E134: Bitwise CIO: It's Boring, But It Will Make You Rich in Crypto

28:46Mark Twain said, it's not what you don't know that gets you in trouble. It's what you know for sure that ain't so. How does this principle apply to those who want to become better crypto investors? Yeah, I think it's exactly what we're talking about. I meet people every day who are absolutely convinced that Ethereum has no chance and Solana's going to crush it. And then I meet people who are absolutely convinced that Solana is old school tech and it's Sui or Aptos or Avalanche or Bera or Monad or name your favorite. And they have 100 % conviction that they're right. Which is reflected by their...

29:27Their allocation. Their allocation. Yeah, so they're 100 % in this asset. Maybe they're even short the other asset if they could be. But their level of certainty is so high. I don't know. that's just really hard like if you've been around technology every time it's just it's it's really uncertain who the long-term winner will be it was uncertain in search it was uncertain mobile uh it was uncertain in cloud it's it's uncertain in ai like tell maybe that's a way to approach it take another category um are you a hundred percent convinced that open ai will be the winner in ai like no no way not a chance but people in crypto are so tribal and so convinced that they have this right um I think it's just really tough it would be terrible to be in crypto for 15 years and have negative returns while the market you know 50x's uh that would be painful I think it happens to a lot of people though I think it happens to a lot of people because they're over allocated to shit right yes to the to the to the minus 99 % instead of the 3 to 5x, right?

30:41That's right. And again, it's not to not do it. It's just to 80-20 of it. You have to scratch that itch. You can't, like, I can't resist it. I can't resist not speculating. No way. You could ask me what I... Yeah, I want to know what you're doing in your 20 % of, like, itch. Yeah, I'll answer that for sure. But you have to allow yourself to do it. But you shouldn't allow yourself to do it with everything. Because you're, I don't know, Maybe you're way better than me, but I'm not that good for sure. You're a CIO, so you understand portfolio allocation. Yeah. So before understanding this 20%, how much is crypto?

31:22Of my own personal portfolio? Liquid? Yeah. It's probably 30 % or 40 % of my liquid portfolio. And then I work in crypto and I'm a shareholder in Bitwise. um you know so the the overall allocation is really significant yeah how responsible is that i think it's fine i think it's fine i love it that's what i wanted to hear yeah look i have a high degree of conviction uh on this space um i wish i owned uh more bitcoin to be sure yeah i think we all do right we probably all own less bitcoin now than we used to own in the past Yeah. Yeah. We should all own more Bitcoin. So what's the 20 %? What's the 20 %?

32:12Right now, there are two areas that I think are undervalued. So one, I think there's going to be a DeFi renaissance that's really significantly bigger than most people think. So that's part of the 20%. The reason for that is, we talked about this infra being built up, but the use not expanding because of this regulatory barrier. So you have like a dam that's filling up to the very top. If you look at DeFi, that's exactly the case. There's incredible technology and incredible infrastructure and incredible revenue in users and proof that it can survive in volatile markets up and down. It's so phenomenal to watch.

32:56But both the penetration into real world assets has been limited and then the tokenomics of the projects has been terrible because if they had any real value drivers, they went to jail. And I think that that's changed. And so I think there's a massive unlock there. And then I don't want to name individual names, but there's some of the emergent layer ones that I think are interesting and I like owning a little bit of. Interesting. What's a great investor? a great investor is someone who's comfortable with their investment doesn't panic uh to me that's the whole game how hard is it to become a good investor it's really easy it's really easy that's so interesting it's really easy just 80 20 it and you're already um you know there's a i i come from an index investing background right what's what is index investing.

33:59Sure. It's, it's, it's, you know, it's, it's owning the S and P 500 in stocks, which say instead of trying to pick and choose stocks, you just own the entire market. And a funny little story from index investing history is it was, it was created in the 1970s and early 1980s. And when it launched, it was seen as un-American. And there was this phenomenal statement. I think it was from someone at Fidelity, which was an active shop, which was, I don't think the majority of Americans will be comfortable getting average returns. And the reason that's funny is by definition, they have to because they own the entire market.

