Latest / The Paul Barron Crypto Show / Market Liquidity Incoming!🚀Lyn Alden INTERVIEW🚨

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Market Liquidity Incoming!🚀Lyn Alden INTERVIEW🚨 · The Paul Barron Crypto Show

0:00
Speaker 1: Liquid.
0:00
Speaker 2: It is the lifeblood of crypto. Today we're going to
0:02
Speaker 2: be breaking down whether or not it could be entering
0:04
Speaker 2: the market.
0:05
Speaker 1: You don't want to miss it. Let's just jump right in.
0:07
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0:37
Speaker 1: Reward to get started. Let's go there.
0:39
Speaker 2: Now.
0:39
Speaker 1: We've got a special guest on today.
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Speaker 2: Of course you have seen Linn before, lin Alden coming
0:44
Speaker 2: in and if you guys don't follower her on X,
0:47
Speaker 2: make sure and do that.
0:48
Speaker 1: It is Linn Alden contact on X. Jumping in Linn.
0:52
Speaker 2: You're going to hit a million followers soon here. Congratulations,
0:55
Speaker 2: it looks like you might be on your way.
0:58
Speaker 3: Thanks you. We'll see how many of them humans are bought.
1:00
Speaker 3: That's kind of an issue of social media these days.
1:03
Speaker 3: But I thank you appreciate the following.
1:05
Speaker 2: Isn't that the case for sure? Hey, listen, you did
1:08
Speaker 2: a great blog over there on the debasement trade. This
1:11
Speaker 2: is on Len's blog, A full rundown. I thought this
1:15
Speaker 2: was a real good topic to kind of get into.
1:17
Speaker 2: First of all, what were you trying to nail down?
1:20
Speaker 2: Because I've read quite quite a bit through it, a
1:24
Speaker 2: lot of different angles on this, and of course at
1:27
Speaker 2: the end you kind of come up with a fairly
1:29
Speaker 2: succinct summary, but give me a rundown of what you
1:31
Speaker 2: found in this research.
1:34
Speaker 3: So I think that the big focus I was aiming
1:37
Speaker 3: for there was to emphasize that although the debasement trade
1:41
Speaker 3: is kind of becoming more popular terminology these days and
1:44
Speaker 3: there's more focus on it, this has really been in
1:46
Speaker 3: place for quite a while. I would say fiscal dominance
1:49
Speaker 3: in the US has been in place for probably six
1:51
Speaker 3: plus years at this point, and then more broadly, going
1:54
Speaker 3: back of course decades, there's been pretty persistent debasement. It's
1:58
Speaker 3: not really something that's kind of materializing the past year
2:00
Speaker 3: or two. I think there's just kind of more information
2:03
Speaker 3: dawning on Wall Street and and kind of institutions in
2:06
Speaker 3: general that this isn't going to stop anytime soon. The
2:09
Speaker 3: other thing I really focused on was the concept going
2:12
Speaker 3: forward that I think my base case we're going to
2:15
Speaker 3: see kind of a gradual money printing. People are always
2:18
Speaker 3: kind of asking when's the next big monetary stimulus? When
2:21
Speaker 3: do things break and then we get a ton of liquidity,
2:24
Speaker 3: And while those things can certainly happen, those are certainly possibilities,
2:28
Speaker 3: I think the more likely outcome is that we shift
2:30
Speaker 3: toward a more gradual central bank balance sheet increasing environment,
2:35
Speaker 3: which means that you know, some of the bearers don't
2:37
Speaker 3: get the tightening that they might expect, whereas some of
2:39
Speaker 3: the bulls don't get just massive kind of understrained liquidity
2:44
Speaker 3: injections that they might hope for.
2:45
Speaker 2: Okay, so when you say gradual, so granted, the last
2:50
Speaker 2: time we saw quantitative easing, it was in a different
2:54
Speaker 2: frame of the market, obviously dealing with more of a
2:57
Speaker 2: crisis that both the economy was dealing with as well
3:00
Speaker 2: as the United States. Well globally, do you feel like
3:03
Speaker 2: this is a trajectory that would happen within the trading
3:08
Speaker 2: year of twenty twenty six, or is you think this
3:10
Speaker 2: could be a multi year qwi.
3:13
Speaker 3: I think this could be multi year. I think it's
3:15
Speaker 3: likely to begin in twenty twenty six unless they do
3:18
Speaker 3: something around supplementary leverage ratios more than they already have,
3:21
Speaker 3: which could allow kind of banks to do shadow QIWI.
3:23
Speaker 3: But aside from that, it looks like we're probably going
3:26
Speaker 3: to get some degree of balance sheeting increases in twenty
3:29
Speaker 3: twenty six. But I generally agree with how the Fed
3:33
Speaker 3: forecasts it, which is that they kind of expected their
3:36
Speaker 3: balance it's going to grow roughly in line with nominal GDP,
3:40
Speaker 3: and I think that's like the most likely scenario would
3:42
Speaker 3: give or take, where they shift more toward balance sheeting increases,
3:47
Speaker 3: but they would kind of say publicly that it's for
3:49
Speaker 3: the purposes of bank liquidity technical issues ensuring what they
3:54
Speaker 3: call ample reserves, rather than for the purposes of economic stimulus.
