Latest / The Paul Barron Crypto Show / Tariff Crypto Crash Over?🔥Bitwise INTERVIEW w/ Matt Hougan🔥

Transcript

Tariff Crypto Crash Over?🔥Bitwise INTERVIEW w/ Matt Hougan🔥 · The Paul Barron Crypto Show

0:07
Speaker 1: Very busy weekend with of course President Trump acting all
0:11
Speaker 1: sorts of craziness on the market, and of course that
0:13
Speaker 1: has been mostly instigated by some of what we've seen
0:16
Speaker 1: around the tariffs. Will break it all down for you.
0:17
Speaker 1: My name is Paul Barren. Welcome back into tech Path.
0:20
Speaker 1: Let's get into it today. I do want to thank
0:22
Speaker 1: our sponsor and that is Uphold. This is a great
0:23
Speaker 1: place for you to kind of get started on your
0:25
Speaker 1: own crypto journey. There's some cool things that they're doing
0:28
Speaker 1: where you can actually earn four point four percent apy
0:32
Speaker 1: on your US dollar balance there, as well as get
0:35
Speaker 1: into all sorts of tokens in the crypto side of things.
0:39
Speaker 1: So a lot to do, a very cool service that
0:41
Speaker 1: they offer.
0:42
Speaker 2: Check it out.
0:43
Speaker 1: It's a great place to kind of get going on
0:44
Speaker 1: your crypto journey. I want to welcome Matt Hogan back
0:47
Speaker 1: into the show. He's been with us before and of
0:50
Speaker 1: course you will know him as the CIO over at
0:54
Speaker 1: if we're getting a transition there a bit wise, there
0:57
Speaker 1: we go. I wasn't sure if we were going to
0:59
Speaker 1: get you on screen there, Matt, and great to see
1:01
Speaker 1: you again.
1:01
Speaker 3: You managed, Paul, It's great to be back thanks for
1:04
Speaker 3: having me and excited to chat today.
1:07
Speaker 2: Yeah, excellent. So let's go with a couple of things.
1:10
Speaker 1: Last time we had you on, we had a chance
1:11
Speaker 1: to talk a lot about bit wise and some of
1:13
Speaker 1: the efforts that you guys are doing on the ETFs.
1:15
Speaker 2: Obviously, we're going.
1:16
Speaker 1: To hit on the scenario around tariffs, and over the
1:20
Speaker 1: weekend we saw what could be one of the greatest
1:23
Speaker 1: crashes in crypto history when you look at where we
1:26
Speaker 1: are right now around tariffs and the potential of what
1:30
Speaker 1: this is going to do to the economy, the United
1:33
Speaker 1: States economy and as well as global economy. How do
1:36
Speaker 1: you see this playing out within the investment community. We
1:39
Speaker 1: saw the crypto market react almost immediately, but we've also
1:44
Speaker 1: seen a little bit of a spin around this morning.
1:45
Speaker 3: What are your thoughts, Yeah, I think you have to
1:48
Speaker 3: think about initial effects and second order effects when we
1:52
Speaker 3: look at initial effects. Of course, this was negative for
1:54
Speaker 3: markets and particularly for risk assets, because people freaked out
1:58
Speaker 3: assuming we were going to have next calm down to
2:01
Speaker 3: pull back, higher inflation, higher rates, all the things that
2:05
Speaker 3: risk assets hate. And you saw that hit crypto in
2:08
Speaker 3: particular because of course crypto trades on the weekend when
2:11
Speaker 3: the rest of the market does not. Yeah, the second
2:15
Speaker 3: order effects, though, is what we have our eyes on.
2:18
Speaker 3: I think if you think about what Donald Trump is
2:20
Speaker 3: hoping to achieve, he's slipping to achieve ultimately lower dollar,
2:26
Speaker 3: a weaker dollar against other currencies. I know that sounds
2:29
Speaker 3: paradoxical with tariffs, but that his long term goal is
2:31
Speaker 3: a weaker dollar, lower interest rates, lower taxes. If he
2:35
Speaker 3: achieves those ends, then that's going to send risk assets
2:39
Speaker 3: sharply higher. We think on balance that's the more likely scenario.
2:44
Speaker 3: But look, anyone looking at this market has to admit
2:46
Speaker 3: that there's more risk and uncertainty than there was in
2:48
Speaker 3: the past. That's a headwind long term. I think it's
2:52
Speaker 3: going to end up being a catalyst.
2:54
Speaker 1: I was looking at your tweet tratfi absurd is like
2:58
Speaker 1: waiting for the news to make it across the ocean.
2:59
Speaker 2: By That's the thing that I'm.
3:01
Speaker 1: Intrigued with is just the speed of the market right now.
3:04
Speaker 1: It is absolutely lightning in terms of how the market reacts.
3:08
Speaker 1: But of course we have twenty four to seven trading
3:11
Speaker 1: here in the crypto side of things, but it seems
3:13
Speaker 1: to be affecting other markets, including things like gold. Do
3:17
Speaker 1: you think this is just the new normal in terms
3:20
Speaker 1: of how trades are going to happen in the open market?