34:40So by definition, they're going to get those average returns. But he was the point they were making is no one would be comfortable with this index-based strategy. The reality is the long-term investors in index-based strategies historically beat 70 to 80 percent of all investors so you can be in the top 25 percent of investors by just doing nothing it's so it's so that part is easy but you just have to hold yourself back yeah actually i read the i told you the other day i read three books 10 years ago 12 years ago about investing to understand how the hell do i become financially free and you read all these i mean i read the little common sense of investing jack bogle um a random walk down wall street yeah burton malkiel and then tony robbins when he mastered the game they all say the same thing by index funds by by ets right yep and do nothing um they also the same thing and even buffett says the day i die i'll put everything in sap 500 because I don't think people can beat the market.

35:47And in one of these books, I think it was the one of Tony Robbins, he was actually saying not 70 to 80%, he was saying 96 % of the active fund managers don't outperform the market after taxes and fees and all that stuff, right? That's right. Which is crazy, right? Think about that. And those are guys getting huge salaries with huge teams, today using the most advanced AI tools, using the most sophisticated traders. they probably have direct relationships with the people running these companies and 96 % of them can't beat my son Dash who owns index funds he is crushing these people making 10 million dollars a year taking stocks and that's just the facts I mean those are just the data and I think it's doubly true in crypto for what it's worth that's what I wanted to ask 100 % but what's what's the S &P 500 in crypto?

36:42Is it just owning Bitcoin? No. Or is it owning... Great question. So if you think crypto is just money, then it's just owning Bitcoin. But if you think crypto can be money or it can be tech, then it's owning the top five, the top 10, the top 20 high quality assets. Trying to screen out the junk. We can talk about that. I can see the eyebrows. It's getting too good. Yeah. It's getting too good. Look, I talked about this earlier, that there may be alpha in screening things out. Right? And I think if you look back through crypto's history, we can all identify some things that we wish we had screened out.

37:30Right? So Luna, I know, is an example of something that people wish they had screened out. FTX's token is something that you wish you could screen out. I think there are ways to do that. I think you can look at, you can at least get warning flags from some of those assets if they're not available from high-quality custodians or if there's no, in the US, no US dollar rails to get in and out of those assets or if there's flaws in the tokenomic design. And you're not going to get them all right and you may miss a few high quality assets. But I think you can get some of them. But even if you don't, even if you just buy the index, you're going to do fine.

38:18The thing about crypto is the space is undervalued by a factor of 10 in terms of where it's going and it's important in the world. So if you get that 10, even if you bought some things that went to zero, as long as that didn't spook you out of the market, who cares? But do these index fund of the top 10 or 15 or 20 beat Bitcoin. Oh, I don't know about that. It's so hard to beat Bitcoin. I don't know if it'll beat Bitcoin. You said before 90 % of my crypto is in Bitcoin, right? Oh, Bitcoin and top 10 assets. So I invested in the next one. But here's the thing. Even if you don't beat Bitcoin, I'd still would buy the index because otherwise, there's just going to be a moment when a friend calls you up and is like, you got to look at this thing, right?

39:05And you're going to get excited about it. It's going to have high returns. And you're going to jump into it. And you're going to blow yourself up. I think the controlling your own personal behavior, it's the whole key. It's the whole key. So if you can, will it be Bitcoin? I don't know. Bitcoin's really amazing. And it's going after the largest market in the world. So that's a pretty good bet. But I do think it's nice to have a way to resist temptation. Are ETFs, you said you were working, you were CEO of ETF.com. Yeah. Yeah. You're qualified to talk about ETFs. Had to say it really. I guess. Are ETFs a good thing?

39:49Yeah. So there are two ways to answer that question. I don't know which angle you're going to, but from one perspective, the core thing an ETF does is it lets my uncle invest on the same terms and the same cost as the Harvard endowment or the largest institutions in the world. So you know that because these institutions own the same ETF that my father owns in his retirement account, right? They use it to get exposure to the S &P 500 or bonds or whatever. It's such a good deal. And that's true in crypto too. The Bitcoin ETFs are priced at such low levels that you would have to be putting$5,$10 billion of money to work buying Bitcoin to get the same deal.

40:34So it's an incredible democratic idea. there's this other debate within crypto which is the you know not your keys not your crypto does it make sense to have an intermediated financial product right instead of owning bitcoin directly um what's your answer to that oh yeah absolutely man for sure look i love people who uh own bitcoin directly i think that's phenomenal um do you i don't yeah i don't I know, which is shocking to some people. But I'm not, I wouldn't trust myself from a security perspective. I'm the CIO, not the CTO. And I have a great deal of confidence in our ETF setup. Can I ask a question about that?