3:59
Speaker 3: And of course, the all thing is if you have
4:01
Speaker 3: an environment where you have an increasing balance sheet and
4:04
Speaker 3: inflation is still above target, which I expect is probably
4:07
Speaker 3: the environment we're going to see ourselves in next year.
4:11
Speaker 1: So higher inflation.
4:12
Speaker 2: Now you've got easing possibly coming in, well will come in.
4:15
Speaker 2: It's just a matter of what that timing.
4:17
Speaker 1: Is going to look like.
4:18
Speaker 2: When you look at the market of bitcoin in general
4:21
Speaker 2: risk assets is isn't that something that bitcoin and risk
4:24
Speaker 2: assets need. Is QE at a fairly risk flow or
4:28
Speaker 2: do you feel like they don't need it as much?
4:31
Speaker 3: Well, I think needs a strong word. I think the
4:33
Speaker 3: way I would describe it is that, at least according
4:35
Speaker 3: to our research, one of the strongest correlates with bitcoin
4:38
Speaker 3: price action is liquidity. It's arguably the most liquidity sensive
4:42
Speaker 3: asset that we track, you know, compared to equities, compared
4:45
Speaker 3: to gold, compared to bonds. It's not the only variable
4:48
Speaker 3: that affects bitcoin, but it's certainly one of the major variables. Now.
4:53
Speaker 3: Historically it's tracked more global liquidity, and that's actually been
4:56
Speaker 3: pretty good this year, so bitcoin's kind of underperformed what
4:59
Speaker 3: you to back to purely looking at global liquidity. However,
5:03
Speaker 3: in the US we've had pretty tight base liquidity and
5:06
Speaker 3: that's where a lot of the buying has come from.
5:08
Speaker 3: So without much buying globally and with quite a bit
5:11
Speaker 3: of buying mostly from the US institutional side. The drying
5:15
Speaker 3: up of base liquidity here in the US I think
5:17
Speaker 3: has likely been one of the variables that weighs on it,
5:20
Speaker 3: in addition to potentially kind of a self fulfilling props
5:23
Speaker 3: around the four year cycle. So I do think that
5:25
Speaker 3: as we get you know, what is probably look like
5:27
Speaker 3: better basic liquidity next year almost being equal, that should
5:31
Speaker 3: be supportive of bitcoin.
5:33
Speaker 1: So better liquidity, are you okay?
5:35
Speaker 2: So are you in the camp of four year cycle
5:37
Speaker 2: still on q no real change in how these cycles
5:42
Speaker 2: have gone in the past, or do you think that
5:43
Speaker 2: has shifted some?
5:45
Speaker 3: My base case is the four year cycle is no
5:47
Speaker 3: longer really relevant. It arguably hasn't been relevant for the
5:50
Speaker 3: past cycle either. Early on, whenever the supply having happened,
5:55
Speaker 3: that was a very big change to bitcoin's kind of
5:57
Speaker 3: new supply coming out. Whereas now the you know, the
6:00
Speaker 3: annual supply inflation rate is well under one percent. It's
6:04
Speaker 3: a lower supply growth than gold as on a percentage basis,
6:09
Speaker 3: So I don't really view that as the main driver anymore.
6:11
Speaker 3: I think there's you know, potentially some selling around the
6:13
Speaker 3: psychology of the four year cycle, but I think at
6:17
Speaker 3: this point the much bigger factors are number one, you know,
6:21
Speaker 3: liquidity and kind of macro effects, and two the rate
6:24
Speaker 3: of selling of long term existing holders kind of og
6:27
Speaker 3: selling pressure that has been on the other side of
6:30
Speaker 3: the institutions and the micro strategies and the ETFs gobbling
6:34
Speaker 3: it up. I think those are the two really big variables.
6:37
Speaker 3: They affect a lot more than the changing in the
6:42
Speaker 3: you know, kind of per block supply rate.
6:44
Speaker 2: Okay, so I want to kind of get your opinion
6:46
Speaker 2: on this, because we have looked at this from variations
6:49
Speaker 2: of around a lot of different analysts.
6:51
Speaker 1: When you look at Michael.
6:52
Speaker 2: Sailor the strategy, that strategy is approaching right now, along
6:57
Speaker 2: with even if you jump over to what's happening with
6:59
Speaker 2: the theory and Tom Lee, which is both of which
7:02
Speaker 2: are buying into the market. Is strategy on the right
7:06
Speaker 2: path right now? I know you hold micro strategy, but
7:09
Speaker 2: would you say, in their current position, which has been
7:12
Speaker 2: a fairly devalued stock over at least in the last
7:15
Speaker 2: six months, what do you think is going to happen
7:17
Speaker 2: here in the next year to eighteen months, do you
7:19
Speaker 2: feel like this is still a positive play for them?
