed like he

661
00:55:20,744 --> 00:55:26,484
had high moral qualities or tried to exhibit them in his professional life. Maybe he had his own

662
00:55:26,484 --> 00:55:29,864
battles. But you know, he and I'm not saying he did, but you never know what someone's like,

663
00:55:29,904 --> 00:55:34,104
but he seemed really of high moral character, way he did business with what he wanted for his

664
00:55:34,104 --> 00:55:37,204
customers and as stakeholders. And there are these,

665
00:55:37,204 --> 00:55:39,664
these kinds of people that you just, you want them to get it.

666
00:55:39,724 --> 00:55:41,084
You want to be around them when they get it.

667
00:55:41,084 --> 00:55:44,004
You enjoy them and you think that the kind of person who would get it,

668
00:55:44,044 --> 00:55:45,164
if you could just get through to them.

669
00:55:45,624 --> 00:55:48,024
That that's exactly right. Yeah. I had the good fortune to know,

670
00:55:48,104 --> 00:55:51,604
know Jack a little bit and spend some time with him.

671
00:55:51,604 --> 00:55:53,324
And he really was a high integrity,

672
00:55:53,884 --> 00:55:57,984
high character person and loved engaging in sort of intellectual debates.

673
00:55:58,324 --> 00:56:01,184
So were he still alive, it would, it would be,

674
00:56:01,184 --> 00:56:04,204
it would sure be fun to talk to him again.

675
00:56:04,304 --> 00:56:05,744
I don't know if I'd be able to bring him around,

676
00:56:05,844 --> 00:56:07,344
but I would love to have the conversation.

677
00:56:08,164 --> 00:56:12,004
What's the one question no one's asked you that you think we should?

678
00:56:12,184 --> 00:56:15,184
What's the one question no one's asked me?

679
00:56:15,624 --> 00:56:17,564
You know, I get asked a lot of questions.

680
00:56:21,664 --> 00:56:25,544
People always, I mean, the people ask me, you know, what could go wrong?

681
00:56:28,364 --> 00:56:29,424
I don't know.

682
00:56:29,724 --> 00:56:30,644
That's a good question.

683
00:56:31,084 --> 00:56:31,844
I'll think about that.

684
00:56:31,924 --> 00:56:34,404
Maybe I'll come back and share it.

685
00:56:34,704 --> 00:56:40,384
Look, I think in the end, Bitcoin is this funny thing, which is when you enter it, it

686
00:56:40,384 --> 00:56:44,604
gets really complex and you dig into mining and you study all these things.

687
00:56:44,604 --> 00:56:48,784
And then at some point it gets relatively simple and seems inevitable.

688
00:56:49,304 --> 00:56:52,664
That's sort of the phase I'm at with Bitcoin.

689
00:56:54,164 --> 00:56:56,564
You know, I do wish people thought, asked more.

690
00:56:56,564 --> 00:57:02,024
a question I don't get from people is sort of why Bitcoin will make the world a better place.

691
00:57:02,084 --> 00:57:08,044
I don't get those questions enough. I think people don't think about that enough, but I do think it

692
00:57:08,044 --> 00:57:12,624
would make the world better. So maybe that's the thing I wish people asked. How has it made your

693
00:57:12,624 --> 00:57:19,724
life better maybe or changed you? Well, you know, look, it's given me a lot of confidence and a lot

694
00:57:19,724 --> 00:57:25,844
of hope in part. You know, I do worry a lot about fiat debasement and sort of the long-term trajectory

695
00:57:25,844 --> 00:57:31,044
of that market. And whether it's the radical solution of moving to Bitcoin or whether Bitcoin

696
00:57:31,044 --> 00:57:36,764
acts as a governor on that, that keeps the Fed in check and slows that process down, that makes the

697
00:57:36,764 --> 00:57:41,264
world better from my point of view. The other way it's really improved my life, I just met a lot of

698
00:57:41,264 --> 00:57:48,824
people who really care about this thing for the right reasons. And it's a phenomenal community.

