The Wolf Of All Streets - Pennsylvania Passes Crypto Rights Bill | Crypto Town Hall

Episode Date: October 25, 2024

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Good morning, everyone. Happy Friday. I obviously missed the last couple of shows I was traveling, so glad to be back, especially with such an absolutely incredible panel today. A lot of friends up here, a lot of people that I love chatting with, so really excited to be up here today, still getting a few others up on stage. I see Matt Hogan, Ascension Invite. Hopefully, you see that in your DMs there. Everybody else, I know the other panelists have been invited, but we have some absolutely huge news to discuss today. I don't know if you guys dove into it over the last few days. Actually, a lot happening in the crypto space, especially in context of the elections coming in

under two weeks. But as you can see in the title, Pennsylvania passes crypto rights bill. Dennis, you obviously were fundamental in this happening. I don't know how much you discussed it here yesterday or if you did, but maybe you can start to walk us through this and why it matters, how it happens. Yeah, absolutely. And thank you for having me up. And just to clarify, the bill passed through the House in Pennsylvania, so we still have lots of work to do.

But I think the reason why this passage is so important, I think why it's why I've highlighted it and was hyping it up so much is because this is happening in one of the most important states in the presidential election, you know, presidential election, whether you are for Trump or for Harris, I think you can agree this is one of the hottest and the closest presidential races that we've seen in a long time. I mean, the polls are razor close if you trust the polls. Obviously, you've got Polly Market saying something different, but both sides are very motivated and very engaged in this race and really think that their candidate has a shot to win. And Pennsylvania is really interesting in the state, not only in the presidential election, because of the 19 electoral votes that we can secure to the race to 270, but also because it

is one of the only divided states from a legislator perspective as well. You have the House, which is controlled by Democrats, and the Senate, which is controlled by Republicans, and then a Democrat governor. And in the House, where it was controlled by Democrats, we were able to actually get this bill through. And without the support of the Democrat caucus and the leadership there, this would have never become a reality. And so Republicans and Democrats united together to vote in favor. Obviously, we had more Republicans than Democrats voting for it. But now, where it sits today is that we need the Senate to move forward. So this gives

anybody in the political landscape, especially at this moment in time, the opportunity to use their bully pulpit, to use their influence, to be able to push this piece of legislation forward. Now, we've passed this legislation in four other states or similar types of legislation, you know, to be able to protect the self-pustity, to protect the right to mine. We've been able to do that. So this is not something totally new or totally abnormal, but it does give those legislatures and also, I think, both presidential campaigns the ability to weigh in here and show how they would govern on Bitcoin and digital assets writ large. So we're really excited for the opportunity to play a small part, very small part in such a close race. But at the end of the day, Pennsylvania, it could come down to just a handful of votes. And it is one of the most important states,

if not the most important bellwether state in the country for this 2024 election. And I'm excited to be able to have a Bitcoin pro Bitcoin bill be put in front of the members of the House and Senate there, and also the governor, and hopefully also for those federal officials who would want to support it. I think especially it makes sense for David McCormick to come out here and support this legislation because he's already voiced support for Bitcoin. I even organized an opportunity for him to go tour the Stronghold site. So he's been out to see the Stronghold Bitcoin mining facility. He did that with Frontier Mining as well. It was a great opportunity to bring those people together. So really looking forward to using this as a tool to be able to

drive the conversation forward, not only at the state level, but the federal level as well. Now that's passed the House, what's the path and timeline to see if this actually becomes law? So the Senate has adjourned between now and the election. So we need the Senate to come back, which is definitely something that we're pushing for. And then we would need the governor to sign it. So this could happen very fast. Or it could happen, I would say on a more moderate timeline, because even if it doesn't happen here at the end of the year, the cycle will repeat. Pennsylvania is a year-round legislature, unlike most states, which is why this news is happening now. Most of our policy success happens at the beginning of the year, January through May. But