7:23
Speaker 3: I think going forward to still makes sense. I mean,
7:24
Speaker 3: you look at their history since they adopted their bitcoin
7:27
Speaker 3: strategy in August twenty twenty, they have outperformed the market,
7:30
Speaker 3: and they've even out they managed to outperform Bitcoin even
7:32
Speaker 3: of course they've had a very rough few months here.
7:35
Speaker 3: They also, of course had a very rough twenty twenty two.
7:38
Speaker 3: Their overall kind of you know, debt to equity ratio
7:41
Speaker 3: is on the on the pretty low side. They have
7:43
Speaker 3: an interesting expense to deal with, but it's not really
7:46
Speaker 3: huge compared to the amount of assets they have. Over time,
7:50
Speaker 3: I would like to see treasury companies that have more
7:53
Speaker 3: cash flows, you know, a little bit more like traditional
7:55
Speaker 3: companies that happen use bitcoin as a treasury asset. But basically,
7:59
Speaker 3: I think that there has been a demand from the
8:01
Speaker 3: market for levered bitcoin and the type of leverage is
8:05
Speaker 3: not callable. They can't be liquidated on the Sunday night,
8:08
Speaker 3: and micro Strategy, I think has been a you know,
8:10
Speaker 3: it's done a good job of providing that to the market.
8:14
Speaker 3: And you know, this summer, when we saw you know,
8:16
Speaker 3: bitcoin treasury companies at very high m nas, micro Strategy
8:19
Speaker 3: was at three x. Metaplanet, I believe was touching like
8:22
Speaker 3: eight x in June. You know, we've just seen very
8:25
Speaker 3: high m nas across the board. I think it's natural
8:28
Speaker 3: for some of that to get washed out. I think
8:30
Speaker 3: it's natural for the coin ones to get washed out.
8:32
Speaker 3: I think some of these kind of tertiary Bitcoin ones
8:35
Speaker 3: also it makes sense when you get washed out, they're
8:37
Speaker 3: not really that differentiated compared to the large and liquid ones.
8:41
Speaker 3: But I think that the biggest and best still have
8:44
Speaker 3: a market to provide for as we you know, look
8:46
Speaker 3: forward several years.
8:48
Speaker 2: What do you make of Tom lee strategy with BM
8:50
Speaker 2: and R. I mean, they have kind of gone to
8:52
Speaker 2: your direction of creating a revenue source that's multi tiered,
8:56
Speaker 2: going after whether it's staking or other asset are is
9:00
Speaker 2: in terms of generating revenue. Do you think they're on
9:02
Speaker 2: the right track.
9:04
Speaker 3: Well, I think it's natural that some empities are going
9:06
Speaker 3: to do the same thing with the theorem that we've
9:08
Speaker 3: seen with bitcoin. In general, I view bitcoin as more
9:11
Speaker 3: of like the asset that you know, kind of meets
9:14
Speaker 3: the qualifications of a of a you know, treasure strategy.
9:17
Speaker 3: I view the other coins as more trading assets. So
9:21
Speaker 3: I'm certainly more kind of in the bitcoin camp when
9:23
Speaker 3: it comes to that I'll do it. I do. Like again,
9:25
Speaker 3: I do think it's natural for the market to test
9:27
Speaker 3: it out. I would say that, you know, when you
9:29
Speaker 3: look at kind of how companies function, you ideally want
9:33
Speaker 3: companies that have cash flow that's uncorrelated to their own treasury.
9:37
Speaker 3: So whether it's kind of you know, earning option income
9:40
Speaker 3: on bitcoin or theorem, or earning staking rewards on etheroereum,
9:44
Speaker 3: that's still heavily correlated income that is kind of tied
9:47
Speaker 3: to their treasury asset. And I just think that that,
9:51
Speaker 3: you know, the market, that's the environment that you know,
9:54
Speaker 3: that's what the market wants kind of lately until until
9:56
Speaker 3: the past couple of months. But I think if we
9:58
Speaker 3: look forward, what's gonna happened in the next cycle, the
10:01
Speaker 3: next five years, I think there's an opportunity for companies
10:04
Speaker 3: that actually have a product and a service, a cash
10:06
Speaker 3: flow it's unrelated to bitcoin or crypto pulls in money
10:10
Speaker 3: and companies that can kind of stick there. You know,
10:12
Speaker 3: they're retained earnings into assets lee bitcoin.
10:15
Speaker 2: Right, Well, I mean that's where you're getting into treasury
10:18
Speaker 2: strategies that would play into publicly traded companies or even
10:21
Speaker 2: private companies that might end up, you know, trying to
10:23
Speaker 2: go out there and raise capital.
10:24
Speaker 1: So a lot of opportunities there.