3:23
Speaker 3: This is definitely the new normal. You know, the old
3:25
Speaker 3: world still thinks you can release news on Friday and
3:28
Speaker 3: give the world two plus days to digest it. But
3:31
Speaker 3: that's no longer true. People now have, you know, multi
3:35
Speaker 3: billion dollar liquidity into macro assets, whether it's crypto or
3:39
Speaker 3: it's gold, and they're used to expressing their views in
3:43
Speaker 3: those assets. And so I do think we're in a
3:46
Speaker 3: new era. I don't think you can put the genie
3:48
Speaker 3: back in the bottle again. Those those days of you know,
3:52
Speaker 3: surprisingly many four thirty pm Friday press conferences, that's over, right,
3:56
Speaker 3: that era is over now. Bitcoin is the leading macro
4:01
Speaker 3: asset for reflecting short term trading views. Gold is right
4:04
Speaker 3: behind it. And that's yeah, as you said, that's just
4:07
Speaker 3: the new normal.
4:08
Speaker 1: Yeah, it's going to be interesting to see how this
4:12
Speaker 1: starts to make its way into what we'll see on
4:15
Speaker 1: the traditional markets. And I'm kind of curious, do you
4:18
Speaker 1: think we'll ever get to kind of a twenty four
4:20
Speaker 1: to seven three sixty five market?
4:23
Speaker 2: Eventually? It's going to happen, You feel that's going to happen.
4:26
Speaker 3: Absolutely, I think it's going to happen. Remember the reason
4:28
Speaker 3: we do nine thirty to four is they needed the
4:31
Speaker 3: overnight hours to process the paper slips and make sure
4:35
Speaker 3: things ended up. Come on, what kind of world is that? Right?
4:38
Speaker 3: That's like it's I can't even make a better analogy
4:42
Speaker 3: than waiting for news to come across on the boat.
4:44
Speaker 3: I think there's almost a manifest destiny of moving us
4:47
Speaker 3: to twenty four to seven three sixty five. That's what
4:49
Speaker 3: we see everywhere else. Right, you can get a package
4:52
Speaker 3: delivered to your door in an hour on Saturday, but
4:54
Speaker 3: you can't trade based on news. The world's not going
4:57
Speaker 3: to stand for that. We're a twenty four to seven world,
5:00
Speaker 3: I think lacking.
5:01
Speaker 1: Yeah, vlat from Robin Hood, he's really been active on
5:04
Speaker 1: trying to get this done.
5:05
Speaker 2: I want to throw a clip to you. This is
5:08
Speaker 2: Tom Lee. Now.
5:09
Speaker 1: He's talking about tariffs and how the impact on this
5:11
Speaker 1: could affect some of the central banks to possibly ease
5:16
Speaker 1: a little bit in terms of interest and also improve
5:19
Speaker 1: liquidity a little bit.
5:19
Speaker 2: I want to get your take though. Take a look.
5:22
Speaker 4: Yeah, Look, the market to this point is kind of
5:24
Speaker 4: operated on the idea that this is a negotiation that's
5:27
Speaker 4: taking place, that these tariffs, if they are implemented, won't
5:30
Speaker 4: last for long. Is that your thought process as well?
5:33
Speaker 5: Still, Yes, I'd say there's decent odds that, let's say
5:37
Speaker 5: we go three months out, that the tariffs will be
5:40
Speaker 5: rolled back because concessions were received, and there are also
5:45
Speaker 5: other mechanisms in place to sort of protect markets from
5:48
Speaker 5: the downside. I know people think this is an unlimited
5:50
Speaker 5: risk scenario for stocks, but if the tariffs come into
5:54
Speaker 5: play and other countries go into recession, those central banks
5:59
Speaker 5: will be ea which will actually improve liquidity. So I'd
6:03
Speaker 5: say that as bad as things look.
6:05
Speaker 2: I do think there's downside protection.
6:07
Speaker 5: It's hard to tell how much of this is an
6:09
Speaker 5: investment in improving US competitive positioning. I think it is
6:14
Speaker 5: kind of a test of resilience right now, and the
6:16
Speaker 5: fact that we're only down one and a half points
6:19
Speaker 5: one a half percentage points on pretty major universal tariffs
6:23
Speaker 5: is actually a sign of resilience.
6:26
Speaker 1: So you know, Tom has been I call him kind
6:29
Speaker 1: of the permeable right now. He seems to kind of
6:32
Speaker 1: go in the face of where markets tend to slant to.
6:37
Speaker 1: Even though we have obviously seen some pretty amazing performance.
6:40
Speaker 2: But what is your opinion. Do you feel like that.
6:42
Speaker 1: We will get some relief with the kind of the
6:46
Speaker 1: performance of what Trump has been able to do so
6:48
Speaker 1: far on these negotiations in terms of interest rates?
6:52
Speaker 2: What are your thoughts?