because Pennsylvania is a year-round legislature, that's why we're seeing this news take place later in the year. So let's say theoretically, the session ends and nothing happens between now and the end of the year, then we can reboot this process with the wind at our backs, having passed it in the house. And we already have multiple lawmakers there in the state of Pennsylvania who have said that they will pick up the mantle if no one else does to make sure this thing gets across the finish line. Awesome. We also have Dan here from Blockchain Association. Dan, in your view, obviously, you're in Washington and working on policy and you see what's happening. How big is the state level, really front-running the lack of action at the federal level. And that happens quite often. I mean, a lot of these states are much more forward-thinking. They're more nimble. But I think it's paving the way for some greater national legislation, potentially in the lame-duck session this year, but definitely next year. We're going to have a lot more crypto, Bitcoin-friendly members of the House and the Senate. But yeah, the Pennsylvania

news was fantastic. He brought up McCormick. I mean, McCormick is definitely running neck and neck now. My money is on him. I think he's going to pull in late and pull this off. I think the Ohio Senate race is looking very good for Bernie Moreno. And even Michigan is looking good for Rogers. I mean, but a month or two ago, they wrote that off, and now he's just making a big comeback. So there's these key Rust Belt states that are looking good for pro-crypto candidates. But even what Dennis did in Pennsylvania, I mean, there's a lot of great states out there that I think are going to look to this Pennsylvania legislation to codify some Bitcoin-friendly legislation. We did some of that down in North Carolina. I know a few other states are doing it.

2025 will be very key. But yeah, we're working closely with our friends at the state level, but we're primarily focusing on the federal side. And we have some good things coming up, potentially, like I said in the LambDuck session, whether we can get into a little while. Yeah, go ahead. I would love... Yeah, go ahead. Go ahead,. Yeah, go ahead. Go Dennis.

Oh, just wanted to say, great to have Dan here. Prayers to the people in North Carolina still recovering from the absolute disaster that happened there. It's an absolute tragedy, but Dan has been doing incredible things to get the digital asset community and the Bitcoin community moving to be able to make positive headways there for people that have been affected. But also just wanted to say a big shout out to Dan because he does a lot of federal work, but he's very, very engaged in North Carolina. And his organization has been very effective in moving things forward. And there's very few states that have, I think, someone as effective as Dan. They're working to make sure that their state moves the right direction. And we're really excited to work with his team and have been for some time. So big props to him and everything that he does at the

federal level, but also at any in his home state, North Carolina as well. Yeah, I agree, Dan, we obviously have been talking this election to death. I think you have a better picture of what it looks like, obviously, beyond the presidency, which is what everyone's been focused on, obviously, with polymarket and, and all the ways that people have been able to sort of bet and give predictions on what will happen. You know, zoom back, you know, six months or something. How do you think we are positioned as an industry here with who you think might win or lose? I'm not talking about presidentially.

I'm talking about all the way down the ticket. You know, do you think that the situation regardless of who wins president is still improving? Because I think that's sort of the perception we have. Yeah, I think, I guess the big picture is, in many ways, the cryptocurrency industry has really already won, you know, regardless of who wins the White House, because we've really been able to get both candidates now to acknowledge it. Trump more so than Harris, but Harris has recently come out and acknowledged its existence. And it's not just, you know, the Elizabeth Warren method. But on the Senate side, you know, we were up in New York City earlier this week, we did this digital asset forum with quite a few interesting people, including Jay Clayton, former SEC chairman, who's had a metamorphosis really of the

whole industry. He weighed in. We had Senator Tuberville weigh in from Alabama. We had Carolyn Pham weigh in. And one of the questions that came up was, will there be a digital asset subcommittee on the Senate side like they do on the House side, currently led by French Hill under McHenry. And I've heard this a couple times, whether it's maybe Tim Scott that puts it together if the Republicans win the Senate. Of course, he'll be lined up to be chairman of banking unless, of course, Trump decides to put him in his administration. But if we have a subcommittee on the Senate side on digital assets, I think that's a big

victory. That really would have been unheard of even a year ago. And then also, we've gotten some news out of Hagerty this week, Senator Bill Hagerty, a great guy out of Tennessee, who introduced some stable coin draft legislation, emulating a lot of the work that McHenry's doing on the House side. And the goal is to give clarity to stable coin to the United States. And we're way behind the ball on this. So I think that is a big, big plus that they're going to evaluate in the lame duck session. We knew once Labor Day hit, both parties are going to run to their sides. There's not going to be anything done for the next couple of months. Everybody's in campaign mode. There's no incentive

to be bipartisan during an election season, unfortunately. So we're hopeful that we can get something done to the lame duck and prevent anything bad from happening. You mentioned McHenry, obviously, he's from your home state of North Carolina. He's not running again. So how big of a loss is that to have such a key figure and supporter? And can that be sort of replaced? Yeah, it's a big loss, not just for our state, but for the whole industry, because it's really rare to have such a big champion that leads such an important committee in the House to be so dedicated to digital assets. I mean, it's extremely rare. The only good news is here, you know, he's going to be moving on to bigger, better things.

