Unchained - Bitcoin to $200K+ This Year? These 2 Crypto Investors Think So - Ep. 817

Episode Date: April 15, 2025

The crypto markets are at a crossroads. While macro chaos — tariff whiplash, rising yields, and inflation fears — continues to dominate headlines, bitcoin has barely budged. And some say that’s exactly the signal. In this episode, Matt Hougan of Bitwise and Matthew Sheffield of FalconX join Laura to unpack the tension between short-term volatility and long-term conviction. They explore why this cycle may look very different from previous ones, how institutional capital is navigating crypto, and whether we’re entering a new era defined by fundamentals, not just narratives. Plus: Why bitcoin might hit $200K, what Ethereum needs to reclaim momentum, and the real potential of DeFi under this new administration. Visit our website for breaking news, analysis, op-eds, articles to learn about crypto, and much more: unchainedcrypto.com Thank you to our sponsors! Bitwise Human Rights Foundation Guest: Matt Hougan, CIO of Bitwise Previous appearances on Unchained: How Small Bitcoin ETF Issuers Will Compete With the Likes of BlackRock Why a Spot Bitcoin ETF Will Probably Launch No Later Than January 10 Matthew Sheffield, Senior Trader at FalconX Links Subscribe to our new crypto + macro newsletter! https://bitsandbips.beehiiv.com/subscribe Recent coverage of Unchained on the economy and tariffs:  Why CoinFund Believes There’s Still a Strong Bull Case for Bitcoin and Crypto Arthur Hayes on Why Tariffs Will Be Good for Bitcoin and Crypto Bits + Bips: Why a U.S. Recession May Be Coming — And Still Isn’t Priced In Bits + Bips: Trump’s Tariffs Are Causing Mayhem, But Will They Revive U.S. Manufacturing? Trump Tariffs Sink Crypto, BlackRock Pumps Bitcoin’s Bags Why Trump-Induced Stagflation Could Finally Make Bitcoin a Safe Haven In Market Crash, What Should You Buy? Crypto VCs Are Making These Bets Bitcoin Tops $83,000 as Tariff Pause Sends Markets Soaring Crypto Traders See Another $1B Liquidated Amid Tariff Turbulence  Recession incoming? Ray Dalio’s remarks on Meet the Press Timestamps: 📍 0:00 Introduction 🧠 3:48 “An extraordinary moment to live in,” says Matt ⚖️ 5:21 The growing disconnect between long-term belief and short-term pain 🔍 7:40 Why fundamentals are finally taking center stage in investor analysis 🐻 12:34 Solana’s memecoin reputation… can it shake the stigma? 🏛️ 14:29 How ETFs permanently changed crypto market dynamics 📉 15:27 What the 10-year treasury is telling us about bitcoin’s next move 📊 20:28 What crypto options are revealing about investor sentiment 📈 22:33 Whether Ray Dalio is right about where the U.S. economy is headed 💵 28:16 What a weaker dollar means for bitcoin’s value 🚀 31:17 Is $200K bitcoin coming? And who will drive it there? 🌊 38:55 What has to happen for alt season to actually return 🔄 44:40 What light ETF outflows since “Liberation Day” mean 📈 51:10 Why crypto IPO demand is heating up ⚖️ 54:37 DeFi’s big regulatory moment and why the market might be missing it Learn more about your ad choices. Visit megaphone.fm/adchoices

I did want to ask you, Matthew, because Matt gave his price projection for Bitcoin this year at 200K. Do you have one? So I would say my projection is higher. I don't have quite as well-defined price target as Matt does, but I do think that we continue to see the ETFs perform well. I think last year around this time, I said I thought there'd be about 40 to 80 billion of inflows. It would not surprise me to see the higher end of that range this year. And so the math kind of falls out therein, even if I'm not publicly given up. a price target just getting to see them in.

Hi, everyone. Welcome to Unchained, your no-hype resource for all things crypto. I'm your host, Laura Shin. We are now featuring quotes from listeners on the show. Today, we have comments responding to my interview with coin funds, Seth Gins, about his outlook for crypto. On X, Allawi Capital says, Interesting breakdown.

The long-term bullcase for Bitcoin is definitely compelling, especially with the potential alt-coin season ahead. ripple effect of tariffs on crypto is often underestimated. Also in X, readdrim Rick says, Bullmark season never ends, bro. To have your comment featured, write a review of the podcast overall or leave a comment on our video on YouTube, X, or Farcaster. This is the April 15th, 2025 episode of Unchained.

Crypto moves fast. It's why Bitwise launched the weekly CIO memo, a jargon-free summary of what's moving crypto markets written by one of the best in the business, CIO Matt Hogan. Get up to speed in five minutes or less. Check it out at bitwiseinvestments.com slash CIO memo. Carefully consider the extreme risks associated with crypto before investing. In many countries, governments freeze accounts, surveil transactions, and seize assets,

not just from activists, but from everyday people. That's why the Human Rights Foundation created the Financial Freedom Report. Sign up to receive it weekly at Financial Freedom Report, Today's topic is the impact of the tariffs roller coaster on the crypto markets. Here to discuss are Matt Hogan, CIO of Bitwise, and Matthew Sheffield, senior trader at Falcon X. Welcome, Matt and Matthew. Thanks for having us, Laura. Really excited to be here.

Good to be here. Thank you. Just a quick heads up, everyone. Bitwise and Falcon X are current sponsors of Unchained. I think they might even be sponsoring this particular episode. I'm not sure. But I just wanted to make clear that their sponsorships had no bearing. on choosing them as guests. Our editorial process is separate from the sponsorship process.

