Unchained - Bits + Bips: Bitcoin Finally Acted Like a Hedge. Will It Last?

Episode Date: March 16, 2026

For the first time in a geopolitical crisis, bitcoin held its ground while safe havens faltered. But can it keep holding if the VIX moves from yellow to red? --- Bits + Bips is spreading its wings Starting soon, new episodes will only be published on our brand‑new feeds. What you need to do: Click the links below. ⁠YouTube⁠ ⁠Apple⁠ ⁠Spotify⁠ ⁠X⁠ Smash Follow or Subscribe. 🎉 Done. --- The Strait of Hormuz is closed. Oil is past $100 a barrel. The traditional safe haven playbook, from treasuries to gold, is failing to perform the way it should. And yet bitcoin is up 4% since the conflict started, holding steady in a tight range that Andy Baehr, newly installed as managing director of asset management at GSR, calls "base camp."  What signals should investors watch to know if the next move is up or down? Why does the VIX suggest calm when the world feels anything but? And why might the tokenization boom be built on demand that doesn't exist yet?  Baehr, who spent years constructing the crypto index ecosystem at CoinDesk, brings a structural lens to a market moment where nothing is where it should be. Host: ⁠⁠Steven Ehrlich, Host of Bits + Bips: The Interview Guest: Andy Baehr, Managing Director of Asset Management, GSR Links: Bitcoin = Safe Haven Is Bitcoin Now a Safe-Haven Asset? If So, Then It Could Be Hugely Undervalued at Just $70,000 How Bitcoin and Gold Reacted Differently to the Iran War Shock Hyperliquid Oil Perps The Hottest New Crypto Trade Is 24/7 Oil Futures Crypto Markets Track War Risk as Iran Conflict Endures Tokenization Wall Street Pushes Tokenized Stocks, but Institutions Aren’t Eager to Trade Them Nasdaq Partners With Kraken in Plan for 24/7 Tokenized Stock Trading Learn more about your ad choices. Visit megaphone.fm/adchoices

Hi, everyone. Welcome to another episode of Bits and Bips, The Interview. I'm your host, Steve Ehrlich, and I am here today with Andy Baer. He is the managing director of asset management at GSR, and many of you will probably know him as the former head of CoinDesk Indecese. So welcome, Andy. Good to see you. Thanks for having me on. Yeah, absolutely. And I know you've been a GSR for a couple weeks now, but welcome and congratulations. on the new role. So I didn't see what you're doing. I've, I've, GSTR is one of the firms that got me into crypto in the first place. John Loughlin, who's the chief investment officer here. We've known each other more than 20 years. And I, I remember seeing on LinkedIn when he joined GSR and thinking like, John Loughlin's at a crypto firm, like, okay. So we have to look into this a little bit more. And so we kept in pretty close touch.

GSR was a great client of ours when I was at CoinDesk. And now we have this great new venture to embark upon. So it's really exciting. And I think it's at a good time for the industry and a good time for GSR, a good time for the markets. Yeah. And it's fun too. I mean,

you and I used to appear on panels together, both as members of, I guess full-time members of the media, you at CoinDesk, me at Forbes and Unchained. And now I'm at Sharplink and you're at GSR. and but we still look at that at the same conversations. I love it. Yeah. Yeah, that's right. No, that's so true. And that's that's kind of what's great about this industry that people who can get around and know folks and are well networked, but also just have a good technical sense of how the markets work can really do a lot of interesting things,

you know, on the practice side, but also on the content and media side. Yeah, absolutely. So we have a ton to talk about today. I mean, all that's going to be sort of being driven by what's happening in the Persian Gulf, so on and so forth. But before we get to that, just a little bit of housekeeping. Number one, as always, nothing that anyone says on the show should be construed as investment or financial advice for full disclosures.

