0:04

What's going on everybody? We are reporting live

0:06

from the Digital Asset Summit here in New

0:08

York City. Super excited to be joined today

0:10

by Matt Hogan a bit wise and we're

0:13

following up from a conversation that we had

0:15

a few months ago where we started to

0:17

outline what are our key views for 2025.

0:19

So I thought I'd grabbed Matt from the

0:21

crowd. He's been a busy guy today, but

0:23

we figured we'd sit down, catch up, hear

0:26

what's going on, and so it's great to

0:28

have you here. Thanks for having me. It's

0:30

a great event. A lot of people and excited

0:32

for this conversation. Yeah, the energy is incredible here.

0:34

It really is really exciting. People are excited. There's

0:36

a lot happening. We're going to tie in a

0:39

lot of our conversation to what's going on with

0:41

the digital asset side of things and stable coins

0:43

we were just mentioning before we started recording. But

0:45

before that, I do want to ask you. What's your

0:48

general macro framework right now? How are you

0:50

thinking about the interplay of what's going on

0:52

on the fiscal side with Trump and everything?

0:54

We had the FOMC meeting tomorrow. What's your

0:57

outlook there? And how is that all starting

0:59

to those cross currents come into your outlook

1:01

on digital assets? Yeah. So when I think

1:04

about the value of any digital asset, let's

1:06

take Bitcoin for example, I think about two

1:08

things. I think about where I think it's

1:10

going long term. Like let's say I think

1:13

Bitcoin going to $200 $200 thousand dollars

1:15

by the present value. The discount rate

1:17

is based on the economic uncertainty

1:19

in the market. I think what's happening

1:21

right now when you look at the

1:24

macro condition, it's actually playing into

1:26

the long-term case for Bitcoin. So

1:28

it's making me more bullish long-term

1:30

because there's economic instability, the

1:32

government is mucking with the

1:34

economy, all the things Bitcoiners

1:36

ate, makes that long-term price target

1:38

go up, but it increases the discount

1:41

factor, which is why the market has

1:43

pulled back. So as a long-term Bitcoin investor,

1:45

I see that as a gift. If I'm

1:47

looking at this short term though, it could get

1:49

worse before it gets better, right? If

1:51

the government keeps sort of pushing the

1:53

risk curve down and we start

1:56

heading towards recession, that's probably

1:58

not good for Bitcoin in the... short

2:00

term so long term extremely bullish short

2:02

term some trepidation and we'll have to

2:04

see what comes out of Powell's voice

2:06

what comes out of other people's talks

2:09

in the the weeks to come. It's

2:11

always this interesting one right because you

2:13

know as people that are believers in

2:15

Bitcoin we often view it as a

2:17

hedge on you know monetary inflation and

2:19

increasing liquidity but then we hear what's

2:21

going on on the fiscal side and

2:24

they want to decrease deficits but at

2:26

the same time there's also a lot

2:28

of governmental... inefficiencies, there's a lot of,

2:30

you know, I don't want to go

2:32

as far as say, you know, fiscal

2:34

chaos, but we're not totally sure on

2:37

where things are going to land with

2:39

tariffs. So how do you square up

2:41

this idea that, you know, there's a

2:43

lot of positive fundamental tailwinds for Bitcoin

2:45

as an asset class, but if we're

2:47

actually pulling back on fiscal deficits, wouldn't

2:49

that be sort of a bearish situation?

2:52

I mean, I basically don't believe it.

2:54

So... You know, look, we're at a

2:56

two and a half trillion dollar deficit

2:58

right now. I don't think there's any

3:00

real realistic way to trim that to

3:02

a trillion dollars or less, which is

3:04

where you have to get to if

3:07

you start to want to sort of

3:09

support the dollar long term and make

3:11

Bitcoin have less space in the world.

3:13

So it is absolutely true. If we

3:15

see real austerity and we somehow trim

3:17

that deficit substantially, that's a headwind to

3:20

Bitcoin. I just don't believe it. I

3:22

feel the same about sort of recessionary

3:24

odds and the idea that we're going

3:26

to go through a period of austerity.

3:28

That also would be bad for Bitcoin,

3:30

to be honest. That's part of the

3:32

same equation, but I don't buy it.

