Bankless - ARK Analysts call $1M BTC, $180K ETH | Bullish Crypto Price Predictions

Episode Date: February 16, 2022

In their seminal 'Big Ideas' report for 2022, the ARK team predicts the prices of $1M for Bitcoin and over $180K for Ether. These numbers may seem outrageous in a short time frame, but with a broader perspective about the total addressable market for cryptoassets over the next decade, these ambitious predictions sharpen into something more than exuberance. With paradigm shifts underway, we're bringing on ARK analysts Frank Downing and Yassine Elmandjra to discuss the why, how, and when of these hot price predictions–and why it's more than just the price that matters. How bullish are you? Not bullish enough. ------ 📣 NOTIONAL FINANCE | DeFi's Leading Fixed Rate Yield https://bankless.cc/Notional  ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/  🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/  ------ BANKLESS SPONSOR TOOLS: 👀 POLYGON | LAYER 2 DEFI https://bankless.cc/Polygon  ❎ ACROSS | BRIDGE TO LAYER 2 https://bankless.cc/Across  🦊 METAMASK | THE CRYPTO WALLET https://bankless.cc/metamask  💳 LEDGER | THE CRYPTO LIFE CARD https://bankless.cc/Ledger  🧙‍♂️ ALCHEMIX | SELF REPAYING LOANS https://bankless.cc/Alchemix  🦄 UNISWAP | DECENTRALIZED FUNDING https://bankless.cc/UniGrants  ------ Timestamps: 0:00 Intro 6:45 Guest Intros 11:32 Big Ideas 2022 Report 14:00 Public Blockchains Transforming Every Asset Class 20:50 Each Revolution Involves A Different Level of Trust 32:50 Bitcoin Could Exceed $1 Million by 2030 48:05 Crypto-Powered Finance Might Scale More Efficiently Than TradFi 53:38 ETH Market Cap Could Exceed $20T In The Next 10 Years 1:02:09 NFTs Could Shift From Static Collectibles to Dynamic Digital Assets 1:05:35 The Growth of the Metaverse 1:07:45 Final Thoughts 1:12:30 Disclaimers ------ Resources: Frank Downing on Twitter: https://twitter.com/downingark  Yassine Elmandjra on Twitter: https://twitter.com/yassineark?lang=en  Big Ideas 2022 Report: https://research.ark-invest.com/hubfs/1_Download_Files_ARK-Invest/White_Papers/ARK_BigIdeas2022.pdf  Ark Invest https://ark-invest.com/  ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures 

Hey, Bankless Nation, welcome to another State of the Nation edition. David, this is going to be a bullish episode. Are you ready to be bullish, man? Always, Ryan. It's my natural state. And we're going to get some extra help to do that today, too. Yeah, so we have two of the analysts behind a report just put out by Arc Invest. And so if you remember the Arc folks, we had Kathy Wood on the podcast a few months ago. And with her an analyst, Yassine, who covers this space, we have two of the analysts. who just published a 2022 update on prices. And we got to say it's maybe the most bullish price report that we've seen. Like I'm almost worried, David, that these prices that we're about to say are more bullish than anything we've ever talked about on bankless. Yeah.

What are these price targets for Bitcoin and Eath? Yeah, we are coming in with a hot prediction of a million dollar per Bitcoin and $180,000 per Eath, which is really bullish. Now, granted, we have between eight and ten years to get those prices. It's not coming next month. It's not next month. It's not next year. But still, at the end of the day, when people like Arc who are famous for actually being able to look into the future, rather than look towards the past to guide the future, come in with a hot prediction like that, I want to understand the math and the analysis and the reasoning behind these numbers, because these aren't just some random crypto-yutubers pulling some numbers out of their.

wherever's. Like these are, these are your arc analysts who say that these are ridiculous numbers. And so we want to see why are they actually not ridiculous? Because there's a whole report, which is also linked in the show notes as well. If you guys want to follow along, there's a whole report to guide some of these models and predictions. So we got the receipts here. We're going to go through the slides, go through the rationale of why 180k ETH and why $1 million per Bitcoin in just a minute. David, before we get in, got to talk about our friends at Notional Finance. So I'm going to, I'm about to sound like Grandpa Defi here. Once again. Back in my day, don't say that, back in my day, okay, there was no such thing in Defi as a fixed rate loan. Okay, we had volatile,

like every block adjustment variable rate loans for just about everything. And so if you took out a loan at like, you know, three percent one day, it could crank up. to like 10% the next. And the same was true in defy summary got to 60. Yeah, I know. And the same is true with interest, right? You could be making like nice, you know, five percent gains one day and suddenly you're down to 1% and you're like, what happened? Well, now the kids these days have the benefit of fixed APY loans. Okay. And Notional is putting one out there in Defi. Look at this. $432 million locked in this protocol, 279 million loan value. 8.5.7,000. percent fixed APY loan on up to a year for USC. That's what you can get at Notional right now.

Pretty awesome to see. Yeah, the last time I saw a fixed rate loan platform, it was down at like three and a half percent. This is the highest fixed rate APY platform that I've ever seen. There is a link in the show notes to go check it out if you are interested in getting a fixed rate loan on your crypto assets. There you go. That's it, guys. So head over to Notional and and make that happen, get some of those fixed rate loans, and lend some of your assets as well. David, got to ask you the question we start every episode with every state of the nation that is, which is what is the state of the nation today? It's bullish, Ryan.

State of the nation is very bullish. I mean, bankless listeners will know that Ryan and I are bullish, but like we're always bullish. So sometimes, like, we start making... People get sick of hearing it from. Yeah, so we start making content. We start interviewing people in like Washington, D. or we start, you know, asking Vitalik about the future of the Ethereum roadmap. And then sometimes we forgot to forget to talk about, like, how incredibly bullish we are.