Please see Unchained.com backslash bits and bips. And second, before we really kick things off, let's just take a brief pause so we can hear from one of the sponsors who makes this show possible. This episode is brought to you by Adaptive Security, the first cybersecurity company backed by OpenAI. As AI makes deep fakes and synthetic identities easier than ever, Adaptive helps companies test and strengthen their defenses. Learn more at Adaptivesecurity.com. Quick note before we get into today's episode, Bits and Bits Now has. its dedicated feed. We're spinning off from the Unchained Feed and moving to a new podcast and YouTube channel. So if you want to keep up with our weekly live streams and macro meets crypto breakdowns,

make sure to subscribe to Bits and Bips directly. We won't publish there until March, but subscribe today so you can be ready for launch. Be sure to subscribe to the new feeds at Unchained Crypto.com slash Bips and Bips. Okay. All right. So let's kind of dive in here. Probably makes sense to just set the stage for where we're at right now. We are talking on Thursday afternoon, time and obviously the world is on a knife's edge. Oil keeps going up, I believe it's over $100 a barrel yet again, despite an unprecedented, I guess, release or scheduled release of, I think, 400 million barrels from the, I think it's the EIA or the IEA.

I forget exactly what the acronym is, the largest in history because the Strait of Hormuz is more or less closed. And despite what was supposed to have, I guess, a bit of a palliative of the time. effect on oil prices, they're still going up. Major some of the traditional safe havens are struggling, industrials, certain cyclicals. But I guess if there is a silver lining, and I don't know if that's quite the right terminology to use in a situation like this, Bitcoin is actually acting like a safe haven. It's up about 4% since the conflict started on February 28th.

And over the last few days or so, yeah, I mean, it's. it's performing the way I think many people hoped that it would. And I think Andy, a really good place is just to kind of start there. I'd love to kind of get your sense of what you're seeing. What do you think is behind Bitcoin and then the rest of crypto, which sort of follows Bitcoin's lead, performing well. And do you think that this sort of quote-unquote rally is sustainable? Yeah, thanks. And I'll just, I'll add on to your.

disclaimer language by saying, you know, we'll talk some views here. These are personal views. These may or may not be the views of GSR. But, you know, I always look at the VIX first. That's just the world I grew up in, in equity, volatility is a sense of big portfolios and banks and insurance companies needing to hedge. And I just checked right now, VIX is around 26 on a day when, you know, equities are down one and a half percent. some of that is just, you know, riding up the skew. And it's, it's not a, it's not a 32 vix, which of course implies like a 2% move, a daily move in equities. It's not a 40 vix. It's not a 50 vix. So it's kind of easy, at least in my mind, to measure the scope of crisis or the scope of

contagion of an oil situation into markets looking at things that way. And to me, you know, these days, 26 fixes were sort of on yellow, but we're not on red. With respect to crypto, it's been at the same time a really frustrating kind of five weeks and a really reassuring kind of five weeks ever since the sort of de-leveraging event on February 5th, which was really, I think most people feel that that was really centered in iBIT and iBid options not not in crypto native exchanges or crypto native trading that was sort of the you know the second shoe dropping after the October 10th de leveraging event which which some people feel is still kind of making its way through the

elementary canal of the markets yeah i think a lot of people are still waiting to hear who really got cleaned out there or or who may not survive and perhaps they think i think i a bit of a reprieve with solidifying in the 60s, 70,000 range. Correct. And even more recently, you're hearing about some firms having trouble related to lending and things like that. So it's clear that by early Feb, you know, the market, the crypto market had taken, had the wind taken out of it, was de-leveraged and was acting very cautious. And we kind of found a Bitcoin level that was pretty much exactly where it was before the U.S. election in 2024. But since then, we've traded this very, very tight range.

Bitcoin Ether, Salana have all, you know, 65 to 71 on Bitcoin, you know, around 2000 on ether and around whatever, $85 once Salana had gotten its legs under it. And we've kind of sat there trading in a range, sometimes absorbing weekend. shocks, but not really, right? Not not kind of exiting that range. So I guess it kind of feels low energy. It feels low conviction. It feels catalyst free, but it also feels a little bit like a base camp that if we have positive catalysts coming out of this, that we could develop some positive momentum. So I guess I'm I'm less impressed by the 4% move since the military activity started I'm more sort of impressed with the level of stability of the base camp, although we're all kind of, I think, frustrated by the low energy.

