Latest / CRYPTO 101 / Ep. 711 Top Crypto Investment Strategies for 2026 with Franklin Templeton

Transcript

Ep. 711 Top Crypto Investment Strategies for 2026 with Franklin Templeton · CRYPTO 101

0:08
[SPEAKER_01]: All right, everyone, welcome back to the Crypto 101 podcast.
0:13
[SPEAKER_01]: I hope everyone is having a fantastic day because no matter where you're coming in from, you're certainly in the right place.
0:20
[SPEAKER_01]: The Crypto Market is electric right now.
0:23
[SPEAKER_01]: And because of all the volatility and everything that's going on, we figured we wanted to bring in one of the biggest players in this space.
0:31
[SPEAKER_01]: to talk about the overall state of the market and what they think about it and just everything because there's a million questions that we can ask and we have about an hour or less to do it all.
0:41
[SPEAKER_01]: So today we have Max Gottman.
0:43
[SPEAKER_01]: He is the deputy chief investment officer for Franklin Templeton Investment Solutions.
0:48
[SPEAKER_01]: For those of you who are not familiar with Franklin Templeton,
0:50
[SPEAKER_01]: is a $1.7 trillion asset manager with about $1.7 trillion in assets under management.
0:57
[SPEAKER_01]: Max, good to have you, man.
0:59
[SPEAKER_01]: Excited to have you on.
1:00
[SPEAKER_01]: Thanks so much for having me, Brendan.
1:02
[SPEAKER_01]: Absolutely.
1:03
[SPEAKER_01]: I mean, let's just start from the top here.
1:05
[SPEAKER_01]: You have a long history and finance tech, I mean, even AI.
1:10
[SPEAKER_01]: What made you start looking into the crypto side of things when you have all these different avenues that you could run with?
1:16
[SPEAKER_00]: Well, my whole life I've been a multi-assid investor.
1:18
[SPEAKER_00]: Like, that's been the one coming thread.
1:20
[SPEAKER_00]: I've never invested just in equities or bonds.
1:24
[SPEAKER_00]: And I've also seen this story play out before.
1:27
[SPEAKER_00]: I mean, you know, it was emerging markets in the 80s, uh, along with high yield, then it was, you know, tech companies.
1:37
[SPEAKER_00]: And so you see these new asset classes come in, everyone says, you know, why would I ever put like junk bonds in my portfolio, fast forward, high yield is like the most vanilla allocation.
1:50
[SPEAKER_00]: You can think of same thing with,
1:52
[SPEAKER_00]: I would never buy equities in Taiwan.
1:54
[SPEAKER_00]: Well, that's now where all of the GPUs powering all of our minds and all of our AI is coming from, right?
2:01
[SPEAKER_00]: So inevitably, what happens is a new asset class comes on.
2:04
[SPEAKER_00]: People look at it skeptically.
2:06
[SPEAKER_00]: You've got a few early movers who make a ton of money.
2:08
[SPEAKER_00]: Then everyone else gets FOMO.
2:10
[SPEAKER_00]: They come in.
2:11
[SPEAKER_00]: It gets institutionalized.
2:13
[SPEAKER_00]: And I've just learned I want to be at the cutting edge of that, not at the back.
2:17
[SPEAKER_00]: And a lot of times when you're a fast follower, you're just in second place.
2:21
[SPEAKER_01]: I would agree with that.
2:22
[SPEAKER_01]: It's funny.
2:23
[SPEAKER_01]: I was just talking to a buddy about a week ago.
2:26
[SPEAKER_01]: He's like, I just don't understand the whole crypto thing.
2:29
[SPEAKER_01]: He's a bit of a crypto hater.
2:31
[SPEAKER_01]: And so I try to do my convincing to him.
2:33
[SPEAKER_01]: But we haven't talked in a while.
2:34
[SPEAKER_01]: And he's like, I just don't understand it.
2:36
[SPEAKER_01]: He's like, no one cares about this.
2:37
[SPEAKER_01]: No one wants to use it.
2:39
[SPEAKER_01]: And you know, you look at all the big names and like,
2:42
[SPEAKER_01]: they don't have any good stances on it.
2:44
[SPEAKER_01]: And I was like, wow, I don't think he's been paying attention as so blatantly.
2:48
[SPEAKER_01]: Um, so I guess for the listeners out there, you know, maybe they are new or they don't understand what the bigger view of crypto as a whole is.
2:57
[SPEAKER_01]: I mean, where does Franklin Templeton kind of stand when it comes to the crypto market?
3:03
[SPEAKER_00]: Sure.
3:03
[SPEAKER_00]: Well, first of all, we don't look at it as a monolith.
3:05
[SPEAKER_00]: And I think that's really important.
3:07
[SPEAKER_00]: I think a lot of times people, especially ironically, I see some of the old crypto natives, like they're just Bitcoin over everything.
3:15
[SPEAKER_00]: I actually personally, I'm not a huge Bitcoin fan.
3:18
[SPEAKER_00]: I think it's in that regard.
3:20
[SPEAKER_00]: I don't really, it doesn't have a real tether to it of human history.
3:25
[SPEAKER_00]: Like gold does.
3:26
[SPEAKER_00]: But that does not make me not super excited about everything else that's going on.
3:31
[SPEAKER_00]: And when I think about like ether, for example, I'm thinking about I get to buy the railroads that are going to run the future of technology and transactions.
3:41
[SPEAKER_00]: I mean, these are literal rails.
3:44
[SPEAKER_00]: So we think about, like, how wealth in America was made at the turn of the century, it was the railroads.
3:49
[SPEAKER_00]: Well, if that is that railroad, you get to buy the actual rails.
3:55
[SPEAKER_00]: And then I think about actual cryptocurrencies like Salana, which is one of my favorite tokens, and one that we're launching product in with at Franklin as well.
4:08
[SPEAKER_00]: just completely changes the way peer-to-peer transactions can work.
4:13
[SPEAKER_00]: It's something that all the major credit card companies are terrified of with good reason.
4:18
[SPEAKER_00]: And so bringing it back to like, what are we looking at at Franklin?
4:21
[SPEAKER_00]: It's all of that.
4:22
[SPEAKER_00]: We're looking to be a provider.
4:26
[SPEAKER_00]: of solutions that are diversified that can bring in product in a wrapper, weather about any TF or an ETF or a fund to investors where they are.
4:36
[SPEAKER_00]: So if they don't want to figure out how to deal with their own wallet or cold storage,
4:42
[SPEAKER_00]: we can make that work.
4:44
[SPEAKER_00]: If the crypto natives are looking at adding traditional assets but actually wrapping those assets in a tokenized format, we want to bring that to them.
4:51
[SPEAKER_00]: If there are other asset managers like hedge funds, then they need to create more complex structures and explore how to custody better, how to
5:02
[SPEAKER_00]: actually get into the yield and their holdings.
5:05
[SPEAKER_00]: We've got our Benji platform for about.
5:06
[SPEAKER_00]: So we're, you know, the fact that we have such a large scale means we can approach this space, the way we approach by the way any other asset class, which is to say, from all directions.
5:16
[SPEAKER_00]: We want, we don't want a client to come to us, whether they're an advisory client, a retail client, or the largest institution, and have to turn them away to someone else.
5:27
[SPEAKER_00]: That's the bottom line.
5:29
[SPEAKER_01]: Yeah, you know, you said something interesting, which is that like, you're not necessarily against Bitcoin, but you seem to like coins that offer a little bit more utility like Ethereum, so to say a bit more it from the institutional side.
5:42
[SPEAKER_01]: It really does look like that is where the bulk of the banks or asset managers are even large institutions.
5:50
[SPEAKER_01]: It looks like that's what they're kind of turning towards, you know, they're building on these things.
5:56
[SPEAKER_01]: The common debate out there is, oh, well, are they going to choose Ethereum or are they going to choose Solana?
6:00
[SPEAKER_01]: Personally, I believe that there can be a world where both exist, but it seems like at the moment, the bulk of these financial institutions are focused on building with Ethereum.
