TFTC: A Bitcoin Podcast - #510: Bitcoin and Market Anomalies with Cathie Wood

Episode Date: May 30, 2024

Marty sits down with Cathie Wood to discuss bitcoin in the context of historic trends and convergent technology. Cathie on Twitter: https://x.com/cathiedwood Bitcoin Brainstorm: https://www.youtube.com/@ARKInvest2015 Bitcoin Monthly: https://www.ark-invest.com/the-bitcoin-monthly/ 0:00 - Intro 0:50 - Bitcoin’s monetization compared to past trends 3:59 - Sovereign bitcoin funds 9:35 - River & Unchained 10:50 - Why is bitcoin outpacing gold 14:55 - Sharpe ratio convinces institutional investors 17:26 - Elections and consumer sentiment 25:56 - Inflation and money velocity 32:35 - Gradually, Then Suddenly & Zaprite 34:12 - Is the level of chaos unprecedented? 39:18 - AI and bitcoin 43:12 - Internet money 46:09 - Energy narratives 50:23 - Converging technologies 57:43 - Ark ETF and bitcoin dev support 1:06:24 - Plugs Shoutout to our sponsors: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠River⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Unchained⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Zaprite⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Gradually, Then Suddenly⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ TFTC Merch is Available: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Shop Now⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Join the TFTC Movement: Main ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠YT Channel⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Clips ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠YT Channel⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Website⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Twitter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Instagram⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Follow Marty Bent: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Twitter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Newsletter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Podcast⁠⁠⁠⁠⁠⁠⁠⁠⁠

this rip of tftc was brought to you by river it's the best place to buy bitcoin go to river.com tftc and enjoy this episode you've had a dynamic where money's become freer than free If you talk about a Fed just gone nuts, all the central banks going nuts. So it's all acting like safe haven. I believe that in a world where central bankers are tripping over themselves to devalue their currency, Bitcoin wins. In the world of fiat currencies, Bitcoin is the victor. I mean, that's part of the bull case for Bitcoin.

If you're not paying attention, you probably should be. Kathy Wood, welcome to the show. oh i'm happy to be here marty thank you for inviting me well thank you for coming and i want to start off by complimenting you on forming an incredible team i'm personally good friends with yasin and david and to see them end up at arc has been uh it's made me very happy because they're two aces in the bitcoin space their analysis and um everything they've done to help me better understand bitcoin uh has really helped me in my trajectory in this space and see them landed arc and work with you uh has been incredible oh thank you no we we are the blessed ones you

know to have them they're they're incredible we have four four people now working on crypto broadly and uh of course yassine and david really leading the charge on bitcoin so uh very blessed very blessed so smart so humble uh so passionate about the space which is great and with that in mind i think one jumping off point i want to start this conversation is obviously you've been in the markets for quite some time you've got a long-term view you've seen a lot of different market cycles a lot of different trends particularly in trek in tech excuse me uh how does the emergence of bitcoin and its current monetization compared to trends that you've seen in the past well it is like nothing i have seen in the past but it is bringing everything i love together so this idea

of bitcoin being a new well a global monetary system uh that fits right into my economics art laffer and i have been he's been so excited about this since we did our first white paper in collaboration with him in 2015 he's become so excited about it uh that you know he we he just joined me in el salvador uh to meet with president bukele uh to advocate for uh you know not only um um helping help he doesn't need any help on the the bitcoin side of it but uh but on the economic side um you know you get economic reform educational reform bitcoin and ai you know working together converging and you have an explosive opportunity there so um uh but global monetary system so it is that bitcoin um technology you know the layer of the internet that

really developers forgot in the early 90s because they had no idea that commerce, financial services, what have you, would take place on it. And then a new asset class, you know, three-in-one. There's never been anything like this. It's been extremely exciting to be riding the Bitcoin wave over the last 11 years. And going back to El Salvador, I mean,

uh i've thought about bitcoin how it's impacted my life individually now we're entering that territory where el salvador leading the charge making bitcoin legal tender putting it on their sovereign balance sheet uh at the nation state level honing in on el salvador considering the fact that you were just there what kind of opportunities do you think bitcoin unlocks for them specifically? Well, I think that President Bukele is leading what I believe will be a movement by more enlightened leaders in emerging markets who are trying to break from the past. And, you know, the horrible cyclical and hugely cyclical booms and busts and especially devaluations which is a very relevant topic today you know i'm shocked to see the nigerian naira plummeting 50

60 percent over the last year or so uh the egyptian pound dropping 40 in march i mean think about how how crushing that is to purchasing power and wealth of individuals and so bitcoin and i know I don't have to tell this community, really is an insurance policy against what that is, which we believe it's confiscation of wealth. So I think it's becoming more and more relevant. You know, the dollar has been going up. The dollar is up a lot in the last 10, 12 years relative to most currencies. I don't think many people understand how much it is up. And that is, you know, debilitating to some of these emerging markets. And so, you know, Bitcoin couldn't come around at a better time. You know, if you have an internet connection and a smartphone, you have access to this insurance policy. And I think more and more individuals are going to take advantage of it. And the smart leaders in these countries are going to put Bitcoin on their balance sheets because one of the devastating consequences of reserves running out is the IMF comes in and does all the wrong things.