I mean, he's going to do great wherever he lands. His successor, you know, I personally hope it's French Hill, but there'll be a race for the chairmanship of the House Financial Services Committee. Again, that's if the Republicans hold the House. If the Democrats win it, it's going to go back to Maxine Waters, you know, who we've been working on. She's got a lot of work to do there. But the more and more I look at these numbers, it's looking a little bit more favorable now to the Republicans actually holding the House and winning the Senate and potentially the White House, which, you know, that's the trifecta, which isn't always good for legislation. You know, oftentimes it's interestingly a divided government. You can often get more done. But I think with McHenry leaving, you know, we need to, it's going to be hard to replace him, to have somebody that's such a champion. And before we jump to everyone else in

the panel, since I've got you, Dan, I kind of just heard you mention in passing that Tim Scott would be the favorite for head of banking committee in the Senate. I mean, that's effectively would be replacing Elizabeth Warren, correct? No, okay, Sherrod Brown. Oh, okay. I heard you wrong. Yeah, okay. I mean, if Brown, even if Brown wins in Ohio and they lose the Senate, he would still be demoted essentially to ranking member. But, you know, I just can't see Moreno losing at this point, especially if Trump wins Ohio by, you know, five, six points. But yeah, Tim Scott would

be in line. Perfect sense. Okay, Carlo, Alex, you both had your hands up. Go ahead, Carlo. Good morning, Scott. You know, Dan took the words out of my mouth. I think that regardless of the outcome of the general election, crypto has won because it has definitely made itself not only a coffee table subject, but also a bipartisan subject. postmortem review is going to be how badly they fumbled the crypto vote. And the fact that they chose to go all in with Elizabeth Warren and her horse and buggy approach to financial systems, and it completely ignore the future of digital assets. And I think that's going to backfire badly on them. You know, Scott, if they would have just made one significant gesture, and it would have been a significant gesture, but I don't think anyone in the industry believes that Gary Gensler is going to be able to maintain his seat, regardless of which party wins. Imagine what it would have done to the polls, if a friendly phone call would have been made to encourage him

to step down before this election, put in an interim SEC chair, what that would have been made to encourage him to step down before this election, put in an interim SEC chair, what that would have done to the view that Harris is pro crypto. And when you look at the amount of fundraising that's gone into Trump from the crypto sector, I think, again, the postmortem on this, the Democrat Party loses is going to be they really fumbled a crypto vote alex yeah i i think the biggest new like part of this story is that i don't think we can give dennis and the team working on this enough credit for what they did you've heard me scott and obviously time and time again on these spaces say we need that crypto is inherently political but we need to make it non-partisan um there are other states obviously that have done this legislation before i'm out in montana

and like we have you know legislation to uh prevent like uh discrimination against bitcoin miners and power pricing and policies and things but to pass this legislation through the most linchpin state two weeks before an election with 175 or 76 of the 200 members voting for it, like, I can't believe they were able to pass anything bipartisan, let alone something that had been an issue in the presidential election. And this is how we will make progress forward. This crypto cannot become a Democratic versus Republican issue. And it's this kind of work and this kind of legislation, even if we do ultimately obviously need to get legislation at the federal level,

given the supremacy clause and all that joy of the Constitution. But this is how it gets done. This is how progress is forward. And like I said, I just, I can't give Dennis and his team enough credit for realizing how important that is and, and putting in the time and effort and work to make sure that it did pass on such a bipartisan basis. It's hard not to look back a year and remember just just especially if you go back 18 months, just how gloomy the prognosis was or if the future looked for the industry in the United States and how much better it is. Once again, as you kind of said, regardless of who wins. I mean, there's definitely some nuance as to what it would look like depending on which candidate, but it's exponentially better in general than it would have been. I mean, Matt, we've got you here. You're always out there talking to everybody