6:10
[SPEAKER_01]: And I think that's, you know, not even necessarily a hot take because I think the numbers are just there.
6:14
[SPEAKER_00]: Yeah, no, absolutely.
6:15
[SPEAKER_00]: It's a fact that I think they're different vehicles, right?
6:19
[SPEAKER_00]: Ethereum really is a technology platform for building smart contracts.
6:23
[SPEAKER_00]: Solana is a super fast transactional rail.
6:27
[SPEAKER_00]: And I look at it like that.
6:28
[SPEAKER_00]: So can both exist?
6:30
[SPEAKER_00]: Yeah, to me it's almost like saying, you can have alphabet exist as well as visa.
6:38
[SPEAKER_00]: like they're kind of doing different things.
6:41
[SPEAKER_00]: Now they may overlap in certain areas and I think when we go into like that specific soul and an eighth example like yes there's a lot more if an overlap um that's the nature of the modularity of blockchain technology but
6:55
[SPEAKER_00]: you know, it's then it's almost like saying, well, we build a bank out of bricks and we build a sports stadium out of bricks and therefore they're the same thing.
7:05
[SPEAKER_00]: Like it's just there are totally different use cases.
7:08
[SPEAKER_00]: Also, I think to me like the bigger question is, could you have, you know, Solana and Ripple coexist and I would say yes because we have MasterCard in Visa and
7:25
[SPEAKER_00]: To some extent, even figure out how to coexist or coexist in competition, it's not going to be an either or.
7:32
[SPEAKER_00]: This does complicate things for an investor, right?
7:35
[SPEAKER_00]: Because like, who do I invest in?
7:38
[SPEAKER_00]: And I think ultimately that's where you have to go and do your research.
7:42
[SPEAKER_00]: Something worth doing is we're exploring these projects.
7:44
[SPEAKER_00]: Very in-depth.
7:45
[SPEAKER_00]: We're talking to
7:47
[SPEAKER_00]: The folks behind them were exploring things like transaction volumes which ones are, you know, moving faster, whatever ways in which they actually operate, you know, like the proof of history, with Solana is a really powerful mechanism in my view.
8:03
[SPEAKER_00]: But those are kind of where we get into the actual valuation of the underlying project, but it does not mean that one project must be the only
8:13
[SPEAKER_00]: one in existence.
8:15
[SPEAKER_00]: By the way, the reason I harp on this a little bit, Brandon is because we would never talk about this if we were talking about, say, like software stocks.
8:22
[SPEAKER_00]: You know, we wouldn't say, like, oh, well, because, you know, Microsoft is dominant in an office.
8:29
[SPEAKER_00]: You can have, you know, alphabet play with Google Street.
8:32
[SPEAKER_00]: You can't have Apple play with words and pages.
8:34
[SPEAKER_00]: It's like, no, you know, there's a dominant player and there's other players who are also dubious and it's all
8:42
[SPEAKER_01]: 100% and it's it's so funny because for whatever reason
8:49
[SPEAKER_01]: And there's haven't gone away over the years.
8:51
[SPEAKER_01]: It could continue to grow.
8:52
[SPEAKER_01]: I mean, you look at the area in which just set all-time transaction records in January, all-time user activity records in January, Bitcoin alone had almost more dollars transacted than almost Visa and MasterCard combined, bigger than either one individually, Solana's been setting records.
9:11
[SPEAKER_01]: It's the same thing.
9:13
[SPEAKER_01]: And people look at this stuff.
9:15
[SPEAKER_01]: I don't know, and I think they tried to judge it a bit differently, or maybe they make it more complicated than it needs to be.
9:21
[SPEAKER_01]: When you look at the current state of the market, obviously we've come down a lot.
9:25
[SPEAKER_01]: You know, we're recording this in February of 2026.
9:29
[SPEAKER_01]: The listeners will probably be watching this a little bit later.
9:32
[SPEAKER_01]: But you know, Bitcoin kind of falling back down into the 60 to 70,000 range at the time of recording this.
9:37
[SPEAKER_01]: And the funniest thing is that once again, people are coming out and they're saying Bitcoin is going to be dead, I saw Michael Burrie was one of the famous ones I just saw, he was trying to get in and said, hey, this could cause a death spiral for the crypto markets.
9:50
[SPEAKER_01]: And it's at times like that, I always like to go, there's this website, I think it's called 99 Bitcoins, but they have a Bitcoin abituary where they count every time Bitcoin has been declared dead.
10:00
[SPEAKER_01]: And then they link the article or they link the post.
10:03
[SPEAKER_01]: calling it dead.
10:04
[SPEAKER_01]: I'm like, oh, well, that's going to be another dot on the chart.
10:07
[SPEAKER_01]: And then they map it to where prices and it's so funny to me.
10:10
[SPEAKER_01]: But you know, obviously, I would disagree.
10:12
[SPEAKER_01]: I think you know, you would disagree.
10:14
[SPEAKER_01]: Most people in finance would probably disagree with that.
10:18
[SPEAKER_01]: You know, at least me, you know, I want to buy the dip here.
10:21
[SPEAKER_01]: But I've seen you say that people should be investing in these assets methodically, like they do with, you know, maybe stocks or bonds and that they are institutional grade assets now.
10:31
[SPEAKER_01]: Can you explain that?
10:32
[SPEAKER_00]: Yeah, absolutely.
10:33
[SPEAKER_00]: Look, I mean, use risk management.
10:36
[SPEAKER_00]: Don't invest on vibes.
10:38
[SPEAKER_00]: I think that's a general comment.
10:39
[SPEAKER_00]: I would make about any asset class.
10:40
[SPEAKER_00]: The other what I mean by that is you should have a benchmark that represents your risk tolerance.
10:48
[SPEAKER_00]: And I mean that in terms of how much risk can you take.
10:52
[SPEAKER_00]: And it's a standard deviation if your returns just to be clear.
10:55
[SPEAKER_00]: It's not super complicated for anyone who's got a G.E.D.
11:00
[SPEAKER_00]: You know, in times of stress, can you lose 20% of your portfolio and be mentally okay?
11:06
[SPEAKER_00]: You know, are you in a state where you need to be withdrawing money from your portfolio every month?
11:12
[SPEAKER_00]: That's going to change your risk tolerance to be a lot lower than if you're young and you're
11:17
[SPEAKER_00]: you know, you can really write that volatility.
11:20
[SPEAKER_00]: Once you figure out your overall level of risk, then a general rule of thumb, and again, general is the operative word everyone should think about it for themselves, but we would say 20% or a fifth of your total portfolio risk should be as much as you allocate to any single asset class.
11:37
[SPEAKER_00]: And crypto is a new asset class, but it's still, it's still an asset class.
11:41
[SPEAKER_00]: It's still a base to physics of the markets.
11:44
[SPEAKER_00]: And so we can plug it into that.
11:47
[SPEAKER_00]: Now, you know, 20% of risk from asset class that has as high of volatility as crypto does may not translate to a huge national allocation, right?
11:59
[SPEAKER_00]: So that could mean for even a more aggressive portfolio.
12:02
[SPEAKER_00]: That's almost all equities.
12:04
[SPEAKER_00]: You're looking at like six to eight percent of crypto and there's ways to lower about
12:11
[SPEAKER_00]: or the volatility contribution by doing things like incredibly increasing how much you have and safer assets like government short data government treasuries reducing how much you have in other risky assets like emerging market equity and international small caps so you basically work to both make sure that your overall risk level of your benchmark in your portfolio isn't higher than what you can tolerate and that crypto itself is about a
12:41
[SPEAKER_00]: And if you can do that, and by the way, we illustrate this in a paper we put out called Back to Benchmarks, which I think does a really good job of breaking down some of these concepts.
12:53
[SPEAKER_00]: It becomes much more tolerable.
12:55
[SPEAKER_00]: And then the other thing I'd say is just like any other asset class, I don't invest just in China, if one I invest in emerging markets.
13:04
[SPEAKER_00]: In fact, right now we don't like China, but we really like Taiwan and South Korea across more, you know, multi-acid portfolio.