41:21Yeah. Because I was actually interviewing Ben from Bybit. Yep. I'm actually not a security expert, right? but I was essentially saying, hey, if you guys were talking about self-custody, but the fact that they got hacked shows that, because they are sort of self-custody in their client's assets, right? Yeah. If with all the security measures they have in place, Bybit, I think they had 20 billions in AUM. Yeah. I mean, in client's assets. They can get hacked. it means that almost everyone can get hacked. And then it just, then they said, oh, look, this part was basically one that we didn't do internally.

42:07We're using another external company. And then I started to kind of think, or even ask him, I was like, do you think, for example, ETFs, right? The Bitcoin is somewhere. Which means there is still a risk. So even when you said before, I'm not comfortable, especially when you have a certain amount, money. I want to basically delegate that. But what you need to understand when you delegate your crypto, I mean, when you have your own crypto, you're responsible for it. So you could lose it very easily. But also when you're delegating it, and it's one of the key learnings he had was, if I start to delegate some part of these things, I become more complacent about, you know, it's fine, like, right.

42:49And then you realize, maybe it's not, right? Sometimes it's not. Yeah. How is... Obviously, an exchange and an ETF is very different. There's probably much less movement of the assets, but how different is it in terms of security? An exchange and an ETF, and how likely would it be that something similar happens to an ETF? And people might say, Kevin, you're so dumb with your questions, but in this industry, you have to ask the dumb questions because all the shit that happened... Yeah. now or two years ago. It's because people were taking things for granted. Yeah. Yeah. I think it's really important to ask.

43:29I mean, the level of security procedures and sort of the fracturing of crypto into multiple wallets that ETF custodians do limits the risk. And, you know, I know in terms of the level of due diligence that Bitwise applies and the various security protocols in terms of where crypto can and cannot be sent out of custodians gives me a great deal of confidence in that approach. You can never say never, right, in this industry in particular. And I hope we don't ever get to that point. And I feel confident in Bitwise's approach, but we're not the only asset manager in the space. Some haven't been in crypto that long.

44:11So I worry a little bit about that. But the good news is these are, the custodians have gotten very institutional in nature. yes it's our home cold storage if they're trading right it should never touch an exchange um and so i feel very confident in it but i completely understand the other side and i love people who self-custody their own bitcoin so we talked about traditional investing before basically all these books you can read two, three, five, six hundred pages, they will tell you buy or buy an ETF, buy the S &P 500, buy the NASDAQ. Yep. And then we send in crypto buy an index, right? How much does this traditional investing principle work in crypto?

45:09It all works. We even have our own words for it. Like what is HODL? all those buy and hold right if you put it in a pinstripe suit and put a top hat on it same thing as buy and hold same thing you read in those books you just make fun of it here in crypto um yeah what is uh buy the fucking dip it's dollar cost average right we just use a different word for it um i think with a few small exceptions where i can't think of a direct tie almost everything that is true about traditional investing is true in crypto so costs matter uh long-term buy and hold will outperform most uh asset picking um dollar cost averaging is a good idea you should buy low and sell when it's high to keep in your your tolerance there are a few areas where i think there are differences crypto is a less efficient market so i think there is arbitrage opportunities that exist in crypto that are real that don't exist in the traditional world at the scale they do in crypto i think staking is a fairly unique thing in crypto for which there's no sort of direct analogy in traditional investing but the same rules of like buy hold rebalance those are gonna you know those those worked in investing for hundreds of years i don't think there's anything about crypto that's changed it these 10 000 new coins every day i mean could be much more could be less yeah i read something like that you know 80 000 a week yeah millions of coins now out there yeah what are the crypto assets that I can buy and hold for the long term?

46:57Yeah. Bitcoin.

47:02No. Look, the way I think of Bitcoin. Bitcoin and Bitcoin. Bitcoin and Bitcoin. I don't think you could just buy it and be dead. I think you have to rebalance it. You know, I would guess that Bitcoin, Ethan, Solana will be here for the long term and everything else underneath that may or may not. Yeah. You know, that's so important. That's so important because when you say, hey, 80-20, that means like, hey, you're 80%. I mean, that's what also Raupal says all the time, right? He says, don't fuck this up, don't fuck this up. Yeah. 70 to 90 % should be in top three assets. Yeah. Otherwise, you're just going to end up like most people are ending up now, right?