about this. It seems that along those ends, I mean, Bitcoin and Ethereum now are fully institutionalized assets, which is something that would have been a pipe dream 18 months ago still. That's absolutely right. Great to be on. I think everything that has been said explains why, right? We've removed so much regulatory risk. We've removed so much political risk. Earlier this week, I was in Nashville, did a dinner with 75 institutional investors, and it felt completely normal. It felt like we were allocating to any other asset. You know, a bit wise, we've found over the past month or two that the conversion rate on meetings with institutional investors is significantly higher than it was, let's say,

even two or three months ago, let alone a year ago, Scott. By that, I mean that the number of meetings that turn into allocations has gone up significantly. And you're starting to see that in the ETF flows. I just noticed that the Bitcoin ETFs did $3 billion of inflows in the last two weeks. I think that is people recognizing that the train may leave the station sometime around the election. Matt, I also just, sorry to interrupt. I also think there was a day when Bitcoin was down significantly, and there was still like a half a billion in flows. Yeah, I think... Which we don't usually see.

That's exactly right. And I think those flows are going to accelerate into the end of the year. I really think, you know, everyone's excited. We've done 21 billion in flows. I think we're going to be significantly higher than that next year. I do think this institutional train is leaving the station. And I really think it's accelerated in the last month. At least that's what we're seeing and hearing when we're out in meetings with that crew right now. You also made comments not long ago that when you're out on the road, you're starting to see effectively 50-50 interest, even though we don't see that in flows. But 50-50 interest as far as the conversations on Bitcoin and ETH. Is that correct? Yeah, we're seeing a lot more people doing what we call crypto sleeves, which is instead of buying a Bitcoin ETF, they will buy two or three ETFs,

Bitcoin and Ethereum, and often a little allocation to micro strategy or miners. This idea of treating crypto the same way you treat stocks, which is you don't just buy NVIDIA, you buy a basket. In crypto, that's manifesting as buying Bitcoin and ETH and some minor exposure, either through single stocks or through a crypto equity ETF. Yeah, the pace of that has significantly ramped up. And I think people are probably sleeping on that as well. I would add that, you know,

the level of interest from the institutional side on stable coins and thinking about how to play stable coins, and many of those people end up with allocations to things like Ethereum is another trend. You know, institutions have noticed sort of the mainstream adoption of stable coins. They noticed the $1.1 billion bridge acquisition by Stripe,

and they're looking for how to play that. And I think that is going to drive sort of an acceleration in ETH flows as well. So, yeah. When you talk about that stable coin part of it, so I think that's really interesting and anecdotally is what I'm hearing as well about kind of a basket, right?

That these sort of products where maybe it's a, the bulk is the ETF and then something slightly higher volatility with a bit of ETH. When you add stable coins, is there a way that people are doing that where they're yielding stable coins to kind of put a little hedge on these allocations?

Yeah, I think that's only amongst the most sophisticated, only amongst the most sophisticated. You know, maybe we will get there. What I'm seeing is people thinking stablecoins are a mega trend for 2025. How do I get exposure to that? Right? They have trouble. They don't have venture portfolios. How do I get exposure to that? That makes perfect sense. Go ahead, Dan. Well, I just want to say you completely agree with what Matt was saying. The stablecoin conversation will be a very large part of 2025, 2026, especially once we get this legislation done. Really, that's the main holdup.

And if you look at, you know, it was on Squawk Box this morning, there was this guy talking about how money market funds in the United States, I think the total market cap is over $650 billion, maybe even more than that in financial assets. And these are all regulated currently under the SEC. The remains to be seen where stablecoins will be regulated. But once this legislation happens, I think there'll be just a huge inflow to these stablecoin projects. USDC with Circle. You just mentioned Bridge, PayPal. It's a very, very big topic coming up. Yeah, the purchase of Bridge that's being proposed, I think $1.1 billion from Stripe. That's the largest M&A by price, I think, in the history of the crypto industry.