13:13
[SPEAKER_00]: So similarly, have a diversified digital asset portfolio.
13:18
[SPEAKER_00]: It should not be just Bitcoin, that is said.
13:22
[SPEAKER_00]: It is a little silly to hear folks talk about yet again, as you said, Brendan, the death of Bitcoin when a major European sourdwell fund, Luxingburg, just added 1% of Bitcoin ETFs to their balance sheet.
13:36
[SPEAKER_00]: When we've had a bunch of whales wake up, these are portfolios with over a thousand Bitcoin each.
13:44
[SPEAKER_00]: They just added 4 billion over the last two weeks.
13:46
[SPEAKER_00]: into the whole things so you know like yeah it's all again it's a volatile asset class it's going to have 40% drops pretty regularly it's just like it's going to have rallies it's if we look at it through at risk lens and what we expect for something that has you know a hundred-day volatility of you know 50 to 60 percent this is pretty normal like this this is
14:13
[SPEAKER_01]: Yeah, you're right.
14:14
[SPEAKER_01]: This is pretty normal for anyone who's been in crypto for
14:18
[SPEAKER_01]: You know, an extended period of time, several years or more, if you've been through a couple of the cycles, or even looked at a couple of the cycles, a 50% move on Bitcoin isn't all that uncommon.
14:29
[SPEAKER_01]: You know, Bitcoin is very volatile, and it always has been.
14:33
[SPEAKER_01]: And when you look at back at how many moves Bitcoin has had a 50% or more, you know, the average bear market usually falls into the or more category by quite a bit.
14:43
[SPEAKER_01]: You know, you can look at 60, 70, 80 percent drawdowns, which I know is just gut wrenching at the time that it happens.
14:51
[SPEAKER_01]: But you always look back on it and go, man, I wish I was a little bit less fearful in those moments.
14:56
[SPEAKER_01]: You know, fast forward to the current day, you're right.
14:59
[SPEAKER_01]: There's a lot of stuff happening behind the scenes.
15:01
[SPEAKER_01]: And I think that's what people are so curious about.
15:04
[SPEAKER_01]: They have a couple of questions about, like, why is this happening?
15:08
[SPEAKER_01]: What does
15:10
[SPEAKER_01]: the big institutions and the smart money investors think about it.
15:14
[SPEAKER_01]: And then what's actually happening behind the scene.
15:17
[SPEAKER_01]: So I'm going to throw a couple of questions at you in regards to all of those.
15:20
[SPEAKER_01]: But I guess let's start off with
15:22
[SPEAKER_01]: Like what in the world is happening here that is going to cause this kind of rundown because people look at previous ones and they say, okay, why understand COVID global pandemic, okay, I understand FTX or Teraluna or Alamita research or, you know, all these different catalysts that have or the tear of crash or the Japanese carry trade crash, they can.
15:43
[SPEAKER_01]: put a specific event or a some sort of like blow up blacks one like opportunity to it and they say okay I can kind of wrap my head around it.
15:52
[SPEAKER_01]: I think this time around there's a little bit more confusion on the retail side of people struggling to understand you know what's going on and why it's happening.
16:00
[SPEAKER_01]: Yeah, what do you see now?
16:01
[SPEAKER_00]: Sure.
16:01
[SPEAKER_00]: So, um
16:04
[SPEAKER_00]: Those are all different examples you just listed of both macro-driven things, which kind of came out of the, you know, a trad-fi world, which, again, I don't really like using those labels because this is all part of one broad world of asset classes, you know, also like very specific.
16:18
[SPEAKER_00]: Crypto things, which I think is where we are now, which by the way, like ironically, a lot of times people talk about how they want crypto to be less correlated to the rest of asset classes, well it's,
16:28
[SPEAKER_00]: Be careful of what you wish for.
16:30
[SPEAKER_00]: Like correlation does not imply positive returns, right?
16:32
[SPEAKER_00]: So cryptos correlation with like stocks and bonds has actually gone down, unfortunately, it's because it's fallen.
16:38
[SPEAKER_00]: And that's so what I mean is it is idiosyncratic.
16:40
[SPEAKER_00]: And I would bring everyone back to the dats.
16:44
[SPEAKER_00]: I was talking a lot about dats back in October and I was telling folks who would listen that you really don't need to inject leverage into crypto ever.
16:55
[SPEAKER_00]: Do not leverage crypto.
16:57
[SPEAKER_00]: I will almost never say something categorically, but like, you know, I have to hear.
17:03
[SPEAKER_00]: Like, that is a bad idea.
17:05
[SPEAKER_00]: It is, again, because it is already so volatile.
17:06
[SPEAKER_00]: Like, why do you need more volatility?
17:09
[SPEAKER_00]: So you had these public companies that were buying up like all of Seoul, a bunch of bit, you know, a bunch of Eve, let me talk about the facts, but that's yeah.
17:19
[SPEAKER_00]: And then what happened is,
17:22
[SPEAKER_00]: There was a liquidity crunch, which by the way, happens in this market all the time.
17:26
[SPEAKER_00]: So hyper-liquid, I very ironic name to go down in history, right?
17:30
[SPEAKER_00]: Kind of hits a snag, cuts liquidity with a rusty knife so everyone's positions just go flump.
17:41
[SPEAKER_00]: And now you're getting to this reflexive leveraging cycle where prices fall, margin calls happen, that causes force selling, the force selling causes prices to fall and you repeat and repeat and repeat.
17:53
[SPEAKER_00]: And so that's in my view.
17:56
[SPEAKER_00]: or kind of these big snowball that started rolling down and ultimately became an avalanche.
18:02
[SPEAKER_00]: But when I look at that and you know, I'm not gonna tell anyone listening to by or not by the tip.
18:10
[SPEAKER_00]: I think that needs to be a question of again, your wrist tolerance,
18:14
[SPEAKER_00]: your portfolio and we can talk about like common sense ways to think about that, but what I will say is look at the state of this system and the state of the broader digital asset economy.
18:26
[SPEAKER_00]: So, are there rails broken?
18:28
[SPEAKER_00]: No, they are not broken, they are functioning fine.
18:31
[SPEAKER_00]: Are there pockets of deep liquidity?
18:33
[SPEAKER_00]: Absolutely, yes.
18:34
[SPEAKER_00]: You need to be very careful, especially this is less for retail I would say and more for like kind of your crypto hedge fund players.
18:42
[SPEAKER_00]: do you know that where you're placing your orders is going to be able to fulfill those orders as they said?
18:49
[SPEAKER_00]: Are you if you're staking can you extract and take your assets back to liquidity quickly enough?
18:55
[SPEAKER_00]: You know, those are questions that the more like medium-sized investor needs to be thinking about very carefully.
19:01
[SPEAKER_00]: And, you know, then,
19:06
[SPEAKER_00]: if the rails are functioning more broadly, what's the macro picture?
19:11
[SPEAKER_00]: Like, in the macro picture in the world is actually pretty great.
19:14
[SPEAKER_00]: Like, we are in a very healthy global economy.
19:18
[SPEAKER_00]: So with all that happening, we need to wait for this reflexive delivering to you and, you know?
19:25
[SPEAKER_00]: And then,
19:28
[SPEAKER_00]: You will start to see the bigger players provide a backstop, which internal provides some liquidity, which will cause the market to stabilize.
19:38
[SPEAKER_00]: I think after bad, it should start going back up.
19:42
[SPEAKER_00]: I tend to not give forecasts too much on super, again, super volatile asset classes, but I would expect we're gonna end the year significantly higher on most crypto assets than where we are as part of this drawdown, because the reals are not broken, and the macro picture is sound.
20:04
[SPEAKER_01]: So let me know if I'm getting the full picture here.
20:06
[SPEAKER_01]: It sounds like you think that the draw done that we've seen is largely caused due to too much leverage and people getting over leverage in their positions.
20:17
[SPEAKER_01]: And that was probably a mix of like you said, hyper liquid and the explosive growth that that was seen.
20:22
[SPEAKER_01]: And then obviously Binance was a big part of this.