10:26
Speaker 2: Okay, so let me ask you when, because I know
10:28
Speaker 2: you kind of are on the fence around where interest
10:31
Speaker 2: rates could be going.
10:32
Speaker 1: It's likely that we're going to get a cut this week.
10:35
Speaker 2: Some people are calling it a hawk is cut, and
10:38
Speaker 2: who knows what's going to happen in January. My question
10:41
Speaker 2: is do you think we will get near zero again
10:45
Speaker 2: or do you feel like this is never going to
10:47
Speaker 2: happen in terms of a interest rate trajectory.
10:51
Speaker 3: Well, I don't think we're going to get near zero
10:52
Speaker 3: in an investible time horizon, so let's call it two years.
10:55
Speaker 3: I don't think we're going to see near zero. I
10:57
Speaker 3: think we'll get some cuts next year and we'll go
11:00
Speaker 3: will go kind of modeled lower. I don't think we're
11:03
Speaker 3: going to get kind of sub one percent. Uh, you know,
11:05
Speaker 3: potentially for many, many many years. I think that was
11:09
Speaker 3: kind of the end of a long term debt cycle.
11:11
Speaker 1: Uh.
11:12
Speaker 3: And going forward, the market's going to demand higher rates
11:15
Speaker 3: than that. Now technically that you know, the front end
11:17
Speaker 3: of the curve can do practically whatever a central bank wants,
11:20
Speaker 3: it's the long end of the curve that that you know,
11:22
Speaker 3: can it is more set by market prices, unless unless
11:25
Speaker 3: the central bank is outright yield curve control. But generally
11:27
Speaker 3: going forward, I expect kind of moderate interest rates where
11:31
Speaker 3: they're not going to let the industrates get too high,
11:33
Speaker 3: even if the bond market wants to go there. But
11:36
Speaker 3: they're also I don't think they're going to have a
11:37
Speaker 3: compelling reason.
11:39
Speaker 4: Uh.
11:39
Speaker 3: And now there's the market really going to comfortably let
11:41
Speaker 3: them bring them down to ultra low levels. I think
11:44
Speaker 3: are more in this kind of range bound state. And
11:47
Speaker 3: if anything, that you know, the market wants that. If
11:49
Speaker 3: you look at you know, for example, bank stocks in Japan, uh,
11:53
Speaker 3: you know, while Japan was doing their negative rate policy
11:56
Speaker 3: and their kind of deep yield curve suppression, their bank
11:59
Speaker 3: stock were suffering because it's hard to make loans, it's
12:01
Speaker 3: hard to operate and provide credit to the market when
12:04
Speaker 3: you can't make a return on it. And then ironically,
12:06
Speaker 3: as as you know, Japan has lifted their indust rates.
12:10
Speaker 3: You know, many people thought it'd be bearissed for their markets,
12:12
Speaker 3: but it actually allows you know, bank stocks in many
12:14
Speaker 3: cases of doubled or tripled. If you look at the
12:16
Speaker 3: large ones there, they're able to make loans again. You know,
12:19
Speaker 3: there's some some semblance of a positive yield curve. I
12:23
Speaker 3: think that's that's more healthy for the market. I think
12:25
Speaker 3: it's actually pretty good for the private sector. And really
12:27
Speaker 3: the nsy that hurts the most is the sovereign because
12:30
Speaker 3: that that interesting expense kind of keeps pouring out into
12:33
Speaker 3: the market.
12:33
Speaker 1: Right, Yeah, for sure.
12:35
Speaker 2: Well, and that's the concern I have because when you've
12:37
Speaker 2: got basically the White House kind of I won't say manipulating,
12:41
Speaker 2: but definitely getting in their side of the of the
12:44
Speaker 2: House in terms of the of what we'll see with
12:47
Speaker 2: the FED. And this is a reference to Kevin Hassett
12:50
Speaker 2: possibly going in as the FED chair. If he goes in,
12:54
Speaker 2: wouldn't that push you into a position where he may
12:57
Speaker 2: get very aggressive on rake cuts in alignment with what
13:01
Speaker 2: President Trump and Scott Bessen have been saying all along,
13:05
Speaker 2: So he may.
13:06
Speaker 3: I mean there are twelve voting members on the FMC,
13:09
Speaker 3: and seven of them are the Board of Governors, and
13:11
Speaker 3: five of them are regional you know, bank presidents, and
13:14
Speaker 3: so you know, over time they can have more of
13:17
Speaker 3: the votes in their favor and they you know that
13:19
Speaker 3: the chairman, you know, has the biggest control over kind
13:21
Speaker 3: of the public microphone of the FED. But it's still
13:24
Speaker 3: a group decision. So I do think my expectation is
13:26
Speaker 3: they're going to put kind of downward doversh pressure on
13:29
Speaker 3: the FED, but it's not absolute. And of course if
13:32
Speaker 3: they you know, if they were able to push that
13:34
Speaker 3: too hard, it could backfire on them because their goals
13:38
Speaker 3: try to get you know, the federal government's interest expense down,
13:40
Speaker 3: they're trying to get mortgages down. But just because you
13:43
Speaker 3: cut the short end of the curve doesn't mean that
13:45
Speaker 3: the long end behaves the way that they want it to.