47:45In the middle of a bull run, most likely. But wrecked. Wrecked. And depressed and down. That's right. It's the saddest thing in the world. Whereas if you have the 80 % in mostly Bitcoin, you're up 100 % over the last year. Like pretty good. So what if you got wrecked? You know what you said before? And that's so important for people to understand, but they don't. And they don't want to hear it, which is, let's say you're at the beginning of a bull market. So you're in the bear market. you look at, okay, I think we were at like 1 trillion more or less at the bottom, right? Yep. And then you say, and maybe previous bear market, maybe 200 billion, I don't remember, right?

48:38But you go 200 billion, or let's say 100 billion to 3 trillion, so that's 30x for the whole industry. And then down to 1 trillion, but you're still like up 5x. Yeah. Yet people end up with less money. They not only lose their money, they put in more money and they lose that money too, right? That's right. While the industry goes up 5x. Yes, yes. 30x from bottom to top and then 5x from bottom to bottom. And then you're thinking, okay, 1 trillion. I was actually tweeting about that like a year and a half ago. I was like, the industry will go from 1 trillion to 10 trillion, whatever it is, whatever it is, but let's say 10x.

49:18And then we go back down to 5 trillion. so basically it would be 5x yet you will manage to lose all your money and some more that's the thing that most people don't understand, like how is that possible yeah, yeah, and that's really sad, and it's really sad and you could do even better if you had a target allocation you sold you know, when it went up a lot, you bought when it went down a lot but yeah, don't let that happen to you right, like if you're in crypto right now, you've had this insight that most of the world hasn't had, which I feel very confident is right, which is that this thing is just getting started and it's going to be really important.

50:00It's a generational opportunity. You've already done the hard work. Don't then, you know, shoot yourself in the foot. You said it's just getting started. It's just getting started. Yeah. Tell me more. Again, I have to repeat the tweet from before. I didn't want the three to five X, so I choose the minus 99 % instead, which is hitting, this hits hard a lot of people in crypto. 325x, this is a tweet. What's the realistic long-term upside from here for assets like Bitcoin, ETH, and SOL? And you are the best position to understand that because you're seeing institutions and what they're doing, and you know how much money they have.

50:43And therefore, you know what's the potential upside and before you said when i went into bitwise 2017 i was thinking 10x yeah i think more 50x right so tell us more about that yeah i mean i'll give you two quick views on on bitcoin specifically i think until bitcoin is as large as gold we were just getting started it's still early and i think once we get to as large as gold then we can talk about you know is it 5x bigger than gold is it 3x bigger than gold is it 2x bigger than gold but there's still a 10x until we match gold and try to think of another area where there's a physical and a digital analog where the physical is still bigger is physical newspapers bigger than digital newspapers is physical advertising bigger than digital advertising are dvds bigger than stream there's just i've really struggled to come up with even one example um and so i think until we get to bitcoin you're actually still or i mean until we get to gold level you're actually still early and it's only after gold that uh that we start counting like how big could this thing be um so you have a 10x until you're no longer early right and then beyond that the other angle is from an institutional perspective the thing about the thing about institutional investors is their starting point is what's called a benchmark portfolio and a benchmark portfolio means owning everything.

52:11So like an index of stocks, the S &P 500 is, you can think of that as the benchmark portfolio, right? That's where they start. And then if they want to overweight NVIDIA or underweight Ford or overweight Tesla, they can tweak around the edges, but they have to get to this starting point. Crypto is now part of the global capital markets, right? It's$3 trillion dollars. Stocks are a hundred trillion dollars. Bonds are another hundred trillion or something. So it's a sliver. It's like a percent. But of those 200 trillion dollars, they have no exposure to Bitcoin. They don't own it yet. So it's not like a little bit of money has to come into Bitcoin.

52:50I think institutions have to buy a trillion, a trillion and a half dollars worth of Bitcoin until they get to level. Imagine what a trillion and a half dollars coming into Bitcoin does to the price. Like who is going to sell? How much will it go up? I think it'll be really significant. People look at the Bitcoin ETFs last year, they did$37 billion. People put$37 billion in. The price went up substantially. This is more buying than selling. I think you got to put a trillion dollars into this just to get to level and um it's just too much money it just has to it has to come in so i think the people who are worried that all the best i actually think there's never been on a risk-adjusted basis a better time to buy bitcoin than right now i think it's eliminated all the risks of failure.