Yeah. We're going to get into all that. But actually, first one, I just talk about the VIX a little bit more. Lots of people know what the VIX is. They've heard of it. They know the motto, short, the VIX, et cetera. It's really just a, it's sort of an index that's based on options pricing for related to the S&P. 500 and you kind of put that at yellow it's not like flashing red like it was during the unwind of the japanese yen carry trade briefly i guess it was what last last august was it august the last year and i'd love to maybe get your sense of the psychology behind that everyone is wondering when trump is going to taco but this may be a slightly different i mean drawn parallels between what happened what's happening now and what happened in june last year in israel but these are different

in Iran, it's already much more, I think it was a 12-day war, 12-day war last year. I think today actually might be the 12th day of this war or we're around that, but this doesn't seem to be any close to ending. So he may not be able to decide when the war is over. But equities traders don't seem to, again, be flashing red. I mean, is it just recent history of these harsh, or harsh rapid rebounds from like Liberation Day and then what happened in Israel? or like, I guess my question is, like, do you think that where the VIX is right now is appropriate?

Or are we looking at this through rose-colored glasses? Yeah, I've stopped telling the VIX where I think it should be a long time ago. Just tell all of us. That's right. I will say that I, that there was definitely more surprise. If we look back a year from now, right, completely different set of circumstances. right? We had a very, I mean, I guess they both were precipitated by the president, but you have the Liberation Day kind of tariff tantrum, as I had been calling it, was pretty severe. Bitcoin really

took it on the chin there, which made you think that it was really leverage and liquidity oriented, right? Bitcoin came off its 100,000 to the, I think, low 80s and maybe even on a per liquidation. I think low 80s. Yeah, might have you've been touched 78 or 79,000. And that was a pretty sharp VE recovery back out of that when the news flow changed. And I think the surprise element really is what would have driven a higher VIX at this point. There is something about what's going on now, which does not seem to include enough surprise for the VIX to really want to be into that more orange towards

red mode. I mean, let's remember, right, the VIX is heavily pricing in how in-demand downside S&P 500 put options are costing, right? And who is buying those? Banks and insurance companies are buying them every day, which keeps the volatility market, you know, shaped the way it is. But is it, you know, is it people who are buying equity protection more tactically, that's driving up the VIX higher. Yeah, it would be. Right now, it doesn't feel like there's a lot of contagion from what's going on in oil into equities.

Equities seem pretty sanguine and laid back from my point of view. Maybe that's a reason that crypto hasn't legged lower here. But at what, what, 6,600, 6,700 on the S&P is like, we're not, it's nowhere near the kind of surprise-based drawdown that we saw last year. And of course, I'm not an equity expert a lot these days. But looking at that VIX number, yeah, you know, one way for people who aren't very familiar with the VIX to think about it is what it implies. The VIX isn't at 26 because of this, but think, you know, a 16% VIX implies a 1% move

in equities every day. day and a 32 VIX implies 2%. So think about what that means. That's, you know, 2% moves on what, 130 S&P points in a day. That would feel, you would feel that, right? So I guess we're about 80 handles down today on futures. So the VIX is kind of, and the movement in equity prices is kind of the same. So we'll see.

I guess the other thing, I like your point though. This could reverse on a dime. with news flow or with a positive announcement, in which case you'd be sad that you bought all those expensive equity puts because, you know, you'd be back, you know, back game on. Yeah, I mean, we just have to look at who was it, the energy secretary with that tweet from yesterday's claiming that the U.S. Navy escorted a tanker through the street and then had to pull it back and just seeing the whipsaw in oil prices. I mean, it gives you a sense of how people are looking for some sort of,

North Star to kind of anchor their strategies. I do want to focus a little more on equities, especially like tech equities right now, because it like there's been some coverage in the FT, the Wall Street Journal, but I mean, people like you and me that just look at charts on a daily basis, it's easy to see that they're doing well right now. And typically, like these are some of the more risky assets

that you would expect to suffer during periods of, I guess economic, worry. But they are, quote, unquote, the safe havens right now. I love your thoughts as to why. I mean, some of the people I speak with say, well, they were punished in the last few weeks because of fears about AI and there was that big drawdown there, not just like cannibalizing revenues from some of the software companies, but also just the amount of debt that was being sold to sort of finance all these buildouts that maybe they hit a bit of a soft landing and now they have room to grow as opposed to being, as opposed to this hitting when those stocks are at all.