13:47
Speaker 3: And in fact, so far we've kind of seen as
13:49
Speaker 3: the FED is cut rates, mortgage rates haven't really come
13:52
Speaker 3: down by the same degree. And if the bond market
13:55
Speaker 3: and the mortgage market kind of loses confidence in the
13:58
Speaker 3: independence of the FED, they could sell out that they
14:00
Speaker 3: could sell off that long end, And so I think
14:02
Speaker 3: that they're going to probably try to thread that needle
14:04
Speaker 3: where they air dubvish, but they still try to retain
14:07
Speaker 3: as much credibility as possible, and they still do have
14:09
Speaker 3: that twelve member you know, voting group.
14:13
Speaker 2: Listen the next few months are going to get very interesting,
14:15
Speaker 2: especially going into next year with all these changes coming
14:18
Speaker 2: out on the FED. For sure, I want to talk
14:21
Speaker 2: about tokenization because this was I've got a clip that
14:24
Speaker 2: we've pieced together here from one of the times when
14:27
Speaker 2: you and I were talking about what that future might
14:30
Speaker 2: look like, and then we had some people on from
14:33
Speaker 2: Vanak also asking the same question. I want to play
14:36
Speaker 2: this for you and then get your opinion.
14:37
Speaker 1: Let's go to that clip.
14:39
Speaker 4: Tokeni's real road assets are going nowhere. They're just adding
14:42
Speaker 4: additional cost and complexity. The yields that you can get
14:45
Speaker 4: on a non chain tee build are less than what
14:47
Speaker 4: you can get in an actual T built. It's just
14:49
Speaker 4: not a very interesting product right now, neither for the
14:52
Speaker 4: issuer nor for the buyer.
14:53
Speaker 2: What is your opinion on token ized treasuries?
14:56
Speaker 3: So I have a constructive view on them, you can
14:57
Speaker 3: go out and buy a global astset that's better than
15:00
Speaker 3: what is available in your own country, makes savings and
15:03
Speaker 3: investing more accessible globally. I do think that this idea
15:06
Speaker 3: has legs.
15:08
Speaker 2: Speaking of the Vanak Treasury Fund, I'm looking right at
15:11
Speaker 2: it right now.
15:12
Speaker 4: It was born out of customer demand.
15:17
Speaker 2: All nice I know, Matthew good friend, but he was
15:21
Speaker 2: wrong there and Lynn you were right. So here we
15:23
Speaker 2: are edging in over nine billion now on token ized treasuries,
15:27
Speaker 2: will continue to see accelerated growth across the market. Do
15:31
Speaker 2: you feel like this narrative that almost everybody on Wall
15:34
Speaker 2: Street is championing now takes away from bitcoin in general.
15:41
Speaker 3: For the most part, No, because I think there are
15:42
Speaker 3: two different markets. I think one serves kind of near
15:45
Speaker 3: term and intermediate term capital kind of this. You know,
15:49
Speaker 3: sen a reason, do t bills take away from gold?
15:51
Speaker 3: I would say not really. Gold prevents your protects against
15:54
Speaker 3: long term debasement, but of course it's price can fluctuate
15:57
Speaker 3: in the near term, whereas TE bills are pretty reliable
16:01
Speaker 3: for maintaining perching power in the new term, but a
16:03
Speaker 3: virtually guaranteed to lose perching power over the long term.
16:06
Speaker 3: And I think that in the digital asset space, bitcoin
16:08
Speaker 3: and then the whole complex of stable coins and interest
16:11
Speaker 3: bearing stable coins and things like that, that's pretty much
16:14
Speaker 3: similar dynamic. You know that the stable coin aspect is
16:17
Speaker 3: good for payments, it's good for new term working capital,
16:21
Speaker 3: it's good for people around the world that want dollars
16:23
Speaker 3: or want t bills. I want things like that that
16:27
Speaker 3: have trouble access them in their market, whereas you know
16:29
Speaker 3: in the United States, many of us, of course can
16:31
Speaker 3: access these things quite easily, and so it just kind
16:34
Speaker 3: of brings that to, you know, entities that otherwise we
16:38
Speaker 3: have trouble with the overhead cost of having access to
16:40
Speaker 3: those things.
16:41
Speaker 2: So Linn, you look at you mentioned gold there and
16:45
Speaker 2: the comparison, I look at it this way. I know,
16:47
Speaker 2: obviously there was the big debate between SHIFT and CZ
16:50
Speaker 2: here recently.
16:51
Speaker 1: I think CZ won the debate.