It raises tax rates. It cuts spending at a time when countries are already reeling. It's a failed strategy that it is their go-to. And I don't understand, if I were a leader in an emerging market, and I think even El Salvador is looking for funds from the IMF, but if I were a leader in an emerging market, I'd say, okay, well, you know, this really doesn't work, you know, in terms of moving countries in a healthy way out of distress. It does longer term. If you give them money and control everything, then, you know, something will happen, something will change, but not the right things. It's not a market-driven approach. That's the literal definition of insanity because i ran these numbers last year i might be a little fuzzy on the exact details but

argentina as an example of this i think between 1956 and 2023 when i did this analysis they had 296 annualized inflation and over that period they had gone to the imf for loans 21 times so like once every three years they were going to the imf with the idea that if we do this we'll fix our economic problems and and then default yes it just doesn't work but if people have this perception of the imf as this prestigious banking institution that is going to solve problems but historically that simply does not seem to be the case i'm just looking at the empirical evidence you know when i know the imf is coming in you know for a while that country is going to be in under a lot of duress you know in terms of an adjustment the kind of a shock they administer

yeah that's for emerging markets i mean another thing just global fx right now you mentioned emerging markets obviously venezuela um nigeria we've seen lebanon turkey egypt sri lanka now it's beginning to eek into the more established economies like the yen is pushing 158 right now Yeah, that, Hannah, it crossed, it got to 161 or 162 before they got serious about not just jawboning, but doing something about it. Yeah, that's an interesting one because, you know, the yen has been over the years considered one of the safest currencies. But during this period, when the dollar has appreciated, the yen has been cut in half relative to the dollar. We're big trading partners, right?

Yeah. And I think it's hard for people to fathom that. And that's one of the insidious things of currency debasement is it's death by a thousand cuts, frog boiling in water. You wake up one day and the Bank of Japan is having to intervene more than they'd like to to defend the penny. Yes, that has been one of the big surprises of the year. This episode was presented by River.

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Go to river.com slash TFTC and set up your account today. This trip was also brought to you by our good friends at Unchained. Unchained is building a financial services platform for a Bitcoin standard. They have over 7,000 clients that are securing over 90,000 Bitcoin with 12,000 keys on their platform. Their platform leverages Bitcoin's native multi-sig properties. Their cornerstone product is their Volt product, a two or three multi-sig Volt, which allows you to hold two of three keys in a multi-sig quorum. that gives you full control over your bitcoin they also have an ira product a lending desk and

they're rolling out a bunch of other products including inheritance protocol and sound advisory so go to unchained.com set up a call with our concierge onboarding team today tell them that tftc sent you and use the promo code tftc at checkout unchained.com how i don't want to be too bombastic ever like how imperative do you think it is for countries to think to begin thinking seriously about diversifying their fx reserves or um just to reserve assets generally towards something like bitcoin well um given what we're seeing in in the private sector in the u.s and hearing from state treasurers who we're working with, the movement is already started.

Now, for example, the state of Wisconsin, I believe, has put a number of, they're not self-custodying Bitcoin or anything, But they have put some of the spot ETFs in their pension plans. And, you know, that to me speaks loudly. And we're also seeing bond funds. I wouldn't think they'd be the first to embrace Bitcoin. I just think of bonds in a different way. But they've been in a world of hurt recently because of Fed policy.

and so bond managers are starting to diversify into bitcoin there was one very visible one i forgotten the name um but the 13f filings came out and we're beginning to see actually was very interesting for every uh manager that added gold in the last quarter um 10 added uh bitcoin so both of them through etfs for the for the most part um that that was illuminating that was illuminating uh ten to one all pacing in bitcoin's favor what do you think is driving that do you think it's people recognizing that bitcoin is superior to gold or do you think it's uh institutional investors recognizing that bitcoin has much more potential upside compared to gold um well it probably is the latter because we're at such an early stage of institutional

involvement with uh with bitcoin as opposed to gold um and i also think i'd like to think that our our study as we were trying to reach institutional investors our study was basically shows that because bitcoin has such a low correlation to other financial assets that and because we believe it is a new asset class that any institutional investor And now that the SEC has given, you know, this wrapper, at least the ETF, the green light to hold Bitcoin, every institution has to consider it because it's now a matter of, okay, what's your competition doing? When there's a new asset class that has a low correlation of returns to other assets, what that usually means is if you add to your existing portfolio a position in Bitcoin, that over time your return per unit of risk is going to be higher than the competition. so it will become a competitive dynamic out there is that where you focus it on the sharp ratio and just yes yes yes look at how high this is compared to everything else yes yes speaking their language