53:47Those are all gone. And I still think it has 10x upside until it's getting started, until it's no longer early. And then I think it has upside from there. What does that mean for the rest of the industry? It's a very tricky question because the logic would be if Bitcoin is the most liquid asset, right? Because of 10x, the rest should go up much more. But what we've been seeing is actually that's not the case. Yeah, I actually think the nature of that is changing. So the reason I think there used to be this Bitcoin goes up and everything goes up more is that crypto was driven mostly by speculation, right?

54:30The hope that it will be better in the future than it is today. And I think where we're at right now is it's starting to be driven more by fundamentals. So like if Bitcoin goes up because governments adopt it, what should that mean for ETH? Not much, right? ETH is going to have to win on its own terms. Solana is going to have to win on its own terms. Uni is going to have to win on its particular terms. And I think this idea that Bitcoin will drag these other assets up is probably from an era where crypto was mostly speculative. And retail. and retail and i think we're moving into an era where it's more utility and more institutional and so you're going to see these assets have very different returns it's going to look more like the stock market does nvidia going up help ford no right they're basically irrelevant to each other and i think we'll get to the point in five or ten years where bitcoin and uh solana are basically not quite irrelevant because they're both within this crypto ecosystem but they have they have a loose affiliation from their returns.

55:39Which one do you think goes up the most in the next 10 years? I don't know. I'm telling you, I think this DeFi revolution is real. I think it's bigger than people think. Nice. Yeah.

55:53We're in this beautiful office. Bitwise office. I have a beautiful Bitwise t-shirt. I have to ask you, what is Bitwise if you had to explain it to your mom? Yeah, Bitwise is a specialist crypto asset manager. So we help people invest in crypto. We use our expertise to build products that are sophisticated on the inside, but easy to understand on the outside so that you can get exposure to the space in a way that's safe and secure and low cost in many cases. So I think that's what we do. I think we do it well. We've been doing it for seven plus years. the stewards of the crypto space you write a weekly CIO memo but you don't do this when you're at your desk you do it while hacking and running that's right, why?

56:49because it's actually the same thing we've been talking about, when you're at your desk looking at the screen, crypto is so hard to understand because you're looking at Twitter it's all extreme opinions and then you're looking at the price move and it's up and it's down and you're letting the price movement influence what you're thinking about, the particular market activity, right? So you see a piece of news, you think this is good for crypto. It fits my long-term view about where this industry is going and then the price craters and you start to ask yourself, wait, wait, am I wrong? And that's healthy to a degree, but it's hard to get away and think what does this really mean when you look at a screen you have to you have to get out so I go hiking how much are you guilty of that oh you're a professional you're a CIO you understand long term investing yeah you're working for a very serious I look at it so company in the institutional space yeah and you talk about looking at Twitter and the prices and being kind of affected yeah how guilty are you I'm totally guilty yeah how guilty are you I'm just a kid no you can't get away from it you can't and it's important you gotta be part of it I'm just an addicted kid yeah aren't we all aren't we all we're all addicted kids we're all DGens at the core but but you have to you have to separate that from your investment decision making except in that 10-20 % of the portfolio where you know knock yourself out yeah but yeah I can't get away can't turn off X which is why you go hike and run yeah and that's literally where you start to have like all your ideas or i write i write the whole thing usually in my head while i run or hike how long is the memo oh they're like 800 words so i'll i'll write at least the full intro in my mind i i've sort of write by speaking i find it easier so i'll write it in my head and then i'll try to remember it when I get home and type it out.

58:57What do you mean exactly when you say I write it in my head? Yeah, you see the words. You see the words and I... You sing the words. No. I mostly speak the words to myself. I was a speechwriter in a former life. And then you remember them. And then I remember them and I write them down as soon as I get back from the run. Or sometimes, sometimes, if I have my phone, I'll stop and take a note. But it's, you know, otherwise there's a screen that's calling up for you and Slack messages. You need to get that separation in crypto. Again, this is like a 10-year trend. How do you focus on that trend when the price is moving?

59:35So every week, you know you're going to go for a run at a certain moment of the week and that run or those runs will be basically for this CIO memo. That's right. Yeah, yeah. It's a couple. It's usually a couple. One to sort of think about what you're doing and then one where I actively write it in my head. And usually, it's not the full memo. It's not like I come home and it comes out word for word. But it's about 50-60 % of the words that end up on the page.