And I only found out after we had booked them that they're companies for sponsors. So now, Matt and Matthew, ever since Liberation Day, the world has been roiled by the unpredictable announcements and reversals by the Trump administration on tariffs. The tariffs went into effect last Wednesday a week after Liberation Day. But hours later, Trump claimed to be reversing most of them, which sent the markets soaring, but only temporarily. People, I guess, realized, okay, there's still a 10% tariff in all goods and all these countries and an even higher percentage on tariffs from China. So the markets went tumbling again on Thursday. And then on Saturday, the Trump admin reversed course again saying actually iPhones and computers from China are exempt. On Sunday, Trump appeared

to maybe reverse that. And some of this is unclear about what's actually happening. We are recording Monday at noon Eastern. So if there are changes between now and when we, we release it, he will understand why we did not discuss it. So Matt and Matthew, as you've been watching all this go down, what are your top line takeaways on the main impacts that this is happening on anything that seems notable to you? There's just so many things we could touch on to a political order, bonds, the dollar, gold, Bitcoin, crypto more generally, something else. I leave it to you. What are your main thoughts? I'll give you a slightly sad thought, Laura, to kick things off, which I realized this weekend as I was spending yet another hour digging

into the on again, off again impact of tariffs on the market, which is that the return of Bitcoin over the past month, at least through Sunday, was precisely zero. So all of this, all this angst, all this worry, all these hours on X, all this reading about tip and dilemmas and, you know, various macro things amounted to nothing. It's just an extraordinary moment to live in because as you mentioned at the top, you know, anything could change over the next hour or day. I think most crypto investors are separating into people oriented short term and people oriented long term. From a short term perspective, the only thing you can count on in crypto right now is volatility. And so we're seeing a lot of interest in people trying to monetize that volatility as a

short term trade. In the long term, I think if you look at Bitcoin's performance and indeed some other crypto assets performance, it's been actually very good. It's been very resilient. It's done better than a previous major market drawdowns or the last 10 years. And so I'm heartened from a long-term perspective, but we can absolutely wake up, you know, down five or up five tomorrow. It's out of our control. So short term, the play is volatility. Long-term, I think we're in a very bullish environment for crypto. And on a day-to-day basis, it's just exhausting to do so much work just to churn water and end up back where we started. Matthew, what about you? Yeah, absolutely. Like, echoing what Matt said, I've never seen.

such a strong disconnect with our clients between their short-term expectations and trepidations and their long-term bullishness about an industry that has so many structural tailings in place. So we're finally having the great conversations in Washington about how to build this industry properly. We're getting the right looks from the right people and we are building things great, but that's going to take a while to play out. And in the short run, a lot of people are nervous to take very much linear risk. You know, I think we're seeing a lot of people express their short-term reviews in options and putting less value on the table. People seem to be okay staying in Bitcoin, maybe Ethan Salon, although Ethan is debatable in this environment as well. But there hasn't been

that much appetite to add Alkoyn risk at all the last few weeks. I think everyone wanted to get through liberation day. Everyone wanted to get a little more clarity. And then they were going to be ready to be risk. And when every day the narrative has been changing ever since, makes it a little difficult for you to start adding that position. So a lot of capital is sidelined. It was a well. telegraphed geopolitical move. And a lot of that capital is still sideline outside the kind of short-term options plays were seen. And I'd love to dig into that a little bit more. Like, what is their reasoning for making those decisions? Obviously, as Matt mentioned, some of it is a short-term play. But then I wondered if any of this is changing kind of the long-term views on this sector at all.

Like, what are you hearing in terms of their reasoning for the different positions that they're taking? On the short-term positioning front, we saw a lot of people buying downside in the last week or two. That makes a lot of sense. People were fading a lot of these moves higher. And on the long-term positioning front, there's a lot of interest in buying things that have more kind of structural or palpable like cash flows. So names like Hyper Liquid have been very popular on desk lately. There are cash flows you can model. It is a business that you can make sense of, as opposed to maybe these longer duration players, which are kind of long-tailed,

risk, those have been a little less popular to add into this type of geopolitical risk, just because ultimately liquidity is what drives this market. And so you don't necessarily want to add the first thing that tends to tip over, but also the first thing that tends to come back when risk gets put on and off as a global market until you have a bit more kind of certainty here. Yeah, I would just add, you know, from my perspective, the investors I speak with and the people who sort of I experiment with thought what's in the crypto market, think that we're moving into sort of a fundamental market where there is more differentiation between this project and mass project than we perhaps had in the past. I think that's somewhat what Matthew is speaking

towards. You can make a fundamental case for hyper liquid. You can make a fundamental case for Bitcoin right now. You can make a fundamental case for certain defy protocols. And I think people are going to be focusing more on protocols and projects that are demonstrating fundamental traction, there are actually significant bull markets in parts of crypto right now from a fundamental use perspective, whether that's stable coins at all time high, whether that's real world assets at all time high, whether that's some of these derivative platforms at all time highs, those are really happening. And I think people are just focusing more on idiosyncratic fundamentals than sort of this broad alt-season risk on trade. I think that may not be a feature of the next year. I think it may be

more idiosyncratic and fundamental than it has been in the past. And just to understand what you're saying there, you mean like it's more about rather than looking at these kind of broader sectors within crypto itself, but actually picking apart the distinctions between, for instance, different L-1s or different L-2s or that kind of thing? A hundred percent. I feel like crypto feels entirely. to what it's had in previous cycles, which is you go into Bitcoin and then you rotate and then you move out the risk curve until we're all buying digital rocks. And then we reset. And I just think the market has changed. That's true of an asset where the primary value is the speculative value, where the primary thing the asset class is talking about is what might happen

five, 10, 15 or 20 years of the future. In that world where the speculative premium is the dominant driver of returns, it makes sense just to roll out the risk curve. And what you buy is less important than its vol and its riskiness. But I think we're entering a world where crypto is driven more by fundamentals. And so you're going to see people picking apart different L1s. We actually saw that in 2024 and just no one talked about it, right? We saw Solana ripping and E falling. That wasn't a risk on risk off trade. That was one L1 that was. capture a real fundamental growth and another that was experiencing a fundamental decline, and we got very divergent returns. I think you're going to see that on each and every asset.

