The Wolf Of All Streets - ETH outperforming BTC | Genesis to DUMP $1.6B | Crypto Town Hall

Episode Date: February 16, 2024

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Sorry, I'm late in starting this space. I have one last bite, and then I'm ready to speak without eating. Thomas, Zach, how are you? I'm doing well, yeah. Thanks for having me. Pleasure's ours. I think it's the first time you're on stage, is that correct? Yeah, that's right.

Yeah, first time. Oh, and you're from Australia? Yep, yep. Melbourne, Sydney, or another country called Tasmania? No, I'm from Melbourne. Nice. Where from Melbourne? Down Bayside. Bayside, East?

So I've lived most of my life in North Melbourne, Colberg and stuff, and Frankston. So I went to university. I spent most of my life in Melbourne. I haven't been there in eight years. So whenever I hear an Australian accent, I'm geeking out. Oh, wow. No, near St. Kilda. Oh, nice.

I was just telling a friend of mine about St. Kilda. Let's kick off the show. We've got the panel here already. We've got Bilo. Good to see you again, Bilo. And of course, we've got Zach and Taylor as well. Taylor, I think it's your first. No, it's not your first time, Taylor, is it?

Not first, but glad to be back well good to have you back let's kick off the show eleanor is here as well man we've got a lot of new voices today and we've got ran i think ran um i think it's ran's first time as well on stage or that's been here for a few months ran i think it's your first second maybe third time on. It's a pleasure to have you as well. Thomas, one thing in Ran's show he was talking about, and I watched Ran's show along with Scott's show before kicking off the space, so I got my news. And Ran's show was talking about this bull market. Actually, Ran, I'll let you explain to the audience why this is the bull market

that no one really wanted, the most unwanted bull market we've seen, how no one was prepared. And we'll have to get Thomas' thoughts on it because he has a sharing accent and it's his first time here on stage. Yeah, sure. Great. Thanks. Well, look, I mean, there's a lot of factors here pushing this bull market,

but the predominant one is these Bitcoin ETFs which we've had massive inflows really just over in fact if you look at all of the inflows including gbtc outflows were still net inflows over a hundred thousand Bitcoin over the last month which is actually far more than really anybody had predicted. What was the number? Say that again, Thomas. Over 100,000 Bitcoin inflows over the last month into all of them. The new nine Bitcoin ETFs have had over 250,000 Bitcoin flows into them. But of course, we've also seen Grayscale have about 150,000 outflows. So that alone is driving it. And then, of course,

we've got these sort of macro factors, which I think are likely to be kind of the fuel to the fire just being coming up to this Bitcoin halving in a couple of months. Plus, there is a general sense, I would say, in the market that interest rates are going to be coming down this year. And, you know, what we're also seeing is it's just a natural part of the cycle where Bitcoin has been consolidating for years in a sort of 30,000 region, really. But now that it's sort of trended back up closer to its all-time high, you start to get that alone brings excitement and buzz back into Bitcoin. The price of Bitcoin becomes its own marketing machine. But Ran, one of the things you keep referring to is a tweet by, hold on, Thomas, you're the person behind that tweet. So maybe I'll ask you that question.

I don't know if it's your tweet that Ran keeps talking about. So you put out a tweet about independent advisors. I'll read out the tweet because I read it yesterday. Independent advisors control $8 trillion in assets and surveys show 77% of them want to add Bitcoin to their portfolios, aiming for an average allocation of 2% to 3%. We're talking about independent advisors here, not the institutions. This means we'll likely see $150 billion flowing into Bitcoin ETFs from independent advisors alone. Thomas, can you just get us, where'd you get those figures from? Because we were debating it a bit yesterday, because obviously we're at 5 billion now and we can see the

price of Bitcoin where it's at. It's hard to imagine where we'll be when we hit 150 billion. And again, that excludes all the other institutions. Yeah, well, look, I mean, I took those figures straight from the video in my tweet, but yeah, this is – look, it's clearly a big story with these independent advisors looking to allocate and create kind of a strategic asset allocation to Bitcoin, really seeing Bitcoin kind of filling that bucket of the alternative assets for just portfolios in general. And, of course, it's not just the independent advisors when you look at it.

We've also seen recently Fidelity in Canada, they have allocated Bitcoin to their balanced fund. And what that says now in Canada, Fidelity's Canadian balanced fund is relatively small, but that gives you kind of an indication of if they did that to the American market. I mean, just to give you some perspective as well, Fidelity alone managed about a hundred billion dollars in assets in their balanced and growth assets in the United States. So if they were to do something similar, you would be seeing many billions more in addition. And of course, that says nothing about if BlackRock were to follow.

But yeah, these are just independent advisors that have shown through surveys their intention to allocate to Bitcoin. Yeah, so, Ryan, I'll go to you because I know you had a similar debate with two of your panelists today on your show. And what would be your conclusion from that debate, from the back and forth? I mean, like the way I said, that's exactly what I said on my show today. It was a very strange rally. Not a strange rally. It's an amazing rally. Why?

Because retail is not here. I showed a whole lot of metrics today and I think we saw it yesterday in Coinbase's earnings where Coinbase said that retail is only 16% of what it was in a period in 2021,

which was a heated period. They're saying that the retail, the amount of retail volume and the amount of retail trading on their platform is only 16% of what it was in the peak bull market. We're seeing the same thing on YouTube. Like, we're not even anywhere near the subscriber growth that we were getting in the bull market. So it's almost like retail is not here yet.