And it's also nice to bring in the arc analysts because they come in it from a different perspective. And so we like people who are bullish and want to talk about bullish things. So, Ryan, the state of the nation today is bullish. All right. Well, I'm ready to get more bullish. And our guests are as well. So, guys, we will be back with the arc analysts talking about $1 million Bitcoin coin price target, 180k, ETH price target in just a minute. Before we do, we want to thank the sponsors

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Across's bridges are powered by UMA's optimistic Oracle to securely transfer tokens from layer two back to Ethereum. Across is critical ecosystem infrastructure and ownership is being handed over. to the community. You can be a part of this story of Across by joining the Discord and becoming a co-founder and helping to design the Fair Fair launch of Across. If you want to bridge your assets quickly and securely, go to across.tto bridge your assets between ETH, optimism, arbitrum, or boba networks. Hey guys, we are back with the analysts from Arc Invest. I want to introduce you to Ysine El Madra. He's been on the podcast before. Yusine joined Arc Invest in July 2018. He was Arc's blockchain crypto analyst still is. His research focuses on crypto assets, of course, as well as

a Bitcoin mining. I've been told Yacine is the Bitcoin bull in the group. Also, who's joining us is Frank Downing. Frank joined ARC in April 2021. He was an analyst for ARC's next generation internet strategies, focused on cloud computing, software as a service, now crypto assets. Guys, the two of you wrote a fantastic report. Really excited to dive into it. Welcome to Bankless. Thanks for having us. Honored to be here. Good to be back again, this time with my partner to crime, Frank. So we're really excited to share some of this, this moon juice that we have for you. Good description, moon juice. All right, you know what? I think just maybe getting some background on both of you would be useful before we dive into the details of this big idea.

report. Maybe listeners want to peek in the inside life of an ARC analyst. So what does it actually mean to be an analyst at ARC? What's the day to day you see? Why don't we start with you? Sure. I mean, I guess the best way to describe it is it's really just a front row seat on all things tech. By way of background, I studied engineering and finance and I was in school and fell down the crypto rabbit hole in early 2017 and kind of told myself, okay, I'm committed to finding an opportunity that will allow me to basically fall down the rabbit hole even further and stumbled upon ARC through Twitter. And ultimately, here I am about four years later, as an analyst that really has a lot of

flexibility in terms of discovering kind of the different multiple rabbit holes within crypto. So I'd say much of the work is divided between just day-to-day kind of research of, okay, let's think kind of top-down long-term feces of how we think the industry is evolving, combined with, you know, more of the product development side of, okay, we are asset managers and how do we answer the question of what's the best way to gain exposure to this asset class? Frank, how about you? So you've been at ARC for almost up to a year now. So what's the day-to-day like for you? What would you add to what you've seen said? Yeah, getting up on a year now, it's pretty crazy how fast time is flown. But I actually, similar to you seeing, I studied

business and computer science and fell into the crypto rabbit hole also in 2017, building my spend pretty much all the cash I had to build a few GPU mining rigs at my house and had to convince my parents that I wasn't going to set the house on fire. Well, that is the same exact story how I got into Ethereum. So we have an alignment there. Same time. Same timing. Yeah. But the day-to-day at Arc, I mean, it was pitched to me as essentially getting paid to study

and report on what you're most interested in, which for me is both crypto and cloud computing. My previous career, I was a data engineer and a cloud engineer. And I now get to do both of those day-to-day at Arc, which is awesome. We spend our weeks kind of chalked up into a few different segments. Mondays are always portfolio reviews looking at our holdings and an aggregate what happened over the market in the past week. The middle of the week is more this long-form, long-term thinking research that you've seen mentioned.

And then Fridays we have a brainstorm with a group of advisors and external parties to help test our thinking and talk about the latest and greatest things. and crypto, even just over my time here, crypto has taken up a larger and larger portion of that brainstorm, which is always pretty fun. Well, guys, it sounds like you guys both have dream jobs that you have a ton of fun in. And right before we get into this report, I just kind of want to also give context to the listeners about what this report actually is.

It's not just about crypto. It's about everything that ARC pays attention to, which is a lot. And so there's even more than just crypto in here. Crypto is actually just one of many sections in here as well. But are you guys as fingerprints in this report? Did you guys help write this? Or how were you guys involved with the actual creation of this report? Sure.

So maybe taking a step back and giving context as to how we're divided across the analyst team. So we aren't kind of a traditional asset management shop where our analysts are divided by sectors. They're actually divided by technology platforms. And we have three, I'm sorry, five technology platforms that we effectively center our research around. So, you know, crypto is one of those. We have genomics, DNA sequencing, energy, robotics, AI, deep learning. And so our analysts are kind of experts in these thematic platforms.

So there are five thematic platforms that all have 14 emerging technologies that come out of those platforms. And you can see here, there are, you know, a dozen or so sections that touch on it. And each analyst effectively is the one, you know, drafting and building out their respective sections. Okay. So just to reiterate, Yassine, you are the big Bitcoin bull. So it sounds like you had a lot of your fingerprints on the Bitcoin section. And then Frank, you're the Ethereum-Eath Bowl. Were you also involved, Frank, with the NFT Metaverse side as well? Yeah, it was myself plus our other next generation internet analyst, Nick Gruse and Andrew Kim, who also work on that team.

We try to be as collaborative as possible, particularly because a lot of these technologies are converging. And crypto is, especially when you get into Web3 Metaverse, is so tightly integrated to the consumer internet, that Nick plays as much a hand in that section as we play. And we, you know, the crypto overview section, the first crypto section that's in there was really the whole team working on it. And it's, it's awesome to see that report come out and get to talk about it in more long-form environments like this. It really is the culmination of like six plus months' worth of work to put that together. Well, you guys are certainly making our job easier at Bankless to report on why these big ideas are so fun to talk about. So let's go ahead and dive right into it.

And it sounds like this show is going to come in three sections. And also I'm going to start reformatting this OBS. That's why the screen is moving around for these viewers out there. So we're going to talk about Bitcoin first, and then we're going to talk about ETH second, but then NFT Metaverse third. So you see it's probably going to have most of the floor for the first half of the show,

and then we'll finish up with Frank for the Ethereum Metaverse stuff for the second half of the show. But this is probably the section that you were talking about where everyone probably had their hands in these first few slides about blockchains and crypto assets.

And it's just a really nice slide to start on first. And again, if listeners want to go and click that link in the shop, So they can follow along. This is slide number 41. But this is just the bulk case for crypto and blockchain at large. And the title of this slide is, public blockchains could transform every traditional asset class.

And this is the metaphor that I think maybe people have heard before, where we had all these different communication mediums, the radio, the TV, the newspaper, and then the internet came along. And then all of a sudden all those things got bundled up into the internet. And this slide is doing the same thing for financial assets. Is this basically, is the conclusion of ARC and also this part of the report, just that every single financial asset will eventually become a crypto asset? I think that's spot on in terms of the framing. I think part of the reason for this slide is that usually the framing to describe crypto assets is entirely new asset class is one that suggests that it's distinct from traditional asset classes, right, and spans every superclass.

So we published a paper in 2017 that basically suggested that crypto assets can't really fit under the equity bucket or the bond bucket or the physical commodities bucket. It is not really a capital asset or a store of value asset or a consumable, transformable asset. It's almost like all in the same. So the initial premise is not only is crypto distinct from traditional asset classes, but it also is going to transform traditional asset classes. and it's going to affect the same asset classes that doesn't really fit under. This was actually a framing that was introduced by Bologi, Srinvasan, who quite eloquently explains how we're seeing a generational shift from internet to crypto in the same way that we saw shift from like desktop to the internet.