I think that's going to be the defining feature of whatever this next cycle is, is a more fundamentally driven cycle with more differentiation between projects that are gaining traction and other projects that aren't and less just sort of spray and prey allocation to risk on mask as in general. This is super interesting to me because as I'm sure you're aware, there is this perception that ETH is better suited for TratFi because of the fact that defy activity there is just bigger than anywhere else. So it sounds like you're almost saying that there's kind of like a fundamental shift in how sort of even like non-crypto-native investors are looking at these two protocols. Yeah, I think that's right. I mean, even if you take something

like ETH. I think in previous cycles, you would be, you would say things like stable coins, all time high, real world asset and tokenization, all time high, you know, moving to multi-trillion. Let's buy some ETH. I think people are being more specific. Is it ETH you want? Or are you really excited at base? Are you looking down at Arbitron? Are you more interested in the protocols that are building on there? Where is value accruing? It's a more mature, more sophisticated, more differentiating approach to where to capture value in this ecosystem. But that's part of what happens when an asset class matures. Again, if you think about crypto historically, the speculative premium was the biggest driver and fundamentals mattered a little. And we're sort of flipping that. And that

tracts a different approach to the market. I think that's what we're seeing. And out of curiosity, when you said that people were kind of less inclined to be investing either right now and more in Salana, you know, I'm sure you're aware that one of the major criticisms of Salana was, oh, it's just a place where people trade meme coins and, you know, really was just about pumped up fun and like kind of basically scams because people like to trot out that stat about how 90 plus percent of people that participated in meme coins lost money. But it sounds like even kind of tradfai investors are actually seeing more fundamental value or at least the potential for that. that what you're saying? I think as they're looking at it right now, that is in fact what they're

seeing in the market. You know, I think Salana needs to recover from that only pumped up fun narrative and find other fundamental use cases and other fundamental traction. But when you look at, you know, revenue versus market cap, it does look attractive, right, on a comparative basis. It's also fair to note that this criticism of it's only fun, it's only, you know, absurd projects has been true of every technological revolution ever, right? The early days of the internet was not, you know, people doing the majority of their work on that market. It was just a play thing.

It was just a toy, maybe illicit activity. So I think people can look past that. But what I was driving at more was people are looking, you know, past the broad narrative to what are we seeing from a revenue perspective? What are we seeing from a user adoption perspective? And that that's going to determine where people allocate in the future more than sort of broad paintbrushed in the past. And Matthew, do you want to add anything?

I think the other thing is the ETF effect. And so a lot of people are eyes towards the Salana ETF being the potential next contender. We did just get CME futures on Solana, which was potentially an indicator that that could be putting them next in queue. One of the tests that was applied when the Clinton and ETH ETFs were applied was the correlation of Spot to CME futures. And so if they want to kind of follow along the same criteria, that would make the Salana CNA C&F futures a prerequisite. And people saw the pop that you got after those. And so if you are speculating on an asset, having a nice long tail move like that, something

that could cause a potential air gap does give you a tailwindle as equal when you think about where do I want to allocate in my portfolio. And then going back to the alt plane point a bit, I think the ETFs is one of the things that changed market structure potentially permanently in crypto because of the last. effect. You don't have these unrealized gains in whatever retail trading account you're using. You can go and easily flip out of, sell your Bitcoin unrealized gains, go and turn that into an all-point position. You have potentially a lot of wealth in these ETFs that you can't just naturally move over without changing the paradigm of how you're trading. So I think that probably does mean that a lot more folks

are going to pile into a few names that they see as quality that they can do tangible fundamental analysis on, we won't necessarily get this very broad kind of everything rising tide cycle that we did last time because a lot of the wealth isn't in a place where it can be moved there. There are a lot of funds that are trying to come to market. It might capture top 30, top 50, 99 percentile of overall market liquidity, etc., which could put us more towards a traditional finance world of index arbitrage and a lot of eyes on what is in and outside the index because that's where those flows can go. All right. Well, let's actually zoom out a little bit to just talk more about what effect the tariffs are having on a lot of things. But, you know, I saw a lot of concerns being expressed about what was happening with 10-year treasuries. So, you know, talk a little bit about like what signs you were seeing there because, you know, just I'm struck math by what you said about how Bitcoin's change in value had been 0% around this whole thing. So, you know, a lot of people have.

had this theory about Bitcoin being like that safe haven and, you know, time of crisis. So what does it say to you to have, you know, just describe what you were seeing in the 10 year treasuries, what, you know, you would have expected and then what actually happened and what that says to you. Sure. I mean, the 10 year treasury market has been crazy. You know, it's been bouncing around like a meme coin. From a yield perspective, it's been completely wild. I think what it's signaling to Bitcoin investors long term are two things, which are almost go back to our short term versus long term perspective. So when it's signaling from a short term perspective is that, whoa, things are changing. We don't know exactly how things are changing, but we know that things are changing. We know maybe

that the world is losing its sort of appetite short term for treasury exposure as a safe haven asset. It's introducing from a short term perspective, volatility and risk into people's mind. And because Because Bitcoin has elements of being a risky asset, that's challenging to Bitcoin from a short-term perspective. I think from a long-term perspective, what we're seeing out of the moves in treasuries and in the dollar is that we're sort of moving to a new monetary order to borrow Ray Dalio's term. And I think that's opening up a window for Bitcoin to get a major seat at the table. So from a long-term perspective, what I see is that market significantly expanding.

Again, short term, it makes the market riskier, which causes Bitcoin to face headwinds. Long term, it's a resetting of the monetary order, which causes hard value, store value assets to increase. And I think raises the long term price target that I and others have for Bitcoin. So it is a best of all worlds, worst of all worlds sort of situation depending on your time preference. And Matthew, what do you think? Yeah, absolutely. I also think that there's a lot of smoke signaling going on in the Treasury market. I think last week's auction actually had considerable amount of information in it. When we look at the indirect participation or the participation by foreign investors, it was an all-time high. It was

nearly 88% taken down by foreign investors. And that was really unique because the administration has indicated a preference that investors who are holding on to dollars outside the country invest that in long-duration assets that they ultimately, are looking at the 10-year and 30-year as a barometer for when we get to kind of a leveled-out rate that incentivizes domestic cap-act. They want the tenure at 3%. They've said so publicly. Not typical policy moves. And so, you know, Besson has indicated before he would like these large stockpiles of dollars to be put into long-duration treasuries. And then all of a sudden we see a largest foreign participation in any 10-year treasury auction history.