3:35

I think the government will blink at

3:37

the end. So I could be wrong,

3:39

and if I'm wrong, it's going to

3:41

be a challenging period for Bitcoin. But

3:43

I think the government will blink on

3:45

austerity. Yeah, I mean, you're definitely on

3:47

the right side of history of, you

3:50

know, if you're trying to fade the

3:52

idea that they can't kick the can

3:54

down the road, they all... always kick

3:56

it. They always find a way. They

3:58

always kick it. It's the easy button

4:00

and no one likes. Politicians don't want

4:03

to be unpopular. They can only be

4:05

so unpopular for so long. You're already

4:07

seeing them kick that can in Germany.

4:09

You're already seeing them start to kick

4:11

the can in China. I don't think

4:13

the US is going to be the

4:15

only one that tries to hold the

4:18

line. We've seen other individual nations try

4:20

to enact austerity against a world that's

4:22

easing. and that's just a very uncomfortable

4:24

position. So I think once they started

4:26

hitting the easy button in 2008, I

4:28

don't think they can stop. So I

4:31

think they're gonna blink eventually. I'm glad

4:33

he brought up the rest of the

4:35

world because this is really interesting discrepancy

4:37

right now that's happening. So to your

4:39

point, you know, Germany's talking about a

4:41

$500 billion fiscal impulse. They're talking about...

4:43

taking off the debt break, we got

4:46

China coming in in size, we got,

4:48

you know, Japan is, has a pretty

4:50

strong economy right now, all relatively speaking.

4:52

So that's all going on at the

4:54

same time that it's, it's sort of,

4:56

you know, we can say short term

4:58

it's the opposite in the US. I

5:01

am with you that, you know, median

5:03

term, it's, it's somewhat, you know, we

5:05

can say short term, it's the opposite

5:07

in the US-centric-centric view, but, you know,

5:09

you know, So how do you think

5:11

that reflects until like you know Bitcoin's

5:14

correlation to risk assets is that okay

5:16

if we assume that you know NASDAQ

5:18

into cues are going to continue to

5:20

bleed lower but the rest of the

5:22

world is going gangbusters on liquidity? How

5:24

do you think crypto assets start to

5:26

reflect that? Are they going to take

5:29

up the mantle of what's going on

5:31

in the rest of work? Because it's

5:33

a global asset, right? Or does it

5:35

get headstrong by the correlation to the

5:37

NASDAQ? No, again, I think that correlation

5:39

is really a short-term correlation, right? Like

5:41

it's a dip and rip sort of

5:44

situation. I think we're seeing global monetary

5:46

supply at its all-time high or very

5:48

close to its all-time high already today,

5:50

and I think that's accelerating. to be

5:52

in a positive orientation to get that

5:54

mark. really moving ahead and like you

5:57

said I think when we look overseas

5:59

you already see that happening and I

6:01

think it'll happen in the US. So

6:03

I think it responds to that global

6:05

phenomenon. I'm much more bullish on Bitcoin

6:07

than I am on the US stock

6:09

market in the short term. It is

6:12

a global asset so it will be

6:14

supported around the world. Yeah, very well

6:16

said. Okay, so there's this whole situation

6:18

going on with the fiscal, which, you

6:20

know, I would characterize as we're trying

6:22

to find efficient and more novel ways

6:24

to monetize debt and refinance debt. That's

6:27

really the big question. We hear, you

6:29

know, Scott Besson and Trump, they're squarely

6:31

focused on bringing down 10-year yields and

6:33

we're all trying to speculate on what

6:35

the core reason is. You know, you

6:37

could, you know, reflect that and just,

6:40

you know, more affordable mortgage mortgage mortgage

6:42

rates, as opposed to long-term debt for

6:44

the last three years, we can get

6:46

those yields down and refinance it, that's

6:48

going to be a great situation for

6:50

the fiscal situation. And then, you know,

6:52

we're talking here at a digital asset

6:55

summit, so let's bring in some of

6:57

those dynamics, but talk of the town

6:59

as well as stable coins, right? We

7:01

had the other crypto summit that happened

7:03

a couple weeks ago in Washington, and

7:05

there, a lot of the themes there

7:07

are about stable coins. Yeah, it's a

7:10

huge piece of it. You know, it

7:12

is this gift from the gods to

7:14

the US Treasury. Where are you going

7:16

to find a trillion dollars of new

7:18

demand for US short-term debt? The best

7:20

single answer is stable coins. Other countries

7:23

are pulling back on their purchases of

7:25

US debt. I don't think the US

7:27

consumer is ready to step in and

7:29

fill that gap. You need something to

7:31

and lo and behold we have this

7:33

stable coin boom. that's already starting and

7:35

I think it's going to accelerate tremendously.