And the analogy that he likes to give is like blockchains are to scarcity what the internet was to information. And this fundamentally changes kind of how software is developed, how it's funded, how it's monetized, how it's used. And we're moving from kind of online to on-chain. And by moving online to on-chain, then we have these sort of assets that can, that, of course, can represent scarcity, that can represent ownership that effectively, you know, that affect traditional asset classes. So whether that's synthetic equity exposure through crypto equity, whether it's kind of the crypto commodities through kind of the ability to send bandwidth or storage. We're seeing the rise of NFTs and crypto arts or value assets or maybe the traditional kind of

corporate structure in Dow's. So all of these really are derivatives of traditional asset classes that crypto is distinct from. But in turn, we're actually seeing that it's impact for them. Frank, if you want to add anything onto that, go ahead. But I also want to throw to you the question. I'm assuming at some time in your role in ARC, you guys have to explain concepts like this to people who are still trying to wrap their heads around it. How does that mental model land with people? Is that helpful to explain crypto or are people skeptical when you explain that concept to them? So I would say that the easiest explanation is one that shows crypto as being a distinct and separate asset class. Right.

So it's like, okay, how do you value crypto? Well, you can't value it like an equity or you can't. imply like a DCF necessarily, especially for these non-productive monetary assets. It's not really like a bond. It's not really like a commodity. And so providing a framework by which they understand how to assess traditional asset classes, you can then just say crypto asset, the reason why you don't understand it is because it requires an entirely new framework. So effectively don't try to force fit the traditional framework into trying to understand crypto assets. I think in Increasingly, people are resonating with how crypto can transform every traditional asset class,

especially as the investment theses and the use cases in crypto develop where there isn't necessarily a one-size-fits-all model. We're seeing a lot of kind of revolutions emerge that are in parallel with the Bitcoin or the monetary revolution that might require like a new kind of framing that more closely aligns to what they're familiar with. So any opportunity that we have to draw to kind of the old world or traditional frameworks is one that resonates with the people that we're speaking to. And I think this does a pretty good job doing that. Frank, you came from like a software as a service, next gen cloud platform sort of world too and like the engineering background. You know, A16C talks about this in a similar term. They talk about it looks

software is eating the world. And now the framing for crypto is software is coming to eat money and finance and digitally scarce things. All of the scarce things that we have as assets. Is that good framing in your mind? Do you think that this is just the same movement of software eating the world and this time it's coming for banks? Yeah, I think it is. And I'll steal, I think, one of Yassin's lines, but we're at a stage where, you know, every bank and traditional firm has to have a fintech strategy now because fintech has been disrupting the traditional banks. And I think we're getting to a stage going forward where every fintech needs to have a crypto strategy. And crypto is where that industry is evolving and moving on to more

crypto native rails. And with regards to kind of this slide and especially relating it to the internet and software, the more that we can tie these new paradigms to, you know, what the traditional world things. I think like the evolution of the internet is a very tangible topic for people because they use these services every day and being able to relate that to how crypto is slowly taking over those more traditional platforms or the more traditional financial services, the better we can be at educating. Okay. So let's keep moving in the slide deck. And I want to move maybe to slide 43, which the title of this slide is each revolution involves a different level of trust. And I think at this point in the crypto section, you sort of established that crypto is coming for finance and digital scarcity.

It is eating the world. This is another software eating the world type moment. And the next question that somebody new to crypto might have for you, even somebody in crypto is, okay, yeah, but what's the difference between a Bitcoin and Ethereum and Avalanche and a Tera and like finance smart chain and go down the list of all of these assets? And to someone who's new, they look at the assets and they're just like, ah, they come. kind of all look the same. Like, what's the difference? And I think this slide does a really good job talking about the spectrum of centralized trust

and decentralized trust. So decentralized trust on the left and centralized trust on the right and the use cases that generally fall out of that section. So there are three use cases here. The first requiring the highest degree of decentralized trust is the money revolution. We can talk about that.

Somewhat in the middle, but still still. skewing towards the decentralized trust side of things is the financial and internet revolution. So we might fit defy here as well as some of the web three things that are coming out. And then on the on the right side of the spectrum, the centralized trust side of the spectrum is basically traditional finance where we have the status quo and the banking system as we know it. And each of these platforms, each of these chains, each of these assets sort of fit in different places on the spectrum of centralization and decentralization.

You see, could you give us kind of the big idea from this slide and talk about where some of these major platforms fit and why they fit in the places they do in your opinion? Sure. Honestly, I think you summed it up perfectly and it's great that you did because we grappled a lot with this slide. With the main takeaway that we wanted from this slide to be that there are no solutions, there are only tradeoffs, and these tradeoffs are made to achieve the functionality and the security appropriate for a specific use case. So the idea that we compare blockchains without recognizing their distinctive design or value proposition, I think is very counterproductive and why there's so much animosity between chains. What we've tried to present here is that

there are different revolutions that are evolving in parallel. We think that the most profound is the the money revolution, but each of these revolutions are going to require a different set of tradeoffs and network implementations. And so you have especially these newer market participants that are questioning, you know, why are Bitcoiners so only interested in Bitcoin, right? Or why do you have these Bitcoin maximalists that think all these other chains are a scam? And they kind of fault them for being closed-minded or unwilling to compromise. But it actually ties back to some of Bitcoin's principles, which, you know, in our view, can't be replicated by other public blockchains.

And this includes, like, a very strong regard for property rights or a high predictability and monetary policy, a commitment to cheap validation and decentralization, a fairness and issuance through proof of work. All of these, we think, make it a prime candidate to compete as a global-based money, which we think is a revolution that necessitates decentralization and security. over something like scalability or features. But as we move along the spectrum and to your point, Ryan, we start to see public blockchains like Ethereum and to an even larger extent, Solana and Avalanche and Kara, that are trading off that potential trust minimization for convenience, for more features, for higher throughput, which to your point, if you are going to kind of create a defy ecosystem or a web3.0,

So it is likely necessary to fulfill those demands that users have. So the biggest question is like, what does that perfect balance look like, especially in the financial internet revolution? I think we have a good idea that the money revolution is going to require max conservatism and the more boring and predictable it is, the better. And on the status quo, it's like you're unapologetically centralized. So if you're a visa or PayPal, it's like I kind of trust the, the intermediaries that are facilitating the flow of transactions.

So the big question, and I know Frank has a lot of thoughts on this, is what does that perfect balance look like? And what are some of the dynamics that are emerging, let's say between Ethereum versus Solano and trying to strike that perfect balance? I think it's interesting. So, you know, how you drew this where Bitcoin is squarely in the money revolution, you have Ethereum sort of spanning money revolution and financial and internet revolutions. and like in the center, not necessarily dipping into money are like Solana, Avalanche, and Terra.