But then institutions also aren't here yet because as per the tweet and the video that was in CNBC, they haven't even started allocating it, which means that if we're at 52,000 and this is all happening before retail gets here and before the institutions actually get here, what the hell is going to happen when they actually do get here? So I mean, I think that's the part that I think I've just clicked. I think we have to change our paradigm and say, retail hasn't even started yet, institutions haven't even started yet, and we're at 52,000 and we're 60 days away from halving.

Can I add to that, Mario, just from an anecdotal point of view? Yeah, so I was just at the ETF exchange conference in Miami and the panel about the Bitcoin spot ETFs, which was hosted by moderated by Eric Balchunas, who we all know, and and an executive from Dave Lavelle, from Grayscale, Steve Kurz from and from Galaxy and Matt Hogan from Bitwise. Just that was a topic of conversation that that that conversation that this thing is still very, very early. And Matt himself said that they expect to see a big secondary acceleration into the ETFs, you know, when retail can get in, when the rest of the institutions,

the national brokerage platforms, he's like, when we get onto those national brokerage platforms in a few months, there'll definitely be a secondary acceleration. So while the numbers are good, they're definitely expecting a secondary surge in the coming year. Zach? Yeah, I was just thinking about the Coinbase earnings call. I don't know if anyone else was listening to that last night. But I mean, if you think about the fact that Coinbase is still basically 50% below where it was on IPO day years ago, and now you've got one of their biggest competitors, two of their biggest competitors, by the way, in FTX and Binance now off the map, essentially.

Not that Binance is off the map fully, but, you know, it's just wild to think about how much farther this could go. And even JP Morgan's out changing their entire bearish call against it and i think rand's right all of that just signals more of what's to come on the retail front as you have this army of investors to eleanor's point out there finally selling bitcoin as we all know it brings people into the tent and then from there altcoin season still to come it's just exciting to see that the tides finally turning. Yeah, I do want to talk about ETH, the ETH narrative as well. Everyone was excited about it right after the Bitcoin ETF. And just relative to that excitement, ETH seems to be underperforming. But going back to what you said about Coinbase, why do you think that hasn't been priced in?

So when you see your top competitors out of the market, when you see the market recover the way it is, you'd expect Coinbase to be performing better. Is there something we're missing? I think it was Pumpstrat who had the call ahead of this, the earnings report on Monday. Sean Farrell, who we've had on Coinage before, was talking about how misunderstood Coinbase is as a company. You know, they haven't really even shown the results of being, what, the custodian for eight out of 11 Bitcoin ETFs and what that's going to do to their revenues moving forward. So we didn't even see that in this report.

And as far as misunderstanding everything else Coinbase has its hand in, they're really just getting started with base. I saw a few people talking about their venture portfolio, essentially having everything that they've ever put their money in at cost. That's another thing that I think Wall Street has no idea what the real value of Coinbase Ventures portfolio is. So yeah, I think there's a lot of things that people are missing around the Coinbase story. And if you think about what Brian Armstrong has said, in interview after interview about where Coinbase as a company goes, it's not just being the exchange of choice for crypto. Think about what real world assets then does for a company like Coinbase,

where if everything else comes on chain, they're essentially not just going to be the biggest crypto exchange that's ever going to be there in the world. They're also going to be the largest tokenizer of any asset ever. And right now, they're basically the only one that anyone thinks is really doing this legally and professionally and trusted. I know Travis is on here. You can speak to that and what we've seen in the past. But I just feel like that is the biggest missed opportunity here in terms of where Coinbase goes. Clearly, if they're still 50% off what they said on IPO day, it's exciting to watch. I mean, I wouldn't.

I very much agree with you. I very much agree with you on Coinbase. I've been calling Coinbase as a biased and spotty dollars very, very publicly saying, you know, buy it. It's the best crypto token on the market. It's the best, you know, it's the best proxy to crypto. I actually even posted a video on my Twitter, which says the same thing. But remember one thing about Coinbase. They still have a legal fight for the SEC.

And even I think at the end of it, there's going to be some winnings and some losings. In other words, I don't think we're going to win in a straight outright win against the SEC. I think that like any big war, there's going to be casualties on both sides. I think that ultimately we'll come out with a little bit more regulatory clarity, et cetera. But the thing with Coinbase is you've got to be careful if you're stocking up a big position on Coinbase, that during the fight with the SEC, the stock doesn't take a few hits because right now it's out of

sight, out of mind, and it's like this overhang that no one's talking about. But when they go to court with the SEC, then I think the price is going to pull back regardless. I was just going to say, I was just looking at the chart for Coin and Mario, you kind of mentioned like, why isn't it performing better? It's actually performed like shockingly sort of in line relative to Bitcoin. So it's up like 470 percent off of its bottom, which is about double what Bitcoin has done off the bottom. And it's about 50% off of its top, which is about double what Bitcoin is off of its top.