It's a huge deal. And that's happening right now. Go ahead, Matt. Yeah, I think people should recognize what a huge deal that is. $1.1 billion is not an exploratory investigation by a company of Stripe's size. That's a statement that the revenues are here and near term and growing significantly. And it's a critical part of what that company is doing going forward. And again, that's just going to catalyze more interest in stablecoin. So I do think that's going to be, people are probably still underestimating the size and scale of the

potential unlock. If we get clarity on regulation in the stablecoin space, it's not a 2x or 3x rise in interest. I think it's a 10x or 20x rise of interest. And I think it's one of the sort of mega themes of 2025. Simon, then Alex. Yeah, and, you know, sticking to the theme of why the Fed is going to be very interested in this. And as soon as the election gets through, stablecoin regulation has to be first on the table because the biggest threat to fractional reserve banking is non-fractional reserve banking. And really stablecoins are a manifestation of taking a blockchain asset and backing it by treasuries,

which is the biggest threat to banking. And so if we were ever in some kind of mass migration event of mass withdrawals from the banking system, if there was a really easy way within Revolut, within PayPal, within Stripe, to easily reduce the exposure of fractional reserve banking by moving over to a stable coin, obviously, there would be massive intervention from the Federal Reserve. So the desire to get the regulations right now is actually, I think, a systemic event, which is why this is going to get so much exposure as these non-bank EMI financial institutions start acquiring these stablecoins. Alex?

Yeah, the thing I'm really thinking about building off what some folks were talking about for 2025 is there's a couple of things that I think are interesting. Number one is if you look, especially at the Stripe acquisition, it's not just that they just paid a billion dollars or want to pay a billion dollars once it closes. It's that they previously messed around with crypto years ago and had like sort of some kind of half-assed, you know, crypto payments acceptance and parsing through, kind of pulled out of it because it was not worth the headache for them.

They weren't doing it. And now they are coming back and paying a billion dollars to get back into it. And now they are coming back and paying a billion dollars to get back into it. And so that says they, you know, this is not, there's a lot of companies who've kind of messed around with it, tried it, and it feels like they'll never come back again. So this is, this is not on a whim. This is definitely something that they have considered, thought about and see the long future on. Yeah. I think they came in in 2014 first, but left 2018, which 2018 is a thousand years ago in crypto years. Right. And they could have come in in the 21 cycle and they didn't. They're coming

in now. So I think that really says something. And I think more broadly, when I look at like, you know, knock on wood, the, you know, increase in just everything that's going to happen over the next couple of years, the two big themes I see are number one, I think, as everyone said, it's going to be stable. Stables are going to be huge. I think for the industry, there is a certain irony to the fact that the thing that will take crypto mainstream is the US dollar. But the simple fact is that moving to crypto rails is a massive technological change. And I think asking people to accept a new denomination of currency and a massive technical change at the same time is too big an ask. And so doing it with dollars, getting people

comfortable with the crypto rails and how everything works there, and then bringing in new units of denomination is the much better way to go about it. And the second thing on this, and like I said, this is where I think it'll be big for 2025 and 26 is real companies with actual businesses coming back and actually starting to use crypto rails. And I think the 21, 22 bull run was all about purely you know, purely on chain inside the crypto ecosystem, rehypothecating assets 17 times over to like pull a little bit of yield and like whatever, that's fine. But the thing that crypto is good for is global rails tearing down these international borders. And, you know, I think the thing that's really interesting is this is why I'm sort of very bullish on what I'll call the alt L ones for this cycle is ETH still obviously has the biggest

developer ecosystem that's out there. But when I look at non crypto tech people, especially out of like AI and general tech and energy, when they when I'm talking to them, when I'm getting pitched by them about what they're building and when they want to, again, use the crypto rails, even if it's not a crypto native product, they're not going to ETH, they're going to Solana. And I think that is going to be a trend that continues and we see as a big breakout. Simon?

Yes, speaking of real companies, it was announced a few hours ago that Microsoft shareholders will be voting on whether Microsoft should be buying Bitcoin. I think the interesting thing about that is that there's a lot of parallels with the micro-micro size of MicroStrategy and their strategy compared to a software company that's one of the largest software companies in the world and being able to utilize software sales in order to have a Bitcoin treasury management strategy. Obviously, I don't think it would be a leverage play, but remember who the two very large shareholders in Microsoft are. The second largest is BlackRock and the fourth largest is Fidelity. So I can