7:38

What that means is stable coin legislation

7:40

is a lock. Democrats want it, the

7:42

executive branch wants it, Republicans want it.

7:44

It is that fundamental source. I think

7:46

it'll be interesting to see, you know,

7:48

how wide, how much duration does... they

7:51

allow into these stable coin assets. What

7:53

does that look like? But yeah, it's

7:55

a multi-trillion dollar sink for US debt

7:57

over the next few years, and there

7:59

ain't that many of those around. So

8:01

I think the US is gonna seize

8:03

that and really lean into it. Do

8:06

you think it's consensus that everybody in

8:08

government understands that because you know you

8:10

look at the last couple years and

8:12

originally there was a lot of fight

8:14

against stable coins and you know was

8:16

that just a pure sentiment political play

8:18

or is it just you know we're

8:21

slowly seeing them understand and come to

8:23

terms of the fact that this is

8:25

going to be the next big marginal

8:27

buyer of debt. Where do you feel

8:29

like that sentiment is currently? So you

8:31

still have Elizabeth Warren and others who

8:34

are strongly anti-stable coins. For reason I

8:36

don't understand. For what it's worth, I

8:38

think stable coins are a strongly progressive

8:40

tool that can lower costs and increase

8:42

access to banking and lots of sort

8:44

of core progressive goals. So I really

8:46

don't understand that. But I think the

8:49

dominant majority. already supports stable coins because

8:51

they see the need for U.S. debt

8:53

purchases, they see the ability to export

8:55

dollar demand around the world, to increase,

8:57

you know, dollars placed as a reserve

8:59

asset. That was on the outs, right?

9:01

That is naturally fading over time. This

9:04

is like a booster shot that may

9:06

extend that duration for a long period

9:08

of time. So it's such a massive

9:10

win for America. that I think you

9:12

are starting to see pretty mainstream adoption

9:14

on both sides of the aisle. I

9:17

think it'll sail through both houses of

9:19

Congress. I see the line for it

9:21

making sense for the US to really

9:23

support stable coins. Where does the Bitcoin

9:25

strategic reserve fit into that framework? Here's

9:27

the amazing thing. You know, people used

9:29

to ask me, what are you worried

9:32

about in in in Bitcoin specifically? And

9:34

most of the objections, they were easy

9:36

to deflect. Environment, easy to deflect. The

9:38

one that wasn't easy to deflect was

9:40

will the government ban it? Right? Because

9:42

from a certain perspective, it's a challenge

9:44

to fiat currencies, and why would the

9:47

government allow that to emerge and evolve?

9:49

The absolute... incredible thing about the last

9:51

six months is we've solved that risk

9:53

we've somehow co-opted governments we've started this

9:55

game theory where they need to have

9:57

exposure to this asset that's emerging as

10:00

a geopolitically important asset and once they

10:02

do that they are not going to

10:04

ban it so it you know people

10:06

say why would the government do this

10:08

they're sort of sowing the seeds of

10:10

their own demise but of course the

10:12

answer to that is they have no

10:15

alternative right they understand Cliff Asnes from

10:17

ACWR wrote this incredible piece anti the

10:19

Bitcoin strategic reserve and he said it

10:21

would be as if the US government

10:23

built a Chinese Yuan strategic reserve. But

10:25

of course that's exactly the point. No,

10:28

it's not that. It's the idea that

10:30

there may be something other than the

10:32

dollar. If we don't make it Bitcoin,

10:34

it's going to be another nation's currency

10:36

that fills that role. And so I

10:38

think the US government realizes that an

10:40

A political option is better than an

10:43

arch enemy's political option. And so I

10:45

think that's where it fits in. But

10:47

it's absolutely incredible. For a Bitcoin investor...

10:49

it dramatically removes the biggest risk in

10:51

Bitcoin and makes it much more attractive.