Now, because the top was the day it IPO'd, there's certainly some IPO mechanics, insider selling. There's a lot of that kind of stuff going on. But I mean, you know, I wouldn't say it's like necessarily underperformed. I think the other thing I would just say is, there was certainly a very meaningful portion of Coinbase stockholders, they were using it, you know, as a proxy for crypto or for Bitcoin. And now that there's spot Bitcoin ETFs available, I think there's some amount of folks that just like, you know, would rather have the Bitcoin ETF exposure because it's straightforward. And that's kind of what they wanted anyways, but they just couldn't get it

because, you know, it wasn't really that available or available in a vehicle that made sense. And now it is so. Okay, my mic isn't working too well, but talking about the Bitcoin ETF, there's a question here from the audience from Green177104. Please, I'm going to read this one. Also, why are we assuming all of these ETFs that bought won't sell when there's panic in the market?

Can someone explain, not just Travis, Dave or anyone else, just how does it work with ETFs? When they buy, do we expect them to huddle? What are reasons they would sell? How often do they sell? And how volatile are they? I think, hi, Mario.

Hi, everybody. I think, I mean, ETFs, there's a portion that's owned by institutions, whales, whatnot. But then there's a vast majority of the portion that naturally would want to be owned by people like you and me or people that are not native to crypto that are not comfortable buying crypto but that would buy the etf so like anybody else and like anything else if they are there is fear in the market they can just as easily sell their shares. Retail, retail. So there's two categories. There's the retail bucket and the institutional bucket.

You think both of them would react the same? I think that the institutional would react less than the retail. I think the retail are, think of it this way, they're new. Those that are investing in an ETF have not really bought Bitcoin in the past, probably, or they're doing it for fiscal reasons if there's tax havens. But for the most part, they're going to be the ones that are the most jittery. So if there is fear and fight on the market, I think they would be the first to press the sell button. And that's the advantage of having a spot ETF versus a futures ETF is that the ETF can actually go and sell the Bitcoin to pay back its customers versus Grayscale

that had to just actually just pay out without having the ability to sell Bitcoin. Dave, we'd love your thoughts on it. And let me just jump in quickly below to Dave. And then, I do want an overview in a bit, just talking about the Bitcoin ecosystem getting a lot of attention right now. We'll do that in a bit, Yago. Good to have you, Dave. Yeah, I mean, people need to understand that while they're true to the statement, obviously, people can buy and sell.

Eventually, I think a large class of people, once we reach equilibrium, and we are so far from equilibrium, it's almost not worth discussing. But once you reach equilibrium, sure, the ETFs, because look at the spreads and look at the zero commission, they're better trading vehicles than people who want to trade in and out on Coinbase, for example, because of fees if you're retail. So it will eventually get there, just like SPY, by the way, is used as the fast in and out trading and the hedge of choice of most equity only shops, which one S&P is trading. But it didn't happen until after it reached equilibrium. And look at the assets under management of SPY and the spider. And there's a long way to go before you get there. So it's worth understanding that, yes, of course, that will be true. And it's also, as a caveat, anytime there's panic, you know, the correlation goes towards one, right?

People sell what they can sell. You know, that's one of the reasons Bitcoin, when there's panic on the weekend, is like we saw back in the pandemic response. We saw Bitcoin selling first. Why? Well, because it was open and people could sell it because they could. You know, so that will always happen. But the important thing is one of the reasons that the spreads are so tight on the ETF now is because the market makers aren't dumb. And they know that it's overwhelmingly buy interest right now compared to sell. And so, you know, that will eventually reach equilibrium as well. So it's a really interesting situation, you know, as we still

have platforms that are going to be slow to add it. We still have, you know, we haven't even talked about investment consultants saying what a traditional portfolio allocation should be. You know, we haven't gotten Fidelity or BlackRock really to put it into their model. So there is a lot of runway here and it's a slow grind. It's just that that slow grind has been faster than I think a lot of people expected. Thomas? actually see ETFs as volatility dampening relative to the classical ways people have been buying Bitcoin. And I think people have to understand that it's fundamentally for a very different class of investor because anybody could have bought Bitcoin, any individual retail could have bought Bitcoin at any point really over the last 5, 10 years. Coinbase is there and it works fine just as all the other exchanges do.

But what these ETFs enable is investment allocations, as was just mentioned, coming off advice from investment advisors or investment consultants for institutions to these Bitcoin ETFs. And when these institutions do allocate to Bitcoin, they do it with strategic asset allocation. So they'll take 5% of their portfolio, put it in Bitcoin. And what that will do is will color the volatility because when that 5% naturally rises to 10% because price rises, they'll sell. And then on the flip side, they'll buy the dip when that 5% drops to 3%. So it's actually, I see it as if anything, it's going to reduce volatility.

And of course, there will still be inflows and outflows. That's just natural. But it won't have this. It's fundamentally a different category of investor that's looking at these ETFs with serious capital, that is. Dave? Yeah, I just want to magnify that volatility point. He's right, absolutely, as we get to those asset allocations. That effect isn't really true now because we're nowhere near those allocations yet. But yeah, that'll happen.