10, 15 minutes later, we announced a pause on tariffs. I don't view that as a coincidence. I think that requests were made, a request were agreed to. And once we got the confirmation that people were playing ball, we paused tariffs. And I think that the auctions are going to be a signal over the next 90 days to make sure that people are keeping up with the terms that they've agreed to and that the kind of tariff de-escalation can continue. Maybe I'm over-reading into it. But there's a very interesting day for that record to be set in a very interesting timeline for those tariffs to get paused 15 minutes later. And do you foresee in that world that like more, you know, more of this thesis about Bitcoin as a safe haven will start to take off? Or do you feel like,

you know, like is it, is it just this uncertainty that is kind of giving people more either, I don't know if confidence is the word or even if it's just general interest? Like, where do you see the impact on Bitcoin there? So I think Bitcoin has only, most exclusively tailwinds regardless of which path we go down, which is really nice because a lot of investors de-risk going into the uncertainty of the geopolitics. And then if you do have a high inflationary environment or a flight away from dollars, that would bode well for something like a digital gold narrative. And then if you did have significant amounts of M2, which we already are actually heading into a very steep path for global M2 regardless. So anything else the Fed already

do it be additive, that's also very positive historically for risk assets. So I do see a very positive long-term path. And that's completely excluding all the other kind of domestic policy things and tailwinds that we were discussing earlier. All right. And Matthew, you, before we recorded, you mentioned that you were seeing some interesting things in the options market and you felt like it might be projecting something. Like, what are your thoughts about that? Yeah. So ultimately, you know, in my opinion, when enough people preposition what they believe to be a recessionary move. It does ultimately de-risk at least a stock market recession. Obviously, a real-world recession with a slowdown and spending can ultimately drag you into

an economic one. But, you know, we saw front-end volatility skews in Bitcoin at 8. And we saw this in Ether 10. That's pretty significant. A lot of people were pre-positioning into this move downside only. And that often leads to a floor being put in on the market because it's very hard to actually realize an outcome that is so well priced in. You know, similarly, when the VIX gets this high, that's generally a mean-reverting signal through time. It's not to say that another tweet couldn't drive the market lower, but it is very difficult when something is so well telegraphed as, you know, Liberation Day was to actually manifest in a true breaking of the market, in my opinion. It kind of leads everyone to position the other way and kind of put it to look for it. I don't

know. Matt, do you have a similar kind of view on? prepositioning. I definitely think that was the general view of people going into the market. And I think it speaks to, you know, whatever you're talking about earlier, which is the long-term tailwinds are so significant. I think it was people, the only thing keeping sort of Bitcoin down from that perspective was people worried about this short-term impact. So that does make sense to me. It's really notable. From one perspective, the global economic world is ending and Bitcoin's at 80K. The last time this happened, we wicked down to $3,000 during COVID. So, you know, we are in a different world. I do think there may be a substantial bottom in here. I think it's

notable that we didn't retest the previous, you know, all-time highs around 72. I see incredible strength when I look at the Bitcoin market in particular. All right. So I wanted to mention some remarks of by Ray Dalio on Sunday where he thought we could be heading toward a recession or something far worse. And I wondered what your thoughts were on that and, you know, what kind of factors you're watching to see if we are headed that way and how severe it might be. Ultimately, I think that it depends on how much of an administration and a Fed put there is in the market. You know, historically, I think that in these well-telegraph moves, it allows investors to shed risk assets so that it doesn't catch them off guard. We saw that in 2020 of a V-shaped recovery,

right. I think similarly here, like if you have a well telegraph administration put, the Fed has indicated willingness to step in. And they do seem to be watching the bond market, right? When we got close to five, that seemed to be when we came to the table in the third year, that that will probably mitigate the risk. Now, Ray does actually take a very long-term view about debt cycles and about the kind of issues that America has put itself in with a deficit. I had the pleasure of working there for five years and reading a lot of his daily research reports. He gets really into the microstructure of what has taken large kind of economies down through time. I think that, you know, that's a bit different than what we're talking about here.

That is a much longer play. He's talking about decades, in my opinion, when I've at least read his pieces historically. I don't see any of the current factors of play being that risky unless we truly do maintain extremely high tariffs for the very long run with all of our large trading partners and become insular, at which point, yeah, you would probably set ourselves back a while because we would no longer be a global economy and we're an exporter of ideas. So that doesn't really work for America unless some major things change. Yeah.

I agree that Dahlia is pointing towards a longer term thing. I think he's pointing towards a very real risk, right? Dead levels really are extraordinarily high. Deficit levels really are extraordinarily high. And if that continues, particularly with the increasingly divisive politics and geopolitics that we're facing, it doesn't end in a beautiful, a beautiful circumstance, right? It ends poorly. And I think a lot of people, you know, in part for that reason, are looking for hedge assets. Over the short term, I do think that this sort of tariff tantrum is a net short term negative for

the global economy. I don't know how you look at it any other way. You're like all the King's horses and all the King's Men can't necessarily put Humpty Dumpty together again. Once we've broken, the trust of, you know, how the world is operated. At least it will take some time. So I do think there is a short-term economic headwind. I do think the market is sort of waiting for the Fed put or someone to push the big red button to save us from this headwind. I actually do think that that will happen. And what it does, I think assets will rip substantially higher. But, you know, I don't, I don't think we can be completely sanguine about it. I think the world is in a more difficult economic position than it was a few months ago. And we have a lot of uncertainty to work through. And that

is a headwind to risk markets until that big red button gets pushed, which I do think will eventually happen. Yeah. I'm sure you know, Arthur Hayes always talks about how the main thing he, the main thing he watches is to see what will happen with the money supply and that he feels like that's the main indicator for Bitcoin and frankly just a crypto bull market. So, you know, It sounds like some of you at least have a similar view. All right. So in a moment, we are going to talk a little bit more about what all of these kind of head spinning moves that Trump is making is having on the crypto markets.