16:52
Speaker 2: But at the same time, it revealed something maybe from
16:55
Speaker 2: the gold camp around tokenized gold and if tokenized gold
17:00
Speaker 2: actually becomes a thing, because we've already seen growth with paxos,
17:04
Speaker 2: obviously with XAU two, with tether continuing to go, and
17:09
Speaker 2: the more we talk to gold people, you know, on
17:12
Speaker 2: this channel, I'm realizing that they may go the route
17:16
Speaker 2: of tokenized gold versus the route of bitcoin.
17:19
Speaker 1: Does bitcoin need that.
17:21
Speaker 2: Kind of liquidity coming out of the gold market at
17:23
Speaker 2: some point to be able to truly grow or would
17:26
Speaker 2: that possibly cause a slowdown in maybe the top cap
17:30
Speaker 2: side for bitcoin.
17:33
Speaker 3: So I view bitcoin and gold as able to grow independently.
17:36
Speaker 3: If you think at kind of global assets, there's hundreds
17:38
Speaker 3: of trillions of dollars of liquid, you know, global financial assets.
17:42
Speaker 3: Gold has been you know, like two percent or so,
17:45
Speaker 3: maybe now three percent after the bull run of those assets.
17:48
Speaker 3: Bitcoin has been a tenth of that, so, you know,
17:50
Speaker 3: point two percent or lower in many cases. And so
17:54
Speaker 3: I I view them both is able to grow into
17:56
Speaker 3: things like the bond market, into the equity market, into
18:00
Speaker 3: the real estate market, and so I don't really view
18:02
Speaker 3: them as competition. That's why I've been long both for many,
18:05
Speaker 3: many years. I do think that token iss gold has legs.
18:09
Speaker 3: You know, there is funny there's a period of time
18:11
Speaker 3: where gold enthusis would say, well, why not just do
18:13
Speaker 3: this with gold, and I would say, it already exists.
18:15
Speaker 3: They're already are these kind of gold back stable coins.
18:17
Speaker 3: And for a while they were a small market. Now
18:19
Speaker 3: they're getting bigger. They're still small in the grand scheme
18:21
Speaker 3: of things, but they make sense. It's kind of like
18:23
Speaker 3: how it again, in the United States, people can buy
18:25
Speaker 3: a gold ETF but if you're in country X, y Z,
18:29
Speaker 3: you might not have you know, a place you can
18:32
Speaker 3: buy that, or if you do, you might not might
18:33
Speaker 3: not trust it, and so it kind of allows just
18:36
Speaker 3: like how stable coins allow pretty much anyone in the
18:38
Speaker 3: you know, anyone of the smartphone to have kind of
18:40
Speaker 3: the equivalent of an offshore bank account. It's kind of
18:43
Speaker 3: like that with an offshore gold vall account. There's still
18:46
Speaker 3: a chain of custody that they trust, but you know,
18:49
Speaker 3: they're they're trusting that nty that that is, you know,
18:51
Speaker 3: outside of their own country and their own kind of
18:53
Speaker 3: you know, maybe inflationary, you know, kind of a legal
18:56
Speaker 3: environment that they exist in. So as long as they
18:58
Speaker 3: trust you know, the chain of of regulations in custody
19:01
Speaker 3: that they're investing in overseas, I think it's a valuable
19:04
Speaker 3: option for them. It's basically a cross border GOLDIETF with
19:07
Speaker 3: the pros and cons that come with it. So I
19:09
Speaker 3: do think that's a growing market. I just view to
19:11
Speaker 3: separate from bitcoin. So I you know, there's all this
19:14
Speaker 3: kind of obviously multi year debate between bitcoin and gold,
19:18
Speaker 3: and I just think that they have different properties and
19:21
Speaker 3: that they you know, they can both serve a role
19:23
Speaker 3: in portfolio. I think the bitcoin's the faster horse because
19:26
Speaker 3: it's newer, it's kind of growing into whatever total adjustmble market.
19:29
Speaker 3: It can be, but that comes with higher volatility, That
19:32
Speaker 3: comes with higher uncertainty, and you know, people can kind
19:35
Speaker 3: of pick the ratio that makes sense for them.
19:37
Speaker 2: Are you in the camp right now in terms of
19:39
Speaker 2: obviously what you've stated here today is that for your cycle,
19:43
Speaker 2: not so much. Do you think that we would see
19:45
Speaker 2: another all time high in twenty twenty six? Do you
19:48
Speaker 2: feel like there's a market brewing for that currently, especially
19:51
Speaker 2: on bitcoin.