and speaking of speaking their language in your experience at arc and interfacing with a lot of these institutional investors what has been the most potent pitch for bitcoin specifically what what resonates the most with institutional investors that last one the sharper issue this this yes the you're the odds of higher risk adjusted returns for a given portfolio if you allocate a position to um to bitcoin that resonates that resonates um i mean in the early days our first white paper was in 2014 the year we founded arc and um you know we were we were facing ridicule and all kinds of i mean you know that in 10 years the flip has been amazing and i do think um i do think what's happening as well is uh what's going on in washington so fit 21 i'm

not quite sure if that's the the nickname for it but um to have 76 democrats sign on to that including nancy pelosi it's like what i mean that that has awakened a lot of people to its broader acceptance instead of this kind of radicalized form of money which is how people uh we're thinking about it in the old days now new asset class good for uh good for our citizens freedom you know lots of our values um very interesting it's a for many people it's um you know this year is a one issue election and i think that vote spoke loudly that okay there was this dynamic democrats against republicans for for the most part and now that's changing quickly so quickly and i think president trump saying the things he said recently

but also taking campaign contributions in crypto trying to reach the community that's also quite significant that was honestly quite astonishing to see how quickly uh the democratic side of the turned on a dime. I think there was a lot of noise made by people in the industry and they were like okay I guess we need to listen now. It's crazy to think. It's beautiful how Bitcoin halving cycles line up with election years because you have this supply inflation shock to the network every two hundred ten thousand blocks which lines up with these election years and you have some beautiful magic that can culminate and I think particularly this election cycle because

15 years in 1.4 trillion dollar market cap it's impossible to ignore bitcoin so that's right watching it be pushed to the floor of the conversation leading up to the presidential elections like holy crap where how do we get here uh i guess satoshi really understood i mean really understood this dynamic i'm kidding i'm not sure if he he or it or they uh you know thought about that but there is something called the well in in equity markets actually it's the first project i ever did when i got into the business no this would have been the first more economics political project i did um because the first one was about hong kong 1997 but was this four-year election cycle and how the equity markets trade around the election cycle and so i did i i

pretended that the four years were the equivalent of one year and applied seasonal adjustment the census at the time it was x11 to it to find out the seasonality and there definitely is quote unquote seasonality around the four-year presidential election cycle and does it trend in favor of one party or the other or is it really dependent on the individual it no it didn't it has more to do with um the dynamics around election so in the fourth year as the election uh is approaching usually we have a good market because now this one this year i think is not so much what i'm talking about a lot of things are different this year but typically the fourth year is where you know what the the incumbent administration which usually has the power of the purse

um you know basically uh throws as much at the economy and at consumer sentiment as possible which they are trying to do but consumer sentiment is terrible uh this year but normally it's very good and then in the first year they really understand okay now we're going to have to administer the tough medicine uh hope that it takes before the midterm elections and hope that we've turned around from taking whatever tough medicine needs to be put in place. And so it depends on the party

what the tough medicine is very often. But that's what usually happens first year of a presidential cycle is the first and second years are a little tough. Third and fourth years are pretty good. Yeah, you mentioned it before we hit record and alluded to it again,

but this seems like an anomalous year in terms of that trend? Yes. I mean, while technically the stock indices are up, what we're seeing is amazing concentration, record-breaking concentration. So I looked at a chart that Goldman Sachs did a month or so ago, and it showed the ratio of the market cap

of the highest valued stock in the S&P 500 compared to the market cap of the stock at the 75th percentile, so the top stock in the bottom 25%. It is higher now than it's ever been. This went back before the depression of the 1900s, 1920s, and it is worse than it was back then so what's happening what was happening in the depression and the depression you know most people were wiped out right those who stayed in the stock market were you know they were crowding into

names that they knew wouldn't go bankrupt and therefore had you know they had balance sheets like Fort Knox right and literally in the day I probably was gold so and so there was huge crowding in and we're higher now than we were back then but the good news for us because we've been hammered in in this environment the good news is as a market broadens out let's say as the risks abate and I think that will come with lower interest rates that's a big problem right um then the broadening out of the market advantages you know small mid and you know the lower end of large cap stocks relative to the mega caps because there has been so much crowding

in and i think that's going to happen this time as well the other crowding in occurs um right before we're going into a horrible bear market so we're either going into a market that's going to broaden out and be a very good, strong market. Or, this is what the concentration tells us, or as in 1973 and 2000, we're going into a bear market, a bad bear market. I'm opting for the former. I think interest rates, I think we're getting all kinds of signals that interest rates are way too high and the headline economic numbers the headline inflation numbers especially when it comes to shelter and so forth are hugely lagging and so i think the fed's overdoing it now and we're we're we've seen a rolling recession housing down autos very weak um commercial

real estate in a world of hurt office for obvious reasons but now multi-family because too much overbuilding. And now the consumer seems to be cracking, certainly at the edges. Low income is definitely. If you look at consumer sentiment today, it is lower for low income and middle income earners, or as low as it was in 08, 09. And the higher income consumer is now starting to capitulate in terms of sentiment now i know we got this is based on the university of michigan consumer sentiment index yesterday we got conference board and it said confidence was up over the many years i've been in the business michigan has been the right leading indicator that was down way below it was shocking last month shocking and and just one sorry sorry marty um