20:25
[SPEAKER_01]: They had lots of leverage, but they also had that de-leveraging event where things like U.S.DE, devalued and deep,
20:32
[SPEAKER_01]: these stabilized and that liquidated a lot of positions.
20:35
[SPEAKER_01]: And so it sounds like the liquidations are like a leading cause of this.
20:40
[SPEAKER_01]: Now, the 1010 crash, the October 10th crash of 2025 was like the initial start of it, but we've continued to see like cascading liquidations since then, is that panic selling, is that other fears about maybe the clarity act and things getting pushed down the line, why have we continued to see
21:00
[SPEAKER_01]: you know, the selling pressure even though now, you know, work, we're five months later.
21:03
[SPEAKER_00]: Yeah, so you're still seeing this delivering happening.
21:06
[SPEAKER_00]: It's just like the 10, 10 crash was just like this massive thing.
21:09
[SPEAKER_00]: Like, you know, that, like, that was to me like the big chunk of the mountain came off and it just started rolling down here.
21:17
[SPEAKER_00]: And, you know, we're past, I think, the major avalanche bringing a lot of folks, but like,
21:29
[SPEAKER_00]: issues with liquidity, which we still have in pockets, not broadly, but in pockets are still liquidity issues.
21:37
[SPEAKER_00]: You still have not enough whales really waking up to go fish.
21:44
[SPEAKER_00]: That's kind of the issue.
21:45
[SPEAKER_00]: You have that reflexive cycle that I mentioned where as prices fall, more folks
21:53
[SPEAKER_00]: or their positions are foresold, which is always really bad for this kind of cyclone.
21:58
[SPEAKER_00]: Again, that's where if you're an institution or a hedge fund really think about your own risk controls that's super critical, we will lose clients very fast and your reputation even faster.
22:09
[SPEAKER_00]: You know, if you have to tell people like, yeah, my position has just got asked kind of arbitrarily by a risk manager on the exchange I'm trading at.
22:18
[SPEAKER_00]: But,
22:19
[SPEAKER_00]: Things are starting to quiet down a little bit more, but I don't want to, I think, there's a difference between buying the dip and trying to catch falling knife, right?
22:30
[SPEAKER_00]: If you're a retail investor,
22:33
[SPEAKER_00]: missing the first, you know, 10% or even 15% of for rebound rally is not going to be as bad as getting out because you got into early and then things fell in other 20 before they stabilize.
22:49
[SPEAKER_00]: So better to be late to the reopening party than than early is what I would say.
22:55
[SPEAKER_01]: As a general rule, I could not agree anymore.
22:58
[SPEAKER_01]: We say the same thing over here for, you know, members that are that are with us,
23:03
[SPEAKER_01]: We say the same thing, you know, why try to catch the following knife, you know, if you want to do a little bit of dollar cost averaging, I think that's all right, but, you know, for the people who want to get much more aggressive, I think it's safer to usually let the conditions switch up, let the trend become your friend a little bit again, let maybe the bottom come in and even though you might not bottom tick the exact, you know, bottom of the market, I think it's okay to let it happen and then jump in.
23:28
[SPEAKER_01]: And I think generally speaking, that's a safer strategy than trying to catch every single move down.
23:34
[SPEAKER_01]: And because what you end up having is just yourself getting liquidated or stopped out over and over and over again, whereas the latter tends to be a little bit more safe.
23:45
[SPEAKER_00]: Absolutely.
23:46
[SPEAKER_00]: And by the way, no one except maybe you're two friends on Reddit are going to care if you bought him a ticket.
23:51
[SPEAKER_00]: Yeah, like this is your money like be smart with it just like again common sense as as I said if you have a target allocation like you're like I want Crypto to be 8% of my portfolio because that's still not a frisk I can take Just have a business is simplest way to actually dollar cost average in a way that is sound and institutionally healthy have a regular Rebalancing frequency so you can say every month
24:18
[SPEAKER_00]: I'm going to rebalance to my target.
24:21
[SPEAKER_00]: So if digital assets fell and there now, you know, 6% of your total portfolio instead of eight, guess what, you're buying 2%?
24:28
[SPEAKER_00]: You're selling some of, say, equities that have run up.
24:31
[SPEAKER_00]: Great, simple, straightforward.
24:34
[SPEAKER_00]: It's very formulaic.
24:37
[SPEAKER_00]: You could literally set up a simple program in whatever brokerage you use most likely to do this for you automatically.
24:44
[SPEAKER_00]: You're not looking at the news.
24:46
[SPEAKER_00]: You're not trying to follow a trend over time.
24:49
[SPEAKER_00]: And I emphasize over time this will work.
24:53
[SPEAKER_00]: Now, if you try to really time things, that's when usually you start getting into trouble.
25:00
[SPEAKER_01]: Yeah.
25:01
[SPEAKER_01]: I would agree.
25:02
[SPEAKER_01]: I think it's near impossible to time the markets and a lot of the people who do time it perfectly, they do it by accident.
25:08
[SPEAKER_00]: And they do it once and then they, you know, they go on TV, it's kind of sell a bunch of books.
25:13
[SPEAKER_00]: Like, by the way, just, you know, people who really know what they're doing,
25:19
[SPEAKER_00]: they're very few and they tend to be very quiet.
25:23
[SPEAKER_00]: So be really careful when someone's out there.
25:25
[SPEAKER_00]: I mean, I think what we're trying to do is give you common sense advice.
25:30
[SPEAKER_00]: If someone's out there saying, this is where you're going to make money and go pay me a thousand.
25:36
[SPEAKER_00]: Can I see this on the off-influencer side a lot?
25:38
[SPEAKER_00]: And it's just like, I don't know, I mean, I feel like.
25:41
[SPEAKER_00]: it's something maybe like the regulators start looking into because people who are charging you for their investment ideas a lot of times the question you should ask is if you're so good why are you not actually just making all the money yourself like why waste time educating us?
26:01
[SPEAKER_00]: But if you're educating people on general topics it's because you're doing a service to a community which is why you know I like being on podcasts like this with you Brendan because
26:09
[SPEAKER_00]: We're not giving people BS, we're giving them rational, prudent things that are going to ultimately preserve their wealth and and hopefully grow it.
26:19
[SPEAKER_01]: I think education is so important.
26:22
[SPEAKER_01]: And again, just helping the people who have been around for all of the crypto cycles and all the volatility, helping them understand, you know, hey, this stuff happens.
26:29
[SPEAKER_01]: Why it happens?
26:30
[SPEAKER_01]: What we've seen in the past and all of this.
26:32
[SPEAKER_01]: You know, the other big question, I think a lot of people have in regards to this and now that they understand, okay, this is why it's happening, this is what has happened, the next question that a lot of people have is, well, what is happening now behind the scenes, what's happening now at the forefront, you guys have plugs and connections and you guys work pretty much all the leaders across, you know, all ends of the financial industries.
26:56
[SPEAKER_01]: You know, what are you seeing on the institutional side on from smart investors or the big investors everyone like what is actually happening here and what do they think about this?
27:08
[SPEAKER_00]: They are generally looking through it, you know, same as we are.
27:12
[SPEAKER_00]: They, you know, depending on how opportunistic they are, there are certainly some who are, you know, making more dynamic calls.
27:20
[SPEAKER_00]: Again, I would say kind of going beyond the top layer of tokens.
27:25
[SPEAKER_00]: Generally speaking, people are,
27:28
[SPEAKER_00]: being prudent with with the risk budget.
27:30
[SPEAKER_00]: So it's nothing too exciting.
27:31
[SPEAKER_00]: I think what would be exciting stuff is happening is more in the tokenization site and the RWA site.
27:36
[SPEAKER_00]: We're seeing a lot more interest there, especially from institutional players who typically weren't in the space.
27:43
[SPEAKER_00]: And what's been interesting, we just talked about education there.
27:45
[SPEAKER_00]: So if there is an education component, of course, to the retail investor, but a lot of what I do is educating my biggest clients on first of all, blockchain.