But the other thing that's interesting is anyone who's seen significant bull runs in the equity market, I mean, even with effectively, in the end, as large as some of the things we've seen in the crypto market, which we saw back in the early 2000s, in the end, as large as some of the things we've seen in the crypto market, which we saw back in the early 2000s, you know, actually in 2000. One of the things that they're doing in equity markets, and the ETFs are trading in the equity markets, is there's a tendency that after three, and certainly by 5% on instruments, people stop buying, they say, you know, I'll wait till tomorrow. And so what we saw, we saw a pretty large rally from 42 up to 52, right? But we didn't see it in a God candle. We saw it three to four or 5% a day, every day, because people basically said,

okay, I don't want to do that. That is not remotely surprising. That is literally, we've seen this story before, and it tends to be part of the psychology of stock market investors. So the fact that this will decrease volatility is fascinating. It's also worth noting that it's decreased volatility, I've said this before, on the spread between futures as well. So it's made the futures markets less volatile as well relative to Bitcoin. And all of that is going to bode extremely well quantitatively when people want to apply for Ether and other crypto ETFs, because effectively it short circuits the SEC's other argument was, you know, which is that, well, you know, we don't have a regulated market of sufficient size and the futures are too volatile. Well, guess what? Approving the ETF will make it less volatile and it will be and it's provably so and so that sort of data especially as it gets there is going to help when you get to that so bill i'd love to get your for your response to dave and also i'd like to second yeah and then yeah can you hear me yeah yeah yeah yeah

yeah i can i guess i'll say yeah i'd like i'd like to respond to Dave, but also kind of pivot to the ETH ETF discussion and the future of ETH because it seems like it's being, it're 100% right. And you don't need to look very far. Just look at what Grayscale dumped on the market and be sure that this was absorbed by the ETFs. Any other time, I think we would have seen a lot more red on the market. So in terms of volatility, I totally, totally agree with this. In fact, I read in a couple of places, haven't checked it out myself, but there's actually, we are actually in a supply shock where there is more Bitcoin being bought up than being produced by the miners. This is something that is extremely rare and could explain to a great deal what's going on right now.

I'm a chartist. I like doing charting and TA and do a lot of Elliott wave analysis. And what's going on right now. I'm a chartist. I like doing charting and TA and do a lot of Elliott wave analysis. And what's going on right now is the most likely scenario is something called an expanded flat. And we're already at its limits. An expanded flat is where you have a correction that goes down and then goes back up above the high of that correction, then comes back down. We're currently exactly at its limits. In extreme scenarios, it can go to 1.618, not to get too technical. That level is about 55 in the 55K region. From a TA perspective, if Bitcoin makes it to 55 and above,

I could tell you that the whole narrative of a mid-cycle top 20 to 30 discount is off the table that's all i have to say about btc i actually posted my um my my tweet explaining this to the nest if anybody's interested onto the eth etfs i'll let somebody else speak Hey, can you hear me? Yes. Awesome. So I would just want to offer a slightly different take. So I do think that over time, Bitcoin's volatility decreases as the size of the market cap increases. And that's because the larger something is, the more inertia it has, the more money or capital you need going in or going out in order to move

the price. And I think the ETF in that respect, by bringing more capital into Bitcoin, does over time, over the long run, reduce volatility. However, I don't think that we are going to see a non-volatile Bitcoin. I think what instead we will see is Bitcoin bringing a level of volatility to the ETF world that the ETF world and the overall sort of TradFi world is unaccustomed to. Following on what was just said, we have a scenario here where already more Bitcoin is being purchased just by the ETF than is being produced every single day. In addition to that, you have more Bitcoin being bought by retail through other means. So we are in the supply shock. Around April 19th, April 20th, we're going to have a halving. And the amount of Bitcoin introduced

into the market by miners is going to drop by 50%, which is going to increase that supply shock substantially. We're still in an environment where the amount of Bitcoin that exists on exchanges to be bought is at historic lows. And that doesn't seem to be changing. And so we're in an environment where the supply squeeze can become extremely dramatic very quickly. And every single time we've seen this kind of setup happen for Bitcoin, we've seen incredible volatility. We've seen the price go up 10x or 20x over the course of a year.

And I don't see any sign right now to expect that it would be substantially different, maybe somewhat different in magnitude. But even then, you know, even if it's just at 5x over the course of a year, there is a degree of volatility, which the TradFi world is unaccustomed to, is going to drive a level of attention to the Bitcoin ETF specifically that no other ETF will have. And it will do what it has always done for Bitcoin, which is be the best marketing for Bitcoin and by extension, the entire crypto world. You know, nothing is better marketing than green candles. So my sense is that in all likelihood, we're going to see another massive, overextended,

over FOMOed bull run occur over the next 12 to 18 months. What a shift in sentiment within such a short period of time. Is there anyone that can counter that? Travis, I think you'd agree with Iago. I just don't see anyone. It's hard to get bears on stage now. A few weeks ago, maybe a couple of months ago, we had too many bears on stage now and you got a few weeks to go maybe a couple of months ago we had too many bears on stage funny how that happens for good reason though i mean to be fair it's not like uh i mean specifically as it relates to bitcoin it's not like we're having to drum up some half-assed reason to be bullish around this asset like we got spot etfs the space had been trying to get them for literally a decade we got them black rocks reading leading the charge on it larry fink is waving the flag on it and the inflows have you know surprised certainly the large majority of of of people you know i think

why isn't it uh we're saying this i just had a quick question for Yago. Where would you place the likelihood? What do you think the likelihood is that Bitcoin's up 5x over the next year? Is that like your base case? Like 50-50 chance? Well, 5x from here is $250,000 of Bitcoin. And I can tell you that every single time there's been one of these bull markets, at the beginning, I and practically everyone I know has underestimated how high it will go.