already frothy levels and maybe the same narrative applies to crypto that it's been punished for a while now. So and gold has been on its hair. Maybe there's a bit of a rotation in there. But I'd love your thoughts on what's happening right now. And like if we really need to kind of reevaluate what qualifies as a safe haven in this particular economy. Yeah. I'm going to bring feelings to a facts fight here. You know, a lot of what we saw happen last year, all through last year. And crypto is a great standard bearer for this. We saw a lot of fast money that helped propel the crypto rally in the second and third quarter. Really broad rally. Everything, you know, my old, the indices that we were building at CoinDess

were going up supported by Alts, right? Ethereum had a massive rally. And then, you know, and there was, of course, great news flow to support that circle went public. My former parent company, Bullish, went public. The Genius Act was passed. You know, you had the SEC and CFTC holding hands in Washington. It was a beautiful thing to see. And then all of a sudden, right, October happened. The fast money moved elsewhere into gold temporarily, right? You have the deleveraging effect in crypto. So nothing really changed, right? In fact, the progress of Integrated, of digital assets and blockchain continued almost at an accelerating pace. The news flow, even in the last couple of weeks, it's almost been like crackens in two or three

different, you know, crazy press releases about exciting things. New York Stock Exchange, NASDAQ, ICE, CME, they're all doing super cool things. FIA Bocas this week. I mean, I can't even imagine all the cool things that are being talked about in those hotel feeds down in at the Boko-Raton. So the, and I think it's the same for tech and AI where the work is continuing, right? The building is continuing, the integrations, the applications, the adoption of blockchain and of AI are continuing pretty much on a straight line. But at some point, the money, the fast money decides it doesn't want to play there.

And it goes elsewhere. it did go to silver and gold in the fourth quarter, and now both of those metals are priced to perfection to the extent that you really can't go into them and think of them as as you would have thought of them a year ago, just because they've had this kind of massive rally. So it really depends, I guess, on what your horizon is. If, again, personal view, not GSR view,

and certainly non-investment advice, But these giant companies that are going to have the power to create, support, store, and energize artificial intelligence, they're continuing to build. And over time, that those benefits will start to realize themselves. We're at a record high on the crypto side for stable coins, 317 billion, I think we hit, or close to 320 billion. Yeah. Half of that is Ethereum, right? And Solana is making is making some strides there in improving its market share. So how can you ignore those things? Bitcoin just minted its 20th, 20 million Bitcoin. The network is as solid as ever. And quantum fears aside, the ecosystem just continues to develop every single day. So I don't know, from a safe haven point of view, that's very, It's a very tactical sort of mindset. Clearly, U.S. Treasuries haven't necessarily been a great safe haven.

Yeah, and that was actually going to be my next question for you before we kind of move into crypto market structure. Where can you go, right? You can go into dollar cash. You can't go into gold necessarily as a, I hope it stays up here at 5100. Oil is extremely volatile and probably too much in the picture. and crypto's kind of just been steady.

So I don't know. Good Safe Haven feels like cash, monitor, and don't trade this market. Yeah, it's really interesting. Sorry. I mean, like up is down, black is white. I totally get it. I mean, during other periods of strife, like you would expect yields to drop, like people to rush into things like treasuries.

But again, that's not what's happening here. It keeps ticking up. And it really, in a way, like, the dollar is, I guess, still having it safe haven status. The DXY is going up, but you would expect yields to go down as people rush into bonds. And that wasn't the case last year. So at least maybe the dollars found its base camp as well as Bitcoin and ether. Yeah, the dollar just still has that Teflon quality. So yeah, I guess my, I just want to give you a chance that if there's anything else you want to comment on treasuries before we take a break and move a little more directly into crypto markets.