If you look at small business sentiment, so the NFIB, National Federation of Independent Business, puts out a survey. I know the person who started it in the late 70s. It is as low now as it was near the lows in 08, 09. It's because small businesses cannot get funding. They cannot. and many bigger companies can't as well because venture except for ai is basically shut yeah and you factor in other metrics look at like 90 day 90 plus day delinquency rates beginning to rise to 08 levels it's it's heady out there and that's what uh i think that's and that doesn't include

buy now pay later which is not in any of these statistics uh but has been all the rage especially uh with young people and that yeah that market's grown i mean what was it layaway uh in the 90s 2000s but now it's been digitized that's right you can do layaway on ecom so that's right that's right that's exactly right which is insane and then i guess the big worry that everybody has maybe is on jerome powell's mind is stagflation like if these inflationary pressures are not tamed um enough and he lowers rates like does that lead us to a inflation scenario that we do not want to be in uh so i i'm looking at a few leading indicators of inflation um what's interesting about this question is art and i are disagreeing on this

right now and we have disagreed in the past and uh so this is good because i want to be kept on my own toes. So Art would say, given the money, monetary base unleashed during COVID, we have yet to see the inflation, you know, cycle play out. Now you can go back to 08-09 and he was making that case and you'll notice we did not go into an inflation spiral why not we didn't and this is where this is the the point we disagree on i've always paid a lot of attention to the velocity of money the rate at which it turns over and um if you look at it over it it peaked in a secular sense, in 1997. I saw a chart recently that also peaked in 1997. I'm trying to remember what it is because I say, wow, this is the only other thing I've seen that peaked that way back then. But

anyway, it's been falling, although has cyclical increases, but in a trend sense is falling, you know, lower lows, lower highs. And so that's what happened. That velocity during the beginning of the cycle did start up, but then collapsed. And what is that? That is people saying, I'm scared. I'm not going to spend as much. I need to save a little bit more. I'm afraid I'm going to lose my job. And if you look at those statistics, and there are stats on this now, the number of people making $100,000 or more who are afraid of losing their jobs now is rising dramatically. And to the point where if you look at its correlation with the unemployment rate in the past, would put the future unemployment rate at somewhere in the 6% to 7% range.

So if that is the environment we're in and the velocity of money, which has had a cyclical turn up but has not hit a new high, I think is in the process of turning down. if that turns down and at the same time money supply year over year is still negative then you have one heck of a hit to gdp so now art on the other hand does not believe in the concept of velocity at all he thinks it's random a random walk whereas i have watched it in the market be highly correlated to two things. One is optimism. So when optimism is up, that's the beginning of the cycle, it will move up. When optimism is moving down, it will move down. That's

what I think is happening right now. The other thing it's correlated to is inflation. If people think that inflation is going higher and that's why we're at a very tricky point in the cycle if people think inflation is going higher let's say it's going to turn around from three three and a half and go higher um what they will do what's the natural thing to do if you think interest rates and inflation are going higher what are you going to do you're going to buy now before those prices and interest rates go up i don't think that's going to happen um but i think uh art does so there you are you have our and and so we can watch what happens here yeah that's i think the question everybody might everybody's mind is what is jerome powell thinking

about this because that's i think i don't think he thinks about that no no no no no i i think well i think he thinks about his legacy but i think he thinks about non-farm payroll employment and and the pce core deflator now i can give you some statistics that on non-farm payroll employment we're up i think we're up about somewhere in the two and a half percent range year over year on the household employment metric we're flat year over year and if you look at surveys temporary and permanent health help agencies that world is crashing including the wages wages have just taken a tumble and are well below where they were in 2019 so we're look we arc and many other economists are looking at many other variables than just non-farm employment and then on inflation

the inflation indicator that i and i've presented this to art as well as you can tell i admire him greatly and and i want i want the debate to debate him uh and and understand where he's coming because he's not in the day-to-day market um so the one i watch is the metals price index over the gold price index uh so what is happening to the purchasing power of gold and we'll do this for uh bitcoin as well but this one you know i've followed back into the you know i guess it's into the 70s um and what you see is the that ratio is down at its lows in 0809 so the purchasing power of gold has skyrocketed relative to metals that tells you in a very weak industrial world which tends not to be inflationary um in other words these metal prices aren't just chasing gold up

they are some are up copper has gone up but many are not chasing gold up uh or if they're moving up not anywhere near the rate at which gold is that tells us uh gold is playing a flight to safety role right now just like bitcoin is quick break here freaks this rip is brought to you by Gradually Then Suddenly, A Framework for Understanding Bitcoin as Money by Parker Lewis. I wrote the foreword to the book. I'm honored to have done so because it's the best zero-to-one primer if you're looking for a logical explanation of why Bitcoin obsoletes all other money. Buy one for yourself and maybe a few for your friends.