So it's right now very hard for me to imagine a $250,000 Bitcoin. Not impossible, but hard. And then by the end of the bull market, everyone is throwing out numbers. Everyone's massively overestimating. And that's a big part of why we see these massive hyperbolic ups and then 80% downs is because people always overshoot in both directions. If I have to go just by pure logic and using the base rate of what we've seen in the past plus the fact that human behavior hasn't changed, I would be entirely unsurprised to see a 5x rise. So is that your base case? Yes, probably yes.

I think emotionally, no. Emotion emotionally, I don't believe it. But I think just trying to look at, you know, it from the position of cold, hard reasoning, I think it's even at $250,000 per Bitcoin, we're looking at a small fraction of gold's market cap. So I think in terms of the capital availability to make that happen. How would it compare if we go on par with gold, what would be the price of Bitcoin to reach that?

About $550,000 or $600,000 per Bitcoin. $550,000 is getting pretty damn close. Could you explain that, Jagu? I'm sorry, I didn't catch how you do that. You basically just take the market cap of gold and divide it by the number of Bitcoin available.

Okay, okay. Just the market cap of gold is really unknown, right? When you think about it? No. We don't really know how much gold there is i don't think it's that much of a mystery i think within you know within a yeah we we probably you know 90 percent no right there maybe we may be underestimating or overestimating by a little bit but i don't think there's massive troves of i'm talking about gold above the ground right i'm not talking about well that's what i mean yeah no no of course but i mean that you know you could have a discovery tomorrow in central africa that's the thing certainly no yeah oh now you're now you're talking about that now you're talking

about the fdv of gold yeah no no i'm talking about just gold in circulating supply. Yeah, okay, I get it. Gold people have to buy it. I get it. But look, my base case since 2011, the very first email I wrote about Bitcoin back then was that it was going to be bigger than gold. And I still believe that. It's far more valuable than gold. It does everything that gold does, plus so much more, in an environment which is increasingly digital.

And I also think it's going to reintroduce a type of gold standard. So my overall view is that over the course of the coming decade, it's going to substantially surpass gold and achieve levels of sort of overall market cap that will be greater than anything that gold has ever achieved or will ever achieve. I'm a little bit skeptical that it will happen over the course of the coming 18 months. But nothing has dissuaded me from the view that we're going to see a global realignment around money. There's going to be a stronger demand for digital money in a more digital AI-driven world. There's going to be a geopolitical realignment with less and less trust in particularly the dollar, but there's nothing really to replace the dollar in the fiat world.

And so if it was only gold, gold itself would be substantially more valuable than it is today. I think Bitcoin has basically eaten all of the, you know, gold. Since Bitcoin has launched, gold has been basically flat. I think Bitcoin has been consuming the growth that would have happened in gold. And because Bitcoin can be transported and stored digitally, you don't need airplanes or ships to move it around, it's much easier and cheaper to secure. It is a much better alternative. Plus the fact that you can actually build programmable money on it. You can build a whole bunch of systems and layer twos on it. It makes it vastly

more valuable than gold. So yeah, I mean, $40 billion market cap for Bitcoin eventually, sorry, trillion dollar over the next decade is not unreasonable in my mind. Brilliant. Iago, I don't know how I wasn't following you. You just got to follow. I didn't realize I wasn't following you. Great stuff.

I followed him after the Satoshi VM space. That's where Iago became the infamous or famous Iago, depending who you follow. But Moby, I wanted to go to the discussion I had earlier, the question I had earlier when it comes to ETH and ETH ETF, the ETH narrative. Would love your thoughts on that. Yeah, of course.

I'm still waiting for ETH to make an all-time high against Bitcoin. It hasn't happened since 2017. So I'm hoping all this... Why though? Why, despite the ETH ETF narrative, like everyone said that they're shifting from the bitcoin etf stories over we've got a bitcoin etf next is the neath is an ecf yeah i think i don't know who it was on your panel a couple days ago that that gave me a good piece

of advice but i don't particularly know how to explain eth as well as I can explain Bitcoin to my mom or my grandma at the dinner table. And the way they described it was, imagine you're investing in an aggregate of the internet and everything that came with it in 1990. So I don't know if that drives as well as... But that seems... Go ahead. Yeah, I was going to say, that seems more exciting than, I don't know, depending on who your market is, but it just seems a bit more exciting in my opinion than imagine investing in digital gold. Digital gold seems a bit weaker than the aggregate, the new internet or the web three version of the internet.

