Animal Spirits Podcast - Talk Your Book: Bitcoin Fundamentals

Episode Date: November 13, 2023

On today's show, Michael Batnick and Ben Carlson are joined by Chris Kuiper, Director of Research at Fidelity Digital Assets to discuss: fundamental reasons Bitcoin is outperforming in 2023, illiquid Bitcoin values and supply/demand affects on digital assets, what Ethereum's different layers represent, and much more! Find complete show notes on our blogs... Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation.   Check out the latest in financial blogger fashion at The Compound shop: https://www.idontshop.com Past performance is not indicative of future results. The material discussed has been provided for informational purposes only and is not intended as legal or investment advice or a recommendation of any particular security or strategy. The investment strategy and themes discussed herein may be unsuitable for investors depending on their specific investment objectives and financial situation. Information obtained from third-party sources is believed to be reliable though its accuracy is not guaranteed.   Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here https://ritholtzwealth.com/advertising-disclaimers. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: https://ritholtzwealth.com/podcast-youtube-disclosures/ Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's Animal Spirits Talk Your Book is brought to you by Fidelity Digital Assets. Go to Fidelity Digital Assets.com to download their quarterly signals report to learn more about Bitcoin, other cryptocurrencies. That's Fidelity Digital Assets.com. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Ridthold's wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ridholt's wealth management may maintain positions in the securities discussed in this podcast.

Welcome to Animal Spirits with Michael and Ben. All right, so Bitcoin is 100% off the lows, but it's still 50% off the highs. I still can't believe it didn't go to like 5,000 with everything that happened. We were talking about it at the time. like Bitcoin should be trading at $5,000. I say this every cycle it feels like, but the most impressive thing about Bitcoin is the fact that it just won't die.

Every cycle, don't act like you're like you were here in previous cycles. Well, we've been doing this. This is your son. This is your first cycle. Okay, you can't pull off sun, first of all. Second of all, uh, no one can.

We've been doing this since like 2017. How many cycles have they been in that time? Like eight, it feels like it. It just, but what I was going to ask you is, is it a bull marketer? sell in a bear market. Oh, that's a good question. It doesn't feel like a bull market yet, does it? Not really. In fact, no, it does not. No, there's not a lot of craziness going on

or chest thumping. When's the last time somebody outside of finance asked you about Bitcoin? Yeah. It doesn't, yeah. No, it hasn't happened yet. Maybe that's a sign of maturity, but I still, we talk about this on the show today, I still view it as a call option to something. Is that still the best way to look at it? The story has certainly evolved and changed a million times over the years for what people thought it could be and it should be. And it's the fact that like people are not capitulating at the bottom to sell. And then also when it moons, they're not like getting out of it.

The main holders, that's one of the more impressive things about it. Yeah, in November, when it bottomed. I mean, just think about what happened in November. I mean, that was the fall of FTX. it's kind of wild that it's kind of wild that that was the bottom although when you think about markets I guess markets do bottom when things seem blackest but it is remarkable that it bottom that what like 15,000 as opposed to 5,000 yes the bottoms move up a little bit every time but it just it won't die Rasputin right did you get that one I don't know what

Rasputin is I know I've heard of Rasputin is that a fable I'll let you look it up on Wikipedia Okay. All right. Today we talk to Chris Kiper from Fidelity Digital Assets, all about their work on it and how they try to put metrics on it, which is interesting. They look at it like short, midterm, long term. It's interesting.

But, yeah, this latest cycle, I think, is one of the more impressive about it. Again, just won't die. Just look up and ask Putin, Michael. It's going to come to eat. It's going to let me up. It's going to go off. I just did. I just did.

All right. Here's our talk with Chris Kiper, the director of research at Fidelity of digital assets. We're joined today by Chris Kuiper. Chris is the director of research at Fidelity Digital Assets. Chris, welcome to the show. Thanks. Thanks for having me on. All right.

Last week, there was 300 some odd million dollars worth of inflows in crypto. This is a chart that comes from coin shares. And it looks like the biggest flow in certainly of this year and probably even longer. What do we make of this? What's changed? I mean, we know that like other asset classes, but maybe especially, we're going to be especially with crypto, it's driven by momentum, right? People are more likely to buy the breakout than to buy the dip.