6:53
Speaker 3: Yeah, I think I think Tom has been right for
6:56
Speaker 3: a very long time as well, because he understands that
6:59
Speaker 3: central bankers know longer allow recessions. They've basically outlawed them,
7:02
Speaker 3: so they always respond with that stimulus. I think Thomas
7:05
Speaker 3: pointing to what the Goldilock scenario is out of these tariffs.
7:09
Speaker 3: The Goldilock scenario is that we get a Plaza Accord
7:13
Speaker 3: two point zero, where other countries agree to weaken the
7:16
Speaker 3: dollar to make US manufacturing more competitive. Maybe they agree
7:20
Speaker 3: to extend the duration of their treasury holdings to drive
7:24
Speaker 3: down US long term interest rates. At the same time,
7:27
Speaker 3: there are economies weaken, so they come in with stimulus.
7:30
Speaker 3: If we see both sides of that happen, we're going
7:33
Speaker 3: to see, you know, a sort of face ripping rally
7:36
Speaker 3: in risk assets. And I think we think the probability
7:39
Speaker 3: of that happening is pretty high. I think that's what
7:41
Speaker 3: Trump is trying to engineer. Whether he'll succeed, we'll see,
7:45
Speaker 3: but I don't think there's a you know, I think
7:46
Speaker 3: it's a reasonable chance that that's exactly what we get,
7:49
Speaker 3: which is, you know, dual stimulus to risk assets.
7:52
Speaker 1: Down the road, well, I would kind of agree with
7:55
Speaker 1: this because I think a lot of people are seeing
7:57
Speaker 1: through though I do agree that you know, border security
8:00
Speaker 1: and you know some of the drug drug traffic, both
8:03
Speaker 1: from Mexico and Canada, they've been an issue. But I
8:06
Speaker 1: think the bigger scenario here is the construct that Trump
8:10
Speaker 1: appears to be trying to put together here in terms
8:12
Speaker 1: of an economy, because I think down the road he's
8:15
Speaker 1: obviously looking at a situation where inflation could get out
8:18
Speaker 1: of control with a little bit. I don't anticipate, at
8:22
Speaker 1: least everybody I'm talking to so far is anticipating, much
8:25
Speaker 1: like Lee, that if implemented, these would not last long.
8:29
Speaker 1: And obviously the deal has already been cut with Mexico
8:32
Speaker 1: to kind of soften up a little bit, so they
8:34
Speaker 1: get another thirty days. Stay here. Let's talk about cryptos.
8:38
Speaker 1: Are David Sachs all right? So SAX has been in
8:41
Speaker 1: the crypto community for quite some time. Obviously also a
8:43
Speaker 1: tech guy, pay Pal Mafia guy, and now leading the
8:47
Speaker 1: digital asset strategy going forward. Big press conference tomorrow with
8:53
Speaker 1: the team that is essentially running this. This includes guys
8:56
Speaker 1: like french Hill has been a big advocate of crypto
8:58
Speaker 1: in general. What do you think is going to come
9:00
Speaker 1: out of this press conference tomorrow?
9:03
Speaker 3: Yeah, I have a good guess that crypto Twitter is
9:05
Speaker 3: going to expect more than this press conference can deliver.
9:09
Speaker 3: What I hope to see out of this press conference
9:12
Speaker 3: is a follow on to the executive order or sex
9:15
Speaker 3: makes clear that they've put together this leadership committee, who's
9:18
Speaker 3: going to be on it, specifically, what they're going to
9:21
Speaker 3: be looking at, how they're starting to think about regulation,
9:24
Speaker 3: how they're committed to the right for people to self
9:28
Speaker 3: sovereignly own crypto and to be able to program in
9:31
Speaker 3: the DeFi space. I think that's what we can hope for,
9:34
Speaker 3: and if we get that, we should be very pleased.
9:36
Speaker 3: If we have good leadership, with good organization and good
9:40
Speaker 3: fundamental philosophy, that's as much as we can expect one
9:44
Speaker 3: week after the executive order. I imagine that over the
9:47
Speaker 3: next twenty four hours, crypto twitter is going to tie
9:50
Speaker 3: itself into knots expecting him to say the US is
9:53
Speaker 3: buying a million bitcoin, and maybe that will happen, but
9:56
Speaker 3: I would be skeptical. So I think this is going
9:58
Speaker 3: to be, you know, like another signpost that we're walking
10:02
Speaker 3: down the road where we want to get to. Washington
10:05
Speaker 3: moves slowly. This Washington moves faster than most, but even
10:09
Speaker 3: this Washington doesn't maybe go from you know, zero to
10:12
Speaker 3: one hundred overnight. So I think that's what we'll see.
10:15
Speaker 3: I think it'll be progressed, but I don't think it'll be,
10:17
Speaker 3: you know, a complete game changer.
10:19
Speaker 1: Well, obviously, the side of this from you know, Congress
10:23
Speaker 1: is that, you know, we've got a couple of bills
10:26
Speaker 1: that were introduced last year, both with FIT twenty one
10:29
Speaker 1: as well as the stable Cooin Bill, things of that nature.