Yeah, I agree. I haven't collected enough anecdotal data ever since I've been given that advice. I'm probably going to do it, try it a bit over the dinner table this weekend, my girlfriend's family. But again, I hold a lot of ETH and I've been very disappointed with what it's done against Bitcoin over the last year, but even what it's done with Bitcoin, against Bitcoin, excuse me, over the last five, six years, because the last time we saw ETH at an all-time high Satoshi level was, I think, in 2017 and then again in 2018, but it couldn't beat 2017 levels. So maybe the ETF will change

that narrative. Maybe all these layer twos that are building on top of Ethereum, the EVM narrative will continue to grow and continue to thrive. But yeah, a lot of hands went up, so we can go to some of those. Guys, jump in. Zach, Travis, Thomas. Yeah. The competitive. Sorry, go ahead, Travis. The competitive landscape for Bitcoin is a more attractive one to compete in than the

competitive landscape that ETH is competing in. And within that competitive landscape for Bitcoin, as you would sort of characterize Bitcoin's investment case versus its competitors, Bitcoin is like more clearly, like, in my view, more clearly competitive in that landscape than when you look at ETH and more clearly accrues value within that landscape than if you then move over to ETH and do that same thing and you go, OK, what is ETH competing against? OK, it's, you know, it's competing. It's all of these things, uh, within crypto and there's jockeying back and forth between

ETH and competitor layer ones. And this happens every cycle. And the last cycle Solana, you know, reached orders of magnitude, more success than any prior ETH competitor. And that, you know, it's not like that bar was really set that high, but it is true. And people are entering this coming cycle with that in their mind. And now you've got a whole new cast of characters basically. But then it's also competing against, you know, kind of like just traditional internet, like and, and, and the way that internet is currently structured and, you know, mass available in the world kind of. And then when you try and say, OK, and then why exactly is this thing a crew value, this token? And then people start telling you that it's like, you know, the way that like oil, you know, runs cars.

So if you're like bullish on, you know, car mileage, then, you know, oil is like maybe a good way to play that. And ETH is like kind of like that, but for like internet traffic. And it just is like, it's just weaker. Like it's not to say that it's not going to win, but it's just, if you were just objectively sort of like examining that versus Bitcoin relative to its landscape. You know, that's my point. Yeah. Mario, let me just really quickly respond to Travis. Travis does a great job of articulating himself in a way that I what I'm thinking.

Travis is able to articulate so well. And I listened to the Pomp interview you had, Travis, and I completely agree with you when I'm trying to explain Ethereum, I find myself not being able to do it with the same level of conviction around the dinner table that I'm able to explain Bitcoin and its value case. But the one thing I want to piggyback off of what you said, Travis, in the interview was, what does any of this stuff even do, right? So when I explain Ethereum, I can explain DeFi and how it's found product market fit.

But a lot of the other stuff that's being built, like all these tokens, for example, what do they even do? They're all speculative. None of them are even solving a problem for the most part. So I think that's where I find difficulty. Again, as a DeFi holder, I find difficulty explaining. You can't use that same argument for Bitcoin. You know, You're speculating

Bitcoin could be a digital gold. There's an argument saying we don't need another digital gold. The bonds are enough. The US dollar should be enough despite inflation. And obviously, you've got gold and other commodities. So why do you need Bitcoin? The whole speculative nature of- That didn't make any sense, what you just said. That doesn't make any- What do you mean we already have treasuries? All you like all you have to do is look at the monetary and fiscal policy situation of the United States and all the other developing nations. And you go, and then you start digging into the way Bitcoin actually, you know, works and is designed. And I've said this a bunch of times publicly, it appears that Bitcoin is sort of purpose built to accrue some multiplier effect of growth in major central bank balance sheets and into money supply.

So if you're bullish on those two statistics going up and you just do the work on Bitcoin, you can pretty logically arrive at the conclusion that like this thing should just actually just be a great hedge against that. If those are going to go up, you know, 3x over the next 10 years, then Bitcoin is going to go up 3x, you know, times some amount, you know, some amount more than 3x basically, because it seems to be kind of purpose built to do that. So Thomas, Zach, do you agree that explaining the narrative, the ETH narrative is just harder than explaining the Bitcoin narrative? I think it could be.

I think to simplify things, and Travis and I have talked about this as I have with Eleanor, it's just like, if you think about what really got us here on the Bitcoin side, yes, it might be technically harder to explain in terms of what Ethereum can do versus Bitcoin. We all know that. But from a simplified, where do we go in 2024 perspective?

If you think about off the lows back in October, when all the excitement around Bitcoin ETFs looking like they were going to get approved a couple months before, those odds jumped to about like 90%. Everyone almost called it a sure thing. To where we are now, right? Bitcoin's up 100% since then in October. Ethereum's actually underperformed, only up 76%. And you think about, all right, ETFs could potentially get approved, ETH ETFs that is,

in May. We've all been calling it kind of a coin flip because still it seems like Gary Gensler wants to have this legal battle. We know the deadline is in May. How hard is he going to push it is the question. And I've increasingly thought that it's looking more and more likely it's going to get approved. And if that's the case, then you have the market coming around to it. So just to simplify, it might be hard to explain ETH.

But if you're saying, look, what are the catalysts that are going to get us to a world where ETH outperforms Bitcoin in the short term? I think more and more people are waking up to the idea that that is more expected, that it will get approved in May. And that would be a very simple bull case to make around Ethereum as we approach that approval. Yeah, I just want to say, for what it's worth, I just think that Ethereum is fundamentally incompatible with ETFs. It's to do with the nature of its proof of stake mechanism for transaction validations versus Bitcoin's proof of work. When Bitcoin is held by custodians and ETFs, you have to understand that Coinbase can hold the Bitcoin, but they have no additional power over the Bitcoin network. They have no control over transaction validation.