And Binance is sort of almost a little bit status quo. Ridiculously centralized. Right. It's much more centralized. And I do think probably some people looking at this slide might quibble with, you know, where the placement is, right? So like myself personally, I probably would have extended Ethereum even further into the money revolution.

But also it's interesting because some of the. these platforms change over time, right? And so maybe you might argue Ethereum squarely started in the center and has kind of stretched into the money revolution over time as it's being used more as money. But regardless, I'm curious, Frank, maybe you could weigh in here on the rationale. So why is Bitcoin squarely on the left? Why is Ethereum sort of spanning? Why are Solana, avalanche, and Terra kind of in the center? Why is Binance smart chain? Why is it sticking into the status quo lane? Can you just give us a high level for why these specific projects in the place that they're in.

Definitely. And first, I draw the difference, one of the primary differences that leads to placement between the money revolution and the financial and internet revolutions, like Yusin said, is conservatism for a base money that is resistant to nation state level attacks or influences that has maximal assurances of seizure resistance, you need to know that what you're building on or what you're holding is consistent and not changing. And that's actually completely different from what you may need to compete in the financial and internet revolutions, which is the frontier of technology, being able to push out updates so you can process more transactions or enable new types of transactions

or generally enable greater functionality. And so that's why Bitcoin, because it has this ethos of we are not changing, we are not evolving, at least to the extent that these other chains are, puts it in that monetary revolution. When you look towards financial internet, to compete, Ethereum we know has the ETH2.0 vision. We're going to go proof of stake. We're going to enable sharding. We're pushing on roll-ups. We have many EIPs that are being rolled out.

And that's what enables it really to compete with some of these newer chains like Solana, avalanche, and Terra, which don't. necessarily have the stability or the track record to be considered money and the economies that are built on top of them are much smaller. So they're not really being used as money to the extent as ether is. If you look at ether and defy, it's a pristine form of collateral. It's with ETH 2.0 or with proof of state going to be this internet bond, so to speak, with the staking yield. It does for, and it's the main currency denominating a majority of of NFT volume across any chain.

So it is functioning as money, and that's why we have it splayed across. Solana, Avalanche, and Terra are making this, we would consider a distinct tradeoff of pushing through more throughput at a lower fee, but sacrificing some of that stability and some of that level of decentralization by having greater requirements to operate the network or having a more centralized token holder base, which is increasingly important in terms of the level of decentralization in proof of stake compared to proof of work. Because in proof of stake, your influence is denominated in the tokens that you hold, rather than the mining hardware, which is off network.

When you look at Binance smart chain, it has some of the aspects of public blockchains. It's composable. It's open and transparent. Mostly anybody can read and write. With the exception that that guarantee that anybody can read and write is dictated by a much smaller, more centralized group of validators. So it may look like it offers you everything as a public blockchain, but you need to make a trust assumption that these validators will continue to operate that network in a way that gives you these features. And so that's what pushes it closer to

the status quo. If there was a desire to censor some transactions or throttle the network in some way, the validators controlled by finance could probably do that pretty easily, which is not unlike Amazon delisting a seller, visa blocking certain transactions. And the more you make these tradeoffs in terms of this trust assumptions required to operate the network, the closer you get to the status quo on the right.

Fun fact about Binance Smart Chain, they just rename themselves to B&B chain I saw this morning. I think they want to separate the Binance name from this thing that they're creating so that they're not known as like Binance affiliated, right? So it's an interesting way to try to span these columns here.

And that's also like to your point how they can change over time based on how the network evolves. Is Solana, which is, I would say, made sacrifices in decentralization to promote high throughput, going to progressively decentralize and move its place on this chain? And is ether or Ethereum in necessity to compete with Solana on the throughput, But is that going to force Ethereum to make some sacrifices on decentralization as well to compete on the throughput side? And what's always funny about this game to you, Frank, is like there's a lot of profit and money to be made in playing the decentralized theater game as well, which is why it's hard, I think, for outsiders to like look at the space and get some objective viewpoint. Because all of these chains, I think, will tell you, many of them will, that they are equally decentralized as well. right, at least some of their marketing language will.

The tradeoffs don't always get acknowledged. This is a separate discussion, of course. But yeah, David, you wanted to say something. Yeah, you got you talked about how these things tend to change over time. So I'm hoping next time you guys write this report, this big ideas report, that you guys keep this slide and, you know, reorient the placement of these different chains as they get updated in 2023 and 2024. If I had a prediction, we would actually see some Ethereum layer two's also on the right side

of the financial and internet revolution spectrum filling up that gap as well. And even perhaps Ether's deflationary aspect allows Ether to push into the left side into the money revolution as well in addition to that. But this is the bank. This is the bankless bias coming out now. So there's that. These guys wrote the report. Anyways.

I think it is well taken. One of the questions that we had is should we make these bands of equal length and just kind of commit to a more, you know, subjective placement. But perhaps there is a scenario where the bands lengthened in some ways. You know, I go back to the fact that I still think that, you know, there are no solutions and only tradeoffs, and that's the tradeoff that these chains are going to have to make. But well taken, definitely well taken.

As I want to skip ahead to slide 55, because this is where we start to get into some of the fun stuff. This is the Bitcoin headline title, the price of one Bitcoin could exceed $1 million by 2030. And there's a bunch of math that goes into it. And this is the reason why I'm not an analyst because I kind of don't really understand how these numbers came to be. But Ysene, can you kind of just walk us through the slide about how this $1 million Bitcoin prediction came to be? Sure.

I think for context, it would be helpful if you could just briefly go to the previous slide to give you just what that actually means in the context of traditional asset classes. So first off, if you believe that crypto broadly is a distinct asset class, it's also going to affect other asset classes, then you'd imagine that in the next few decades it is going to be on par with other asset classes. So, you know, we've sort of sized the opportunity in the next 10 years as being, you know, 25 fold from where it is today, which would amount to about a $28 trillion market cap. But in the context of global equities and M2 and global bonds and real estate, that that's actually still only a fraction of the broader kind of asset class base. So with that, the $1 million does sound, you know, quite like an insane number to throw around. So if you go to the next slide, we can break that down. Yeah. And real quick, I will note you've seen, though, that this, you know, $28 trillion price would be, you know, almost 3x gold.

So that in itself is fairly bold. That's right. That is right. And so you can kind of make the argument, again, that Bitcoin is going to challenge gold as a global store value. You can see in the opportunities slide that we actually estimate that Bitcoin will, in the gold use case, only capture around 50% of gold's market share. as a digital store of value. But I'd make the argument that, you know, Bitcoin is a 100x better version of gold.