10:32
Speaker 1: Do you think we could see any kind of indicator
10:35
Speaker 1: coming out in that press conference that would maybe give
10:37
Speaker 1: some light to what's happening there.
10:41
Speaker 3: Yeah. Look, I think there is massive bipartisan support for
10:44
Speaker 3: progress on stable coins. There's also push from the crypto
10:47
Speaker 3: industry and from traditional Wall Street to get that bill done,
10:50
Speaker 3: and so I imagine that that's the easiest legislative step to
10:54
Speaker 3: take and maybe we'll hear something about that. I have
10:57
Speaker 3: been hearing more about twenty one when I've been chatting
11:02
Speaker 3: with people in Washington, which tells me that there is
11:05
Speaker 3: more discussion about that than maybe I expected. If we
11:08
Speaker 3: start to see that moving forward really aggressively with a
11:11
Speaker 3: hope of congressional action, you know, that's an upside surprise.
11:14
Speaker 3: I don't think that's played chriced into the market right now,
11:17
Speaker 3: so that would be a surprise on the upside. And
11:19
Speaker 3: now that you mentioned it, I have been hearing a
11:21
Speaker 3: little bit more chatter about it.
11:23
Speaker 2: Well, it's going to be intriguing. We'll see how this goes.
11:25
Speaker 1: I anticipate this will be a step process because Sax
11:28
Speaker 1: is a master of this obviously, coming from the software
11:31
Speaker 1: as a service industries, he understands PR control and how
11:34
Speaker 1: to pace that out across So we'll see how this
11:39
Speaker 1: comes to pass here as well. I want to kind
11:42
Speaker 1: of give you a little bit of an insight here.
11:44
Speaker 1: I'm sure you've been watching, but the fear and greed
11:47
Speaker 1: definitely popping. We've seen what I would say, not quite
11:50
Speaker 1: the cut that we saw back in September of last year,
11:53
Speaker 1: where fear index was down around thirty five. We are
11:57
Speaker 1: hedging it around thirty nine. But it was a quick
11:59
Speaker 1: cut in the market's largest liquidations, but also a very
12:04
Speaker 1: fast turnaround, not necessarily back up, but at least in
12:08
Speaker 1: a direction going up. When you look at the fear
12:10
Speaker 1: and greed where it is today, especially around the bitcoin
12:14
Speaker 1: dominant side of things, do you think that there is
12:17
Speaker 1: any challenge on these cycles around this all coin market
12:20
Speaker 1: that could ever really become something at least on this cycle.
12:24
Speaker 1: Does this have any indicator on changing the all coin strategies.
12:29
Speaker 3: Ah, that's a good question, you know. I think the
12:33
Speaker 3: all coin space is waiting for this regulatory clarity that
12:36
Speaker 3: we've been talking about. It's waiting for a fundamental catalyst.
12:40
Speaker 3: I don't necessarily think we're going to see the kind
12:43
Speaker 3: of waterfall cycle that we've seen in the past where
12:47
Speaker 3: money immediately flows from bitcoin to eth and down the
12:50
Speaker 3: capitalization spectrum. I think there's more specific interest in Bitcoin,
12:56
Speaker 3: specific interest in ETH, specific interest in salt, so I
12:59
Speaker 3: think the market may have changed a little bit. One
13:02
Speaker 3: reason for that, Paul is I think we've shifted from
13:04
Speaker 3: a market that's primarily based on speculation to one that's
13:08
Speaker 3: based on speculation also fundamental utility. Right, you can talk
13:12
Speaker 3: about revenues and eth you can talk about users in Solana,
13:15
Speaker 3: you can talk about fundamentals for many of these blockchains
13:19
Speaker 3: in a way you couldn't four years ago. So I
13:21
Speaker 3: think the cycle looks a little bit different now.
13:25
Speaker 1: So, Matt, we were watching a couple of things. One,
13:28
Speaker 1: when you look at the Bitcoin Strategic Reserve, which has
13:32
Speaker 1: now slowly become the Digital Assets Strategic Reserve, you think
13:38
Speaker 1: about where Trump is generally right now. You look at
13:41
Speaker 1: even some of the things he's doing with his within
13:43
Speaker 1: his own digital asset company, A lot of it is
13:45
Speaker 1: leaning toward things like Ethereum, but there are other major
13:50
Speaker 1: US projects out there, including companies like Ripple and XRP
13:54
Speaker 1: that could viy for a position within this group. Do
13:57
Speaker 1: you think this will be a at least an this
14:00
Speaker 1: stockpile idea. Do you think this will be a bucket
14:03
Speaker 1: of tokens or a bucket of assets, or do you
14:06
Speaker 1: fill it's going to kind of focus in on ethan
14:07
Speaker 1: and bitcoin.