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that we're living through right now because you have these inflationary pressures you have the mechanics of the monetary systems globally where they're being debased and then you have the censorship of assets with the west freezing russia's treasury assets and then last week russia freezing western bank assets within their country and there's a lot of back and forth happening at that level which only adds to the case for bitcoin yes definitely and um how would you describe this current environment compared to the environments you've seen throughout your career is this as chaotic as a 32 year old yeah this i was 17 when 2008 happened yes it's all qe1 twist qe2 obviously covid european credit crisis

this seems like the most chaotic time in my life it it probably is i don't know um if one of your family members lost or you lost your house that probably was the most chaotic in 0809 so if that didn't happen, then this would be. I remember when I started in my career, it was the late 70s. I was in college. Art got me my first job at Capital Group. And big, big break. And interest rates and inflation were rising into the double digits. The dollar was plummeting. Productivity was plummeting. The U.S., and that's one thing that's not happening now, productivity is actually accelerating thanks to innovation. That is a potent anti-inflationary force, potent, because what it does is stimulate unit growth. As prices of new technologies fall, these new technologies

boom and help productivity. Of course, AI certainly fits that bill. But back then, I remember it was a little bit like now. Of course, we're not at double digit anything in terms of inflation and interest rates. But I think we were at a tipping point back then because chairman Volcker had come in and Ronald Reagan ultimately came in and that, and their policies, um, brought inflation and interest rates under control and created just an incredible environment for my, the early days of my career, eighties and nineties. Um, I think we're at a similar juncture now where everybody feels just so chaotic. And I remember back then saying, how are we ever going to get out of this?

And, you know, I put my economics hat on as we were watching the policies evolve, Volcker, Reagan, and we saw how we were going to get out of it. I think a lot depends on this election. It makes this election, I think, very important. And what my experience is, the stock market's going to tell us

who's going to win first and maybe quite early um if uh and i'm just saying this is these are the policies the stock market will reward i am not saying uh anything i'm not trying to be partisan at all um but if the market does see more free market less regulation um more uh incentives for innovation and acceptance and less regulatory backlash even against ai now you know if we have this executive order out there um then uh it will start rewarding strategies like ours right now that's not happening right now it is not happening i think that's more fed related um if we could get the fed and perhaps an administration more friendly

in terms of regulatory taxes, not raising taxes. It's not going to help anybody. It's not. We're talking laugher curve territory here, right? You know, if you look at the history of taxes over time, after taxes hit 18% of GDP, and they're higher than that right now, people either bow out of the labor force

and enter the gray market or just retire, work less. So, you know, raising tax rates is only going to exacerbate that. And also, as Art would say and does say almost every day, if you pay people not to work, they will not work. And that is what is happening now. And that is what has been happening. And some of it is unfortunate because of COVID. And, you know, hopefully those people were able to get on their feet with help but you know we're out of the nest now you have to be um can't continue to incentivize you know lack of work yeah and it is chaotic and there's a lot of doom and gloom in the world right now but when you think of something like ai and bitcoin it gets me really excited because i do believe particularly from the bitcoin point of view

and experimenting with AI, implementing it into what we're doing here at TFTC, and it works, it makes us extremely productive. You can see that. And if we were allowed to just run, innovate, and build, it is infinitely exciting to think about how good the world could be in the next five, 10 years. So we, and I saw Rod Rudy here from Bitcoin Park a little earlier, we did with him a podcast.

It's called, well, we do it every month, but Bitcoin Monthly. I mean, Bitcoin Brainstorm, right? It's Bitcoin Brainstorm. We also do a Bitcoin Monthly that's on chain analytics with our David Puel, but the Bitcoin Brainstorm. And we did it with, you know, the Lightning Network, Roast Beef, and he was in Africa at the time. And so we did it with Bitcoin developers who are trying to harness this idea of the convergence between Bitcoin and artificial intelligence. And he said, you know, we think we understand gig economy here in the U.S. or the developed world with, you know, with what they're doing with this convergence.

They are redefining division of labor there into micro. And we've always heard about microfinance in the emerging markets. well bitcoin and ai together are enabling like super mic uh micro finance and again redefining division of labor in a way that we can't possibly understand here so it's pretty exciting yeah the uh one of our portfolio companies at 1031 stack work i believe paul made a bit on that conversation paul toy um we have an immediate example of that in guatemala where stack work uh see a bitcoin ai bitcoin working in two facets ai working in one facet bitcoin and ai helped prove the guatemalan election results the presidential election results last year last fall the

incumbent party tried to say that the vote numbers were different than they actually were and And there's a company, the name's escaped me, Logan. There's a company that basically was anchoring vote data into the Bitcoin blockchain using open timestamps, basically saying there's this many votes at this time. And if you try to say this many votes didn't happen at this time, after the fact, we can actually prove cryptographically that's not the case.

So that happened. And then you get in stack work with their army of AI bots and individuals that can do micro tasks to literally send micro tasks out to AI bots and humans alongside them to validate individual election results within the span of two weeks. and the humans that participated in that got paid out in Bitcoin over the Lightning Network. So that right there, you literally have Bitcoin incentivizing the sanctity of data in this election and then incentivizing people to validate that. And AI agents, you can incentivize them with Bitcoin now too. Of course.