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MemeT writes, BTC dominance rising isn't the green light, it's the pressure buildup. True alt-season aren't called. They're triggered by structural mispricing and capital rotation, not just vibes. Again, if you want to hear a comment featured on the show, please read a review or leave a comment on an episode on YouTube X or Farcaster. Back to my conversation with Matt and Matthew. So, Matt, I know you have been looking at how the tariffs have caused the dollar to go weaker. You know, and you just sort of reference this about just like trade deficits and our debt and things like that. So if Trump is trying to weaken the dollar as it appears, what do you think that would mean for Bitcoin?

It's up only for Bitcoin. I mean, one of the strong. The longest correlations that Bitcoin has had over its entire history has been a negative relationship with the dollar. Weak dollar is good for Bitcoin. It's literally denominated in dollars. So it's almost axiomatically good for Bitcoin. And more broadly, it's just generally good.

It's just a weakening of confidence in the US dollar and all of that attributes back into positive for Bitcoin. I've said this before. There are extraordinary statements coming out of the White House, particularly from the the Council of Economic Advisors about what they want to happen with the dollar. They aggressively want the dollar to be substantially lower just as much, I think, as they want the tenure to be substantially lower and just as much as they want to reset trade. It's sort of the trifecta that they're aiming at. And one reasonable assumption is what Trump wants he tends to get

through one way or the other. And I think we can expect dollar lower to be a relatively dominant paradigm over the next two years. You know, everything that's happening from this tariff perspective, everything that's happening from sort of confidence in the U.S. suggests me that we're going to get that. And so that historically has been extremely positive for Bitcoin. And I don't see why it wouldn't be extremely positive for Bitcoin this time around. I count it as another tailwind behind this long-term bull market. And Matthew, what are your thoughts? Yeah, I agree.

Ultimately, the administration continues to do everything that they indicated they would on the campaign trail in thereafter. Desson was involved with breaking the Bank of England and the pound. He has seen exactly how these trades work mechanically. He has said that he wants a lower tenure and a cheaper dollar. I have no reason to believe that everything we do will not be oriented towards that. And like Matt said, the weaker dollar is historically good for Bitcoin and mechanically should be too. So I do think that is a reasonable tailwind. I really think the only headwind is a true breakdown

of risk as a whole and then people just taking risk off the table. But otherwise, there's a lot of tailwinds for Bitcoin structurally here. Yeah. And I would just add a thought experiment that investors can run is what do you think Bitcoin's price is if the 10 year is at 3 and the DXY is at 94? Like, what do you think Bitcoin's price would be? When I run that thought experiment in my head, Bitcoin's price is substantially higher than it is today. And I think as Matthew mentioned, the Trump administration has been extremely clear about what it wants. It tends to get what it wants. These are things that it wants. And so if we move in that direction, ask yourself, where is Bitcoin at that point in time? You know, I certainly see it in the six figures.

I see it at new alt-time eyes substantially higher than we are today. Yeah, well, I saw in one of your newsletters you said you could see it hitting 200K this year. A hundred percent. Yeah, absolutely. The reason for that lawyer for what it's worth is I think in a level macro environment, there's a fundamental mismatch between demand and supply Bitcoin. New supply of Bitcoin is 165,000 Bitcoin. Last year, ETFs bought half a million Bitcoin. Corporations bought 350,000 Bitcoin. I think governments may buy hundreds of thousands of Bitcoin this year.

So there is much more sort of structural demand for Bitcoin than there is new supply. And what that means is existing holders have to sell. We saw existing holders sell at 72,000 from March to November before we ripped up to 100,000. The reason I say 200,000 and not like 162,351 is because I think that's the next level at which existing holders will be willing to sell it because they're behaviorally driven humans and it's a nice round number. So I think once the macro market levels out, this fundamental demand supply mismatch will force Bitcoin up and up and up till we shake Bitcoin loose from existing holders. Maybe they'll shake it loose at 150K. But I'm not sure. I think it could get all the way up to 200k by the end of this year because there is this just dramatic supply demand mismatch in the market.

And just to understand a little bit more there, like you're saying that in this, So actually, the way I want to phrase it is, who do you see as those buyers? Like, do you see that as more like institutional type buyers? You see it as like retail. And, you know, because there has been this narrative that, for instance, like people in the developing world, like, you know, there was a period early on in the world of Bitcoin and crypto that they were turning to Bitcoin. But then as Staples have risen, that has maybe been more what they've been turning to.

So do you feel that this will even kind of. of like sucks some of the air out of stable coins? No, I think people will want stable coins. I'm extraordinarily bullish on stable coins. They are a killer app. If you're in a challenged economy and you don't have significant wealth, you can't handle the volatility of Bitcoin, even if it's over time, stable coins are just an extraordinary killer app.

I think there'll be trillions of dollars of stable coins in the next couple of years. In terms of who are the buyers at Bitcoin, I really think there are three, but I think they're all significant. I think governments will buy hundreds of thousands of, of Bitcoin over the next year. I think corporations, which bought 350,000 Bitcoin last year, went from a FASB accounting perspective. They could only market down on their books. It could only hurt earnings. And that changed January 1st. I think they will buy more Bitcoin this year than they bought last year. And I think hundreds of companies will do it. And then I think institutional

investors are recognizing that Bitcoin is now part of the global capital market. And if you're not at 1% Bitcoin, you're effectively short against the global capital market benchmark. And so I think there are, you know, hundreds of billions of dollars of investment that need to come into Bitcoin just to level up to flat. You know, I continue to think, 95% of all Bitcoin is owned by someone and 95% of the people who have to own Bitcoin don't yet own any. And the cross of those two numbers just is this fundamental source of demand. So governments, corporations, and institutions, I think those are multi-year trends. And I don't see anything slowing that doubt.