And it really doesn't matter from the perspective of other Bitcoin holders. But that is absolutely not the case under a proof of stake mining protocol. So what you have with Ethereum is you would actually just completely destroy the network if it were to have an ETF, because you would essentially have the custodian, which would probably be Coinbase, take control of a large to majority share of all of the Ethereum tokens. And then Ethereum would have complete control of the ability to well, they would have control over any kind of transaction validation. So it would destroy the decentralization of the network. And what you'd have is you might as

well use a like Coinbase's Oracle database. It would have the same effect so i think anybody that is bullish on ethereum long term shouldn't actually want an etf um doesn't doesn't concern me because i'm not but uh i just thought i'd lay that out there. I think what Thomas is saying, first of all, I think it's true. But regardless of whether or not it's true, it does make the proposition of an Ethereum ETF very different. Because it's quite clear that the SEC would prefer not to see an Ethereum ETF. And this is the type of argument which is available to them to deny or at least substantially delay any ETF. What we've seen with the Bitcoin ETF process was a back and forth between the SEC and the applicants, where the SEC kept on coming up with objections,

sending the applicants back home, and then they would need to reapply. And the overall theory is, well, that work has already been done with Bitcoin. And so it's going to be easy for Ethereum applicants to apply. But there's a whole slew, and this is exactly the kind of argument, there's a whole slew of arguments that the SEC can challenge them with that do not apply to Bitcoin. And I think the SEC will do everything in their power to use these objections and send people back home to do their homework again and reapply. I agree with that. Any final thoughts? I mean, this is exactly, I mean, very well articulated, but this is what I also thought. The proof of stake move was a bad move, in my opinion,

when it comes to ETFs and even the SEC. It gives the argument to the SEC, there is an argument to be made, where some aspects of the Howey law are now being tested, yet to be proven, you know, it hasn't been made into a big thing yet. But just the fact that you have so much delegation power in one concentrated place, goes to make the network a lot more decentralized the second thing is that um bitcoin doesn't doesn't really have any competition eth has a lot of competition there's a lot of layer ones that are out there competing at toe-to-toe with eth solana is is is a competitor you have injective appearing out of nowhere uh taking the the taking the market by storm. You have a lot of other stuff that's coming up on the market. It's not the same narrative when you're preaching to your possible investor as an ETF broker to say, invest in Bitcoin versus invest in ETH.

There is no other Bitcoin. There could be a lot of other ETHs. I mean, I don't think it's the same thing at all. Dave? Yeah, I think two things. First, the point about concentration risk is complete nonsense, at least in terms of ETFs. The exact same argument gets made all the time about ownership in corporate America and the power that the index funds have. And the fact is, it's a competitive market. And the same thing would be true in ETFs. BlackRock is big. Vanguard in the S&P is big. State Street is big, et cetera. And they will have to compete.

And the fact is, is it's also entirely possible the SEC is going to stupidly, I think, but I think it's highly likely the SEC is going to force them to say you can't stake your ETH in an ETH ETF, at least in V1. And that, of course, makes the product less desirable because you're giving up a huge yield. So it might make the product nowhere near as popular. But, you know, the fact is, is it's entirely possible that they could say you could only stake a certain amount, you'd only have, there's all sorts of things they could do. But to say that index funds, which own somewhere between 10 and 15% of all corporate America, all corporate, you know, actually more than just America, is necessarily a problem is, is probably way overstated. So Dave, Dave, in the context of decentralization and

crypto and blockchain and delegation, it's not really the same thing comparing corporate America to blockchain, right? Well, no, certainly it is because it's voting. It's the ability to, you know, get board. It's literally corporate governance. It is the same thing. I mean, look, most people would argue that decentralization on a blockchain is more important. I'm not going to argue with that. You're right, of course. And look, I've been fairly critical of Eatsmoves to proof of stake as well. It's fairly public about that, that, you know, in terms of what it's doing and what it does. But, you know, look, we could argue it. Let the market decide. The fact is, is the I can't remember who it was. I was talking about differences between

ETH and Bitcoin. I mean, Bitcoin, the investment case for Bitcoin is easy enough to explain to pretty much anybody. You could be completely technologically out of it. And I've been able to orange pill people by explaining that sound money and the ability to have a store of value makes sense. That Bitcoin, as Iago stated, is dramatically undervalued. It's actually trading. I use the words that trades as an option on its own adoption. And so it's a lot easier to explain. Ether is sort of like trying explaining to someone what Google was in 2003.

Yeah, I'm old. Sorry. Remember that? I mean, I got the idea. I mean, people remember Netscape. They got really excited. And then the internet bubble, and then after the internet bubble popped, trying to explain to people why Google would be a big deal, why Amazon is like an incredible buy at these prices. I mean, at the same time, there were 10 or 15 other companies, actually probably more, that failed and you don't hear about anymore. And, you know, whether or not Ether will be the ultimate success,