1:00:08How much can you use AI for this memo? I had a conversation with Mike Novogratz last summer. And he was telling me, he was like, I'm so bullish on this AI stuff. AI agent. Like he was basically catching like this thing, like a couple of months before. Yeah. He kind of blew up. And he was giving an example. He was like, hey, um, Scaramucci, uh, Anthony Scaramucci wrote a book on Bitcoin. And I had to, to, to write the, the, the, the words in the beginning. Do you say four words? Yeah. Yeah. The four words. Yeah. And, uh, he asked me to do a thousand words, but he was like, man, like a thousand words, what the fuck?

1:00:49like and then he just like used the AI and he said hey if you were Mike Novo and you had to write four words about this this this he put the whole book in there yeah and then like the AI helped him a lot and then he just literally likes I mean change a few things and it was done right yeah how much can you use a mix of running and hiking in the nature and AI I love it I love it I'm really bullish on AI. I use it all the time for data gathering or to write sort of formulaic things. I'm on the board of an AI investing company. But for the memo, not at all zero. My view is that the challenge in writing the memo is actually the thinking.

1:01:36Once you do the thinking, and once you have it really, really clear in your head what you're trying to say, then it writes pretty quickly. And I haven't found a way for AI to yet do the really clear thinking for me. Maybe it will. I'm not counting it out, but so far, so far I don't use it. For this podcast, I'm actually thinking about something similar. A friend of mine was like, the other day was like, you should take, for me, every episode is a blank piece of blank sheet, right? Yeah. It's absolutely not scalable. Yeah. But that's how you have the best conversation. you have to understand who do I have in front of me and how can we get the best out of this person that is useful for people who are listening yeah like just otherwise it would be like most of these conversations that I see too much online which is like very shallow right yeah so you could have like a template but if you have a template you get bored people get bored right but then with AI I was thinking I mean actually my friend was like you could take all your previous episodes them into an AI and then if you're able to have this kind of conversation prep that I have often, not always, but often, I could take the notes from the prep and then put in the AI, like, analyze all the...

1:02:50I don't know. I don't know. Maybe. Maybe. Maybe, but... I mean, my conversation is so... Again, like, the more it's still, it's not scalable. If I'm recording 15 episodes, like, this month, like, it's going to be crazy preparation. but it makes the whole thing so much better I don't know I think it makes it much better I still think maybe it'll get there but I still think there's like a 20 % that we haven't yet replaced so I don't know, maybe it could throw out a few good questions but it has to be the questions you want to know yeah exactly but I have to say I interviewed an AI, you know the virtual ecosystem I had these AI agents and one of them is called Luna and she has like a million followers.

1:03:37She's like an AI doll playing music live on TikTok. She has a million followers and she's worth like$17 million. It's crazy. So I went to the studio and I interviewed her. That's amazing. For like 70 minutes, 70 minutes, like an hour and 10 minutes we talked. Yep. And one of her big plan this year is actually to have her own podcast. So I was like, holy shit, like, you know, like maybe we're just hoping like, hey, my CIO memo, I can't really use AI. Me, my podcast, I can't really use AI, but we're probably, I don't know. Maybe there's some coping there. That's incredible. That's incredible. What's something that you believe in that most people would not agree with?

1:04:14Well, I mean, come on. I think crypto is, that's too easy. It's crypto. This is actually important. You think most people would not agree with the fact that crypto is important and it's going to get big? I think 95 % of people still don't think crypto is important. And they just signed a 0 % chance to the idea. We have one here. There you go. we still love you. We do. That Bitcoin could be a globally important monetary asset. And I think most people may agree with stable coins. I don't get a lot of pushback on stable coins. But the idea that Bitcoin could be a globally important monetary asset or that we could be using crypto in our day-to-day lives in three years on a widespread basis, I don't think, I think maybe 98 % of the world disagrees with that.

1:05:02Do you think that's wrong? I'm not sure about the numbers, but the only thing I want to say is I've been in crypto since late 2018. I thought I was late. Like we all do, right? Of course. Man, I'm late. Yeah. There's this very weird thing in crypto where if it's a bear market, for example, two years ago, everyone got completely wrecked with all these exchanges going bust. Obviously after that, it's kind of lame and kind of like you don't want it tell people to measure in crypto, right? So you don't feel good about it. And then you think, yeah, but at some point, when things get better, I should be proud and say, kind of like, this is my moment, right?