14:09
Speaker 3: Yeah. I mean my personal view on a base case scenario,
14:13
Speaker 3: and what I think is priced into the market is
14:16
Speaker 3: that it's bitcoin only. What that means for you as
14:19
Speaker 3: an investor, is if an outlier scenario happens, or you
14:24
Speaker 3: have a particular view, or you're you're listening to people
14:26
Speaker 3: and you're seeing photos of Brad garling House and senators
14:30
Speaker 3: and you think that something is going to happen that's
14:32
Speaker 3: more than bitcoin. Well, that I don't think is priced
14:35
Speaker 3: into the market. So that's that's kind of how I
14:37
Speaker 3: think about I think about what my base case is
14:40
Speaker 3: and then what the external scenarios could be, and I
14:43
Speaker 3: think that's how I view the market.
14:45
Speaker 1: What are your thoughts on bank custody? Do you think
14:47
Speaker 1: that's going to happen soon this year? What's the cycle
14:51
Speaker 1: that we could expect.
14:53
Speaker 3: Yeah, absolutely, it's going to happen as fast as the
14:56
Speaker 3: banks can possibly move, which isn't as fast as crypto moves,
14:59
Speaker 3: but is pretty fast. They all want in on custody.
15:02
Speaker 3: They all want in on stable coins. You know. The
15:05
Speaker 3: famous thing going around is that Tether made almost as
15:08
Speaker 3: money as Goldman Sachs last year. Goldman Sachs didn't like that, right,
15:13
Speaker 3: JP Morgan doesn't like that. Bank of America doesn't like that.
15:16
Speaker 3: They don't like other people making money in a financial service,
15:20
Speaker 3: which is what that is. So they're waiting at the doors.
15:24
Speaker 3: As soon as they have anything that looks like a
15:26
Speaker 3: regulatory green light, they're gonna come slamming in. And you know,
15:29
Speaker 3: a bit wise. We talk to those firms all the time.
15:31
Speaker 3: They're very serious, they have very serious teams with very
15:34
Speaker 3: serious people, and they want in because it's a big
15:37
Speaker 3: and growing market.
15:38
Speaker 2: For sure.
15:39
Speaker 1: Well, I think the capacity there will also initiate maybe
15:43
Speaker 1: some people that are on I won't say the sidelines,
15:46
Speaker 1: but at least, you know, somewhat skeptical about moving into
15:48
Speaker 1: the market, which could open some things up.
15:51
Speaker 3: Yeah. Absolutely. I mean you have to think about what
15:54
Speaker 3: that rule SAB one twenty one meant. In principle, it
15:57
Speaker 3: effectively say this stuff is too radioactive for mainstream institutions
16:02
Speaker 3: to touch. That was the message that it was sending,
16:06
Speaker 3: and now it's saying it's safe, come on in the
16:08
Speaker 3: pool's fine, and that is a game changer when you
16:11
Speaker 3: go to an endowment, a foundation and institutional board. It's
16:16
Speaker 3: just a different conversation when large banks are in this
16:19
Speaker 3: space and operating in this space than it is when
16:22
Speaker 3: it's all cryptonative firms. It's really positive for the space
16:25
Speaker 3: long term.
16:26
Speaker 1: Matt with banks you have to think in terms of
16:29
Speaker 1: their biggest product centers. Payments is one of the biggest
16:33
Speaker 1: ones out there. And we keep hearing and seeing signals
16:38
Speaker 1: that there might be some potential blockchain rails that could apply.
16:41
Speaker 2: Here.
16:41
Speaker 1: You've got XRP that's doing some things with SBI in Japan.
16:46
Speaker 1: The potential there is huge. Do you think that could
16:49
Speaker 1: ever challenge what we see out there in terms of
16:52
Speaker 1: merchant services with MasterCard Visa in the future.
16:55
Speaker 3: Yeah. I have to say when I look at that
16:57
Speaker 3: market and I look at you two and a half
17:00
Speaker 3: two point one percent fees on every transaction, long term,
17:04
Speaker 3: it's a dead man walking. There's no way that stands.
17:07
Speaker 3: That's like markets trading from nine thirty to four. These
17:10
Speaker 3: are vestiges of a prior age and they have to
17:14
Speaker 3: be eliminated. That will be hugely beneficial for consumers, hugely
17:18
Speaker 3: beneficial for small businesses. Those profits are just going to shrink.
17:23
Speaker 3: So what smart financial services firms are going to do
17:26
Speaker 3: is understand that that's going to happen and pivot to
17:29
Speaker 3: make money on other things. Again, stable coins cost nothing
17:33
Speaker 3: to send. Teather makes thirteen billion dollars a year. There's
17:37
Speaker 3: still profits made, but not in the traditional intermediary sense
17:42
Speaker 3: of MasterCard and visa. That game is over within five years,
17:46
Speaker 3: and we've shifted to blockchain rails.
17:48
Speaker 1: Well, this could be a pretty significant thing because it
17:51
Speaker 1: will affect this will have a I think a lot
17:53
Speaker 1: of flowdown effect on you mentioned small business. Some of
17:56
Speaker 1: the biggest sectors out there, the restaurant industry cranking about
18:00
Speaker 1: one point two to one point four trillion a year.