19:53
Speaker 3: I think in twenty twenty six or twenty twenty seven
19:55
Speaker 3: we'll see a new all time high in bitcoin. I'd
19:57
Speaker 3: be less common to say, you know, if it happens
19:58
Speaker 3: in the twelve months or so bitcoin. I mean, something
20:02
Speaker 3: like a thirty percent move can happen very quickly in bitcoin,
20:05
Speaker 3: right There's also things that can change quickly, so I
20:07
Speaker 3: wouldn't try to guess too much that. I do think
20:10
Speaker 3: that going forward, the four year cycle has really no
20:13
Speaker 3: bearing on the asset. It's mostly things like liquidity on
20:16
Speaker 3: the demand side and things like og selling pressure on
20:19
Speaker 3: the supply side, and how those things are gonna, you know,
20:22
Speaker 3: work together. There's also you know, there's increasing discussions around
20:26
Speaker 3: sovereign buying, as mentioned by black Rock and others, and
20:30
Speaker 3: I think that'll be an ongoing multi year factor. So
20:33
Speaker 3: I think it's it's healthy for bitcoin to get off
20:35
Speaker 3: of this four year clock that it's been on. You know, ideally,
20:39
Speaker 3: as a monetary astic grows and as a supply having
20:42
Speaker 3: you know, becomes any irrelevant percentage of supply, you don't
20:45
Speaker 3: want to. You don't want a money that kind of
20:47
Speaker 3: goes up and down on four year cycles. So I
20:49
Speaker 3: think it's gonna it's gonna mature in a similar way
20:51
Speaker 3: that gold has no particular clock that that moves its
20:55
Speaker 3: price around. I think cooin is going to behave similarly.
20:58
Speaker 1: Yeah, that's a good point.
20:59
Speaker 2: I'm looking at your multi asset portfolio here. We'll go
21:04
Speaker 2: into the primarily areas I want to look at, which
21:06
Speaker 2: is the growth stocks. One of them that we see,
21:09
Speaker 2: of course is PayPal obviously because of their stable coin,
21:13
Speaker 2: you know, innovation that they've done with py usd. They're
21:16
Speaker 2: starting to break into some blockchain. But you look at
21:19
Speaker 2: two major companies that could go IPO soon, and that
21:21
Speaker 2: would be someone like a Paxos or also poly Market.
21:24
Speaker 2: Would those be considerations for you if you let's say Polymarket,
21:28
Speaker 2: Paxos both with boat both went public. Would you potentially
21:33
Speaker 2: put them in your in your growth stocks category?
21:36
Speaker 3: Potentially? That would depend on valuation. For the growth stocks category,
21:39
Speaker 3: I tend to look at profitable companies that have kind
21:43
Speaker 3: of reasonable earnings multiples relative to their growth, so good
21:46
Speaker 3: price to earnings to growth ratios. I've avoided Circle, you know,
21:51
Speaker 3: despite otherwise being bullish on stable coins, and so it
21:55
Speaker 3: would really depend on what they look like when they
21:57
Speaker 3: come to market. But you know, to the extent that
21:59
Speaker 3: they have growing revenues and growing product market fit, and
22:02
Speaker 3: then they trade at reasonable multiples. Probably I would suspect
22:06
Speaker 3: that they'd be probably new and therefore expensive relative to
22:09
Speaker 3: what I would look to pay. But yeah, I would
22:11
Speaker 3: certainly evaluate them.
22:13
Speaker 2: You've got Google in here with alphabet trade. It's about
22:17
Speaker 2: eight percent of your twelve percent slot here. When you
22:20
Speaker 2: look at the trade right now that it centers around AI,
22:23
Speaker 2: and even if you look at the pe on in
22:26
Speaker 2: Video or someone like that, a lot of these AI companies,
22:29
Speaker 2: the pe is interesting when you look at what the
22:32
Speaker 2: upside could be. Is there an AI trade still available
22:35
Speaker 2: out there?
22:37
Speaker 3: I think there is. It depends on where you look
22:39
Speaker 3: for that alpha position. I actually recently reduced that from
22:42
Speaker 3: twelve percent to eight percent of that particular slice of
22:44
Speaker 3: the pie. And that's because my thesis largely played out.
22:47
Speaker 3: There was a while where people were saying that Alpha
22:50
Speaker 3: is going to be disrupted by AI, whereas I viewed
22:52
Speaker 3: that they still had a pretty good lock and that
22:55
Speaker 3: the types of search that AI was eating into is
22:57
Speaker 3: mostly the nonprofitable search. You know, someone's curiously want to
23:00
Speaker 3: know is what is Napoleon's wife name? They might look
23:02
Speaker 3: that up. Google doesn't care if they lose that market
23:04
Speaker 3: share because they're not gonna make money on that. They
23:06
Speaker 3: make money on things like a plumber near me, right,
23:09
Speaker 3: That's the type of search they care about. They also,
23:11
Speaker 3: of course have their very own powerful AI business, which
23:14
Speaker 3: in recent months has gotten kind of credit finally.
23:17
Speaker 1: Yeah yeah.
23:19
Speaker 3: And so as that kind of played out, as that
23:20
Speaker 3: kind of stock ran up pretty quickly, that's when I
23:23
Speaker 3: started to trim back the position where I'm not bearish
23:25
Speaker 3: on it, but kind of the bullish thesis played out.
23:28
Speaker 3: Same thing for some of the chip stocks, like in
23:30
Speaker 3: Video and AMD. I still think there's areas to play.