No, no, no, traditional markets. I think I've already said 105% of what I feel confident about. So all good there. But I do think in markets like this, and this just comes from being, you know, in in finance for a couple of decades, if people feel like this is a very. tough market to navigate and nothing is where it should be that happens sometimes and it's it's it's a good time to observe with dry powder yeah i think so or it reminds me i don't know if you ever watched the show parks and recreation um if that was um tom haverford he had this um he had this one he had a lot of famous lines but when i like he's like when i go bet on the horses i never lose and he's like and he's like you know why i bet on all the horses and they're um i want Maybe not the worst advice in this market. Anyway, let's take a very quick break so we can hear from another one of our sponsors.

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be ready on day one. You can find the new bits and bits channels at unchained crypto.com slash bits and bibs. You can also find us by searching bits and bips on YouTube, Apple Podcasts, Spotify, or wherever you listen. So one of the, uh, we're back. So one of the really interesting things about crypto, uh, although TriFi is finally catching up is that it creates 24 7, 365. It doesn't know holidays. It doesn't take vacation. And for a while, I mean, going back in years, going back years, we would see Bitcoin and other cryptos being punished sometimes because of the fact that bad news seems to happen over the weekend and there's nowhere else to put on a view. That is changing a little bit. And there's even in the world of crypto, there's a lot of different ways that that fast money you were referencing can now be used to express advantage points on the markets.

I think we have to start with hyper liquid and what's happening there, especially with some of their oil perps contracts, which are, I think they did like $1.2 billion of, of no actual value in a day, which for them is, is massive. I mean, the hype token is surging. Cali and Polymarket. I know CaliChi is not, quote, unquote, a crypto company. Polymarket is. I mean, we're seeing tons of activity happening there. Some of it, I guess, morally ambiguous related to like the Ayatollah and his fate, but nonetheless, it just shows the demand for, people being able to trade on on these events and and what's happening and like this is the quintessential product market fit so i love like your thoughts on just kind of what's happening

what are you seeing and like what is the associated impact on of all this activity on on traditional markets is this the case of like the tail wagging the dog to a certain degree that's a big question and i i would be uh i don't think I don't think the answer is noable right now. The most confident, the thing I guess I could think about with most confidence is that Bitcoin in particular is the most, I guess, is the asset with easily the most regulatory clarity and methods of access, right, of all digital assets. It's the asset which makes the most sense to me as a risk absorber over weekends, right? There's not only, you know, there's a very, very deep options market. That's 24-7, right?

Very good perps markets. And you could actually get more people who are not in crypto a lot thinking about using Bitcoin as the thing that they would reach to on a weekend. Does that extend down all the way to, you know, the top 20 or top 30 names? Probably not just out of familiarity. Then you just have crypto people trading with other crypto people, right? And to me, that's less of a shock risk absorber function

and more of just people liking to trade and being able to trade on those markets. As for traditional assets, that's either being represented in derivatives or tokenized over the weekend. I guess the first question one has to ask oneself is like, well, who is able to access these things, right? I think sometimes in our industry, we still tend to overestimate the degree to which the market can be on hyper liquid. Or, you know, the market can think about using tokenized equities. It's a pretty small subset. It doesn't mean the people

aren't smart or that they haven't written smart algorithms. But that kind of macro shock absorber effect for the weekend, you know, suggesting that SIFIs, that big banks and insurance companies or giant pension funds or sovereign wealth funds or giant macro hedge funds can now reach into these other blockchain venues and, you know, continue to hedge their books over the weekend or take shots. I don't know if we're quite there yet. So I see that there is room for more volatility over the weekend in the absence of other markets being open. I'm just not sure it's all the players. And therefore, I'm not sure it represents the market view so much.

It just represents the view of the people who can trade there. Bitcoin might be the exception to that. And my view may be outdated, but that's my sense. It can only be the market's view. when the entire market can participate. Okay. So maybe we can just expand a little bit further then. I mean, I think we're getting close to a point in time

when the entire market can participate. I mean, tokenized stocks are a thing. We were discussing before you mentioned Cracken partnering with NASDAQ. And was OKX partnering with ICE? With ICE, yeah, with ICE. Yeah, with ICE's money anyway. Yeah. Yeah. And I think the CFTC, I mean, they're either setting up rules or they're laying the ground work to allow for 24-7 trading of Derrida's contracts on the platform.