10:53

I've said this before. I think it's

10:55

the single best time in history to

10:58

buy Bitcoin from a risk adjusted perspective

11:00

because we've removed that risk. It's really

11:02

an incredible development. Yeah, I totally agree.

11:04

And you know... to your point it

11:06

feels like a lot of the reason

11:08

there because you know I see I

11:11

see the the argument for any emerging

11:13

market country like El Salvador to buy

11:15

Bitcoin that makes a ton of sense

11:17

but you know it wasn't in my

11:19

you know playbook to see the US

11:21

be one of the first to go

11:23

because they're the reserve currency right it

11:26

does make sense to me for them

11:28

to buy it for the basis that

11:30

if we fast forward in 10 years

11:32

and it continues to build up how

11:34

it has been doing and it's like

11:36

okay well we need to own some

11:38

Bitcoin because if we don't we might

11:41

lose reserve currency hedge money but you

11:43

know do you see it actually strengthening

11:45

the reserve currency hedge money for the

11:47

US? Obviously I see it for the

11:49

stable coins but what about for Bitcoin?

11:51

Yeah that's an interesting question I mean

11:54

I think there is that argument in

11:56

the same way that like having gold

11:58

reserve sort of sort of helps ensure

12:00

that there's the strength of this of

12:02

the of the US dollar but I

12:04

don't think that's the core basis for

12:06

why the US dollar is the world's

12:09

reserve currency so I I think it's

12:11

helpful I mostly see it as this

12:13

hedge or is this way of sort

12:15

of pushing Bitcoin to be the secondary

12:17

solution beyond the dollar. It's a way

12:19

better world for the US if the

12:21

dollar is the reserve currency and the

12:24

alternative option is apolitical than if the

12:26

dollar is the world's reserve currency and

12:28

the alternative option is the ruble or

12:30

the juan. Those are bad worlds. So

12:32

you could close your eyes and shut

12:34

your ears and stuff and pretend that

12:37

there won't be an alternative, but that's

12:39

foolish. I actually like the idea that

12:41

we're sort of... leading down the path

12:43

toward maybe there will be an alternative,

12:45

but let's make it a political rather

12:47

than from one of our adversaries. I

12:49

think that's a better path. Yeah, that

12:52

makes sense to me. Okay, I want

12:54

to continue this line of thinking of

12:56

applying these innovations that we got going

12:58

on in the digital asset industry and

13:00

thinking about how do they cointegrate with.

13:02

the macro landscape in the chat-fi world.

13:05

So we haven't talked about anything other

13:07

than Bitcoin and stable coins so far.

13:09

It feels like the rest of the

13:11

industry is trying to figure out what's

13:13

next for it. So we have Ethereum

13:15

that's been struggling. We have Solana that

13:17

went on a huge run over the

13:20

last year and a half, and now

13:22

we're sort of thinking about what's next.

13:24

So. What's your state of play for

13:26

the other L1s and what's going on

13:28

there and any sort of cointegrations with

13:30

the traditional finance world? Yeah, so I'm

13:32

excited about where the L1s are. When

13:35

I look at them, you know, over

13:37

the last two years, a lot of

13:39

people are sad about what's transpired. I

13:41

think it's been incredible success. We survived

13:43

an extinction level fraud event, right? Like

13:45

a meteorite killing the dinosaurs level fraud

13:48

event. We reduce cost by 99% we

13:50

increase throughput by like 10,000 X. That's

13:52

a pretty good couple of years. I

13:54

think they're gonna, they may struggle from

13:56

an investment perspective until we see a

13:58

real uptick in stable coins. tokenization and

14:00

institutional defy. But I actually think if

14:03

you look underneath the surface, that last

14:05

one in particular is looking pretty alive

14:07

right now. Defy TVL, activity on Ave,

14:09

Uniswap, decks volumes are doing really well.

14:11

Many are at new all-time highs. I

14:13

actually think the next, like the most

14:15

immediate area to rally, may actually be

14:18

direct defy assets. And then that will

14:20

eventually trickle into these layer ones. So.