27:53
[SPEAKER_00]: And I kind of say, like, I want to introduce someone to the beauty of blockchain before I take them to crypto.
27:58
[SPEAKER_00]: Right?
27:59
[SPEAKER_00]: And once we talk about the benefits of blockchain, then it's okay.
28:02
[SPEAKER_00]: How can I use this technology?
28:04
[SPEAKER_00]: A lot of times tokenization comes up first as a way to potentially generate liquidity or in some cases even create brand new asset classes, which is where our deliouase come in.
28:13
[SPEAKER_00]: And then we tend to start getting more into like tokenomics and specific projects and actual digital assets.
28:22
[SPEAKER_00]: But what I will say, this is a really key thing.
28:25
[SPEAKER_00]: The all the biggest institutions are now
28:28
[SPEAKER_00]: looking at the space.
28:29
[SPEAKER_00]: It is a sea change.
28:30
[SPEAKER_00]: Like if you think about, you know, Jamie Diamond saying that, you know, I don't remember exactly the quote, but in fact, the way that like Bitcoin is is trash.
28:40
[SPEAKER_00]: Yeah.
28:41
[SPEAKER_00]: You look at JPMorgan's balance sheet.
28:42
[SPEAKER_00]: That doesn't light up anymore, right?
28:44
[SPEAKER_00]: We've heard the same thing.
28:46
[SPEAKER_00]: You know, like it would, in fact, I think they just bought
28:52
[SPEAKER_00]: or total holdings now like over a billion BTC.
28:55
[SPEAKER_00]: So there's a lot going on that is pretty different from where we were before.
29:07
[SPEAKER_00]: And as I talk to large server wall funds, the largest pensions, they're looking at the space very differently.
29:13
[SPEAKER_00]: And a lot of them were looking at it as an opportunistic allocation, or we're looking at it as a way
29:19
[SPEAKER_00]: to generate potential liquidity for certain asset classes, but we're looked at as a liquid before, but that's kind of the general theme is greater adoption, greater focus on discovery, and for us, it's knowledge transfer first and foremost.
29:35
[SPEAKER_01]: I would agree.
29:36
[SPEAKER_01]: I think it is a dollars transfer and people learning and I like what you said and introduce some to the technology for us.
29:42
[SPEAKER_01]: Help them understand why this matters.
29:45
[SPEAKER_01]: Sometimes you probably have people come to you and they just say, I just want to throw money at it.
29:49
[SPEAKER_01]: You're saying, okay, well, let me help you understand why
29:52
[SPEAKER_01]: you want to put money into it so that we can vote beyond the same page when things do get south and you can understand why you're invested in the first place and I think that that is so important and it goes back to this topic that we were talking a little bit about earlier which is just asset allocation and how much you could have.
30:10
[SPEAKER_01]: I saw another quote from you.
30:12
[SPEAKER_01]: It said that
30:13
[SPEAKER_01]: And something along the lines of like the standard 3% allocation recommendation that's been floating around out there is a fort of it's a form of I think you said it was dejan gambling behavior.
30:24
[SPEAKER_01]: Yep.
30:25
[SPEAKER_01]: And it actually encouraged more risk than not and that stood out to me because I was like I hadn't thought about it that way.
30:32
[SPEAKER_01]: Can you just kind of walk the listeners through what that means in your mindset behind it?
30:37
[SPEAKER_00]: Yeah, and it's something we talked a little bit about earlier in the pot, but basically the short answer is no part of your portfolio is a casino.
30:47
[SPEAKER_00]: So when I say it's a de-gen mentality and a lot of times, you know, people will say, let's paradoxically, 3%, like, well, I would never go to an institution, right, like say a pension and say, you know, I'm going to just like, you all know, 3% of your assets guys just, you know, let's see what happens.
31:03
[SPEAKER_00]: Because they've got liabilities that are supporting thousands of individuals in retirement, that's a pretty fast way to not just get fired, but have security drag you out.
31:13
[SPEAKER_00]: So, if you're an individual, if you're own portfolio, and your advisor is telling you, okay, I know you like crypto, let's just kind of like see what happens, let's put 3% in or 2%, but the number doesn't actually matter.
31:28
[SPEAKER_00]: It's just 3% is what I feel like.
31:30
[SPEAKER_00]: And people often hear it's like, it's okay to lose that, you'll still be fine.
31:35
[SPEAKER_00]: Why think about it like that?
31:38
[SPEAKER_00]: That has no bearing in the weather, you should actually need to have only 1%.
31:44
[SPEAKER_00]: You may need to go up to eight.
31:47
[SPEAKER_00]: And it's a question of your risk tolerance and what else is in your portfolio?
31:53
[SPEAKER_00]: All the asset classes in your portfolio interact with each other better have different correlations.
31:59
[SPEAKER_00]: So how does adding certain parts of digital assets and again, I'm speaking about the broader asset class, not just Bitcoin or just the, right?
32:07
[SPEAKER_00]: But how does adding this asset class to your portfolio change the overall covariance matrix?
32:13
[SPEAKER_00]: of everything in it, is it going to introduce additional volatility, even most likely, yes, is there a way to reduce that additional volatility so your overall risk level is still something that you can tell it, because maybe you add 5% into crypto and then you also add 3% into treasuries and you take the 8% out of small gap equities.
32:40
[SPEAKER_00]: And overall, your risk level doesn't move as much because you took something risky.
32:45
[SPEAKER_00]: I don't know if it's something that's appropriate or not a little bit in something that's way less risky.
32:50
[SPEAKER_00]: That is a really important concept for investors to understand.
32:54
[SPEAKER_00]: So again, it's ultimately its risk management.
32:57
[SPEAKER_00]: I cannot emphasize the importance of thinking through a risk lens, not a percentage allocation lens.
33:04
[SPEAKER_00]: If you take nothing else away from this conversation,
33:08
[SPEAKER_00]: do not think of digital assets or really any asset class in your portfolio as just a national percentage because every asset class has a very different level of risk that it contributes to your portfolio and that's what matters.
33:23
[SPEAKER_01]: Risk management is, I mean, we say the same thing.
33:26
[SPEAKER_01]: I mean, risk management is one of, if not, I would say the most important, but also, arguably the hardest part of it.
33:35
[SPEAKER_01]: Anyone can go in and find a big winner, and you have it happen all the time, the real hard part comes to managing risk.
33:45
[SPEAKER_01]: Because not everything's gonna be that big winner, moving forward, and other things can happen, and bear markets happen, and there's so many different scenarios.
33:53
[SPEAKER_01]: So really, really like that point, and for all the listeners out there, I mean, I would write that down, make a note of it, I mean, risk management, especially in a market that is as volatile as this one is extremely important when it comes to the current state of the market, kind of switching themes back here.
34:19
[SPEAKER_01]: Disconnected from the fundamentals because on the fundamental side, it feels like the the tail there's so many different tailwinds You know, we mentioned art of UAs we mentioned tokenization.
34:30
[SPEAKER_01]: I think you could allude the stable coins.
34:32
[SPEAKER_01]: I think you could allude to
34:34
[SPEAKER_01]: you know, decentralized finance and any other form that blockchain has and probably will be used.
34:41
[SPEAKER_01]: And there is a fight over how they can use it, who can do it the fast enough?
34:46
[SPEAKER_01]: Like, everyone's already looking to do this stuff and you see it talked about all the time.
34:51
[SPEAKER_01]: And then when you're going to go back to some of those other fundamental metrics saying, hey, obviously there's all these, this is a big push in all these different categories, but on top of that, you have growing transactions, growing users, growing activity, all these things.
35:03
[SPEAKER_01]: Even on the ETF low side, I saw something like 90% of holders are holding strong and everyone so focused on the 10% that are selling and so that's where I see and as I feel like there's a little bit of a disconnect here from the fundamentals and what we're actually happening and it's just panic selling from a lot of the liquidations that we have seen.
35:26
[SPEAKER_00]: I would say panic selling and for selling more importantly, but yeah, it's the marginal dollar that moves the price, right?
35:32
[SPEAKER_00]: Like that's again, not just crypto, it's any security.