What do you think are, to the extent that there are fundamental reasons for not the chasing, we know why that exists, but for the price move. I mean, prices went from, I think it was like a $26,000 run to $34,000 fairly quickly, maybe an ETF, other news. What do you attribute this to? Yeah. So certainly if you look at year to date up 100% now, the first. first leg of that was all in the first quarter of the year, basically. So we had this huge surge

up. Then we kind of traded sideways for a while, especially over the summer. And then this next leg has come on the back of a lot of this, this ETF news and speculation, right? So overall, though, it's been a little surprising to us on the research side because our research shows that Bitcoin, in particular, is most correlated to money, you know, especially broad money supply changes, central bank balance sheet changes, liquidity metrics. It's almost always reacting or anticipating these changes in money creation and liquidity, right? So we hadn't seen a lot of that. It's actually been tightening up. And so 2022 made a lot of sense with central banks tightening, Bitcoin going down, real rates going up, Bitcoin goes down. That makes sense to us,

right? Because you've got higher real rates. As you know, investing is a relative game. So of course, these higher yields are looking a lot more attractive. So it's a little perplexing, especially these last few months, that Bitcoin is moving up, even as real rates are also going up, right? So it's usually in the, they're usually correlated. So there's this huge decoupling that's happening. And the trillion dollar question is, well, does it recouple and correlate again, meaning does Bitcoin have to drop?

Or, and this is the camp I'm in, is Bitcoin sniffing something else out, maybe these structural deficits say that it's continuing to hold up and even go higher, especially when you've got some other catalysts on here. And I think, you know, in favor of that camp is also gold. Gold's also been holding up and doing better, even as real rates go up. So that's why I think that's maybe more of what's going on. But, of course, we can only speculate on the past price performance here. I was going to bring up gold, actually, because it's the same thing.

People have said there's this relationship between real rates and gold, right? And that makes sense because gold, just like Bitcoin, doesn't have a yield that it pays, right? And so you would assume, well, when rates are really low, that makes it more attractive when real rates go higher. And real rates have been shooting up really high this year, right, in a hurry. And kind of at the same time as Bitcoin and gold have been going up, right? Like these real rates, especially in the long end, that happened really quickly in the last couple of months. And gold and Bitcoin have both rallied at that same time. So does this make you think that Bitcoin does share some of those characteristics or at least the investment?

in Bitcoin share some characteristics with people who invest in gold? Yeah, there's a huge overlap when you talk to people. People who are of a certain mindset on the macro side and tend to like gold for the reasons of monetary debasement, a hedge against monetary debasement. It's the same macro side on the Bitcoin side. If you're thinking of Bitcoin, which we usually do as a aspiring form of money, store of value, something that doesn't pay a cash flow or dividend, but with its cap supply and predictable schedule, it has a clear value proposition just like gold, but of course,

even improves upon a lot of the characteristics of gold. It's more divisible. It's more audible. It's scarcer. It's got a higher stock to flow, that sort of thing. To that point, Drucken Miller and Paul Turner Jones were at a conference last week talking about the idea of macro forces, gold and Bitcoin. Did you catch any of that? I saw a few headlines. I haven't seen the whole thing yet. Yeah, it was more or less what you're saying. But I think one of the interesting things about Bitcoin is, and you're right, we're speculating. You could, who knows why it's doing what it's doing. Earlier in the year, as it retraced a lot of the losses from the previous bear market,

a lot of people were saying that it was just a high beta trade. It was going up because the NASDAQ was going up. It was going up because risk assets were growing up. Now we're in this interesting time where risk assets are not going up. And for reasons, again, unknown, I guess probably the cleanest one is maybe just rallying in anticipation of an ETF, which is sort of a head scratcher to me because I think, at least I assumed that an ETF was. always coming. I mean, you would think it would be priced in, but maybe nothing and everything

is, who the hell knows? But it is definitely a confounding move that we've seen over the past like two weeks or so. Yeah, absolutely. I mean, I think the, um, the ETF stuff, like we could argue either way, uh, what's what comes first, right? If you can price in it if you can't or how much or how isn't, obviously with that leak that we got, what was it two weeks ago now in a Monday? Coin telegraph. Yeah, where there was a, uh, erroneous report saying it was approved and it shot up about 10%, so clearly some people don't think it's priced in. But I think the whole thing about the beta trade is interesting, too, because you did clearly see that narrative. We saw a correlation of 0.8, I think, between Bitcoin and NASDAQ. So I like to say, you know, I can pound my