14:22

It's not as bad as people make

14:24

it out to me. Yeah, if people

14:26

just want to, you know, it all

14:28

happen all at once. It just seems,

14:31

you know, I mean, it's because of

14:33

the excitement of everybody in this industry,

14:35

but yeah. Yeah, I also think, you

14:37

know, the way to think of it

14:39

is we were so constrained by regulatory

14:41

that we overbuilt infrastructure. And so we're

14:43

at a point right now where the

14:46

infrastructure is too good for the use

14:48

case. And that's frustrating to people. The

14:50

bull case is now that we release

14:52

the regulatory break, you could get faster

14:54

growth than we would have in the

14:56

past because the infrastructure doesn't have to

14:58

scale with utility in the way it

15:01

normally does. So infrastructure is overbuilt and

15:03

again, release the regulatory break and I

15:05

think we could get maybe a faster

15:07

bull market than many people think. Yeah,

15:09

I love the way that's put. you

15:11

know so much of our audiences you

15:14

know traditional finance audience on on forward

15:16

guidance and oftentimes you know the only

15:18

time they'll ever hear about crypto is

15:20

in a negative connotation that things like

15:22

you know FTX or lately it's been

15:24

the meme coin craze you know far

15:26

coin all of that but you know

15:29

that's that's sort of gone you know

15:31

to the wayside recently and it feels

15:33

like there's you know we're here at

15:35

a digital office i'm in the institutional

15:37

conference and you know guys like you

15:39

in the institutional side are extremely excited

15:42

while all this weird casino stuff seems

15:44

to be just kind of going by

15:46

the end of it do you see

15:48

that continuing it's so funny you mentioned

15:50

that that's the biggest dichotomy in crypto

15:52

right now like krypto native DJen world

15:54

is in existential depression and all of

15:57

the institutional players coming into the market

15:59

are like this has never been better.

16:01

We are on the cusp of a

16:03

multi-year bull market, the scale of which

16:05

you haven't even imagined. I think that's

16:07

absolutely true. Look, I think

16:09

the meme coins will always exist. I

16:12

also think they were great stress tests

16:14

of this infrastructure that we've built and

16:16

they showed it can handle real throughput.

16:19

But from an institutional

16:21

perspective, when I look at what's

16:23

happening on stable coins, on tokenization,

16:25

on institutional investment,

16:28

those are all up into the right. And

16:30

I think that thesis is the right thesis

16:32

right now. And the, you know, the sort

16:34

of crypto native world will come back

16:36

to that in the future. Okay, so I

16:38

want to shift into, you know, what your

16:40

firm is so known for, which is ETFs.

16:43

And I want to ask you, a bit

16:45

more of a new last question around it,

16:47

they're just getting like your state to play

16:49

update on it. And one of the big

16:51

questions when they came forth, you know, first

16:54

off with the Bitcoin ETF, is, okay, you

16:56

know, fragmentation of asset ownership, you know, we

16:58

have the ETF owners and then we have

17:00

the on chain owners and when you reflect

17:02

on previous cycles, you know, typically how it's

17:04

gone is, you know, people own the low

17:07

beta first as they get confidence in

17:09

the cycle and as that starts to

17:11

perform, they go further on the risk

17:13

curve with the profits that they're making.

17:15

So, you know, they'll sell some Bitcoin

17:17

and that sort of leads to that

17:19

top in the Bitcoin dominance and, you

17:21

know, they go further out on the

17:23

higher beta risk risk curve. it feels

17:25

like that asset allocation is isolated from

17:27

what's going on on chain. So, you

17:29

know, you have this, this, this, you

17:31

know, institutional money that is excited about

17:33

ETS and Bitcoin. But, you know, they're

17:35

not the ones that are going to instant,

17:37

you know, there's maybe some, but they're not

17:40

going to be the ones that quickly flip

17:42

and go party on chains. So. How do

17:44

you think about how that goes when we have

17:46

this siloing of asset allocation? What does that do

17:48

for the market? Yeah, I think that's really well framed.