Yeah, I saw that Block released a website where it shows their current holdings. And I thought, oh, maybe this will be a trend as well where corporations are just kind of like, you know, proudly declaring like this is how much Bitcoin we have on our balance. And Matthew, what are your thoughts there about, you know, who would be these buyers and, you know, how their interests in Bitcoin compare to their interests in stable coins? Yeah. So I think that we are very early in the adoption curve for institutions, sovereigns, and specifically the pension money, I think that they're one of the allocators that takes the longest to get comfortable in the new space. So once the ETF launch, that didn't mean that they were necessarily able to participate. They needed enough data about it.

They needed to be able to go back, make an argument for it, figure out what their allocation was going to be, justify that allocation when it is in an asset class that they have a kind of fundamental competitor to. And then you can start to get involved. Look at the large brokerage houses. A lot of them weren't allowing people to even make investments when the UTF won live. Some of them still aren't.

And when you look at the prime brokers, almost all of them still don't actually give you any sort of leverage. or prime today, which makes it somewhat capital and efficient. Everyone is getting comfortable with this on an institutional basis. Once those frictions are removed from the market, then you can truly open the floodgates. On the sovereign side, I think there's a large game theory element of this that probably means a lot of countries are actually accumulating very silently now, because you don't really want to be public with your accumulation until it's done. You don't want the United States to necessarily be the largest holder of an asset that is extremely underallocated by every other

country is explicitly a good short against your own currency and grows with GlobalM2 because then eventually we are essentially rebacking ourselves while everyone else is losing value. So you probably play catch-up in silence. So we've heard the whispers. I think they've gone through the industry that there are sovereigns that have been buying. I think we're going to continue to hear those. And the headlines will stay muted to the best of people's ability until they get to their target allocation. There was a very interesting study. Crypto quant did this in Q4, 2023, about the dollar impact. to the market capital of Bitcoin per dollar inflow. And at the time, it was $5 to $10,

the market cap appreciation per dollar of inflow. I believe that's probably closer to $10 to $20 now because there's a lot less Bitcoin on exchange. As Matt was saying, the marginal price that you'd be willing to sell your coin for continues to go higher and higher. And there's a lot less people who are, yeah, I'm now a seller at 86, but I wasn't a seller at 84.

I'm a seller at $1.25, but I wasn't a seller at 108. I think that it is going to require much more stepwise moves for folks to be able to pair down. And then finally, I think the ETFs have created a sticito type of buyer than we historically had, which means that that is going to become a more and more inelastic price move required for people to be willing to part ways, because any one of these pensions that got involved wasn't doing it to flip a quick 10%. You're making the argument that I'm here for the next three years, five years, 10 years. I plan on growing my allocation through time. So I think that we fundamentally are seeing a change in the

type of holder and the type of investor. And that's going to change the way that the microstructure plays out in it all be a pretty positive way. Yeah. Yeah. I think, you know, that this is why we're hearing people say that the four-year Bitcoin cycle might be slowly fading, which I could see happen. Obviously, I don't think it'll completely go away just all of a sudden this cycle, but we are seeing that there's like starting to be less of the having being such a major impact. I did also want to ask you guys because obviously we've been talking about Bitcoin as being the beneficiary of this shift. But what do you feel like the impact? And by that, I'm talking about like a weakening dollar or the dollar losing its world reserve currency status.

What do you think would be the impact on other cryptos? And you know, you can call out specific ones. But yeah, I'm just interested to hear if you feel this is only really going to impact Bitcoin in that way or if you feel it also will have ripple effects. I think that most likely you get more towards an alt season once you start to feel the effects of true easing and helicopter money in the system because then you do have marginal money. We were talking before about the wealth effect and a lot of the ETF investors don't have the money to actually go purchase all coins. So I do think that we have to wait until we see that global M2 rise and people have more

money in their accounts to basically be able to go and actually see that breath. So when we do get there, I'm sure that Ethereum will have it. day. Obviously, like, there's only so much that something can get oversold that still does have a strong fundamental product that resonates with people, whether you're calling it the oil of crypto or the app store of crypto. It still does have a strong narrative that makes sense to people and you can at some point model out the cash flows. I think hyper-liquid going back to it as the new product in town. It has a strong following. We saw their airdrop go extremely well. We saw a lot of people want to hold on to the token because they believe in it, that's always a good sign.

And they brought a product to market that works well. Is it decentralized? That's a question for the market to ultimately figure out. But what they do have is a product people really enjoy. And ultimately, I think going back to what we're talking about of like almost the gambling effect of some of these long tail points, you do need to plan to the entertainment economy. anything. Protocols that are entertaining and provide you that immediate kind of ability to enjoy are the winners of PMF because you're creating a product people want to use as opposed to people who create really great tech. I think they require someone else to come in and build something on top of it that makes you forget that you're actually engaging with the blockchain, which most people

don't actually care about. What they care about is, does this thing have the utility and work in a very simple way? And I think, yeah, hyperliquid and other dexes are starting to, I think, be the first use of that PMF that people are able to anchor to. Yeah, I love that. I think the I think the dollar challenge story is really a Bitcoin story, but I do think there are other bull market stories, which Matthew is talking about in other parts of the crypto market, you know, expanding beyond hyperlicket. I generally think there's a bull market story in defy right now. If you look at activity on Abe, you look at activity on Utiswap, you think about how a change in regulatory approach really unleashes those protocols, what opens them up potentially to other real-world

assets, opens them up to resetting how value accrues to token holders. I think there's a strong bull market case to be made in that area of crypto as well. I think it's separate from what's going on with the dollar, which is a Bitcoin story. But you can have two narratives running at once. And I do think every time I look at defy right now, it's increasingly attractive to me, whether that's the regulatory reset or the fundamental adoption metrics. And then there's the fact that it just works really well. These are just nice protocols that are fun to use that work really well. And I think you can't overstate that. They've sort of found product market fit. And I think now they're scaling the available market. And that's a very bullish setup for that quadrant of crypto.