35:36
[SPEAKER_00]: You know, I'd say the second thing everyone should take away is crypto is just another asset class.
35:41
[SPEAKER_00]: It just has a bit more volatility or a lot more volatility.
35:44
[SPEAKER_00]: But the rules of gravity of the market still apply, right?
35:48
[SPEAKER_00]: So if everyone's holding and then you've got like the small group that are just all, you know, seeking a bid,
35:56
[SPEAKER_00]: price is going to come down.
35:57
[SPEAKER_00]: It's just, that's just what happens, right?
35:59
[SPEAKER_00]: There's more sellers, not enough buyers.
36:03
[SPEAKER_00]: It's going to move the market down because other investors are holding their positions.
36:08
[SPEAKER_00]: They're not willing to buy.
36:10
[SPEAKER_00]: So what needs to happen is the price needs to come down enough that those people who aren't willing to buy more actually be cumbling to buy.
36:17
[SPEAKER_00]: And again, we're starting to see a little bit of that happen with Finn, the crypto native space.
36:24
[SPEAKER_00]: We're probably going to, I mean, almost like definitionally, the further the price falls to more.
36:28
[SPEAKER_00]: There isn't, there is a demand.
36:30
[SPEAKER_00]: I think about like Econ 101, right?
36:32
[SPEAKER_00]: If you're, you know, supply curve in your demand curve, when they intersect, you've got a wall-functioning market.
36:39
[SPEAKER_00]: It hasn't intersected yet.
36:41
[SPEAKER_00]: We're getting closer and you know, what like we said before, don't try to, you know, get the bottom tick.
36:49
[SPEAKER_00]: Just rebalance.
36:51
[SPEAKER_00]: the way you normally would have a structure program for that, and you will be fine, you should have as much in this asset class as you can handle, given the volatility, given what we just talked about, right?
37:05
[SPEAKER_00]: And that is risk management.
37:07
[SPEAKER_01]: Yeah.
37:09
[SPEAKER_01]: Does the Fed chair changing?
37:11
[SPEAKER_01]: change the way that you view the crypto market or have any kind of impact on the way that you view the crypto market?
37:19
[SPEAKER_00]: It doesn't change the crypto market so much in itself, but like I said before, macro matters for all assets, including crypto, right?
37:29
[SPEAKER_00]: So horses, you know, I think a relatively pragmatic
37:34
[SPEAKER_00]: chair.
37:35
[SPEAKER_00]: We know that he wouldn't have gotten a job if he didn't promise more cuts, but the FOMC chair can't just run a muck and do what he wants.
37:45
[SPEAKER_00]: So we expect probably you're going to get two more cuts in in 2020, six that are probably going to come after wash is installed.
37:54
[SPEAKER_00]: There's a bigger question for me that's gonna relate to digital assets.
37:59
[SPEAKER_00]: And it's how cozy a wash is gonna get with a secretary descent, because traditionally the Fed and the Treasury have been very independent.
38:08
[SPEAKER_00]: Some of the things worse has said, already make me question if that's gonna be the case.
38:13
[SPEAKER_00]: And if there's gonna be more coordination between the Treasury and the Fed,
38:18
[SPEAKER_00]: To the extent that that causes some concern from Treasury holders, and we've already seen other reasons for why large, sovereign, or selling treas, including the tariffs, it just kind of adds to this downward momentum to the dollar, which I expect will continue to see.
38:38
[SPEAKER_00]: By the way, FedRATE cuts also pushed the dollar down more.
38:41
[SPEAKER_00]: Also, we've had one big beautiful bill.
38:44
[SPEAKER_00]: That's ballooning the deficit far more
38:48
[SPEAKER_00]: on a relative value-based dollar looks really unattractive, relative to most tradified currencies.
38:55
[SPEAKER_00]: So as with dollar falls and as treasuries, you know, also fall, that does create a bit more of a motivation for the basement trade, and that generally should be good for digital assets.
39:10
[SPEAKER_01]: know, one of the fears that people have is that historically, you know, Bitcoin has done, and I would say most risk on assets do well in cutting cycles, and then once you start looking at hiking, it's where people start getting a little bit more fearful.
39:27
[SPEAKER_01]: You know, what we've seen here is that now Bitcoin is down, you know, maybe we do get a couple more cuts, and then we go
39:37
[SPEAKER_01]: Do you think that that's going to have any impact, or do you think that that could be a negative catalyst?
39:43
[SPEAKER_00]: I think no one's looking at Hikes just yet, and that's important.
39:47
[SPEAKER_00]: I mean, we're not necessarily looking at that many cuts, but I think,
39:53
[SPEAKER_00]: What's important is not to get like tunnel vision on a single trend when we're investing good point in anything, right?
40:00
[SPEAKER_00]: So like the Fed matters, absolutely.
40:02
[SPEAKER_00]: If Worsh comes out and somehow muscles the FOMC to just cut 50 bips every time, it's going to be very good for all of the asset classes that have, you know, a significant future cash flow.
40:17
[SPEAKER_00]: So if you think like
40:19
[SPEAKER_00]: kind of basic finance rate.
40:22
[SPEAKER_00]: The value of future cash flows discounted back to the present is a value that what we would call a fair value.
40:28
[SPEAKER_00]: So the reason why like a lot of growth stocks are very interest rates sensitive is because if we use a dividend discount model or a discounted cash flow model,
40:38
[SPEAKER_00]: You know, we're discounting them by the interest rate, the lower the interest rate, the higher their present value.
40:43
[SPEAKER_00]: And most of their cash flows, like from all the AI names are far in the future, we can think of a lot of digital assets having a similar concept, where a lot of their biggest benefits are far off in the future.
40:52
[SPEAKER_00]: So lower interest rates is good, right?
40:56
[SPEAKER_00]: That is one single theme.
40:58
[SPEAKER_00]: Look at what's happening with software stocks.
41:00
[SPEAKER_00]: right now, okay?
41:02
[SPEAKER_00]: It has nothing to do with the Fed.
41:03
[SPEAKER_00]: It has to do with our investors freaking out that AI is going to replace everything that software companies does, which as an aside, somewhat irrational.
41:14
[SPEAKER_00]: And in order to the fact that most of you software companies are of themselves deploying AI, but that's a topic for a separate conversation.
41:22
[SPEAKER_00]: you know, but it's, this is why it's more than not to have tunnel vision.
41:27
[SPEAKER_00]: The reason I brought up software is because to me what it says is right now, we have a kind of a very different theme going on in crypto and it's much more of a technical delverging and the force selling.
41:39
[SPEAKER_00]: So we got to get through that.
41:41
[SPEAKER_00]: before we start thinking really about the broader macro picture.
41:46
[SPEAKER_00]: But even then, look at all of the storylines happening.
41:49
[SPEAKER_00]: I think one of the things that for me has always been really exciting about being an investor, especially a multi-asset investor, is
41:55
[SPEAKER_00]: you have to look at so many different things and figure out how they all interplay.
42:00
[SPEAKER_00]: Same thing here.
42:02
[SPEAKER_00]: Interst rate cuts are gonna matter.
42:03
[SPEAKER_00]: They're not gonna be the only thing that matters.
42:05
[SPEAKER_00]: Institutional adoption is gonna matter a lot.
42:07
[SPEAKER_00]: Are we gonna see other countries adopt more efficient crypto regulation, especially as it relates to taxation?
42:13
[SPEAKER_00]: Is that gonna allow bigger players to jump into space, especially big pensions, big sovereign wall funds?
42:19
[SPEAKER_00]: We are seeing that come out, which I think is a really bullish.
42:23
[SPEAKER_00]: point.
42:25
[SPEAKER_00]: You know, are we going to see
42:28
[SPEAKER_00]: projects like Soul actually become more usable in a day-to-day consumer world.
42:34
[SPEAKER_00]: I think that's going to be really important, especially as you have more consumers looking to make more cross-border transactions in an efficient way.
42:40
[SPEAKER_00]: Those are the things that I'm really looking at.
42:44
[SPEAKER_00]: Much more than just a fat.