So we are getting to that world. I'd love you to sort of talk about like or sort of, I guess, explore, like when you think we might get to the point where these are basically, that's what I'm looking for, where these are like mature. liquid perpetual markets, no pun intended, where sort of information can get disseminated across financial infrastructure right away. And it doesn't have to just be crypto. Right. No, it's a good point because I do think that Bitcoin has a unique place and role there right now because it's it's the most familiar. It's probably the thing that you can imagine a non-cryptor native market participant reaching for in one form or another. And look, you know, CME announced that they're aiming towards futures exchanges will aim towards 24-7 trading regulated futures exchanges. I think that's just a matter of time. And that may just be, you know, how this conversation ends early, right,

that you end up with the regulated venue. So there, let's bring it into two parts, right? There's, there's perps and then there's let's say you know tokenized equities or tokenized securities um perps are amazing uh they're a brilliant um innovation they've proven themselves uh successful i think that the as as another you know is my my friend and and uh you know bits and bits and bits and Post Chris Perkins points out that, you know, having not having an independent member-driven clearing function, right? Having exchanges clear themselves creates some vulnerabilities in how the perp markets work. But they're a fantastic innovation, but not extremely compatible with the way Americans tend to trade, right? It's definitely compatible with the way retail can trade. But I think

I think they're, you know, spent some time thinking about this. I think they're a little bit more different than dated futures contracts than people realize. It's not just you take the expiration date off and you have a funding event and, you know, suddenly you have this experience of trading a perpetual and you don't have to think about, you know, a term structure of interest rates or cash and carry costs and all that. I think there's more to it than that. Part of the reason perps work is that, you know, if a retail person goes and buys a highly levered perp on finance or buy-bit or OKX or somewhere offshore, they post a little bit of collateral, they really have an experience that's more like owning an option than owning a Delta One derivative, right? In other words,

they're either going to get liquidated or they're going to have experience a big, you know, positive P&L event. There's no shade thrown out. them if they're liquidated, right? If your collateral gets liquidated on a on a perp exchange, well, you can show up the next day with, you know, without a big red mark next to your name and do it again. That's different from the way futures markets work here. And so I would like to think that perps will be this heavily adopted instrument that institutions around the world will come to use, especially on nights and we, weekends to try to express views, but I'm not entirely sure that it's as compatible in current

form as people think it might be. It might be a longer distance away. It may be that you have traditional exchanges running 22 hours a day and just adding Saturday and Sunday. And on things like maybe it'll start with Bitcoin and ether and then move to oil and maybe to equity futures too at some point that'll probably be the load at the road of less of less resistance okay um one more question on crypto and then i want to sort of look ahead a little bit we've spoken about bitcoin uh we've discussed hyperliquid and what's happening with a hype token yeah crypto markets are are highly correlated during normal times and they are right now as well but i am interested if there are any tokens that are either outperforming or underperforming that you've noticed that are worth mentioning.

Or just one of the reasons, frankly, I like bringing on people like you and people from firms like GSR is that you really kind of have your finger on the pulse of what the smart money is doing. Like maybe not quite the fast money, but the smart money, the institutions. And I always like to sort of get some insight into what you're seeing across your platform that might help the retail investors who listen to this understand sort of the ways that professionals in a very not financial advice manner are thinking about periods such as this. Let me answer this way. First of all, GSR has a fabulous franchise. We're a 13-year-old firm whose primary business is helping new projects. get off the ground with good market making. And therefore, GSR has this tremendous and almost unique experiences with newer and smaller names,

many of which have grown up to be big names. And that's helped GSR grow and really maintain a business based on excellent risk management, excellent trading, but really customer franchise and being a first choice for many people who want market making services for new issues. You know, therefore, the trading activity around what happens is very, we have a lot of restrictions about what kind of names we want to look at, what kind of names we can talk about. I think that my strongest feeling about investing in portfolio management in crypto is just to think that breadth, and I said this in my old role too, breadth is important. You kind of need more than Bitcoin and a couple of majors to go up and stay up. You need kind of a cadre of big names who are going to, one, they're going to demonstrate better the connection between the token price and the value of the underlying business or operation.