hand on the table all day saying Bitcoin is different. Here's why. Here's the value proposition. It's not a tech stock. But at the end of day, if traders are going to trade it like a tech stock, that's how it's going to trade, right? And so I think you saw people treating it that way. And now it's going to be really interesting to see if they're coming around to some of these other core characteristics and maybe, maybe seeing the other side of this, the other narrative. Drunken Miller called Bitcoin a brand. And I would go a step further and say that it's, it's a religion to many people. And as evidence of this, there was a tweet from Will Clemente. And the tweet is as such.

According to Glass Node, there are now 600,000 plus months. more Bitcoin that haven't moved in 10 years than there are on exchanges. And there's a chart that we'll link to them in the show notes. And the chart, again, just shows what I described. Bitcoin supply that was last act over 10 years ago with the amount of Bitcoin on exchanges. That is, that is some serious conviction. I would definitely say that stock investors, for example, don't share that conviction. Maybe, you know, Tesla shareholders do. But just by and large, that is that sort of fervor dedication is is makes it interesting yeah I hadn't seen that stat but that's actually encapsulating two data points that we've seen so you've got two them working

for you the first one is the number of illiquid coins so we look at say coins that haven't moved in over a year that's hit 70% of the total supply that's the highest it's ever been and then coins on exchanges since we know these exchanged wallets and stuff like that you can see the number of coins on exchanges, that is down 30% from its peak just for the number of Bitcoin, right? So you've got both of those things working in that stat that you just said. And I agree. People eventually come around to this is a core allocation. Maybe it's very small, but it's very asymmetric. And I'm just going to hold it and put it away. Like I have conviction that this is either going to work or it's not. And that's my personal opinion. I fail to see in the

longer term how this is not very binary, right? It's either going to work or it's not. I don't see how it can kind of just sit in the middle at a trillion dollars or less. But, you know, that's me personally. You think of it as like a call option in a lot of ways. Because that's kind of how I always looked at it as well. Yeah, I think that's a great way to put it. It's a long-dated call option. You don't have the decay like you do. You just have to hold it. And, you know, whether you hold it with a custodian, pay a little bit or self-custody at yourself. So you don't to pay that. And then, yeah, if it's a small enough part of your portfolio, it's not going to eat into it meaningfully, but there could be a huge asymmetric return there.

Do you think some part of the reason why there's been no decrease in volatility, even as prices have gone significantly higher? I'm talking about from like 500 to 10, you know, to 1,000 to even at 64,000 or wherever it. And, you know, at 34,000 here today, there's been very little in the way of decreased volatility? Is that because there's such a permanent portion of Bitcoin that just never trades? And so it's just sort of like a low float type of security. Yeah. I mean, it depends on the time frame you're looking at, and it's all relative. We have seen a decline of volatility, but it's gone from like an 80-vall asset down to a 50, and that was even before this recent move. So maybe it's gone back up. But yeah, it's,

there's only a few million on exchanges. We can see that stat, like you said, what, you know, have it moved in 10 years. There's tons of coins that are lost. And then there's tons that are just put away for probably decades in people's minds, right? And so you don't need a lot of flow to move that marginal price. So you have a piece that you recently wrote about why investors need to consider Bitcoin separately from other digital assets. Is that the brand thing that Michael was talking about?

Is it like, is Bitcoin being looked at by you as millennial gold? Like, what's the thinking behind this? Yeah, that gets at it for sure. It's called Bitcoin First, why investors need to consider Bitcoin in front of other digital assets or something like that in the subtitle. I don't quite remember. But it's kind of twofold. Number one, Bitcoin was first in that it was the first to do this technologically. So you do have that first mover brand type thing. But it was also the first to do that zero to one, the Peter Thiel, zero to one kind of thing. It was the first to invent the wheel. It was the first to create a truly scarce digital money. And as we know with the blockchain Trilemma, when you design these