To validate that. Absolutely. In a beautiful way. Oh, and yeah, that's the best example so far I've heard. Yeah. And it's crazy to think because the Internet, when it was originally designed, designed and had this native payment layer that's gtp 402 yes but because no one thought well a

couple of things the internet was illegal for consumers to use in the us in the 80s until i think it was a telecommunications act and so i think the vestiges of that basically and and the desire to get this internet thing going you know and and commercial in a way um you know developers just did not build in payments infrastructure because we'd come from this illegal place it was only for the exchange of information and um there was an aol in the wings and that was a very quick uh you know first big hit uh you know to help people understand uh what was going on it's interesting in 19 uh 1993 uh email was first connected to the internet um that was the chat gbt moment and from then on you know just they ran with it and so this payments infrastructure

and maybe you know more of the history in terms of um the actual layer that they they tried to put in place but my guess is commercial um desires got ahead of that and this vestige of wait this is an information network let's let's do this first and they just never built it in yeah it was they had four out so you get the 404 error file can't be served from the server because it's not there and they knew that there would be a payments layer but a combination of commercial interests and i think there simply was not an option a native option where now like bitcoin over the lightning network you do have something that is interoperable with http directly well most people remember you don't remember but uh i do remember in the early 90s i mean the internet was suffering

through what bitcoin is suffering through oh it's for it's for pornography it's for gambling you know this is we've got to keep our kids away from this uh and i'll never put my credit card on are you kidding you know so there was a lack of trust in the internet big time uh which was all the more reason to put that payments layer in meaning now now that we know what we know right it's how a lot of technologies you know are they're not derailed they are you know the status quo tries to slow them down with this hey criminal activity and ill illicit activity yeah the long arch of history uh says that these things will get out there they will proliferate uh and on that i'm talking like positive i'm trying to be more positive on this podcast kathy the doom and gloom gets people down

the end of that story was positive wasn't it yeah okay and combining ai and bitcoin i think one thing that's becoming abundantly clear is that it needs abundant amount of energy too what are your thoughts on the intersection of the energy sector and this growing sector for compute yeah this there are so many convergences taking place and these are technology convergences taking place so one is you know this idea that Bitcoin can really help not only is more than half of it produced with renewables now but it actually is a solution to some environmental problems right um exxon putting bitcoin mining machines in its natural gas fields to to um basically harness instead of flaming natural gas and venting even worse with meth methane uh you know harnessing

that energy to mint bitcoin that was the first like finally people are getting this we wrote um piece in conjunction with at the time I think it was square now block about how Bitcoin actually will be we we are seeing this it is happening now will be a way to over build a solar and wind so you put Bitcoin mining into a utility ecosystem where let's say in florida where we relocated our company in florida the sun shines all the time right and so much so that it fills up in utilities these huge you know storage units and then what you just waste it no put it into bitcoin mining mine the bitcoin and let that be your funding source for more solar and wind infrastructure and so we see the convergence

to be a win-win actually right yeah and i mean we we experience it firsthand down here in texas and uh particularly in west texas where there's a lot of solar and wind it helps monetize those periods when electricity prices are negative and you don't want to push it to the grid because that's a cost for you so you mine bitcoin with it then it also helps out the reliable generation like natural gas uh plants as well if they're suffering from negative pricing too so yeah you put a bitcoin mine behind the meter and monetize that it prevents the prevent or it eliminates you know peaker plants and more and more peaker plants that are used you know seldom five percent of of the time right so i mean there there are puts in and takes i think bitcoin mining

is going to lead us to peak energy efficiency most people don't understand it but you can literally bring the market to the molecule absolutely there's no such thing as stranded energy anymore and it's it's insane to think about yeah it's been interesting you know this brings us back to again the internet in the early days do you know how much electricity the internet is consuming it's consuming as much energy as denmark and of course it was the same thing with bitcoin this is a familiar refrain and it's it's it's weird too that there's been this demonization of energy uh we can debate about clean energy green energy whatever it may be but i think we can all agree that humans if we were going to progress and flourish absolutely we need more

energy that's not to say we shouldn't be efficient or we should be wasteful of that energy we have to acknowledge as a society that we're going to need a lot more abundant cheap energy if we want to flourish well as uh even a human being grows same thing right yeah so and that's um that's the beauty of bitcoin too we can shift from ai and how the lightning network affects ai to how's bitcoin affecting the energy systems we talk about sovereign nation balance sheets uh yeah and you know i i give our team so yassin david frank downing is our director of um research on the next generation internet but hugely involved in crypto and we just hired uh lorenzo valente i mean we have just an incredible team and they're do they're doing this research when what