42:46
[SPEAKER_00]: Although for my, you know, day job running every asset, I am very much paying attention to a wash and what's going on with that.
42:54
[SPEAKER_01]: That's fair.
42:55
[SPEAKER_01]: I mean, there's at a time like this, there's so many different things to pay attention to.
42:59
[SPEAKER_01]: And I like what you said about not just getting tunnel vision on a single factor.
43:03
[SPEAKER_01]: Because I think that's really important, as you have to weigh all of the good, all of the bad, and you have to say, okay, well, where does the majority of the data kind of point us towards, as opposed to this, you know, one single factor, which it's easy, it's really easy to get caught up in an encrypto.
43:17
[SPEAKER_01]: And
43:18
[SPEAKER_01]: One of the best examples of that, I think, is the four-year cycle.
43:23
[SPEAKER_01]: We have people who come on and they love it, they think it's perfect, they think it'll never break.
43:28
[SPEAKER_01]: You have other people who come on and I would say this is the more common trend lately.
43:33
[SPEAKER_01]: and they disagree with it.
43:34
[SPEAKER_01]: They think the four-year cycle, and that's what we've been hearing a lot of on the podcast.
43:38
[SPEAKER_01]: I mean, do you have any thoughts or stance on that?
43:42
[SPEAKER_01]: Because this is something I'll let you go first.
43:43
[SPEAKER_01]: This is something I debate with with a lot of my retail friends all the time.
43:47
[SPEAKER_00]: Yeah, so I'm probably more of a younger people.
43:50
[SPEAKER_00]: Look, Bitcoin halving is a real thing.
43:53
[SPEAKER_00]: I mean, yes, it happens roughly every four years.
43:57
[SPEAKER_00]: It is a supply shock.
43:58
[SPEAKER_00]: It is absolutely a framework.
44:01
[SPEAKER_00]: It is not canon.
44:03
[SPEAKER_00]: It does not necessitate that you're going to see price go up.
44:08
[SPEAKER_00]: If you think about any asset class as a forward discounting mechanism, we actually know about the having cycle will happen.
44:16
[SPEAKER_00]: Everyone's aware of this.
44:18
[SPEAKER_00]: certainly every large investors are aware of this.
44:20
[SPEAKER_00]: So it's kind of should be in the price, right?
44:23
[SPEAKER_00]: Because when we project whatever the, or the fair value of Bitcoin is for us today, we know that there's gonna be a having cycle that happens.
44:32
[SPEAKER_00]: We know much more about that than we do about how many cuts we're gonna have from the Fed, right?
44:38
[SPEAKER_00]: So from that perspective, yes, it's important.
44:41
[SPEAKER_00]: Yes, you're gonna have,
44:43
[SPEAKER_00]: some impact from it, but I find catalysts that are well known in advance to just not be as critical.
44:51
[SPEAKER_00]: What I find much, much more important is liquidity, investor sentiment, the broader macro picture, and then where you think you know a catalyst that not everyone sees.
45:03
[SPEAKER_00]: Yes.
45:04
[SPEAKER_00]: So if you have an edge, usually it's because I have a view on something that's going to happen.
45:11
[SPEAKER_00]: that I don't think everyone shares.
45:13
[SPEAKER_00]: That's where I lean in into opposition.
45:16
[SPEAKER_00]: But we all know they having cycle occurs roughly every four years and we can project it.
45:22
[SPEAKER_01]: I would agree.
45:23
[SPEAKER_01]: I would very much agree with you there.
45:25
[SPEAKER_01]: And again, way all of the factors, I think that you can't just look at the having cycle and say, okay, well, everything, all my investments are gonna be based upon this.
45:34
[SPEAKER_01]: And crypto has to get destroyed this year because of according to the cycle, I just would agree with that and say that there's a lot more going on now in this trillion arguably, multi-chilling dollar industry than just that.
45:47
[SPEAKER_01]: And I think it does a disservice to everything else that's happening and everything else that's going on
45:52
[SPEAKER_01]: you know, products and verticals and all that.
45:53
[SPEAKER_01]: But, um, so let's just talk, I guess, let's move away from this.
45:58
[SPEAKER_01]: You know, we've talked a lot about just cycles and everything else.
46:01
[SPEAKER_01]: Uh, you know, when it comes to actual utility, you know, what are, and I'm not sure if you're even a lot of the talk about this, so I don't want to get you in trouble.
46:07
[SPEAKER_01]: But, you know, when it comes to actual, different crypto projects.
46:11
[SPEAKER_01]: I mean, what, what do you like?
46:13
[SPEAKER_01]: You know, what are your favorites out there?
46:15
[SPEAKER_01]: Are you allowed to pick favorites?
46:16
[SPEAKER_00]: I mean, I'm not going to talk about things that I like, you know, I'm not going to tell you what you should do with that information.
46:22
[SPEAKER_00]: This is not an recommendation to buy or sell any security, you know, and not financial advice, but, you know, I already mentioned it.
46:31
[SPEAKER_00]: So I'll talk a little bit about so I really just like that it can be a legitimate global payment rail.
46:37
[SPEAKER_00]: I think one of the biggest issues we have, you know, we talked about, like, anybody including at Franklin, and I think it's an important project.
46:43
[SPEAKER_00]: We talked about democratization of privates and tokenization of how that can help, like retail investors get a private equity and venture capital, super important, really excited about that.
46:52
[SPEAKER_00]: I want to democratize actually money.
46:55
[SPEAKER_00]: Like, there are so many unbanked people around world.
47:00
[SPEAKER_00]: And what's crazy is, and I've seen this happen with other projects, like cell phone infrastructure, where you had parts of self-sufficiency in Africa, but went from literally no way to communicate with the village of, you know, a couple hundred kilometers over to smartphones.
47:19
[SPEAKER_00]: Like, they just leapfrogged.
47:22
[SPEAKER_00]: So now we're going, we can go from unbanked to on-chain.
47:27
[SPEAKER_00]: And that is super powerful.
47:29
[SPEAKER_00]: So if we have something that's got a really fast consensus mechanism with proof of history, we have very low fees, super high frowput, you know, that to me is really exciting.
47:41
[SPEAKER_00]: And you need that high speed low fee secure platform, but just why really like so.
47:46
[SPEAKER_00]: Now, it's an experiment, like most anything in the space, you know, it's
47:52
[SPEAKER_00]: been doing better a lot better.
47:54
[SPEAKER_00]: I would say, right, um, had one full year about a block failure, but it's, you know, it's still in the early stage.
48:02
[SPEAKER_00]: I think we need some greater adoption, and it may be it will come from a sovereign that kind of says, we're going to allow Solana to be a medium of transaction for us, or it's going to be kind of crowdsource where people say, hey, we've got these smartphones now.
48:16
[SPEAKER_00]: Let's get a wallet, and this is just how we're going to transact, because this lets us bypass the inflation of our local market currency, or even in many cases, the fact that we can't go to a bank, because a bank does not exist where we live, but we do have a smartphone with a network.
48:30
[SPEAKER_00]: So to me, that's a really exciting project, because A, I think it's got a normal potential, to, I think it actually solves a humanitarian issue.
48:39
[SPEAKER_01]: So if you had to pick a favorite to solve this issue, I think that the big contenders out there would be Ethereum, Solana, and maybe XRP, sounds like you're leaning towards it.
48:50
[SPEAKER_00]: I'm leaning towards Solana.
48:51
[SPEAKER_00]: I think XRP is a good alternative.
48:53
[SPEAKER_00]: I think to me, ether is always going to be not a currency, but a vehicle for creating powerful projects, including smart contracts.
49:02
[SPEAKER_00]: I think for,
49:04
[SPEAKER_00]: I mean, there's a lot of really cool L2s being built on ether, you know, and I think that's going to be important, but the gas fees make it really difficult to have as a real currency.
49:21
[SPEAKER_00]: And again, like, it doesn't need to be.