things, you can either optimize for two of three things, right? Decentralization, security, or speed. And Bitcoin opted to go for decentralization security. And that makes sense. If you think of this as an emerging money and aspiring store of value, that's what you want, right? And so it was first, it took a hold that market. Anything that comes after it is going to make a trade-off with those things, right? So it might improve one thing, but it's going to make a trade-off with something else. And so we think if you think of Bitcoin as a money and the network good there, that's a whole different bucket than all of this other stuff that's come after it. And so as an investor, you have to take the same framework. You need to look at Bitcoin as

an aspiring money and then everything else through more of a technological VC capital-like investing framework. At Fidelity Digital Assets, where you mentioned or I mentioned, we're talking about the number of Bitcoin that are held on exchanges. I guess those are going where to cold wallets? Well, we don't know. We just know they're coming off of the exchange wallets in all these different firms like Glassnote and other ones that we use. They can identify the exchange wallets.

So they could be going to a custodian like Fidelity Digital Assets. We wouldn't be classified as an exchange. Or they could be going to a personal cold wallet, someone who's just holding the keys themselves. But yes, more than likely, they're going to some kind of long-term cold storage, at least as far as we can see from the data. And again, this also is supported by the number of coins moving around as well. You mentioned Fidelity Digital Assets as a custodian for, is it Bitcoin and ETH as well or just Bitcoin? Correct.

We offer custody services for Bitcoin and Ether. So what exchange do you all use to purchase and sell? So we have an execution platform, and we have a number of different venues and ways we try to find liquidity. But users of the platform can do it right directly on our own platform. So I'm curious, so you said like the 70% that basically doesn't seem to change hands, how much turnover is there going on the other 30%? Is it similar to the stock market? Like, have you done work on that? Like, how much is the other stuff changing hand?

Because I got to imagine that stuff is moving around quite a bit. Yeah, that's an interesting question. So first of all, the 70% is a new high. So that's not normally. It's been as low as 30%. I think maybe averages around 50. Don't quote me on that. Can you remind us what does that number represent?

I forget. I'm sorry. Yeah. So the percentage of coins that haven't moved in over a year. So if you call those illiquid, then the other 30% are the liquid ones, right? Which is setting the price. Right. Exactly.

The marginal price. Yeah. But there was basically like complete apathy. I saw a tweet like, I don't know, maybe two months ago. that the volume on Coinbase was, I don't know if this is the lowest ever, but it was the lowest in a long time. There was essentially not no activity, but anemic volume, to say the least. Yeah, trading volumes, not just Coinbase, but like all in US or USDA supported trading volumes. I think from their peak are down about 90% still. Maybe it's picked up a little bit.

So yeah, you're absolutely right. There's certainly apathy in the trading speculative world, But because we have these on-chain metrics, and we put out this thing called the signals report, we bucket these different on-chain metrics. So trading activity is one way to look at it. But if you look at what I call long-term fundamentals, basically you're wondering if people are becoming apathetic about the network itself, meaning are they leaving the network, is activity slowing down on the actual on-chain network. That's actually gone up. You know, new addresses are up, active addresses are up, hash rate is up. So I like to say if I was in a coma and I had no idea what Bitcoin's price had done for the last five years and you showed me these fundamentals, everything that has to do with everything but price, I would be surprised we're still in this bare market down 50, 60 percent because the activity keeps going up. And for me is, you know, if you're a long-term investor, that's what you care about.

You only care that people aren't becoming apathetic about the network itself. So getting back to your piece about Bitcoin treating them different from digital assets. are you ready to pour dirt on most of these other coins? Because we heard about in the run-up in like 2020 and 2021 is like, okay, these other cryptocurrencies, they kind of take a little bit what Bitcoin did and there's a trade-off, but they're going to do it better. They're going to do something faster. They're going to change the network somehow, whatever. Are most of those, should they all be worthless? Like, where are your thoughts on these other coins? Yeah, that's certainly not at all what the report says or tries to say. It just says you need a different lens. And so because Bitcoin has

solidified itself in our minds as the emerging monetary good. And it emphasizes decentralization security. Everything that comes after it, that tweaks it, tries to improve on it, it might be better at something. You know, there's networks that are faster. There's networks that are programmable. They can do more stuff. But they've made a trade-off somewhere else. And so you just need to be intellectually honest about that and saying, I'm okay with that. There's a different use case for this. But because of that, there's also going to be more competition, right? And we've seen this with Ethereum and others, there's a lot more competition. They're trying to match their use case to what the network can do, right? And they're trying to find that product

market fit. And that's the challenge for them. And that's what you as investors need to do. And you can even just look at, you know, the top 510 market cap from three, four, five years ago compared to the top 510 market cap today. Almost every single one is different except for Bitcoin, Ether, and maybe one other one on there. And that just just shows you the level of turnover and competition that these face. Well, Bitcoin market cap dominance is, I'm looking now, I'm seeing it's 53%. Yeah. Which is definitely the highest it's been since March of, I'm sorry, April of 2021.