I'll tell you what one of the reasons we did the research on energy is remember when Tesla but or Elon put tests Bitcoin on Tesla's balance sheet he did that thinking that was the right thing to do and then he had this huge environmental backlash and of course Tesla he created Tesla to quote-unquote save humanity from itself in terms of uh you know energy you know energy um electric vehicles and autonomous mobility generally and here he has bitcoin on his belt and it was it became this big and so he and jack dorsey uh and i and i think steve lee all um were the first speakers at a seminar we did around this and many other topics and misperceptions about bitcoin it's still it's

called the b word the b word it's still up on our website i think it's on youtube too no it's very important to um it's funny because but you learn being involved in bitcoin that most people don't understand money and then they don't understand energy systems as well so like trying to but what's so interesting about what you're saying this is a big problem for all markets especially the equity market and we've centered our our company around this idea that five major platforms are converging these five major innovation platforms involve 14 different technologies that are converging and so the five major platforms are robotics energy storage ai blockchain technology and multi-omic sequencing in the life science space and ai is the biggest

catalyst you know for the convergence but they're all converging they're all influencing one another in some way shape or form um and the way that the traditional financial world is set up research departments is analysts responsibilities are organized by sector or industry or from their point of view even better sub-industry we have five consumer analysts we have five healthcare analysts we have five technology analysts each one of very thin slice of each of those. But guess what? If technologies are converging, that is absolutely the wrong way to organize. So we have organized ARC, ARC's research, by technology. So 14 different technologies, 14 analysts organized by technology. They are tech specialists and they are sector

generalists so that they can watch as these technologies follow learning curves, which are expressed in cost declines. As cost decline and prices fall, and these technologies scale across sectors, our analysts will be well positioned. Whereas these other analysts, following a very small silo they're not going to see it coming and they're they're this idea of convergence they're not set up to embrace it even they're not they're not or to understand it so i i think that's a very important distinguishing factor um when it comes to arc you know many people will look at our performance and say well hasn't helped you much has it and um uh what has not helped us what has killed all long duration assets in this market uh 21 22 and this year

last year was great because people began to feel that interest rates were coming down they sense we're near the peak and now there's the opposite again um and we have this concentration uh issue um uh so i'm lost my train of thought where was i going there the convergence of all these sectors if you're siloed yes they say it hasn't done much for you so they're quite happy to be organized remain organized the way they are thinking that they're doing things the right way because this concentration strategy comes out of that organizational structure um uh our or our structure is all about you know the future and how it's going to play out so i think truth will win out and we will win out and you can see i mean i see it up close and personal from our perspective

at 1031 investing in energy uh energy companies via mining exposure ai exposure companies like stackworks um lightning network exposure like you're beginning to see these synergies like at the mining sector like you can see ercot implementing ai to predict peak demand and the need for certain amount of power draws from certain sources at certain particular times and then that data can be used to pass on the miners like hey here's when we think you're going to need to shed some load to send back to the grid and even at the lightning network creating efficiencies for channel routing when you're sending a payment through the lightning network all this can be applied and then directly like if you want to pay for compute up front

for the ai to go go ping a model you can put a lightning network paywall in front of it monetize it up front instead of waiting for a credit card fee absolutely i don't know if you've heard on the energy side of it there's a hydroelectric plant uh up in upstate new york i think it is and um i heard the story where you know it would love to have you know transmission of you know its power into down into new york city but it's just not possible from an infrastructure point of view but now with bitcoin mining you've got a whole new community building there and you You know, the area is beginning to flourish, you know, because of the Bitcoin community. So it's bringing new life to, you know, rural areas that, you know, we're kind of left for dead or stranded.

It's actually a reversing of Triffin's dilemma where you flood international markets with dollars, which leads to you hollowing out your manufacturing base and you have all this infrastructure sitting there. substations miners come in and say hey we'll buy that energy give you some revenue yeah it's uh it's a beautiful thing to see um and i want to be cautious of your time but before we wrap up i mean you made a big announcement right before you came over here i think it's something we should touch on um in terms of what you guys are doing at arc to give back to bitcoin because obviously this is an open interoperable uh system that is dependent on individuals maintaining it yes and it is important for people who are leveraging bitcoin to make sure that it is maintained and you guys

are taking a step forward to do that at arc yeah there was a lot of controversy around arcs um not coming forward with any support what what people don't know is we've been thinking about this since 2019 i had the privilege of meeting many of the core core bitcoin developers at a confab in uruguay and this issue came up and you know i came back and i said we've got we've got to figure out how to we have to figure this out let's we'll we'll do this at the right time and then of course we go into covid and you know all hell breaks loose both ways for us and um so then we were thinking originally our our bitcoin etf that the idea was that it would be priced we thought the pricing generally in the industry would come in at about 60 basis points