699
00:57:49,264 --> 00:57:54,084
So just from a personal perspective, it's opened the doors to meeting some people I wouldn't

700
00:57:54,084 --> 00:57:58,204
otherwise have done that I've really, really enjoyed. Well, I look forward to meeting in

701
00:57:58,204 --> 00:58:02,904
person. I'll leave it to you for any parting words and let people know where they could follow Bitwise.

702
00:58:03,204 --> 00:58:09,444
Read the investment pieces you guys are putting out. Yeah, absolutely. So Bitwise Investments,

703
00:58:09,644 --> 00:58:15,344
I'll call out, I write a weekly memo called the CIO memo. What I like about the memo is that it's

704
00:58:15,344 --> 00:58:21,344
short. It's only like a thousand words, usually 800 if I can. And if you sign up for the memo,

705
00:58:21,344 --> 00:58:25,824
we won't send you other sales material we'll just send you that so that's a that's a fun thing the

706
00:58:25,824 --> 00:58:32,384
other thing you can follow me on x matt underscore hogan h-o-u-g-a-n what i try to do on x is share

707
00:58:32,384 --> 00:58:37,344
some of the things that i get to do that other people don't get to do so as an example i recently

708
00:58:37,344 --> 00:58:42,624
posted about a webinar we did where we surveyed advisors on their attitudes toward crypto and if

709
00:58:42,624 --> 00:58:48,064
they're going to buy uh no one else can see the results but me but i try to share that to people

710
00:58:48,064 --> 00:58:51,324
So maybe it's worth looking for me on X.

711
00:58:51,844 --> 00:58:52,484
Sounds great.

712
00:58:52,544 --> 00:58:53,224
This has been so dope.

713
00:58:53,344 --> 00:58:54,344
Thank you so much, Matt.

714
00:58:54,384 --> 00:58:55,064
I really appreciate it.

715
00:58:55,084 --> 00:58:55,804
I've really had fun.

716
00:58:55,904 --> 00:58:56,304
Thank you.

717
00:58:56,684 --> 00:58:59,964
Hey, hey, and that's a wrap on this one.

718
00:59:00,484 --> 00:59:05,224
If this conversation added value, share it with one person who needs to hear it.

719
00:59:05,584 --> 00:59:09,504
That is how the Bitcoin matrix where critical thinkers meet grows.

720
00:59:10,124 --> 00:59:15,444
Huge thanks to our sponsors, Stamp Seed, Firefish, Club Orange, and Camp Nakamoto.

721
00:59:15,444 --> 00:59:19,184
These are companies and products I personally use and believe in.

722
00:59:19,644 --> 00:59:22,644
Please support them so they can keep supporting the show.

723
00:59:23,244 --> 00:59:25,804
Links and codes for all of them are in the show notes.

724
00:59:26,404 --> 00:59:27,524
Not on Fountain yet?

725
00:59:27,944 --> 00:59:33,464
$5 a month gets you every episode a full day early, completely ad-free.

726
00:59:33,864 --> 00:59:36,704
Or $1 per episode after early access.

727
00:59:37,364 --> 00:59:38,424
Follow me on X.

728
00:59:38,664 --> 00:59:39,844
I'm at Sed Youngelman.

729
00:59:40,244 --> 00:59:42,684
The show is at underscore Bitcoin Matrix.

730
00:59:42,684 --> 00:59:45,864
We're in the conversation every single day.

731
00:59:46,484 --> 00:59:47,584
The Matrix is real.

732
00:59:48,064 --> 00:59:48,924
Keep on stacking.

733
00:59:49,344 --> 00:59:50,444
Keep your head on a swivel.

734
00:59:50,864 --> 00:59:51,884
Spend your time well.

735
00:59:52,164 --> 00:59:53,384
And thank you for listening.