November 29, 2024 • 14 mins
A pro-crypto president. A pro-crypto Congress. A pro-crypto SEC. That’s what the cryptocurrency industry will soon benefit from in this “Gamechanger” moment, according to Matt Hougan, Chief Investment Officer at Bitwise Asset Management. That, in turn, has enormous implications for investors in Bitcoin and other cryptocurrencies, which Matt and I explore in this week’s MoneyShow MoneyMasters Podcast.
Our chat begins with a primer on Matt’s background and an overview of Bitwise, one of the largest crypto-focused investment management firms, with $11 billion in client assets across ETFs, funds, staking services, and active strategies. Next, we discuss the seismic shift in the industry’s future growth potential and institutional acceptance driven by the election results, as well as the wildly successful roll out of Bitcoin (and other) ETFs and what it means for investors and traders. The conversation then pivots to sector innovations and developments fueled by cryptocurrencies, including those that are “very serious and very fun.” They include the growth in election prediction markets that garnered so much attention this fall...the use of crypto-enabled stablecoins for B2B payments in developing markets…and the use of blockchain technology to validate ownership and transfer of video game perks and upgrades.
We also cover how Bitcoin and other cryptocurrencies can and should be used in investor portfolios, how Bitcoin measures up against gold, and what new investors in the asset class need to keep in mind. Finally, Matt previews what he’ll cover at the 2024 MoneyShow/TradersEXPO Las Vegas, scheduled for Feb. 17-19 at the Paris Las Vegas. Click here to register: https://www.lasvegasmoneyshow.com/?scode=061246
Our chat begins with a primer on Matt’s background and an overview of Bitwise, one of the largest crypto-focused investment management firms, with $11 billion in client assets across ETFs, funds, staking services, and active strategies. Next, we discuss the seismic shift in the industry’s future growth potential and institutional acceptance driven by the election results, as well as the wildly successful roll out of Bitcoin (and other) ETFs and what it means for investors and traders. The conversation then pivots to sector innovations and developments fueled by cryptocurrencies, including those that are “very serious and very fun.” They include the growth in election prediction markets that garnered so much attention this fall...the use of crypto-enabled stablecoins for B2B payments in developing markets…and the use of blockchain technology to validate ownership and transfer of video game perks and upgrades.
We also cover how Bitcoin and other cryptocurrencies can and should be used in investor portfolios, how Bitcoin measures up against gold, and what new investors in the asset class need to keep in mind. Finally, Matt previews what he’ll cover at the 2024 MoneyShow/TradersEXPO Las Vegas, scheduled for Feb. 17-19 at the Paris Las Vegas. Click here to register: https://www.lasvegasmoneyshow.com/?scode=061246
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:04):
This is an exciting time for cryptocurrency investors. Bitcoin has
been flirting with the one hundred thousand dollars level. The
incoming president has promised to be much more crypto friendly,
and the influx of mainstream funds has given investors easy
access to a market that.
Speaker 2 (00:17):
Used to be very difficult to target.
Speaker 3 (00:20):
But what comes next for crypto what could follow Bitcoin
one hundred and k Joining me to share some unique
and timely insights is Matt Hogan, his chief investment officer
at Bitwise Asset Management.
Speaker 2 (00:30):
Matt, Welcome to the podcast.
Speaker 4 (00:32):
I'm so excited to be here. Thanks for having me.
Speaker 2 (00:34):
Yeah, I'm glad I can have you on here.
Speaker 1 (00:36):
I know you haven't been on the podcast before, so
I guess to kick things off, I wanted to give
you a minute to talk a little bit about yourself
and your background and what it is Bitwise does.
Speaker 2 (00:43):
If people haven't heard of the company before.
Speaker 5 (00:45):
Sure absolutely. Bitwise is one of the largest specialist crypto
asset managers in the world. We have more than eleven
billion dollars in client assets that we look after across
ETF's funds, staking services, and active strategies. We've been in
this market since twenty seventeen. So we've seen some bull
markets and some bear markets, and some bull markets and
(01:06):
some bear markets. It's wonderful to be where we are today,
with crypto now moving firmly into the mainstream. It's a
very exciting moment. My own background, I've been at bitwise
for six and a half years now. Before bit wise,
I was the CEO of ETF dot com and helped
create the first ETF ratings and analytics and data service,
(01:28):
the largest conference in media space. So my background is
traded by For the last six years, i've been crypto native,
and I hope to put sort of the best of
those two worlds together.
Speaker 1 (01:39):
Excellent and I mean, it really is interesting to see
how things have kind of merged, you know, and what
used to be a niche market that again was hard
to access a lot of people weren't involved with unless
they were a specialist, is now open to the masses.
And I was wondering if you could talk a little
bit about that that transition and your role in that.
Speaker 4 (01:53):
Yeah. Absolutely.
Speaker 5 (01:55):
The real key mark of that transition was the launch
of spot Bitcoin ETFs in January this year. You know,
before that you could buy crypto through an app. You
could buy crypto on your phone, but you couldn't access
it in the same way you access traditional stocks and bonds,
which is through your brokerage account. In ETFs and funds
that have the protection of regulators and so Bitwise, amongst others,
(02:19):
launched spot Bitcoin ETFs in January and the response has
been overwhelming. As I mentioned, I was the CEO of
etf dot com prior to the Bitcoin ETF launched. The
fastest growing ETF of all time was the Cues the
Nasdaq one hundred cues that many people use to invest
in technology that launched in nineteen ninety nine and pulled
in about five billion dollars in its first year. On
(02:42):
these bitcoin ETFs, we're up to thirty billion dollars in flows,
so not just the fastest of all time, but six
times bigger than number two. It just shows that there's
tremendous demand to access crypto in a safe, low cost,
familiar format like an ETFE.