1:05:45Yeah, yeah, yeah. I mean, stay humble, but like, this is my moment. Hey, I was right. We always say like the best drug is not making money, is actually being right, right? Being proven right. Yep. But when crypto goes up, or let's say when Bitcoin goes up, the attention goes on so much shit, like it goes on all the wrong places, that still makes you feel that you're kind of lame to be here and that make most of the people out there not trust it and be like, this is fucking lame and weird. So basically, yeah, I'm not sure about 95 or 98, but like there's way too many people that still don't understand.

1:06:20And the reason is because because humans' attention goes on, obviously is disgusted by all this stuff when it goes down 95 % and everybody loses all their money. But when it goes up, there's too much shit happening and the attention goes on the wrong thing, which is why I'm doing this podcast. I'm like, how do I talk to the most credible people? And the same as a Bitwise is doing in crypto with like this, you know, long-term investing, boring. Like I'm trying to do the same in education. Like, hey, look at the right people who are doing the right things and stop. Obviously, yeah, like the meme coin, whatever, like it just, it's great, but it feels good for like five minutes, but then you lose everything and then you don't come back or like you always feel like this industry is kind of scammy, which it kind of is, right?

1:07:09So it's, to answer your question, yeah, it still feels like the image is not good. The image is really not good. And the other thing, one thing that strikes me about that, I mean, I have lots of thoughts on what you said there, is, you know, the market is mostly Bitcoin and then some ETH and some Solana and then a handful of very small assets. But the media attention and weight that is paid to meme coins or to these scams is like almost equivalent, right? Which is an incredible fact. Because, again, the market is 70 % Bitcoin. And it's 90%, you know, Bitcoin, ETH, Solana, BNB. But is the media attention that?

1:08:00No, absolutely. It's mostly on this negative stuff. I was talking about that with Ran Neuer from CryptoBenter. Yeah. And I was challenging him. I was like, hey, you have multiple shows, but most of them are about trading. Do you really believe that people can make money trading? He's like, yeah, I start to believe a bit more, but actually, don't do that much, right? And then I'm like, you talked about all these meme coins or AI agent, etc. Like, what's the ratio? Same, right? What's the ratio? You're doing media. And I understand, I mean media, I understand the attention game. Yeah, yeah. So you need to give people what they want to click on and read.

1:08:36But you also need to do it kind of the right way. Otherwise, they're going to get screwed. So do you want to use your attention or do you want the right education and have to use your attention? The right is very hard, right? Very hard. So I told him, what percentage of your shows are all this crap? And what percentage? Because your portfolio is 90 % Bitcoin. Yeah. So therefore, 90 % of your shows should be in Bitcoin. Right, right. Same, right? And it's like, obviously, yeah, we don't do that because people, right? But like, that's the freaking problem in media outside of crypto, but also in crypto.

1:09:09It's a big problem. It's so hard. I mean, yeah, you know, I was running ETF.com and we literally could have written one story that said buy an index fund and then that's it. And then period. But that's not a good media business, right? And I think this is a really, I think it's a really big issue. we spent so much time focused on all these wrong things i don't know there's a way out of it eventually the real things prove themselves in a way that can't be denied and i think we've we're starting to get there with bitcoin we're starting to get there with stable coins um but yeah there's this media circus it's one of the reasons i'm sympathetic i'm not a maxi but i'm sympathetic to the bitcoin maxis uh in the sense that this circus does color people's perception of this market in a way where if it was just bitcoin and we were talking about governments adopting it as a sovereign asset and you know regulation improving that would give one view um so yeah it's a painful reality my approach to this is uh i come to the us i record 15 episodes i keep them one two three four five months i don't release them when it's the right moment the attention oh you're doing an IPO oh you're doing a TG oh there is something around your company boom I realize it so the attention is there the content is not necessarily about the the drama whatever but keep half your attention I like that it's still serious right but like and I started to understand this better since mid last year and like the views and everything exploded a lot but I was like how do I stay credible by not surfing the latest wave, which by definition means you're too late already.

1:10:58Because you're giving information about AI agents when people click on AI agents. Or the other thing I was doing, I was using my seven, eight years in crypto to try to anticipate some trends, to be able to say, I need to get this founder just before they blow up. And then you kind of seen as like the podcast credible, also that almost research service before free, right? Very hard to do, especially in studio but you have to do that right otherwise yeah otherwise you're just surfing and people at the end of the day people get wrecked and if they get wrecked they're not going to stay and that's a big problem that we have right that's exactly right yeah it's so complicated yeah yeah I love that what's your biggest prediction for the next 12 months biggest prediction within crypto I I'm really bullish really bullish I mean I think, I know that's too easy to say.