Yeah. Yeah. That was very evident in the year 2022 when we just saw so many of the centralized actors in crypto get taken down. But, you know, there were very neat unwinds in the defy space. Yeah, did you want to add on that? No, it's just so very true. They've been extraordinarily stress tested. And then at the same time, the throughput and cost per transaction of executing transactions on blockchain has fallen, you know, 99.9%.

At the same time that we have a regulatory reset that allows these to expand their market, you know, 100 fold. So you have proven technology that's been strong. stress tested that has Lindy driven confidence from users that they won't fail. And you have a technological unlocking and a regulatory unlocking at the same time. It's just a really powerful trio of forces. And, you know, I don't know if it's tomorrow or the next day, but I think there's, I think there's a D5 Summer 2.0 coming as those three forces collide is really going to reset. What are, you know, the most useful apps that we built in crypto? They really are great.

Yeah, yeah, that makes sense. Matthew, did you want to add anything on that? Hitting that escape velocity is the most important thing for any Silicon Valley startup, right? And a lot of people are currently gauging, you know, Ethereum on not getting the fees generated that they would want to see for someone so large and they're concerned that that is a long-term indicator. But ultimately, you just want to onboard as many users as you can throughout the world, get as many folks as possible integrated with you. And then you can turn the fee switch on down the line. When you look at all the large unicorns that ultimately IPO at large valuations out of Silicon Valley,

no one cared the first five to 10 years of their existence, how much money they were generating. I think that people have lost kind of the narrative a little bit. Like you're investing in tech, you're investing in extremely high forward multiples because you're investing in a growth story here and not something that you can go click coupons and put into your dividend book. So I think that we'll need to see a reset of growth investors. The problem is people want short-term flips. And ultimately, short-term flips mean that you trade the narrative that everyone else is trading right now.

And that's the difficulty of it. It's a bit circular. So I think we need longer-term growth capital to start investing and talking about those narratives for things like Ethereum to have their day in the light of down. So we have been talking a little bit about the Bitcoin ETFs, but I did want to, you know, dive deeper into the action there. Since Liberation Day, the spot Bitcoin ETFs have actually seen mostly outflows. on liberation date itself, it was net inflows, but then other than that, largely outflows. The biggest day of the outflows was the date before the tariffs were briefly implemented before Trump reversed himself. So I wondered what you're reading into that activity. And by the way,

also, the amount of activity is just quite a bit less than we've seen earlier in the last few months. I thought it was very positive. These outflows are pretty muted in the grand scheme of things. Like there was, you know, a bet on desk of what outflows were going to be after we saw the market opened down 6% equities-wise on Sunday. And everyone overshot it, right? That's really strong. Like, I think on that day, we saw $100, $15 million on Monday of last week. Outflow is an aggregate.

That is like a half standard deviation bad. Like, that is nothing in the grand scheme of things. I think a lot of that is actually because, one, people would already do risk like we were talking about. And two, when you look for a flight to cash and what to do with your dollars, the cash and carry trade is still incredibly strong. And so a lot of people were putting on that cash and carry trade using the ETF as their spot Bitcoin to go and generate front end yield. You know, T bills are offering you four and a quarter. The cash and carry trade is offering you six plus. Like a lot of portfolio

managers and money markets are fighting over 15 dips for their career. This is an incredible opportunity still. And we kind of see that often acting as a stopgap to potential outflows, especially when there is a front-end yield grab like we saw. So I think Matt is more in touch with the direct data investors. We're an LP choose some of the ETF. So we have the privilege of getting to help them source those spot coins, but we don't get to figure out exactly why any individual investors you're doing what they're doing, unfortunately.

Yeah, I mean, we've been pleased with the resilience as well. It's worth noting that when Bitcoin ETFs first launched, the popular narrative was these were all paper hands and people would flee at the first pullback. Well, we've gone from 109 to, you know, 78 and a percent or two up the market. That's pretty an extraordinary strong show of strength. I do think different segments of the market are moving differently. So we did at one point see a lot of money come out of the basis trade from the hedge fund space.

That's relatively hot money that comes and goes as the value of that trade deviates. I think we have seen some retail investors exiting the market. I think the institutional bucket, which is financial advisors, family offices, and true institutions, is up only. And you can see that in the 13F data, which is, of course, extraordinarily lacked. But we can also see that at bitwise in terms of, you know, our sales progress and the clients that we work with. I think that middle segment, which is ultimately the segment that's going to drive long-term flows, is up only. I was at the Barron's top team event last week, which are the largest advisor teams in the world. You know, the percentage of people that are allocating is up substantially year over year.

The percentage of people who plan to allocate the year ahead, lots of hands went up. And the market is still not completely unleashed. I'll tell you that half the people in that room still can't invest to go back to Matthew's point. So I'm very bullish about what we're seeing from Bitcoin ETF perspective, particularly in that long-term co-or, which is the institutional money, I think that's up and to the right and the flows are still coming in, even as they're offset by a little bit of retail selling. And how has all this uncertainty and all this chaos changed conversations? Like, are people that aren't already in crypto or that are more institutional investors or just

at least aren't crypto-native, are they asking different questions? Are they saying different things to you about their understanding of it? Like, how are you noticing any change in their perceptions? You know, the funny thing about talking to institutions is that for them, Bitcoin's still in a full market. I mean, I tweeted this earlier today. Bitcoin's outperformed the S&P 500 over the last one, two, three, four, five, six, seven, eight, nine, ten, eleven, twelve, thirteen, and fourteen years.