17:50

I think there are two things that are going

17:52

on and they're going to have big impacts. The

17:54

first is I think you're absolutely right. A lot

17:56

of the money that's going to come in, it's

17:58

just going to be Bitcoin. or it's gonna

18:00

be index, like top 10, and it's

18:03

just gonna allocate a little bit over

18:05

time. And I suspect that will mean

18:07

that those assets will have lower volatility,

18:09

lower pullbacks, a persistent bid, a persistent

18:12

slope upwards, and that'll probably separate from

18:14

assets beyond Bitcoin, maybe beyond the top

18:16

like five or 10 assets, right? And

18:18

there'll be a long tail that just

18:21

trades very different, much higher vol. So

18:23

I think that's very true. The other

18:25

thing that I think is happening, which

18:27

I think the world maybe doesn't reflect,

18:30

is if you think about any crypto

18:32

asset, there's sort of two pieces of

18:34

its value. There's its utility value and

18:36

its speculative value, right? Bitcoin has utility

18:38

as a store value, and then we

18:41

speculate it will be more useful in

18:43

the future. In previous cycles, crypto is

18:45

mostly speculation, right? The utility value even

18:47

of something like eith or Solana was

18:50

relatively low. This cycle is more, the

18:52

utility is more established. And that just

18:54

means that we're going to have assets

18:56

trade in different ways, like different correlations.

18:59

I think the correlation between Bitcoin and

19:01

Ethereum will be lower, substantially lower in

19:03

the future than it has been in

19:05

the past. Because they're very different things.

19:07

One is digital gold, one is like

19:10

a new internet. Why should they be

19:12

correlated? And so I think because these

19:14

different types of investors and also because

19:16

we're in this utility phase, you're going

19:19

to see much more dispersion, lower correlations,

19:21

and we're not going to have the

19:23

same cycles that we had in the

19:25

past where you did sort of move

19:28

down that risk curve. And I feel

19:30

like that makes a lot of, you

19:32

know, longtime crypto natives nervous, but I

19:34

mean, I just think about, you know,

19:37

the equities market, like we're talking asset

19:39

classes here, not just single stocks. So,

19:41

you know, in an asset class of

19:43

equities, you know, you don't have people

19:45

do well on the S&P 500 and

19:48

then decide to go trade pink sheet

19:50

penny stocks, right? That's the way people

19:52

frame up doing well in Bitcoin and

19:54

going to buy a meme coins. So,

19:57

you know, you know, you know, roll

19:59

those returns, to a higher beta asset.

20:01

That's not like a thing that needs

20:03

to happen. So yeah, I think it's

20:06

part of maturing asset costs. Again, I

20:08

think it means lower volatility on these

20:10

large cap assets and lower correlations between

20:12

assets. And it's more on each investor.

20:14

You shouldn't assume that the playbook that

20:17

worked for the last 10 years, when

20:19

it was mostly retail, will work in

20:21

the next 10 when it's gonna be

20:23

majority institutional. I just think different playbooks

20:26

will have to apply. Okay, so my

20:28

last question here, one, we're talking about

20:30

correlations. I just, I can't help to

20:32

think about what's going on with gold

20:35

right now, passing 3,000 while Bitcoin's struggling.

20:37

You know, it feels like the correlation

20:39

between Bitcoin and gold is fluid, it

20:41

changes over, is fluid, over time, it

20:44

changes, it changes, over, time, and gold

20:46

is, is fluid, how are you thinking

20:48

about that narrative, right? and there's its

20:50

discount factor, what gold is telling you

20:52

is that the long-term value of non-fiot

20:55

stores of value is higher than it's

20:57

ever been before. Just to make that

20:59

concrete, a few years ago if Bitcoin

21:01

matched gold, Bitcoin would get to 800,000.

21:04

Now it will get to 1.1 million.

21:06

So Bitcoin is growing that TAM. It's

21:08

just worth suffering because we have this

21:10

risk asset element. But to me... What

21:13

Gold is telling me is that Bitcoin

21:15

is going to follow that, that its

21:17

addressable market has never been bigger, that

21:19

its opportunity has never been bigger, and

21:21

we're just going to catch up to

21:24

that once the market normalizes from a

21:26

risk perspective. So I see it as

21:28

a leading indicator of where we're going.

21:30

I love it, I totally agree. That

21:33

is a great place to leave it.

21:35

Matt Hogan, absolutely pleasure to have you

21:37

here at the Digital Asset Summit. I

21:39

know you had a panel earlier today,

21:42

it sounds like it went really well.

21:44

It's an absolute blast here this week,

21:46

I gotta say. It's unbelievable. This is

21:48

the best crypto conference of the year

21:51

and the best crypto conference I've been

21:53

in many years in terms of the

21:55

level of people here and the level

21:57

of conversations and indeed the... energy. So

21:59

thanks for having me.

22:02

me. Yeah, absolutely it. you.