18:02
Speaker 1: I mean that's a significant number just in that not
18:06
Speaker 1: even retail, not fashion, not medical, any of that. So
18:09
Speaker 1: there's a big opportunity here. I've got a chart here.
18:13
Speaker 1: I want to get your opinion on this because when
18:15
Speaker 1: we look at this, and also I think when many
18:17
Speaker 1: people were probably watching the charts over the weekend, you
18:20
Speaker 1: see these unbelievable wicks. This is the XRP wick right there,
18:25
Speaker 1: and then this immediate you know, it was as if
18:29
Speaker 1: though somebody was waiting for that happen and waiting with
18:32
Speaker 1: a literally brinkstruck to come in on these moves. So,
18:37
Speaker 1: first of all, how do these things happen? How do
18:39
Speaker 1: these things happen for the markets to be able to
18:41
Speaker 1: suck that kind of move down right back up?
18:46
Speaker 3: Yeah? Well, I mean This is part of what crypto
18:49
Speaker 3: is and how it works, which is there is a
18:51
Speaker 3: news event that caused the price to drop. There's a
18:54
Speaker 3: lot of leverage and a lot of smart contract in
18:56
Speaker 3: DeFi organizations. Within crypto, they get stopped out and liquidated,
19:01
Speaker 3: causing the price to drop more, and you have to
19:03
Speaker 3: wait for that over leverage to be washed out of
19:07
Speaker 3: the system. Once it is, there's no one left to
19:10
Speaker 3: sell and it bounces straight back up and people you
19:13
Speaker 3: can see to some degree where that leverage exists in
19:17
Speaker 3: the system by looking at where those positions are and
19:20
Speaker 3: estimating where it is at the bottom. But this has
19:22
Speaker 3: been happening in crypto for time immemorial. The lesson to
19:26
Speaker 3: investors this often happens on weekends, which are low liquidity
19:30
Speaker 3: period which is why this can be amplified is unless
19:33
Speaker 3: you're a short term trader, you have to just sit
19:35
Speaker 3: on your hands because it moves so fast and there's
19:38
Speaker 3: this cascading liquidation thing and there are people at the
19:42
Speaker 3: bottom with that. You said, briks trucks waiting for the
19:45
Speaker 3: intiviable bounce, and that's just an old story in crypto.
19:49
Speaker 1: Yeah, it really is. You look at I'm looking at Ethereum.
19:53
Speaker 1: This is one of the I feel like underperforming assets
19:56
Speaker 1: out there am as a percentage of market cap right
19:58
Speaker 1: now continuing to gift over here. Do you feel like Ethereum,
20:02
Speaker 1: you know, from an AUM side of things on the
20:05
Speaker 1: market cap, do you feel like this is still an
20:07
Speaker 1: underperforming asset or are the days of ETH limited?
20:12
Speaker 3: Yeah? I mean, look, I think Eth is a contrarian
20:15
Speaker 3: plane crypto. I think there are elements of the fundamentals
20:18
Speaker 3: of ETH that are extremely strong. It's directly exposed to
20:22
Speaker 3: the growth in staple coins, in tokenization, in AI's use
20:25
Speaker 3: of crypto. It's the center of those trends. But it's
20:29
Speaker 3: been suffering from sort of a philosophical challenge it's been
20:34
Speaker 3: having on how to monetize that user growth and how
20:37
Speaker 3: should it structure its architecture. I think until it works
20:40
Speaker 3: through I hate to use these words, but until it
20:42
Speaker 3: works through the bad vibes, which I think could take another,
20:45
Speaker 3: you know, six plus months, I think it's going to
20:47
Speaker 3: be a challenged asset for long term investors. I think
20:51
Speaker 3: there's a strong fundamental case to be made for Ethereum
20:54
Speaker 3: long term because the growth in users on layers twos
20:58
Speaker 3: is phenomenal. The utility is really interesting, but it has
21:03
Speaker 3: to work through these sort of community bad vibes before
21:06
Speaker 3: it gets to the other side, and it hasn't done
21:08
Speaker 3: that yet.
21:08
Speaker 1: Yeah, we showed a short chart there of gold features
21:13
Speaker 1: right there and the performance to an all time high,
21:16
Speaker 1: trading almost at twenty nine hundred. Why did gold react
21:20
Speaker 1: so differently than bitcoin on this news? Obviously with tariffs
21:25
Speaker 1: playing into this, gold is the greatest cure asset, but bitcoin,
21:29
Speaker 1: I would assume has a similar response to most investors.
21:33
Speaker 2: What were your thoughts on this?