I don't know. The key to everything in crypto is ETFs for all cryptos deemed not securities, i.e. sufficiently decentralized, no corporate ownership. That's where the real money is going to happen. That's the big thing that will happen. And that will be in the the future dave i want to ask you a question and the rest of the panel to kind of wrap up the show and it's a question from the audience anyone in the audience that bubble purple bubble at the bottom right corner is where you can put your comments drummer put a put a question there where do you see the total market cap of crypto going in the next two years and everyone's very bullish we're going to get some pretty big numbers here uh d, you want to kick it off and then we'll go Simon and we'll go in order after that? Yeah, I look at Bitcoin differently. I'm kind of I'm not quite as

optimistic as Iago in this cycle, although I think ultimately we get there. I think he and I, we've actually talked about it back in Vegas before FTX fell. And we both kind of think that it will surpass digital gold for lots and lots of reasons. And in the next couple of years, I think we might get to a reasonable thing. My high, I kind of use for that a Bitcoin market cap of two or three trillion. The rest of crypto is going to depend on what happens if you ask the question, does the tech sector around the world and people who value technology with AI and tech, does it continue to go? Or do we get a big correction in the next couple of years? I think that the two of those things are very related.

But I think that start with Bitcoin and then figure out where all these other technologies are going in. To be blunt, AI needs crypto. And we've talked about that many times. True. I will probably do about that many times. True. And we'll probably do a space on that. Simon, just rapid fire for you and the rest of the panel. Where do you see the rest of the market in the next two years?

And we can separate Bitcoin and the rest of the else. Yeah, so the narrative is, I mean, we're at a trillion dollars for Bitcoin. I think you can have steady growth over the next two years um eating away at gold what'd you say sorry what was it was the number sorry what growth i think i think you could get two trillion dollars a market cap i think you could double from here conservatively um it normally outperforms i'm pretty conservative normally um the east narrative to me is uh it's almost like a debt and equity you've got you've got your Bitcoin, which is like equity, and then you want your debt and yield,

and you can convert your staked ETH into Bitcoin and just use it as a mechanism for earning more Bitcoin. And then it looks like because SEC is the only regulator in the world that's trying to take securities jurisdiction over the rest and everything else is going through a virtual asset service provider, He's the only regulator in the world that's trying to take securities jurisdiction over the rest. And everything else is going through a virtual asset service provider that you will probably get crazy altcoin cycles where every year, you know, there's a different new flavor of the month. But it adds another trillion dollars. So I think he could get to three to four trillion dollars over the next two years. Moby, and we've got Travis, Thomas, and Bilo.

I think doubling of the market cap is a conservative bet that I'm making, Bitcoin's market cap. Although I think that every time I've made a bet before a bull cycle happens, Bitcoin will outperform that bet. So probably Forex, the current market cap at the bull market top is what I'm thinking is going to happen. But I'm not betting on that just because I don't know. Travis? Yeah, I think, you know, Bitcoin is ironically sort of rapidly becoming not a crypto asset. And just what I mean by that is I feel like it's just rapidly further separated. It was already kind of in a class by itself within crypto.

But I think with the introduction of these ETFs and in the types of flows that are now driving price action for Bitcoin is it's just further separating itself. And I think that there's less and less crypto native type of capital that is going to be like heavily involved in price discovery for Bitcoin. And it's just going to, you know, because I think people are just going to crypto native type of capital will just be spending more and more time in crypto assets other than BTC. And then I would just say for this coming cycle, I think that this competition of value accrual and activity for ETH versus ETH L2s versus L1 competitors, this monolithic versus modular blockchain thesis. It looks like this is probably going to be the headline battle for this coming cycle. And it's not an exaggeration to say

that it's going to be the trillion dollar question because it'll probably move a trillion dollars worth of market cap. And TBD on exactly how that's going to shake out. But I think everybody should be paying a lot of attention to that. Thomas? Yeah, look, over the next couple of years, I think it's very reasonable to think Bitcoin could challenge gold's market cap. So the vicinity of $10 trillion, I wouldn't necessarily be so bullish on the rest of the crypto market. Definitely could see a rise there, but probably depends. Well, I would agree with Travis's take that Bitcoin is going to be separated and the rest of the crypto market will probably be correlated to NASDAQ somewhat.

And I could see it probably doubling from here. Oh, no, did you see it? Okay. Okay. Yeah, go ahead. Sorry. Yeah. Cool.

We'll go to Bilo. I've got more questions, but I think we'll just open up a whole new discussion. So we've got Bilo and Iago. Total current market cap is sitting at approximately $2 trillion for everything, I think, right now. So if we talk just about Bitcoin, I could easily see it going 3x from here over the next couple of years. 3x the trillion that it's at now. I think that's a conservative figure given what's going on. Not much to say about the rest of the crypto market.

I think there's a lot of narratives that are pumping that market cap for crypto that may not be there in the next couple of years. So if we focus only on Bitcoin, I'd feel comfortable saying 3x. Iago? So currently market cap for entire crypto space is 1.3 trillion. I think we're going to see a significant increase in all aspects. So that's Bitcoin, it's the other sort of smart contract chains, and also stable coins. Taking all that into consideration, low end would be a total market cap of 3.5 trillion. High end wouldn't surprise me for us to see 12 trillion.

Cool. I think on that point, I will wrap up the space. I think it was a great coverage of the current state of the market where we could see in the next two years. I think I want to, I want to focus a bit more on the ETH narrative on Monday, if there's no major news,

but otherwise appreciate the panel coming in and we'll see everyone on Monday or the weekend. If there's breaking news, enjoy the weekend. Thanks everyone.