So during the run-up, it's not like Bitcoin is taking market share. It depends. So, you know, Bitcoin was 100%, and now it's down to 50, but it's way big. bigger on an absolute basis. So it's not that Bitcoin's market cap has shrunk and gotten competed away. It's just that the whole space has gotten bigger overall, over the long term. Now, in the shorter term timeframes, yes, there might be some big booms, the ICO boom, the NFT craze booms, like some of these booms where, yeah, Bitcoin does suffer a little bit. But if you zoom out and take the long term picture, dominance is still well over half, and it's

only gone down because the pie has gotten bigger, so to speak. So for Bitcoin, to me, like, I view it as an emerging or what's the term that you use an aspiring store value. That, to me, is how I think about Bitcoin. I am not in the camp that it's ever going to be this payment platform that people are buying and sending and spending. Like, I view it as an as an investable asset class. Ethereum, on the other hand, to me, that should have more observable fundamental. fundamentals. Like, are people using this technology to create whatever, whatever the next thing is, or are they not? What is the state of the building block, the Lego set that Ethereum has been described as? Yeah, I think that's about right. There's, it's built with more of a use case in mind, so to speak, in terms of applications being built on top of it, obviously. And so you want to see that user activity. And ultimately, you want to see, fees being generated on it, right? So we can look at that. You know, in terms of the fundamentals,

we include this in our latest signals report as well. We do a whole set on Bitcoin. We do a whole set on ether. And fundamentals for Ethereum network are down a bit. Addresses and activity are down. Fees are down. Part of that's the market. I think there is just, you know, people are still building on it, but there's just not as much of a craze and experimentation around that. So I think we have to be honest about that. But it gets a little nuanced in that there's also these L2s being built on it. So they're taking that activity and it's going on top of it on the L2s. So it's cheaper up there. But then there's less activity and fees showing up on the base layer. And so there's this debate right now of, well, is it going to cannibalize it? It's this bad for it. Or is it good for it? Because if you have

better speed and lower fees, that brings more people on. So ultimately, that could be good for the base layer as well of Ethereum. So we're watching that closely, seeing how that plays out as well. Can you explain what is a layer two? So layer two is something that sits on top of Ethereum, like builds on top of it. So you can do a bunch of transactions, batch them all together, and then send the whole batch to the base layer. And so that's how you try to solve for the scalability and high fee problem, if that makes sense. So what else in your signals report? Because we said Bitcoin doesn't, it's not like producing cash flows or paying yield or anything.

So what are you looking for in terms of trying to figure out different metrics? to pay attention to when you put these reports out. Yeah. So one of the things we looked out at the research marketplace was there's a lot of on-chain metrics out there, a lot of smart people doing it. But give me a subscription to one of these platforms and I can paint any picture you want with these, kind of like the regular equity markets, as you know, that's my traditional background as well.

So we wanted to be consistent in showing the same metrics every quarter. And then we also wanted to guide people because a lot of especially traditional allocators, they know they're out there, but they don't know how to use them or what they are. And so the first thing we did was we bucketed them by timeframe. So if you're a short-term investor, say less than a year, here's a few things you can look at. If you're a medium-term investor, meaning maybe you've got a big lump sum. I mean, sorry to interrupt, but I mean, short-term, I'm sure, is like just trend, right? It's just moving averages. It's basic price stuff. There's not actually a lot of on-chain stuff in the short term. I mean, there is, but we don't

deal with that. Medium term, say your investor that's got a lump sum, to either invest or take out, you don't want to hit the absolute top or bottom. And we've seen these four-year cycles, right? Here's the things you can look at to try to gauge that. And then long-term is what I mentioned before. Your long-term investor, you don't really care about price over the next five years. You just want to make sure your core thesis is intact, which is the network still running and being adopted. So I saw a tweet.