It's more portable. It's more divisible. You know, every marginal kind of an individual who is transitioning from the physical to the digital world isn't thinking about buying gold. I've never considered ever buying gold. And yet every chance I have my Bitcoin. So there is kind of just a shift in the mentality

of these kind of next generation asset holders. But with that being said, it is a big number. It is relative to when we first sized the opportunity, though, a smaller jump. So we actually first gained exposure to Bitcoin in 2015 through GVTC when Bitcoin is trading around $200. And at the time, we had predicted a $50,000 price. And you'd imagine like a $200 to $50,000,

you must be absolutely absurd, right? That's a 200x from here. So we're effectively predicting a 50x to, I'm sorry, a 50,000 to a $50,000 to a $20 price, which in relative terms is a 20x. So actually an order of magnitude less than kind of the previous predictions that we've had. I think that the main takeaway from sizing the opportunity broadly

and how we think about it is Bitcoin's use cases, given it as a monetary asset that has a fixed supply, are additive. Right. So there's a fixed 21 million Bitcoin supply cap, which means that for every Bitcoin that's being used as a digital gold can't be used as a remittance asset. And for every Bitcoin that's being reused as a remittance asset can't be used as protection against arbitrary asset teacher. So when you combine kind of the 21 million fixed supply with the fact that that supply itself is becoming more and more longer term focus where people are buying and never, you know, adding to and never willing to sell, then. And the price multiplier as well increases where now for every dollar that flows into the asset, the reflection on what that looks like for market cap is not necessarily one dollar. It might be $10. It might be $25. So the point is that for many of these use cases, specifically for the nation state treasury and for the corporate treasury,

we have assumed the price multiplier where you look at kind of the liquid supply that's available in Bitcoin, and you just take that as kind of the denominator set that's absorbing, you know, new demand. Before we move on, I want to just reiterate that point because that's a point about Bitcoin that I've never heard before that I think is really cool. What you just said is that because buyers of Bitcoin tend to be long-term focused, a dollar of buying Bitcoin at $30,000 price tag has some amount of impact on the price, but a dollar at buying the $300,000 Bitcoin price has an outsized impact in comparison to the $30,000. $30,000 price tag. Is that right? That's exactly right. I look at Bitcoin as like a what many people call like a vebbling good, which is a good that actually the demand for the good increases as the price increases. So like, you know, luxury is considered a veblen good.

But more than that, it's like if you employ Bitcoin as this long-term asset where the number one rule of Bitcoin should be that you forget that you own any Bitcoin, then by definition, there is a supply shop that isn't necessarily priced in today. In 10 years, if you have nation states competing on, you know, amassing Satoshis, then every dollar that's going into Bitcoin is going to be sucked up by a subset of that 21 million fixed supply. So there is definitely a case to be made that the more we see nation state adoption institutions and the more that it's seen as less of a speculative bet and as a long-term investment, then we might see this kind of fly based on just small inflows.

And even if we don't see the small inflows, and I urge you to read for the audience, our white paper that was published a year and a half ago that details some of these use cases, including economic settlement network and digital gold and seizure-resistant asset, these are all, I think, pretty reasonable estimates. if you do believe that Bitcoin is this global monetary asset and really kind of a generational

opportunity to really put your foot in the ground in the digital world as the economy shifts through the digital world. You see, I want to go through some of these categories really quick, particularly for the podcast listeners. So if you're watching on YouTube, you can see this slide and you can see the breakdown. But for the podcast listeners, I'll just rattle them off really quick. and maybe you could give some color commentary, you know, where you think it requires it. So when you say this thing, like the estimates are somewhat conservative, they're not wild,

they're not crazy. The way you get to $28.5 trillion, which is a million dollar Bitcoin price, is by consuming 50% of golds market cap and being the digital gold, so that's where a chunk of this comes from, by being a corporate treasury, that's where 5% of this, 5% of cash on the S&P 500 would be invested in corporate treasury. We've seen some of this with micro strategy. We've seen some of this in other companies that are acquiring Bitcoin for their balance sheets. 2.5% of institutional asset bases is Bitcoin. Like right now, it's got to be far less than 1% for institutional investments, right?

And then we have 5% of global high net worth investments. So these are all of the kind of the global whales, the billionaires, and the hundreds of millionaires of the world. They choose to store 5% of their wealth in Bitcoin as a seizure-resistant asset. And then 1% of total reserves of nation state treasuries go to Bitcoin. And this is just like what you see here in these things is just kind of an extrapolation of a trend that we've already seen, right? So El Salvador, they're acquiring Bitcoin.

Okay. Now, what would it look like if you throttle that up to 1% of all nation state treasuries? You know, high net worth individuals, billionaires are already buying Bitcoin. What happens if that becomes 5%? Institutional investments, we're already seeing that with institutions are coming, with, you know, big endowments and that sort of thing. Corporate treasuries, the micro strategy example. And then this belief of digital gold.

So all of these things are happening. What you're doing is you're just kind of extrapolating them. quantifying as a percentage of market share of how much they would consume in each of these categories. You have any colored commentary on that? I can give an example of like how we get to, let's say, the two and a half percent or the five percent, right? I think to your point, all of these are taken from initial signals that we've seen the market grow at us, right? If we see a Tesla allocating 8 percent of their balance sheet into Bitcoin and a square

and a micro strategy, it's like, okay, do is there a trend that's a, emerging. So for the institutional investment, we conducted a Monte Carlo simulation that basically asked what is the optimal portfolio allocation of Bitcoin for an investor, a traditional investor that has exposure to all asset classes from emerging market currencies to real estate, to bonds, to equities, that would like to basically either minimize volatility, of their portfolio or maximize their risk-adjusted returns. So what percent of Bitcoin should they put in their portfolio to achieve one of those two optimizers?

The two and a half percent is basically to minimize the volatility. So we basically took the last 10 years and saw the returns of asset classes, including Bitcoin, and said, okay, what percent of Bitcoin would need to be allocated into this portfolio? The answer was two and a half percent. This was actually the lower bound. The upper bound was six and a half percent, where to maximize risk-adjusted returns, an investor should allocate six and a half percent consistent with the asset class returns

that we've seen in the last 10 years. Now, of course, this is in hindsight. So there's also an analysis that we conducted on a prospective basis where it's like, okay, if we were to size the opportunity, what would that look like? that ranged again between 1 and 7%. So this is really like if you pitch to an institutional investor of, look, you're a strategic allocator, you want to minimize the correlation of returns across your asset classes. Adding Bitcoin to your portfolio is going to do exactly that. I don't think it's necessarily a tough sell for institutions. The seizure resistant asset is another good example where

we take the use case of Bitcoin, where with good public and private key, management, Bitcoin isn't a seizure resistant or unseasable asset, right? If I'm custodying Bitcoin on cold storage, unless someone comes knocking on my door and takes physically my private keys, there's no way for anyone to seize my Bitcoin. And as such, you can see it as really an insurance policy against arbitrary asset seizure, whether that's through indirectly through inflation or directly through the outright confiscation of wealth or the freezing of bank accounts like we're seeing now in Canada, like we saw during the Hong Kong protests. And there, the 5% estimate is really us estimating what the probability over a lifetime would