So from their perspective, they're looking at an asset that whether you measure it on a one year basis or even since a since inauguration basis is outperforming, Bitcoin is probably outperforming goal. If you go back three years, it's the best performing asset in the world by significant factor. So from their perspective, this is still a bull market. These people invest over multi-year periods, not over multi-week periods. And so when I go to a crypto conference, there's all this consternation, all the pullback, the uncertainty, no alt season. This thing is a disaster, so much sadness. When I go to a Tradfai conference, it's like you're so lucky you're in crypto. Incredible bull market. Of course, we're moving in this direction. We're an oil tanker,

not a speedboat. It really is different worlds. It's still extraordinarily optimistic. They increasingly see the value of having a hedge. If anything, what's changed into questions they've asked is they ask fewer questions about some of the fud that used to exist around custody, trading, criminal use, and regulatory risk in particular. The regulatory risk has been substantially removed. And so it's more, to be honest, I know it sounds like I'm like shilling a bull case. It's more how much should I rebalance and where does it fit in my portfolio? It's much more practical implementation questions from that heartbeat. Interesting. And Matthew, do you want to add anything on that? When people and mostly retail say we are no longer in a bull market, it means that

they are not making 510x on alt coins quite yet. And that is what they previously associated with a bull market. It's very hard for me to believe that we're not in a bull market when every time I turn on MSNBC or quite frankly, any other financial pundant, they spend like a third to a quarter of their time talking about an asset class whose largest coin isn't larger than the largest equity in the S&P 500 and NASDAQ. So that we are getting a lot of attention here. And, you know, all these conversations in D.C., I think remind the institutions that this is a bull market. Price just doesn't necessarily immediately reflect reality. So I did also want to ask because obviously this is, this is really where crypto and the equities markets intersect. There were a number of crypto

companies that were going to go public this year. You know, Circle has already filed. Unclear what's going to happen there. Galaxy intends to shift its listing from Canada to the U.S. Where do you think, you know, these intended crypto IPOs could go? Like, you know, do you feel like the terror of turmoil is going to affect any of that? Or how do you see all that playing out? I think it's still going to be IPO season for crypto equities. I think there's substantial demand from traditional finance for exposure to crypto and equity packages. I still think there's a premium available to certain crypto equities, particularly ones associated with hot themes like stable coins.

So I suspect they're going to find their way out. Are they going to go out in the midst of plus 10 minus 10? daily volatility. Absolutely not. You'd have to be crazy to try to do that. But if we get even a modicum of stabilization in the crypto, in the equity markets, I think these companies will come public. There's substantial pent up demand. They want to get to a liquid market. And so I absolutely think you're going to see five to 10 IPOs in the next 12 months, assuming we get past this extraordinary volatility. You can't do anything when the market is plus five minus five. You can't take Facebook public in that market. But once we get some sort of stabilization, I think you'll see

a number of these firms come to market. I think the market wants to have more breath in their ability to take a view on this industry. A lot of people view investing in Bitcoin as investing in crypto holistically. And when you do have Bitcoin dominance at this high of a level, you're not exactly wrong. But ultimately, that only gives you exposure to one asset. And so I do think that institutions who want to make a bet on this industry don't want all of their risk tied to a single risk asset. They'd like to be able to take an investment on institutional adoption. They want to be able to take an investment on stable coin adoption, which does dovetail they're in. And then you have the stocks like Coinbase that give you access to retail adoption and pro-cyclical trading volumes.

I think the more options that you give people to build a holistic portfolio, the more comfortable they'll be riding it because they won't be taking as much idiosyncratic ball by having that much concentration risk. Although, to be fair, I was wrong about that with the Ethereum UTF. I thought that people would go one-fourth, three-quarters as their balance if you're trying to build a kind of risk-adjusted portfolio. We have not quite seen that level of demand. So, you know, I'm very open to being wrong on that view, but I do think that it is IPO season like Matt's saying once we get past, you know, you're just being tariffs overhanging. All right. Well, I did want to ask you, Matthew, because Matt gave his price projection for Bitcoin

this year at 200K, do you have one? So I would say my projection is higher. I don't have quite as well-defined price target as Matt does, but I do think that we continue to see the ETFs perform well. You see that $10 to $20 of market cap appreciation per dollar. I think last year around this time I said I thought there'd be about $40 to $80 billion of inflows. It would not surprise me to see the higher end of that range this year. And so the math kind of falls out there in, even if I'm not publicly given a price target,

just getting the seat, I'm in. All right. And so we're basically at time, but I just wanted to ask if there is anything that I didn't ask you about that either of you would want to mention. I think the only other thing which we only touched on, but I think is really true, is, you know, particularly in the Bitcoin market, but even in parts of defy and some of the layer one space, investors are maybe not quite appreciating how much we've de-risk the market. The shift from the regulatory positioning is so extraordinary that we don't have any previous analogs to imagine what it's like to go in a period of six months from every major crypto company being sued to all of those being removed and crypto being a priority for the U.S. government to support

and grow. And because we don't have any previous historical analog for that degree of regulatory shift, I think the market is probably underpricing what it means. from a risk reduction perspective in the market. I really think we've just massively de-risked, and that makes me extraordinarily optimistic about where we're going. Absolutely. And to follow on to that, even if you're just running your simple DCF, which is always a weird way to look at crypto, but if you are, it's a lot of savings of Treasury that was getting

spent on legal defense costs. And a lot of these protocols were spending a non-trivial amount of what could have been marketing budget, could have been incentives for the community to build on, you know, lawyers. And so if anything, I'd say your long protocol is in short legal firms at the moment. I love that, peritory. Yeah, that's not even just for crypto. But anyway. Okay.

Well, you guys, this has been such a fun conversation. Where can people learn more about you and your work? Sure. At bitwiseinvestments.com, you can sign up for my CIO, M-V, which I write once a week. Or follow me on Twitter or at Matt underscore Hogan. Hogan has a U and at H-O-U-G-A-N. And yeah, you can find us at falconex.io. Sign up for our head of researches weekly reports.

Sometimes I'm in there. You can follow me on X at a Sheffield report. Perfect. Well, it's been a pleasure having you both on Unchained. Thanks for having us. Thanks for having us. Thanks so much for joining us today to learn more about what's happening with these Trump tariffs and how they're affecting crypto.

Check out the show notes for this episode. Unchained is produced by me, Laura Shin, without from Matt Pilchard, Wanda Ranovich, Mechengavis, Pamma Jimdar, and Marka Curia. Thanks for listening.