imagine just all of the large traditional financial institutions, they seem to have engineered over the last three years, a very co-opted strategy to driving the price of bitcoin up as soon as they got their positions and they took out all of the traditional financial players so you can see i can only see this continuing and continuing from here yeah the microsoft news is huge it should be clear that it won't pass right it's on the docket but it's already been recommended that it won't pass and microsoft actually came out and said we've been looking at these assets for a long time but i do view this as a very important stepping stone and when you look at actually how it was positioned uh in the sort of argument for making it a reserve asset

for microsoft the national center for public research argued that bitcoins and i think the quote was excellent hedge against inflation, and they recommended a 1% allocation to basically every institution. So whether it passes or not, whether it happens right now or not, the fact that we can even discuss Microsoft adding Bitcoin as a treasury asset, I think is absolutely just massive. Lawyer, I'm assuming you're given the hundreds. I'm assuming you agree that that's pretty big news regardless of what happens. Yeah, I mean, you have to be pretty new. For a long time, my mindset was either Bitcoin is either a thing or it's not a thing. And if it's a thing, it's going up forever. This seems to be confirming the thingness, but I guess a lot has been recently. Yeah, that makes perfect sense. Mike McGlone, good to have you here. Obviously, you know, you have a pretty outspoken belief that Bitcoin is a risk asset. And obviously, the best case for Bitcoin is S&P rising. The worst case

for Bitcoin is a correction in the stock market. Do any of these fundamental things, could they change that view? Could there be sort of a major catalyst outside of that normal cycle that would kind of change your opinion on where Bitcoin could go right now? Oh, absolutely. I think I really appreciate what I heard from everybody. This is something that most of us dreamed of five years ago. We all knew that this space had a lot of money, it had votes, and its base layer is a dollar. So it was just a matter of time our elected representatives figured it out. And it's ironic, this historic election, they all figured it out and they're fighting for it. So to me, this is a delight to hear. And I just saw a look at when Seyfriedin Anamis wrote his book, Bitcoin Standard 2018. It's typically a classic, no doubt like a convert. I didn't really believe it, but it's happening.

And back then, that's when market cap of Tether was about $2 billion. Now it's $120 billion. I so enjoyed presenting to a business class in London this week. And I always start with the same thing when I talk about crypto. The most widely traded crypto is Tether. It's the dollar. It's not Bitcoin. And most people don't get that. I'm glad people are figuring it out. We see it. The problem is we all know, and when you're a tactically-oriented, commodity-oriented person, when you hear a call like this and everybody's pointed to all the bullish factors, you know that's when you have to be careful. It's when you get a call like this and you hear all the bearish factors, typically it's the time to buy.

So I just like to point out the key facts of what's happening lately. Bitcoin, 60-day correlation to beta, S&P 500 is 0.62. That's the highest ever on the way up. Okay, so we get it. Beta has to go up. Bitcoin should go up.

The problem is Bitcoin used to lead these factors. That's what I'm just concerned about. And lately it's been showing what you would expect after that massive run up to the peak in March. So we all know it's all about the election. Now the markets priced for a red sweep. You see that in bonds and just think of the macro bonds, the Fed cut 50 basis points, and the bond and bond yields are up 50 points. That is not good. It means mortgage rates are going up. It means that the grease of the economy is actually decreasing despite Fed cuts. So that's not good. That's

a factor that's usually good for risk assets. But bottom line is Bitcoin is still three times the volatility of S&P 500 and gold. And gold's at a record high. S&P 500's at a record high. We all know Bitcoin made that record high early in the year. It's been lagging since, as Matt points out. We sure see those inflows. But to me, it's all about how this election pans out. The market, I think, is too optimistic for a red sweep. I think the more likely case is the risk is we have a Harris presidency and a Republican Congress, which means natural, probably headwind for gold, natural headwind for bond yields and potential that that natural check and balance will help start to reduce the deficit. But deficit spending like that 7%, yeah, it's great for risk assets.