be for an individual to have their assets seized. So you can say in any given year, it might be one, one thousandth of a chance. So over 50 years, you multiply that, it's about 5%. So we're effectively equating that 5% to the probability that your assets might get seized over your lifetime. And as such, a sensible allocation should equate to that probability. So you take the $80 trillion of global high net worth wealth, you multiply that by 5%, and it gets you that $4 trillion opportunity alone. So that's kind of the rationale and some of the logic that we employ going through these different opportunities. Just like I said at the beginning, these are not

just, you know, numbers that have been made up out of thin air. There's actual thought and analysis and rationale put behind the $1 million Bitcoin price tag. Like there also is with Ether and Ethereum and also some of the consumer metrics in the Metaverse. So that is what is coming up next in the show right after we talk about some of these fantastic sponsors that make the show possible. If you're going bankless, you need Metamask. This is your tool to unlock the world of Defi without giving up custody over your

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defy, you can bridge over your eth or other tokens and start playing around with any of the thousands of applications that are available on Polygon. Bankless is proud to be sponsored by Uniswap. Uniswap is a new paradigm in asset exchange infrastructure. Instead of a cumbersome order book system, where trades are matched with other humans, Uniswap is an autonomous piece of software on Ethereum that lets you trade any token at the current market price. No human counterparties or centralized intermediaries, just autonomous code on Ethereum.

Input the token you want to sell and receive the token you want to buy. The Uniswap Grants Program is accepted. accepting applications for grants. Do you have something of value that you think you want to contribute to the Uniswap ecosystem? No matter how big or small your idea is, you can apply it for a unique grant at Uniswopgrant.org and help steer Uniswap in the direction that you think it should go. Thank you, Uniswap, for sponsoring bankless. All right, guys, we are back with Yacine and Frank from Arc Invest, talking all about the big ideas report, specifically the crypto section of the Big Ideas Report. And this is where we're going to get into

the Ethereum, DeFi, Metaverse, NFT, Scy, of the conversation. And this is a theme that we've talked about on bank lists a number of times before. And to me, it explains how Ethereum and stuff on Ethereum is always just so goddamn investable. It's very investable things. And this is a slide that talks about the LTM revenue per employee in the millions of dollars. Frank, can you explain for the listeners what LTM revenue per employee means and what this chart slash graph is showing?

Yeah, definitely. So on the definition front, LTM is last 12 months revenue. We used on-chain data for the crypto-based protocols you see here. We used quarterly financial statements for the traditional finance companies. And then for employee, we used LinkedIn numbers. But the really key idea here is we wanted to show, one, the scale of what kind of revenues are these crypto-native applications or companies operating at? And how does that? compare to traditional financial institutions. And, well, it's not the same on the absolute level. If you look at the amount of revenue that these protocols are generating per employee, which has significantly lower operating costs and operating needs than some of these traditional companies, you can see you get a massive amount of leverage in crypto-native protocols compared to traditional institutions and traditional financial networks. And that's for a few different reasons. It's because you don't have counterparty risk. You have less parties involved. You could spend way more money on developers and way less money on compliance and marketing and

operations. Your protocols are global by default. You have all these things that allow you to gain a lot of leverage. And to sum it up broadly, I'd say it's the power of building on top of open source networks. You can also think of composability. Metamass didn't have to build its own AMM to operate as a brokerage in your pocket, it can plug into Uniswap and it can plug into Sushi Swap and it can get you the best rate across all of Defi. And so this composability is another thing that lets, you know, decentralized protocols operate at much higher leverage than a traditional company. I want folks to just kind of really understand this because it's something we've talked about on bank lists. The amount that, let's take Uniswap as an example, the amount that

they've been able to do with like 15 to 20 employees is absolutely mind blowing. And you have a chart that compares uniswap to the New York Stock Exchange on LTM revenue per employee. So what's interesting about this is it's revenue per employee, right? So it's like normalizes it on an employee basis. And if you look at the uniswap section, we're talking about $40 million worth of top line revenue that Uniswap generates per employee, if I'm reading this correctly, Frank. And the direct comparison, if you want to take an analog to Uniswap, what is Uniswap? It's kind of like a D5s New York Stock Exchange. And the New York Stock Exchange per employee generates revenue too, but it's like, you can barely see it on the chart. It's like below a million here. I don't know if it's like 300K or

something like that. It's in that range. So we got a uniswap with 20 people generating a 4 million per person and we've got a New York stock exchange with like buildings full of people, lots of paperwork, lots of infrastructure, all of this stuff that they have to register in the real world and they're generating far less revenue per employee. If that doesn't show you the efficiency of software eating money, software eating banks, software eating finance, I don't know, I don't know how else to show it because this is incredible to see. Did I get some of that right, Frank? Yeah, definitely. I think that sums it up well. To be a little bit fair to the New York Stock Exchange, their revenue is listing fees and market makers are the ones keeping the market efficient.

Uniswap doesn't even need market makers because it's an automated market maker and it has liquidity provided from anybody who wants to provide liquidity and earn a yield on trading fees. So it's not 100% apples to apples, but it gives you a really good feel there. And I actually think, you know, another way to look at this, but it's harder to measure. sure may have been inspired by a former bankless podcast. I might have heard somebody say that uniswap is the most valuable code-based line-for-line ever based on the market cap or the revenue per lines of code, and it's going to show that same thing. I think this is, yeah, go ahead. I'm pretty sure that was Chris Dixon. No, that was Chris Dixon, Ryan. Oh, that was Chris Dixon.

I was going to say it's probably the smarter co-host, David Hoffman, probably said that because I don't remember saying it. Well, let's keep moving here. Wait, no, before we do one last thing on this line, but something stuck out to me in this report. And it's this Tradfai word. Revenue per employee illustrates defy's efficiency relative to that of traditional trinit finance in parentheses Tradfai. Frank Yacine, is Tradfai about to be a term that's going to be adopted by Tradfai? After GM in Wagney, yeah, probably.

Okay, so maybe not. I think it's Sadfai. if I look at this chart correctly. All right, well, let's get into the HappyFi, which is the next slide that's coming up next, which is slide 65 for those following along, which is Ether's market cap could exceed $20 trillion in the next 10 years. And we've got a pretty simple looking chart here

with a little bit of an explainer, comparing the current market cap of Ether, which is clocking in at $.4 trillion, and comparing that to all global financial services, the market cap of all global financial services at $22.5 trillion. Frank, can you explain to us why this comparison is justified in how this kind of lends itself to why Ethereum, Ether's market cap might exceed $20 trillion? Yeah, definitely.