21:35
Speaker 3: Yeah, you know, I think Bitcoin's going to catch right
21:37
Speaker 3: up and then exceed gold. So it is the case
21:40
Speaker 3: that gold ran in this case. I don't know if
21:42
Speaker 3: that's investors imagining that foreign sovereign banks will roll off
21:45
Speaker 3: dollar assets and roll more aggressively into gold, which has
21:48
Speaker 3: certainly been a trend that we've been seeing. You know,
21:52
Speaker 3: Perhaps it was just the type of investors who are
21:56
Speaker 3: in this market. Bitcoin's also has more elements of a
21:59
Speaker 3: risk ass said, so it often has a one day pullback.
22:02
Speaker 3: But I think if you look in a week, my
22:05
Speaker 3: guess is that bitcoin is outperformed gold and has more
22:08
Speaker 3: than caught up from that move.
22:10
Speaker 1: Crazy stuff out there right now. I got to look at,
22:13
Speaker 1: of course, what else is going on within the administration.
22:16
Speaker 1: Doge is on a absolute tearror right now and trying
22:20
Speaker 1: to adjust into not only the expenses of the US government,
22:23
Speaker 1: but also changing some of the I think idea of
22:27
Speaker 1: how the US government is going to go spend, and
22:30
Speaker 1: this of course will have some effect direct effect on
22:33
Speaker 1: the economy. Is there anything that you're seeing right now
22:36
Speaker 1: with what Elon Musk is doing that you're saying, Hey,
22:38
Speaker 1: this could be good for markets, This could be good
22:41
Speaker 1: especially for risk markets in the future.
22:43
Speaker 2: Anything that you're picking out.
22:45
Speaker 3: Well, he's making big claims about how successful he is
22:50
Speaker 3: being right now at cutting spending. Right he's talking about
22:54
Speaker 3: getting down four billion dollars a day, getting to the
22:56
Speaker 3: point where the US budget deficit is cut in half. Obviously,
23:00
Speaker 3: if that happens, that will give US space to lower
23:03
Speaker 3: interest rates significantly without sort of inflation picking up, and
23:07
Speaker 3: that will be very good for risk assets. I think
23:10
Speaker 3: we need to see sort of the receipts of that happening.
23:15
Speaker 3: If the early indications are true and we're getting back
23:18
Speaker 3: to a more normal level of government spending, that is ultimately,
23:22
Speaker 3: in my view, extremely positive for all sorts of assets
23:25
Speaker 3: and is something we should be rooting for now.
23:28
Speaker 1: He has now met with several blockchain companies trying to
23:33
Speaker 1: implement this into governmental transparency. How big of a deal
23:39
Speaker 1: do you think that would be for the crypto industry
23:42
Speaker 1: if he were to choose one or two blockchains to say, hey,
23:45
Speaker 1: we're going to use these for full transparency and really
23:49
Speaker 1: begin the next era of blockchain usage.
23:53
Speaker 3: I think it would be phenomenal whichever blockchain they choose.
23:56
Speaker 3: I think it would be a proof of concept for
23:58
Speaker 3: something about the blockchain industry that people don't talk about,
24:01
Speaker 3: which you can have proof of information at a given time.
24:05
Speaker 3: So one of the reasons you would put this kind
24:07
Speaker 3: of information on the blockchain is stamped indelibly and can
24:11
Speaker 3: be available to everyone and can never be changed in
24:14
Speaker 3: the future. Right. It's one way of the government not
24:18
Speaker 3: telling citizens to trust us, but showing exactly what we
24:23
Speaker 3: did when forever that anyone can look into at any
24:26
Speaker 3: point in time, and that they never have a chance
24:27
Speaker 3: to change. And so I think that would be a
24:29
Speaker 3: great thing for governments to do, and it would certainly
24:33
Speaker 3: benefit whichever blockchain they choose. Just because it would be
24:36
Speaker 3: sort of a government stamp of approval for blockchain X,
24:39
Speaker 3: Y or z. But I do think it would be
24:42
Speaker 3: great to see it happen.
24:44
Speaker 1: Okay, So I got to ask you this, which ones
24:46
Speaker 1: do you think you might choose?
24:48
Speaker 2: Here?
24:48
Speaker 1: I mean, you got ripples on the table, avalanches on
24:50
Speaker 1: the table, there's a lot here. Hadera's on the table.
24:53
Speaker 2: What do you think?
24:54
Speaker 3: Yeah, I think you might choose multiple, is my guess,
24:58
Speaker 3: And then that would be good for the over all
25:00
Speaker 3: scope of society. I don't know that they'll want to
25:03
Speaker 3: pick a winner or a loser. We have seen state
25:05
Speaker 3: governments pick winners and losers, right, I think it was
25:09
Speaker 3: California put vehicle ownership avalanche. But I don't know that
25:14
Speaker 3: the national government is going to want to pick one winner.
25:17
Speaker 3: I think that would be challenging. My guess is they will.
25:20
Speaker 1: Pick multiple, yeah, or you know industry specific. You know,
25:24
Speaker 1: so there's some that could be living over in the
25:26
Speaker 1: payment side of things. There could be some for international usage.
25:30
Speaker 1: I could see that being more relevant to that. I
25:33
Speaker 1: like your opinion.
25:34
Speaker 2: There.