23:33
Speaker 3: I think one of the ones I'm watching that I'm
23:35
Speaker 3: not sure about yet, but I'm watching it closely. Is
23:37
Speaker 3: Adobe because they're in the same camp where they're kind
23:40
Speaker 3: of viewed, as you know, heavily threatened by AI, and
23:45
Speaker 3: I certainly do think that's a variable. But as they
23:47
Speaker 3: get cheap enough, you know that, I think they get
23:50
Speaker 3: more and more interesting. So we'll see how that plays out.
23:52
Speaker 3: I would say it's I'm a low conviction bowl on
23:55
Speaker 3: Adobe and would look to see signs of a bottom
23:58
Speaker 3: and signs that there may be more than the market expects.
24:01
Speaker 2: But well, that'll be Yeah, that'll be the question. I
24:03
Speaker 2: guess I agree with you. I think a lot of
24:05
Speaker 2: people kind of google out. Gemini's updates here recently have
24:08
Speaker 2: been pretty significant. And then of course open ai struggle
24:11
Speaker 2: because it looks like they're going to be ending up
24:14
Speaker 2: on more of the retail side where we get enterprise
24:17
Speaker 2: starting to play into it.
24:18
Speaker 1: Google could win that game very quickly, for sure.
24:21
Speaker 2: One last couple of questions I want to hit on
24:24
Speaker 2: one is this right here, I'm looking at z cash
24:27
Speaker 2: and we saw this big run up and then here
24:30
Speaker 2: recently we saw a massive falloff. Do you think that
24:33
Speaker 2: that that pump is finally over and we're going to
24:36
Speaker 2: see that liquidity coming back into the market on traditional
24:39
Speaker 2: assets like bitcoin, ethereum, et cetera.
24:43
Speaker 3: Well, yeah, I would caution people about investing and following
24:46
Speaker 3: these massive pumps. Uh. You know, often you'll see kind
24:49
Speaker 3: of a lot of enthusiasm sometimes even coordination around a
24:52
Speaker 3: specific asset, and you know, I think that that the
24:56
Speaker 3: overall traction is still obviously very limited. I kind of
25:00
Speaker 3: re iterate that outside of bitcoin, and outside of the
25:02
Speaker 3: growth of stable coins and kind of you know, certain
25:04
Speaker 3: real world assets like you know, get tokenzed gold and
25:07
Speaker 3: things like that, I'm pretty cautious on the whole space.
25:10
Speaker 3: I think I'd be very careful chasing any of those
25:13
Speaker 3: other assets that I think that generally speaking, over the
25:15
Speaker 3: long term, the inclination is down relative to bitcoin.
25:21
Speaker 2: Okay, last question, is this a time to DCA bitcoin trading?
25:25
Speaker 2: Literally as we recorded around ninety K is this a
25:28
Speaker 2: DCA time for bitcoin?
25:31
Speaker 3: I think so, And almost by definition, if someone's dollar
25:34
Speaker 3: costs averaging, it's it's always the right time. That's the
25:36
Speaker 3: kind of point is you're not really trying to time
25:37
Speaker 3: the market. I think it's more of a question of
25:40
Speaker 3: is it time to accelerate the DCA a little bit?
25:43
Speaker 3: Generally speaking, when the sentiment comes off. We've seen the
25:46
Speaker 3: Bitcoin treasury m navs disappear. We've seen some of the
25:50
Speaker 3: metrics I look at, like market value compared to on
25:52
Speaker 3: chain cost bases, that it's compressed quite significantly. It makes
25:56
Speaker 3: a lot more attractive. Overall, enthusiasm is elsewhere, it's on AI,
26:00
Speaker 3: it's on gold. You know, public sentiment around bitcoin's pretty low.
26:04
Speaker 3: I gentally, I think this is the time to lean
26:06
Speaker 3: into it now. You know, investors obviously they have to
26:09
Speaker 3: know their own volatility thresholds. But I think as a
26:12
Speaker 3: as a you know, larger slice for portfolio, I think
26:15
Speaker 3: it makes sense to buy the fear rather than kind
26:18
Speaker 3: of buy the enthusiasm.
26:19
Speaker 2: All right, Lynn, it's always fun chatting with you. Thank
26:23
Speaker 2: you so much for coming in today.
26:24
Speaker 1: Again.
26:24
Speaker 2: Just a reminder to jump over on x Lennold in contact.
26:27
Speaker 2: You can get some of her news there, jump into
26:29
Speaker 2: her blog. Does a great job on everything in terms
26:33
Speaker 2: of your analysis. So thanks again for coming in today.
26:35
Speaker 2: We appreciate it.
26:36
Speaker 3: Thank you.
26:37
Speaker 1: You bet all right.
26:38
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26:40
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26:42
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26:44
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26:49
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26:51
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26:53
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26:56
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26:58
Speaker 2: right here on the Paul Baron Show.
27:03
Speaker 4: To me to