So going back to something that we opened this conversation with, there's a lot of things about crypto assets that are so new and so different that you can't model them like traditional companies. But there's also some places where they overlap and you can. And you can think of all of the transactions that are happening on Ethereum, especially post EIP 1559, where the transaction fees are burnt and return to token holders as revenue for that chain. And it actually directly translates to earnings in that the revenue is fully burnt and going back to token holders. And so you can kind of look as more and more volume moves on chain, how revenue accrues to that to that underlying currency in this case either. And what we see with defy across not just,

you know, one or two segments of financial services, but across the full spectrum of exchanges to lending, to asset management, to insurance, everything that was on that previous slide plus more, plus net new things that don't even exist in traditional finance, you're seeing more and more revenue at the margin sucked out of traditional finance and moving on chain and net new financial services revenue being created on chain. And so what we see is, you know, over the next 10 years, this market cap, which is, you know, you can think of as a multiple overrevenue or a multiple over earnings, moving into the protocols that power this future financial system, in this case, Ether. So we think over, you know, the next 10 years, and we see this really as the market

cap opportunity for what Ether as supporting a global financial system could look like. And this reminds me of the very first slide that we talked about in this show where blockchain networks really allow for kind of in the same way the internet allowed TV, radio, you know, insert your communication medium here, all came onto the internet. Perhaps Ethereum allows all global financial services to eventually make its way onto Ethereum or, you know, pick your favorite smart contract blockchain here. Is that kind of what we're alluding to here, Frank? Yeah, exactly. And that's also like just a generalized design. development platform with smart contracts, you get all the financial services that you can code up, plus you get new things that people create with it. And that kind of gets into the NFTs and the

Web3 and all of that as well. But the other thing I'd call attention to here is the global M2 opportunity, where we're increasingly seeing, you know, if you have a global financial system built on top of Ethereum, the native currency, the most secure form of currency on that blockchain, you can ascribe at some value, some monetary value. And you can do it almost similar to how we did it for Bitcoin, and we don't break out a specific number here. But you see, like El Salvador is adopting Bitcoin, for example, and that's an emerging market.

In the same way, Ethereum is being adopted by NFTs, and that's its own emerging market that gives value to Ether. So we're kind of seeing this hybrid between a global development platform that earns revenue from the economy is built on top, plus value to the currency or to the token as being the native currency in that economy. This is cool. I think maybe for bankless listeners, we'll start to see some repetition here in terms of how other analysts we've had in the podcast see ether as an asset in terms of how we see it.

But Frank, if I'm interpreting you correctly, basically almost the base case here. If you ignore the monetary premium, if you start thinking about ether as what we might call a capital asset and start doing like things you do with equity analysis, which is discounted cash flow analysis, right? And you think about the DCF of ether as an asset, accruing, you know, blockchain fees and that going to people who stake as something that is, you know, productive and income generating is sort of like a, you know, a dividend, if you will, the stock buybacks and bankless listeners will recall the DCF episode that we did just two or three episodes ago that talks about that discounted cash flow analysis. That's how you get to Ether getting to like, you know,

the size of the global financial services industry, which is about $20 trillion. Okay. So that alone is almost like the base case for this thing. And that assumes maybe something like Bitcoin eats all of the monetary premium in the space. None of that flows to Ether. But then you stuck this Global M2 next to it, which shows like the potential for monetary premium that also exists. if ether does continue to transition more towards a monetary asset and a store of value, medium of exchange. And then the potential grows to like the tens of trillions to hundreds of trillions and you start to look at some of the factors that went into the Bitcoin price analysis and you add that to ether as well. So at some level, depending on how things work out,

and like, of course we never know, but like the $20 trillion, which is $180,000,000, ETH price point is sort of the conservative base case for what ETH could become, or at least maybe the smart contract platform segment as a whole, if you believe that Ether's lunch is going to be eaten by all of these other chains. Did I put that correctly? Yeah, definitely. And that goes towards what I was going to just wrap up with is that it's important to note that the financial and Internet revolution,

kind of this whole space, is actually a lot more competitive than the money revolution. And so we can pretty confidently say we think based on our rather conservative or crazy bullish, depending on which way you look at it. But why we feel really good about Bitcoin there, this is the opportunity for Ether, but it also has a lot more competitors. And we'll see quickly over the next few years how the market weighs the different decisions and the different tradeoffs that each blockchain is making. So I just want to paint the most bullish possible scenario. say I'm an ETH Maxi and I think Ether is not only going to win the smart contract wars, but also the money wars, would we take that $22.5 billion market cap,

the 56x that Ether's already going to grow, and then multiply that by five more four, or no, six more times to get to the Global M2. Is that what would be the logical conclusion of this? Christine, what's your point? What's your thought? defer. If Ethereum is the one that completely swipes the floor of the whole entire crypto industry, which I don't think is going to happen. But if it did, would it go to $122 billion?

I think David wants to hear the answer of yes on that. It would be more so you'd add the 22 and a half to the 28 and a half that we size for Bitcoin. Okay. So it would be call it $50 trillion. Because the Global M2, like you have to, I don't, you have to assume that it replaces global one too entirely when I don't think that's necessarily the case. I think to Frank's point though, which is really interesting, is that there are creative, additive opportunities that Ethereum is unlocking where we don't even know like how to size that. I think it's analogous like,

how do you size the internet in the late 90s? I think that that's where the opportunity for Ethereum is, is like there could be these parallel opportunities that emerge outside of the money case that we don't even know exist today. So in that sense, there is no upper bound, David. That's what I like to hear you, Seam. All right, guys. So that was the Ethereum section. We've covered Bitcoin. We've covered Ethereum, but there are two slides left in the Web 3 NFT era that I thought were just really, really good. And so I want to unpack those a little bit. So we're getting into slide number 70 and 71, Ryan, if you want to go there. And this slide is NFTs could shift from static collectibles to dynamic digital assets.

So you're saying the endgame of this whole NFT phenomenon isn't just to collect JPEGs. What is it actually going to be when it actually matures and develops along its trajectory? Yeah, I think that, you know, especially because of how the market has been over the past year, the trend is, you know, we're flipping JPEGs. It's just art. You know, there's not much to it. But when you really think of it and what, you know, a lot of the section of the report is predicated on is that, NFTs are functioning as a form of digital property rights that give us the ability as internet users to own our data for the first time.