49:29
[SPEAKER_00]: great viable alternatives that exists like but to me one of the beauty of digital assets in general is like the frictionless that blockchain allows so I can just you know I mean the like I if I have holdings in e-floor ready just you know I'm gonna pay them pay the gas fees once and I'm gonna move to a platform where I want to transact for you know buying coffee at the bakery I don't need to do that every single time I think you saw a little bit of that in like the
49:58
[SPEAKER_00]: I mean, we're like, oh, I, I mean, I remember I was out with someone from from Coinbase and they're like, look at me, I'm going to use my card to buy Uvis Capicino with Bitcoin.
50:08
[SPEAKER_00]: I'm like, okay, cool, like, that's a cool party trick, but that's actually not a good use of this protocol, right?
50:18
[SPEAKER_00]: I would rather not pay an extra tax in my caption, rather give that as a tip to the barista.
50:27
[SPEAKER_01]: One of the other things, what you were just saying got me thinking about this.
50:31
[SPEAKER_01]: And it was like, I was thinking about all the different ways that you can get involved in that you can back these.
50:37
[SPEAKER_01]: And I was listening to a podcast earlier, ironically.
50:42
[SPEAKER_01]: And it was talking about how we have kind of fractionalized
50:47
[SPEAKER_01]: the way we invest and look at crypto.
50:50
[SPEAKER_01]: And it was talking about, well, now we have so many different options.
50:53
[SPEAKER_01]: Oh, you want to go get invested into, you know, let's just say Bitcoin here, but it can be implied to anything.
50:59
[SPEAKER_01]: But you want to get invested in Bitcoin?
51:00
[SPEAKER_01]: Oh, we can go buy Bitcoin.
51:01
[SPEAKER_01]: You can also go buy Bitcoin ETFs.
51:03
[SPEAKER_01]: You can also go buy Bitcoin treasuries.
51:05
[SPEAKER_01]: You can go buy Bitcoin mining companies.
51:07
[SPEAKER_01]: You can go buy Bitcoin, you know, other related companies that work with it.
51:09
[SPEAKER_01]: And you know, market makers now.
51:10
[SPEAKER_01]: Bit go just one.
51:12
[SPEAKER_01]: you know, public.
51:13
[SPEAKER_01]: And so you have all these different places.
51:18
[SPEAKER_01]: I think obviously the big one that you brought up earlier that probably caused maybe some issues was, was, was dats.
51:24
[SPEAKER_01]: I mean, if people like Solana, if they like Ethereum, if they like some of these different, you know, altcoins, what do you think about dats in regards to them or those treasury companies?
51:36
[SPEAKER_00]: So I would say go for most regret, you can.
51:39
[SPEAKER_00]: And, you know,
51:41
[SPEAKER_00]: I'm, again, I'm not gonna name products, but there is a so easy way to get Salana exposure via an ETF form.
51:50
[SPEAKER_00]: I hope that I just said this can get me in trouble, but, you know, if there are direct ETFs that give you access directly to the token.
51:58
[SPEAKER_00]: You don't need the leverage, you don't need some weird wrapper, just, you know, also,
52:03
[SPEAKER_00]: You know, set up an account and buy it on chain, like get exposure in whatever way you're comfortable with, but get as close to the actual token as you can, and there is really no reason right now to not be able to get it either through an ETFETP or on chain.
52:22
[SPEAKER_00]: through a wallet like that's and that's kind of been my issue with a lot of these other things because they do what they do is they add bells and whistles and they add risk you do not need to add risk to crypto it is risky enough as it is it's unpredictable enough as it is
52:38
[SPEAKER_00]: You know, I look, I started my first hedge fund in, you know, 2006, I traded credit derivatives through a credit crisis and have come out quite well from that and it was because I knew how to break things down to their base.
52:56
[SPEAKER_00]: principles and not add complications where I need it to like I use derivatives because I need it to use derivatives I use cash bonds where I need it to you know I knew also as an institutional investor like every single you know line item in that derivative stack and I could do it a mouth to calculate it if you can't do all that why are you going into something just because it's shiny and because you know again I hate to say it but a lot of times I feel like it's because someone
53:26
[SPEAKER_00]: set it and you're like lots of cool way like people are too focused I mean again I want to make too many generalized comments but I see a lot of folks coming up in investing right now and they're too focused on getting their bag too fast you know the bag you get may be a bag of something you don't want yes right so be careful and by the time you realize that you don't want it
53:54
[SPEAKER_01]: or that you shouldn't have it, it might be a little bit late.
53:57
[SPEAKER_01]: Exactly.
53:59
[SPEAKER_01]: Yeah.
53:59
[SPEAKER_01]: Well, to wrap us up, you know, I got one final question for you.
54:03
[SPEAKER_01]: When we're looking at the future, what is Franklin Temple Tins plans for the crypto space?
54:09
[SPEAKER_00]: Our plan and I'll kind of end where I started, it's to be the solution for any investor interested in being in the space, expanding the role in the space, transacting with others in the space.
54:24
[SPEAKER_00]: We want to be a full featured.
54:27
[SPEAKER_00]: platform.
54:28
[SPEAKER_00]: Whether it's crypto natives, crypto newbies, institutions, or retail, we're really working on that.
54:34
[SPEAKER_00]: One of the huge benefits, and by the way, one of reasons I came here after running a DeFi hedge fund, is because we have scale.
54:42
[SPEAKER_00]: We have that $1.7 trillion you mentioned.
54:45
[SPEAKER_00]: It alerts us, get into meetings, or folks that otherwise I couldn't get into.
54:49
[SPEAKER_00]: It lets us have leverage
54:54
[SPEAKER_00]: And it means we can build really cool stuff.
54:58
[SPEAKER_00]: I mean, I just spent last weekend with RCO, Jenny, and our head of digital asset teams really brainstorming.
55:08
[SPEAKER_00]: Some ideas that I can't share just yet, but what I can tell you is it's so important that we all had to fly across the country to spend our Saturday, you know, 8 a.m. to 8 a.m. really figuring this out.
55:24
[SPEAKER_00]: And we're committed to serving our investors with really innovative products that also, and this is really critical, our secure and sound and have really robust liquidity and practices behind them.
55:37
[SPEAKER_00]: So that's what we're doing with Franklin.
55:40
[SPEAKER_01]: Well, once we can know about what happened in that meeting and once we can know more, you got to let us know.
55:46
[SPEAKER_01]: We'll be happy to have you back on and you can tell the whole world about it.
55:51
[SPEAKER_01]: But, you know, Max from the whole crypto community over here in the whole blockchain space, we appreciate what you're doing.
55:58
[SPEAKER_01]: We appreciate what a lot of these other people that are coming from more so the traditional financial side.
56:04
[SPEAKER_01]: You know, we all appreciate
56:06
[SPEAKER_01]: the foundation that's being built in the infrastructure and we like the adoption path.
56:11
[SPEAKER_01]: And we hope to continue to see more and more people have the opportunity to interact with this stuff because a lot of us are fans on it.
56:18
[SPEAKER_01]: So again, really appreciate you having on, having on where can people track what you're doing, maybe any socials, websites, anything like that for both yourself and for,
56:30
[SPEAKER_01]: Franklin.
56:31
[SPEAKER_00]: Sure, so for myself really easy, just type in my first and last name, Max Gockman.com.
56:38
[SPEAKER_00]: It'll take you right to my LinkedIn, happy to connect with folks, or usually, you know, I'm pretty active on on that channel for Franklin, go to futureprofilios.com.
56:48
[SPEAKER_00]: And that is a website we build that I think is really illustrates actually where we think the future of.
56:55
[SPEAKER_00]: investing is going and especially as it relates to blockchain crypto so that's a great way to to see and hear from myself as well as other folks at Franklin you know where we really think the future is heading and it's a really fun ride so I highly recommend people check it out.
57:12
[SPEAKER_01]: awesome.
57:13
[SPEAKER_01]: Well, Max, once again, thank you so much for joining us and that's going to bring a wrap to today's episode everyone.
57:20
[SPEAKER_01]: We hope all of you enjoyed and we'll see you all at the same time, same place in the next episode.
57:25
[SPEAKER_01]: Take care.