I think it was from, it was from somebody a bit-wise. I don't remember if it was Matt or somebody else, Matt Hogan or somebody else. That 5% is a new 1% in terms of portfolio construction. They said that they've been having a lot of conversations with advisors that are thinking about crypto in a more serious way. What are you seeing from the advisors or the investors that you're talking to in terms of how they're thinking about crypto in the context of portfolio of construction? That's interesting, the 5% is a new 1%.

I didn't see that all to look it up. But I mean, on our end, we're still early. So it's still trying to get people off zero. maybe part of that five versus one is the fact that maybe allocators are looking at and saying like, eh, 1% isn't going to do much for me. I think the challenge is still getting people off zero. But hopefully maybe they'll be incentivized to look a bit deeper into it as well. We mentioned earlier about like the widening fiscal deficit, obviously the inflation story.

Do you think that it's just hold that to the side and it's really just, you know, it just is what it is that people will be interested. at 50,000, at 60,000, as more and more people chase price? Like, isn't it more likely that price will convince people to get in rather than like the story that determines, that defines what Bitcoin is? What's your thoughts on that? Yeah, it's a little chicken or egg. And you see this in regular equity markets.

So to draw a parallel, think of a value investor. Value investor knows the core story and thesis of the stock, right? and they're going to invest when the chips are down and nobody believes in it and they see something someone else does. But eventually a few other people notice and maybe a few other people notice and maybe there's a catalyst or something. And then eventually probably what is carrying that price more is just people momentum piling it.

So I would expect the same dynamics here. We're still in the bare market. We're still trying to say here's the core value proposition, the story, the narrative. But eventually the best advertising is price. And so I fully expect that, as you say, when we get there, that's what's going to pull people in too. But hopefully they get pulled in and they start actually learning about it. I mean, we're huge advocates here of education, of understanding what you own and why you own it, not just for the price. And so maybe if the price peaks their interest, maybe they do more research from us and from others

that do a lot of great work and then learn that core thesis and narrative. If the Bitcoin ETF comes out and it's a resounding success and billions and billions of dollars flow into it, Is there any impact on Bitcoin itself in terms of making the network more robust because there's increased demand? Is there any flow through there because it's just kind of a secondary holder of this asset? Does it actually improve anything with Bitcoin by having more money in an ETF when it happens? Yeah. Actually, in our Bitcoin First Report, we have this little wheel graphic that we call the virtuous cycle.

And I don't think we're the first to do this or propose it, but it's simple but powerful, which is if demand goes up, price goes up, and if price goes up, it's more profitable for miners to mine Bitcoin. So they plug more machines into the network. That increases the hash rate or measure of the computing power on the network, which means security goes up. Once security goes up, people say this network is even more secure. It's more attractive. That core value proposition is even more attractive to me and then increases demand again. Now, of course, it doesn't just happen nicely like that. There's ebbs and flows and swings, but that is the core adoption cycle of why we continue to see

hash rate go up with price, right? The two are linked. Chris, do advisors that want to allocate to Bitcoin or Ether on their clients' behalf, do they need to be working with fidelity, the traditional fidelity, with fidelity? I'm trying to put with fidelity. Not digital assets, but fidelity, fidelity. The royal we. The royal fidelity.

Do they need to be a client of fidelity in order to work with fidelity digital? Yes, we have a number of products and avenues. Our first core product was Fidelity Digital Assets were a subsidiary of Fidelity, the big fidelity, right? So a separate entity dedicated to this space. That's where we have institutional investors, high net worth individuals on board to our platform.

They can buy and sell through our platform and then custody with us. So RIAs could do that. that RAs firms could do that on behalf of their clients. We've also launched the integration with our WellScape platform. So RAs who are already on that can just plug directly into that. And then we're the back end custody and service of that. So that's a very streamlined way for them to plug into this.

Chris, where do we send people to learn more? Fidelity Digital Assets.com. And you can click on the research tab, sign up, get on our mailing list for all of our latest research as well. Perfect. Appreciate it, Chris. Thanks for coming on. Thank you. My pleasure.

Okay, thank you to Chris. Again, remember to check out Fidelityitialassets.com. Send us an email Animal Spirits at thecompoundNews.com, and we'll see you next time.