But when 11 were approved at the same time, we had no choice, any of us, but to take it down to really a place where there's no profit or very little profit, right? And so we recognized that. We went down to 21. and are our rationale and genuine it's a not not rationale in the bad sense this is wait a minute this is a public good so maybe it was a blessing in disguise that all 11 were approved at the same time all the pricing is going down to 21 or i mean there there's some still at zero until x dollars or what have you uh so we went to 21 uh we went to zero for the first billion and then thank god hit the billion pretty quickly um but at 21 you know when when you think about all the sales and

marketing and legal and infrastructure and ops uh and the sales is a big one because in the And in our world, getting on advisor platforms is critical. And no one is on any big platform yet. There are a few small platforms that have put some ETFs on. So we basically said, okay, we were going to give a percent of profits at one price level. And we're saying, well, it would be kind of disingenuous to say, okay, we'll give an X percent of profits when we knew there was going to be very little in the way of profits. Now, maybe that will change over time, you know,

as we see more efficiencies, but so far, you know, as it stood. And so we thought, we have to think of something different. So we took our time, and I'm not going to divulge everything, and I didn't this morning either, because we want to reserve that for a Bitcoin park. We do the Bitcoin brainstorm with them. every uh every month and i think that in july this this might happen um but we we we have private funds private crypto funds and so we have and and some people in the community very very few

know this but we are uh going to give a percentage of our revenues not profits we're not going to to play that game um to core bitcoin developers and um we'll give more of the details uh in july but uh and we always knew we were going to do it and all of the all of the drama that took place was first of all i i kind of didn't know about it because other markets were other markets were calling for my attention um but uh yassine did call my attention to it and so um yeah that's awesome yeah to see and i think having followed the work that you've been putting out at arc over the last decade it's i think particularly in the position that you stand in interfacing with institutional investors i think you guys have done an incredible job of highlighting

what the opportunity that stands before us and how it works in the first place and again i think this uh step by arc to contribute to core developers is just a continuation of um the the the lead that you guys have had in terms of understanding and um really being on top of what's happening in the space and and really wanting to become in some way a part of the community and the community has welcomed us so warmly and you know the the drama kind of you know energized everybody a bit more but but i think we're all good yeah we're all good the uh The drama is, it gets tiresome sometimes. It comes with the territory.

It's true in everything we do. It's just innovation. When disruptive innovation, disturbing the traditional world order, there's always a lot of drama. Why? Because the old guard basically is treating us in the early days like fleas. Get out of here. You don't belong here.

Uh, and I'm talking about the traditional financial world vis-a-vis Bitcoin, but it's true. The traditional financial world versus what we are doing at ARK right now, you know, people think we're crazy for actually investing in companies that aren't in the broad base benchmarks. our entire portfolio practically is made up of those and they think that's nuts I started in a world in 1977 when I was in college at Capital Group no one used a benchmark as his or her guide they had a clean sheet of paper and they didn't have computers at the time but they thought there was critical thinking original research a lot of hard work and trying to figure out how the world is going to work that's what we're doing and hopefully the pendulum which has been to passive and which has nourished these broad benchmarks for years and years and years now 20 20 years hopefully that pendulum is going to swing and that this massive concentration towards just a few

stocks is is going to end because you know that is not good for innovation yeah yeah the concentration is never good and i think the success of the the launch of the etfs uh is a validation what you just said is like people are looking for something to diversify away from that concentration absolutely Absolutely. And, you know, our strategies, all of them, including the spot Bitcoin ETF, which I should have mentioned is in partnership with 21Shares. All of our strategies, all of the active equity ETFs are diversifiers against what has happened in the last 20 years. You know, this, I often say, worshipping at the altar of the almighty indexes. You know, that's a thing that has happened. But, you know, with real research and hard work and an eye to the future,

we think ultimately we're in a winning position. Well, Kathy, I really appreciate you taking time out of your day to join us here in the Commons. Thank you, Marty. It's been my pleasure. All right. Can we send anybody listening anywhere to find out more information about ARK, your research, Spot ETF? Sure. Well, we do two monthlies for investors interested in Bitcoin. One is the Bitcoin Monthly. David Puella authors that. And that's all on chain analytics. And, you know, we basically rate them as bullish, neutral or bearish and how they've trended over the last month. So it's a good way. It's a nice way to get to know the internal dynamics, the health of the ecosystem and so forth. Then we have Bitcoin Brainstorm with Bitcoin Park, which is monthly as well.

And there we invite the people who are doing the hard work behind the scenes. You mentioned, I think our last one was on miners behind the scenes. and, you know, what they are seeing, thinking, worrying about. You know, it's a really, really good confidence enhancer for anyone who doesn't understand, you know, all of the moving parts here and all of the people involved, all of the puts and takes and so forth. And then, yes, we have white papers there on our site, arc-invest.com, as well as blogs.

and um you know we also put out something called the brainstorm weekly and very often on our friday brainstorm we will have featured um uh bitcoin uh and so you'll often yassin and the team david and others are often on the brainstorm so we we just we give our research away because we think these first of all these movement this movement is so important but these the area of disruptive innovation broadly is is so inefficiently priced in the market because it's not well understood the the companies that are going to move and shake the world going forward are not in the broad-based benchmarks if they're not in the broad-based benchmarks then traditional analysts don't want to follow them.

Those are exactly the kinds of names we want to follow because they're probably the sleepers and are going to create some surprising results longer term. I'm bullish. I'm bullish too. I'm leaving this conversation more bullish than I entered. Kathy, again, thank you so much. I hope you enjoy the rest of your day.

I am sure I will. I love Austin and it is a beautiful day out there. You're lucky it's not Sunday when it was 115. We got good weather today. Yeah. It's gorgeous. It is. Peace and love, freaks.

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