It's Trump's elected, it probably goes to 10%. That's great for Bitcoin. But so now it's all about the election. And next week, we have the non-fond payrolls on Friday, the election on Tuesday, we see how it pans out. And it should be a great trade. But the macro big picture is when you have the highest 68 correlation ever of this highly speculative

risk assets to beta, your biggest risk is beta goes down. Dave, you literally magically appeared while Mike was speaking. Yeah, imagine that, guys. Imagine Mike and Dave having a debate. Imagine it. Well, no, I mean, look, we've litigated this too many times to go over it, but I think it's really understood what matters. There's so many things that I disagree with that people can tune in on Mondays to hear. But what does matter is the correlations over a couple of years, you know, it is incredibly difficult to hang your hat on. I mean, I like to get on the Bitcoin cycle folks who say, well, you know, at this point in the Bitcoin cycle,

we've had four of them, you know, this is what's going to happen. And you're looking at correlation since the all time high euphoric top. The interesting point that I tried to make, I made this a week ago, in a tweet, I basically said, listen, gold is doing a great job of maintaining purchasing power parity. And if you're going to deficit spend, and you're going to increase inflation, gold will let you maintain it. Bitcoin will ultimately do the same if it achieves that status. But there's 10 to 15 times appreciation between now and then if it gains enough acceptance. And the question one has to ask oneself, and this is the perfect panel to talk about it because Dennis and his team have done amazing work proselytizing this, is are we seeing that inflection point of acceptance?

Because that is not priced in. That is not even close to priced in. And that's sort of like saying, well, whatever sector it was, it doesn't really matter how Microsoft was before Microsoft became a digital company and how it was versus the market vis-a-vis GE, which did not. And Microsoft and GE used to be unbelievably correlated. And if you, as the internet age grew on, hung your hat on trading Microsoft because, of course, it was getting more and more expensive, the GE. You got carried out in a body bag. And I think that that's the same risk here vis-a-vis gold. And it really is a question of acceptance. If you believe Bitcoin is going to gain that critical mass,

then what Mike is talking about is irrelevant. If you believe it is not, then he's right and will probably prove it to right by historical i happen to believe that it will mike do you have any thoughts oh i agree with what we we agree a lot more than we disagree of course i guess i'm a more tactically orientated and i mean just have to listen to everybody we are really smart people in this call just have to listen to everybody. We are really smart people on this call. Just have to listen to ourselves. This is a very, very bullish call. And you have to ask yourself, okay, am I adding to long-sare? Am I adding to long-sare? I'm being careful.

And I just point out as a tactically-oriented commodity person, that's when you have to just say be careful. The charts are showing it. I just look at that big money corporation. And to be clear, we agree. Anytime I don't say not investment advice, obviously, lawyers would like that. But most importantly, tight stops and are very careful with leverage in both directions. raised on leverage. Everything was 21 leverage. And one thing I learned about stops is a great way to get your face ripped off. I just usually try to find things to do and options that were more attractive. But overall, I mean, I get it. But remember, we got this election come on. It's going to be a major game changer. The market's already priced for one side of the boat, which means the risk is normalization. I mean, I've said this before, but if the market is entirely

priced for one side, even if it gets that full red sweep, don't you usually get a sell-lose event? Yeah, exactly. If the trade is already happening before. Well, it's a key thing is the volatility. It's going to be great for traders. A lot of people are going to get stopped in or stopped out. But for now, it's the macro big picture I like to point out. And as we all know, Bitcoin is in the mainstream now.

Just look at that volatility. Just look at options and futures and dribs and ETFs. And you have to analyze it versus beta and versus gold. And it's still a very highly volatile risk asset. I want it to prove at some point that it trades more like treasury bonds, more of a risk off asset. But I still think in the volatility lately, all the indications lately, it's more of a risk asset than it has been in the past. Larry Fink has been on the roadshow saying that it's a risk-off asset. BlackRock wrote an entire paper about it. Obviously, we mentioned before that in this Microsoft News being called the best inflation hedge. So, Mike, in your mind, and I think in the mind of most, are those theoreticals? Like you said, you need to see it proven. Yeah, exactly. Let's see the proof. Right now,

I'm still obviously very bullish gold, and I fully expect if Harris wins a presidency, we'll have a decent correction. We're way overdue for that. And that's a trade. What's the trend? The trend is gold's outperforming most assets. Sure, on a year, yes, I get it. Bitcoin's had a historic year. It's been great. But again, we all know from trade and spend. Here's the key thing. I'm really indifferent between Bitcoin and copper. Both have made new highs this year.

Both have good fundamental stories. Both look great in the charts until you compare them to beta. They're way underperforming beta. The question is, what's the next big trade? Can beta keep lifting them up? Will they catch up? Or we get a normal way overdue?