In Web2, you have social media where it's really user-generated content, but you don't own that content that you're generating. It's the centralized platforms like Facebook and Instagram that are owning the data. NFTs allow the user to own the data that they're generating, and that unlocks pretty profound things. And it also incentivizes more spending on digital content because you can actually own that content and it can't be taken away from you as easily. So when we look at how these NFTs are evolving from just images or JPEGs, they'll be used actually similar to what you've seen just said in use cases we can't even think of yet. But I think the first that we're really seeing, and this is showing that as well, but the first that we're really seeing is gaming. There's games like Fortnite that generate $5 billion, which blows my mind every time I hear it, but $5 billion in revenue from in-game assets that users can't do anything with.

It just makes their character look cooler, but they still want to buy it. And there's this social like aspect to it. There's a status signaling aspect to it. But increasingly we're seeing more and more projects adopt this, I think, adopt the same concept of in-game purchases, but on crypto-native rails. that gives you the option to exchange assets or sell assets or cash out or have portable assets that could be used across multiple virtual worlds or games, creating a much more like interactive and high fidelity experience that you can use your NFTs for. And I think like a really good example of this, like where this ties into you could do things that we didn't think would happen

or be possible is something that we caught on Twitter in, I think it was Indonesia. The Axi Infinity, one of the native tokens when you're playing the game is smooth love potion or SLP. And the game has been popular, you know, really blown up as a way to actually make income in some of these developing areas. And so much so that people aren't actually exiting out of SLP to do things in real life or in the physical world. There's, There's a cab and what I'm getting to is a cab driver and a cab company accepting SLP as payment for your cab. So you have an in-game asset that's something that you can use to breed your axes and, you know, a full game mechanic utility. But you can also use it outside that platform if somebody's willing to accept it as a form of payment.

And that merging of, you know, data portability plus your in-game asset is also utility outside of that game. It is really incredible. And guys, I want to go on to this last slide because this is what I think culminates in this grand story that we're all talking about, these new digital experiences. And that's slide 75 and 76 where we where ARC has predicted just the online consumption, the online monetization, money moving around in digital worlds across digital projects, products starts to move beyond real products, you know, Web 2 products or just actual, you know, physical atoms. And to me, when I interpreted slide 75 and 76, it was really just the growth of the metaverse.

This is really what we're talking about at the end of the day, especially this one with the chart here. Frank, can you just unpack these charts here and kind of tell us your interpretations of them? Yeah. So ultimately, you know, you can trend over time that we've been spending more and more time online, and that's only been accelerated by the pandemic. And with technologies like crypto-native NFTs that allow you to actually own your assets, we're seeing and we forecast an acceleration of spending into digital goods over physical goods that will ultimately, we think converge

the monetization rate or the dollars of revenue generated per hour spent online. the online version is going to approach the monetization rate of offline, basically saying, you know, in short, that users will eventually, or individuals will eventually value digital goods as much as they do physical goods. And that's going to have, you know, massive ramifications. And one of those being reducing the spending, and what you see on 76 is reducing the spending on physical goods and increasing the spending on digital goods.

Yeah, well, that doesn't scream the metaverse. and I don't know what it does. And that's something I think that so many people already resonate with. We already know that people spend money on Fortnite skins before they were actual digital on-chain goods. And having it actually be able to be an on-chain good is just an unlock for the value of those things and really incentivizes even more consumption.

Guys, Yassine, Frank, thank you so much for running through some of the most profound slides about Bitcoin, Ether, and the Metaverse and Web 3. Just any last open-ended comments about where you think this industry is going over the next five, five to ten years that might not have made it into these slides. Frank, you want to take that one first? I think, I mean, what's really interesting, and we're kind of talking about this before we hopped on the show, is the proof points that we're getting that crypto is becoming more mainstream and higher adoption

and more of a day-to-day topic that I think has more legs than the speculative thing that we saw in 2017 and 18. That cycle with the ICO boom and bust had a lot of hype and a lot of speculation and very little follow through. What we're seeing now is a market where you can see actual products being developed, millions of users actually engaging with these projects, and also a segmentation and diversification outside of just, hey, this is a token like Bitcoin and Bitcoin Cash, you know, all of these things that are kind of copies of the same. We're seeing more differentiation in crypto. And the more that, you know, things like El Salvador adopting Bitcoin is legal tender or Canada potentially freezing bank accounts, essentially asset seizure,

the more that we're seeing the proof point for crypto play out. And I expect we'll see more and those over the next five to 10 years. The last thing I'd say, which I also think is really interesting is that regulation is often talked about as a negative for crypto or something that will eventually slam the hammer down and stop the industry. But we're seeing two recent proof points. One is both Miami and New York City mayors accepting paychecks in crypto. Crypto is becoming a popular thing for politicians to support rather than crack down on, at least in some segments of the political sphere. And also how increasing acts of regulation can actually provide the clarity needed for more people to join the system. So you saw BlockFi being fined $100 million

for their interest accounts. And they are pausing that for now, but they're going through the formal process with the SEC to register those as a security so they can eventually offer those to consumers again, which not just allows them to continue selling that product and offering that product, but it opens the door for somebody like Coinbase who was blocked from offering a similar product to offer that product. And for many other companies, now they see the proper process to go through to launch crypto-based products. And so I think we'll see that continue to develop and how more rules of the road that come in will broaden the total market for crypto. Yeah, it's so funny to me, that block-fi thing, we have other thoughts on. We'll get to you in an episode later this week in the

roll up, but how that is widening the lane for more adoption in crypto. And it's funny how BlockFi had to actually do it and then ask for forgiveness later for the SEC to actually weigh in. But it's really forced the SEC's hand. Ysene, what would you say? Closing comments for us, reflecting on all of this. Yeah, I mean, I just echo Frank and saying this is all unbelievable to be witnessing in real time. And so this is my fourth big ideas. And when I look back at like the first 2018 or 2019 big ideas of we were assessing Google trends of Turkey and saw spike in emerging markets to fast forward four years. And it's like you have an emerging market currency that has adopted as legal tender.

It's like who knows what the next four years is going to look like. So these are always great to just kind of see the evolution of crypto in real time. And I mean, I don't know what's next. like I didn't know what was next the last year and compared to where we are today. So in any case, it's awesome definitely to be on the show and appreciate you guys having us on. Well, thank you guys. We do know one thing that happens next and that is number go up. I think if these things come to fruition. Also, I must say a disclaimer, this is a non-investment advice. Of course, of course.

You're only for informational and research purposes only. informational and research purposes only but definitely definitely bullish on this report and these statements and ark is had a fantastic track record predicting some of these things before they happen so you seen and frank thank you for joining us today thank so much guys thanks for adding us bankless listeners if you like what you heard make sure you like make sure you subscribe to this podcast if you're on apple iTunes write us a review give us a five star as well we'll include links to resources in the show notes, including the slides that we talked about today. Go scan those when you have some time. Of course, as you've seen said, none of this was financial advice. It never

is on bankless. Bitcoin is risky. So is Eith. So is DFI. You could definitely lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.