Two, they're going to have a reduction in volatility and have some kind of, you know, increased steadiness, which hopefully will increase with different access points like ETFs or derivatives or things like that. I do think, and this is definitely a carryover from my old world, that you do need index derivatives, right? You absolutely need traders to have a way to risk manage bigger chunks of the market at once. I think doing things token by token is not going to be a good way for the market to evolve. So the indices that I used to build, I still have a lot of, you know, obviously keep an eye on them and hoping that they proliferate in the derivative space. Once that kind of group is established, whatever index triumphs and becomes the heart of risk management, those names are going to become, they're going to take off, right?

Because they're going to basically represent that sort of bigger bite of crypto that becomes essential. And then it's going to just be a game of size, relevance, familiarity, access, and use that's going to make those names important and familiar. So right now, you know, most investor conversations where you really think about adoption and new money coming in and staying in for the long haul, they still are grappling with this idea, okay, well, what about stable coins? How do I play stable points? How do I play tokenization? Okay, well, you have big layer one, you know, blockchains like Ethereum and Solana. And maybe you stop there.

Maybe your portfolio is Bitcoin, Ether, and Solana, and you just wait to see what happens next, but you're at least following the slow news of record numbers of stable coins and record numbers of tokenization. So I still like to think about coming from the top down. On the other end of the spectrum, the growth in things like D5 vaults is, I think, reinvigorating a new,

second coming, let's call it, of defy that has a lot broader user, potential user base and a lot more mature platforms and a lot more, you know, rings around the trees for some of these protocols. So I do think anything involved with advancing borrowing and lending and providing yield through defy is going to be, there are going to be some big winners there because I think the demand side of simple, trustable yield is going to, you know, expand whether or not rewards are allowed on stable coins. So I think that's just a sector that I think has tremendous growth potential. But aside from

that, you know, just start from the top down and follow the adoption trail and follow the risk management trail. Yeah. Well, when we have you back in a few months, we'll check and see if you're right, and then we'll hold you to it. Okay, so let's start to wrap up here, but I'm not even going to ask you to prognosticate on what's going to happen with the war, but there are some legitimate years that inflation, I mean, could go up to like three, three and a half percent for a

prolonged period of time. I mean, actually, we had a report that essentially was obsolete the second it came out. I think inflation was flat month to month and was up, I think, what, 2.4% year over year, which was actually somewhat encouraging, again, irrelevant now because it's a snapshot of a world that doesn't exist anymore. But there was hope, I guess, that like if it was going to flat, maybe we'd get a few more rate cuts this year, especially once Kevin Warsh, if and when it becomes Jerome Powell's successor as Fed Chair, I know that the employment numbers for February were abysmal. So that also would kind of lend some credence to the idea of perhaps stimulating the economy.

But now we're in a world where if the oil is going to stay above $100 a barrel, we're looking at inflation like 3, 3.5%, etc. Central banks in Europe are talking about rate hikes, not cuts. In the U.S., I think talking about a hike would almost be like anathema, given the current political climate. But I know betters are now pairing back their expectations of successive cuts this year. So what do you see and how, I guess, like, how, again, like should investors in a not financial advice point of view, like, how should they think about allocating, especially as like this conflict, the longer it goes on, I think it's fair to say, the longer it's going to be. to need to go on because it just becomes more complex, more actors enter the fray, um, positions become hardened and then we're going to run up against the midterm elections

in not a very long period of time. So, so, I know it's kind of a complex question, but I know it's going around in my head and I'm sure in our, in our listeners and viewers and they're trying to make sense of all of it and perhaps, um, uh, harden their portfolios for multiple different worlds, like a multiverse of different scenarios. It's the essential question, right? And it's people kind of want to know what to do and how to feel. They also want to know, are they in this alone or are they in this together, right? Are they weathering a storm?