25:34
Speaker 1: Last thing I want to hit you with is when
25:37
Speaker 1: you look at all of these executive orders that Trump
25:40
Speaker 1: is pushing out and how digital assets are looked at,
25:44
Speaker 1: you know, from traditional markets, but also really retail investors.
25:49
Speaker 1: I think today and what we saw this past weekend,
25:52
Speaker 1: which is, you know, you hint on a couple of
25:55
Speaker 1: major tariffs and immediately the market does a meltdown. How
26:00
Speaker 1: big of a future do you think this is going
26:02
Speaker 1: to be? Will people just get used to this kind
26:05
Speaker 1: of movement in the market or do you feel like
26:07
Speaker 1: they're going to start to become a little bit tone
26:09
Speaker 1: def to what's happening in DC and its effect on
26:13
Speaker 1: markets in the future.
26:15
Speaker 3: Yeah, it's a great question, you know, specific to crypto,
26:18
Speaker 3: I think a lot of crypto investors are still fighting
26:20
Speaker 3: yesterday's wars, and yesterday's wars were all about macro. My
26:24
Speaker 3: actual view is that's happening specifically to crypto matters more
26:29
Speaker 3: than what's happening on the macro side. So David Sachs
26:32
Speaker 3: press conference matters more than the tariffs. But the crypto
26:37
Speaker 3: short term trading environment hasn't yet realized that. So I
26:41
Speaker 3: think as they do, we'll start to see some of
26:43
Speaker 3: that volatility come out of the market and be more cryptospecific.
26:47
Speaker 3: It's a little bit funny to talk about the macro
26:49
Speaker 3: economy and you know, say, what's happening on tariffs and
26:53
Speaker 3: taxation is so volatile and what's happening in crypto is
26:56
Speaker 3: so steady. But that's actually the case, that's actually where
26:59
Speaker 3: we are today.
27:00
Speaker 2: Yeah.
27:00
Speaker 3: Yeah, Look, we're in for a volatile period across multiple markets,
27:05
Speaker 3: but the long term story from crypto is still extraordinarily
27:10
Speaker 3: strong and the trends there are playing out over years,
27:13
Speaker 3: not over days.
27:15
Speaker 1: Okay, so we have the super Bowl coming up. Last
27:17
Speaker 1: question to you. Last time we had a Super Bowl
27:20
Speaker 1: that had a crypto ad was several years ago.
27:23
Speaker 2: I think it was. It might have been FTX.
27:25
Speaker 1: So so now you've got Calci and Robinhood kind of
27:28
Speaker 1: jumping into this, so this could be big. The question
27:31
Speaker 1: is will this be a catalyst for crypto? Will this
27:35
Speaker 1: be the true coming out moment? Now in a super Bowl?
27:39
Speaker 1: Even though I don't know if everybody's watching the super
27:40
Speaker 1: Bowl these days, but what do you think?
27:43
Speaker 3: Oh man, I wasn't ready for this question, So I
27:45
Speaker 3: don't know super Bowl question. You know there are there
27:49
Speaker 3: are all there is this history of Super Bowl ads
27:52
Speaker 3: being a top so that question makes me a little
27:55
Speaker 3: bit nervous. If I'm being honest, I don't think it's
27:58
Speaker 3: the case here. I think the top is still a
28:01
Speaker 3: long ways away. But this particular point you're raising is
28:04
Speaker 3: making me a little uncomfortable.
28:06
Speaker 1: Well, there's a lot, you know, you got to think
28:08
Speaker 1: about that Robin Hood and Cal she's going in on this,
28:10
Speaker 1: and of course Cal she being kind of the betting
28:12
Speaker 1: system out there, you know, within this, so I get
28:15
Speaker 1: the marriage and of course the also the demographic that
28:18
Speaker 1: Robin Hood brings, you know, to the market, which is
28:21
Speaker 1: kind of unique in the fact of, you know, new
28:23
Speaker 1: investors and stuff. Anyway, it's been a good one for sure.
28:26
Speaker 1: Thanks so much for coming in today, Matt. We always
28:29
Speaker 1: love to have you on the show, so we appreciate it.
28:32
Speaker 3: Thanks for having me, Paul, You bet all right.
28:34
Speaker 1: So you guys, if you're not in the Diamond Circle,
28:36
Speaker 1: make sure and get in over there. That's a great
28:37
Speaker 1: place to get additional content from us. You can also
28:40
Speaker 1: join our private telegram group, which is pretty cool because
28:43
Speaker 1: we do a lot of back and forth in there.
28:45
Speaker 1: I jump in there and have conversations with our audience
28:48
Speaker 1: as well. So we'll leave a link down below that
28:50
Speaker 1: you guys can get to that. And of course if
28:52
Speaker 1: you're not following me out there on X do that
28:54
Speaker 1: it's just at Paul Baron. We'll catch you next time,
28:55
Speaker 1: right here on tech Path.
29:00
Speaker 3: The mutin
29:03
Speaker 1: Mot