That's a 10% correction in beta. And that gives us a chance to all reset positions and portfolios. Right now, my sense is, I'll just end on this. I do like when people mention $6.5 trillion in money markets? That's about 10% of total market cap of US stock market, which is 2.1 times GDP, about 100 a year, about the most in 100 years. If you just compare that same metric to 2008, money markets were closer to 15% of market cap of US stock market. So the whole thing to me

is US stock market, if it keeps going up, sure, everything's fine. If we do what normally happens at some point, it just takes a trigger. And then all things reset. And that's what I have to point out. I'm still quite bullish. Matt, you obviously are talking to institutions every single day, answering their questions. I'm assuming a lot of them, there's echoes of what we're hearing in this conversation to them as far as their view to its risk and volatility. How are you answering these questions when you get them? How is Bitwise framing this for advisors and institutions when you're out talking to them? Yeah. I mean, I, you know, look, I think every conversation that we have wants to cover, you know, both the near-term opportunity around the election and the near-term risk around the

election. But in the end of the day for these institutions, they're making small allocations for long periods of time, right? They are not making the trade that Mike is talking about. They're going to allocate one or 2% and hold it for five or 10 years. And if you have that kind of perspective on an asset like Bitcoin, then these short-term volatility concerns really, really fall away quickly.

So we talk a lot about position sizing as a way of limiting that short-term risk. And that seems to resonate for folks. I think institutions know that they're buying an asset that can go up or down 20% or 30% very quickly. And I'll just add one thing that I always like to remind people when we're on these calls that are very bullish. And I agree that there is a risk when everyone is bullish. But the vast majority of people who are going to own Bitcoin still don't own Bitcoin. And so in the short term, sort of the hyper concentrated bullish view is a little bit concerning. But the bigger picture is how many

people are converting into Bitcoin from zero. And I just think that trend is really strong right now. I don't know what that's going to mean in terms of, you know, how things play out right around the election. But I think, I think any, any, from my perspective, that sort of short term pullback would be quickly covered by people who are getting off zero, because I think that's a big trend right now. Perfectly framed. I think. Anyone else, any thoughts on that topic where Bitcoin right now sort of falls in portfolio construction, how it should be viewed? Because one is obviously a trader's view and one is sort of a longer term investor's view. If nobody has a take on that, we can obviously move on a bit. I mean, we've covered actually most of the news for today.

Awesome having Dennis here, obviously, to sort of break down what's happening in Pennsylvania. My feeling is that it's going to be really wonderful in a couple of weeks to talk about all this in hindsight and see what's likely to happen in the future and predictive markets and all of it. Go ahead, Simon. Yeah, I'll cover one more thing um and unpopular uh topic because of stupidness of the ecb's conclusion um but the ecb talking about concentration of wealth and that uh as bitcoin is a store of value it can lead to more you know concentration of wealth um which is in a sense true. It's tied to that subject, which is the importance of everybody spreading the word of getting

off zero because we do want Bitcoin to be as distributed as possible. There are a lot that people hold in exchanges. So some of those large concentration wallets are millions of people behind them holding their coins, Binance or anything. But the mission here is to get as much of it in the hands of as many people as possible. And ideally, thanks to Dennis's work, if we can get that protection at the federal level eventually, where as many people can hold it in self-custody because there is a big push to get BlackRock to hold it for you and to get Fidelity to hold it for you. And so as a community, take the ECB's message as a challenge to the sector. We need as many people to own Bitcoin in self-custody as

possible, because as much as it's great to transform your personal wealth over a four-year cycle, it's even better if we can do it all together and drain the swamp, which I think is the overall mission of where Bitcoin started. So please do your part to try and spread the word and make people get off zero, because I think it's easier than ever to do that, given all the tools and the arsenal and everything we've got behind us. I don't think there's a better way to wrap up than that, Simon. Thank you very much. I hope you all have an amazing weekend. We will be back, obviously, on Monday, same time, same place. And before I let you go, you all have to follow everybody on stage. We love them. They're our guests. We bring them on week in and week out.

And they have incredible insight, obviously, outside of this show as well. So please give them all a look. Give them all a follow. And we'll see you all on Monday. Thank you, everyone. Have a great weekend. Bye.