You know, after having whatever, between a 30 and depending on what token you're looking at, 30 or 60 or 70% drawdown since October, and then basically a flat sort of energyless market, you know, people have the right to be frustrated. I guess my observations are that the attention span of the market feels like it moves in quarters. So even if you had, I guess, a pretty firm sense about Fed policy or you know the you know the midterms are going to be you know three quarters from now or two and a half quarters from now or you you have some event that's deep in the future the market's going to behave it's going to develop its trends its supply demand it's its appetite for leverage its availability of leverage it's kind of kind of move quarter to

quarter last year was a great example where you had a horrendous first quarter amazing second and third quarters and a terrible fourth quarter, right? We're starting out the year with a quarter that got pretty sour pretty quickly, and we're coming to the end of that quarter at the end of this month. At the end of this month, we may have a resolution to the geopolitical situation. We may have a completely digested, you know, October 10th and February 5th, you know, resolution that allows some liquidity back into the market. We're closer to him or we'll have a new Fed chair. And we'll probably begin in that season of making things look good for the midterms. Right. I don't want to call it window dressing, but there's, you know, there's, we'll call it staging the house. Yeah, yeah,

good, that's right. Perhaps pun intended this time. Good news, that's right. Good news won't, uh, good news won't be a surprise. So and then we've had this base camp of very low volatility, a very steady crypto in an otherwise kind of, you know, not so unturbulent market. So I think Q2 is going to be a really interesting time to watch. And if trends, if we really can develop good uptrends, I think that's what people should, you know, keep an eye on, whether they're already allocated into crypto and want to just sort of feel some relief or whether they're looking for entry points.

It's frustrating to enter in a flat energy list market because nothing happens. and you're just kind of frustrated and uncomfortable. So look for the quarter to turn, look for signs of transforming, maybe look even for a little bit more volatility in crypto, keep an eye on things like per funding rates to see if people are reaching. You know, another thing I like to look at, and this goes back to my work at CoinDesk is,

I like looking at AVE rates. You know, CoinDEST put this AVE staking rate product together. And you can sort of look at the daily, not staking rate, sorry, borrowing rate for AVE for USDC. And you note that when the markets are really kind of low energy, those rates go down because nobody wants to borrow. There's nothing to do with your leverage, right? So if you see defy interest rates starting to go higher, that's demand. So I would feel like I would lean into that and see what the next quarter brings because that pulse will probably last a quarter or two. Gotcha.

All right. Well, that's a really great place to end. Before I let you go, I just want to give you the chance either to share anything, any views you haven't had a chance to express or I always like to see if my guests have a contrarian opinion or two that they're issuing to get off their chest. You haven't heard enough contrarian opinions yet. Okay, so here's a contrarian opinion. I do think a lot of tokenized equity stuff is being built very well. And by a large number of people chasing this elusive, you know, Saturday night in Europe kind of trader. I do think a lot of stuff is being built in crypto on spec right now.

And we're going to have to see if the demand's really there. that will be an interesting test, I think, for a lot of these builders. It's great that the stuff's being built. And at the same time, you know, what the New York Stock Exchange and NASDAQ are doing to push forward tokenization tech programs is, you know, is fantastic and is going to be undoubtedly useful. But it will be interesting to see if, you know, if suddenly all of equity trading sort of moves into the tokenized world just because of availability.

That's my contrarian views. Like, I'm not so sure. Yeah, I don't think that's actually as contrarian as, not to put you down in any way, but I don't think that's quite as contrarian as you may have prefaced it prefaced it as. I mean, anyone who's followed my work at Forbes before I moved over to Sharpley knows I've written several stories and heard from some very angry people about tokenization and sort of the gap between the promise and the practice. And but it really comes down to it's easy to, not easy, that's the wrong way to say it,

but it's feasible and relatively straightforward to build out pilots and POCs and tech stacks and operationalize this stuff. But you can't artificially, or at least sustainably artificially build demand. And you can't just by decree. create secondary liquidity, which is really the linchpin, the keystone for all of this. Yeah, that's a good point. I mean, if people should remember one thing is that, you know, good liquidity costs money. Yeah. So. Yes, coming from a market maker, I guess, you know that.

Good liquidity costs money. And who's going to, you know, who's going to pay for the liquidity once the products are out there? So we'll see, but people do love trading. And, you know, I think the next couple of years are going to be fascinating. All right. Well, we'll have to have you back. Thanks, Andy, again, for joining. Congrats on the new role. Thank you to everybody for watching and listening.

And tune in next week for another episode of Bits and Bibs, The Interview. Thanks, Steve.