1:11:55We can get to a more specific prediction if you want. But unless you lived in crypto the last four years, you didn't know how challenging it was and how repressed the industry was from the regulatory overhang. And as a result, I think people don't understand how good it is now and how significant forward will be in crypto. So my general prediction is just it's going to be an amazing year in crypto. I know it's noisy. I know it's good news and bad news. But I think that I think it was just tied away in positive change. I usually never do like price prediction and all that stuff because it's kind of noise.

1:12:32But now that we talk about that, you see, I'm so bullish. People are kind of like, yeah, it's very noisy. So one day they're super bullish. The day after they're down, other people got wrecked on all these shit coins, right? And they had the majority of the portfolio in. so to give a bit of hope yeah i remember some time ago you guys released the uh a paper saying giving some price targets we did 2025 for bitcoin ethan solana yeah yeah tell me more about that i mean it's we'll start with bitcoin we think bitcoin's going to 200 000 or above this year 2025 25 my view is if you look at uh if you look at bitcoin i want want to go too far into prices, but if you look at Bitcoin since the ETF launched, it's done two things.

1:13:22So first it ran from 50 ,000 to 72 ,000, and then it traded sideways. And then it ran from 72 ,000 to 100 ,000, and then effectively traded sideways with a lot of volatility. I think that tells you everything you need to know about the market. The ETF introduced structurally more demand for bitcoin than there is new supply they bought half a million bitcoin last year we're producing 165 000 so there's more demand so why did it trade to 72 000 that was the last all-time high people are people they're willing to sell at the all-time highs why did trade to 100 000 and then stop there it's a round number that's it so people are willing to trade at 100 000 i love it the reason i bring that up is i think if we get north of 100 000 the next place where 200 200 right and it'll probably stop there and you know boy that doesn't sound like a sophisticated CIO view you said before yeah but you said before I have one alpha which is like the long term big alpha that's right yeah keep it stupid simple keep it stupid simple there's more demand than supply and people are people I think that tells you how this thing people are people yeah if yeah Yeah, I think ETH, I'm bullish on everything.

1:14:39I've realized maybe that's not that interesting. I think ETH will get back to a new all-time high. I think ETH is the contrarian bet in crypto right now. And here's my argument for ETH. What are the things people are most excited about outside of Bitcoin in a serious way right now? They're probably most excited about stable coins. They're most excited about tokenization. And they're most excited about agentic AI, right? We just talked about those things. Where are those three things happening? It's all happening on ETH, right? ETH is the largest platform for stable coins. It's got the highest share of tokenization, like an 80 % market share.

1:15:17And most of the agentic AI stuff is on ETH or base or whatever. I don't know. Like I know Solana has been the cool kid because it's been the center of meme coins and the technology is very exciting. But if you look at the things people are bullish on, they're based on ETH. And so I'm pretty bullish about ETH. So I think it gets back to new all-time highs. I think Solana also does well. And maybe people ask, well, how can ETH do well and Solana do well? It's because I think we're going to 100x the number of people interacting with these blockchains. And they have different value props, Solana and ETH.

1:15:55One is more institutional, one is more retail. And so I think they're both going to do fine. So I think Solana will do quite well as well. What does that mean in terms of price for Solana? $400,$450, maybe more. Not 10x. That's the challenge for people. But 2x is great. Reax is amazing. In traditional finance, those are life-changing returns. And in crypto, they can be really significant as well.

1:16:29Thank you so much for doing this, Matt. Thank you for having me. That's awesome. Thank you for being a steward in the crypto space. We need more people like you who stay optimistic through the thick and thin and who have the right mindset, the boring and the long-term mindset. Your mindset is boring, not you. I know what you mean. I'm down. Boring is good. Boring is good. Investing should be like watching a paint dry. In crypto too. We always say in crypto, crypto is a get-rich-slow scheme and a get-wrecked-quick scheme. I think that's very right. We need more people like you who can help new investors navigate this super noisy industry and not just say, hey, I'm part of crypto, but actually make money, which is a big problem we talked about today, right?

1:17:22Thank you so much. Thanks for having me. This was fun.