Speaker 1 (03:01):
Let me talk a little bit about the lineup of
products that you offer. I mean it's not just bitcoin, right,
and both the private fund public trade and see the
fund market and private funds.
Speaker 5 (03:09):
Correct, that's exactly right, you know, Our first product, the
one that we consider our flagship, is actually an index
space product. It's called the Bitwise ten. It holds the
ten largest crypto assets, weighted by market cap and rebalanced
every month. Our view of crypto is that this is
a new disruptive technology. It's hard to know exactly how
(03:29):
it will turn out.
Speaker 4 (03:30):
Right.
Speaker 5 (03:31):
One of these could be Facebook and one of them
could be MySpace. And so we launched this index product
so you could have exposure to crypto without having to
pick and choose winners. That product still exists today. It's
about a billion and a half dollars, but it's not
yet available in an ETF. We also offer a variety
of other strategies. We have spot ethereum ETFs, we have
(03:53):
futures based ETFs, we have crypto equity ETFs, we have
an active hedge fund, we have private solutions. The goal
is investors want someone they can trust in crypto. Bitwise
has been in this market for seven plus years now,
with the stirling track record of shepherding billions of dollars
in client assets. Whether they want just bitcoin, an index
(04:15):
strategy and active strategy, Bitwise wants to be there for
them absolutely.
Speaker 1 (04:20):
Matt I want to ask you about this a really
incredible trading action we've seen in the bitcoin cryptocurrency space
recently post election, but really throughout twenty twenty four.
Speaker 2 (04:29):
What's driving that?
Speaker 1 (04:30):
What are some of the key drivers that have given
us such a powerful market for bitcoin and for crypto
in general.
Speaker 5 (04:36):
Yeah, you know, we've been surveying investors for seven years
about what's kept them from accessing crypto, and you might say,
or you might imagine, it's the volatility, it's the negative headlines.
I don't know how to value it. All those things
are very real. But the number one thing people said
for the sit in past six or seven years has
(04:57):
been regulatory uncertainty. People didn't want to stick their neck
out and invest in an asset that sure has had
spectacular returns, but where the sec and Treasury in the
government is not certain it has a place in our
financial future. That's completely changed. It started to change with
the launch of an ETF. Once you have ETFs and
(05:18):
you have firms like black Rock building in the space,
it's probably not going away anytime soon. But as you
mentioned in the kickoff, the election was a game changer.
We have a pro crypto president, we have a pro
crypto Congress, We're going to have a pro crypto leader
of the SEC. All of that regulatory uncertainty is stripped away,
and that means investors can look at this asset and say, well,
(05:41):
on a fair playing field, do I want some exposure
to it? And what we're seeing is a lot of
people are looking at an asset that has low correlations
with stocks and bonds, high historical returns. They can add
to their portfolio at like a one or two percent level,
and it can increase their risk adjuster returns at least
on a historical basis, and that's driven billions in flows.
Speaker 3 (06:03):
Now.
Speaker 1 (06:03):
I know it's all a little bit of a crystal
ball at this point because the new administration hasn't even
taken office yet officially, but it's going to happen in
twenty five. So what are some of the concrete ways
that regulatory structure or the investment landscape for people individual
investors is going to change as the next twelve to
eighteen months kind of unfolds.
Speaker 4 (06:19):
Yeah.
Speaker 5 (06:20):
I think there's probably two things to focus on. The
first is that the crypto industry made huge progress over
the last four years. Prices in bitcoin are up four
hundred plus percent. We've seen Blackrockets and others enter the field,
but it's faced such aggressive regulatory headwinds that it's kind
of been constrained. If you were an entrepreneur looking to
build in crypto, you might have chosen to go somewhere
(06:43):
else because of the regulatory risk in that space.
Speaker 4 (06:46):
That's been washed away. So I talk about us entering
a golden age of crypto.
Speaker 5 (06:51):
That's because all the entrepreneurs and all the vcs who
were tempted but on the sidelines are now going to
come onto the field of play, and I think you're
going to see a million applications unfold. The other thing
I would expect is, look, we now have access to
spot bitcoin and spot ethereum in ETFs, but there's a
lot more in crypto. There are many exciting crypto assets
(07:14):
with their unique value propositions making their own traction in
the market. My guess is that assets beyond bitcoin and
ethereum will start to become available to everyday investors and
institutional investors, and you'll see some excitement in those areas
as well. So we're finally going to see what crypto
can really do when it's on a level regulatory playing field.
Speaker 1 (07:36):
How mainstream do you think crypto is going to become
over the years. Is it going to be one of
those things that always a sort of you know, relegated
to put two, three percent or four percent above your portfolio.
Speaker 2 (07:45):
Is that's going to be one of those.
Speaker 1 (07:46):
Things that ultimately in your mind becomes like stocks, bonds,
and other mainstream assets.
Speaker 5 (07:51):
It's going to become like stocks, bonds, and other mainstream assets.
And let me give you three quick examples of what
I mean. For one, I think bitcoin is going to
become and common as common in portfolios as gold. Bitcoin
is like gold, but has many advantages and some disadvantages.
But if you look at people under the age of
forty or forty five, they vastly prefer bitcoin to gold.
(08:15):
So I think bitcoin's going to become, you know, fill
that same role as gold, but an increasing.
Speaker 4 (08:20):
Number of portfolios.
Speaker 5 (08:22):
I also think you're going to see Wall Street banks
building aggressively in this space and taking assets that we're
previously in the traditional finance world and moving them into
the crypto world. We're already seeing this through money market funds,
which in crypto we call stable coins. They're not quite
the same but very similar. That's become one hundred and
seventy billion dollar market. We're also seeing them tokenize funds
(08:46):
and move them on blockchain rails. It could be someday
you're in your Schwab account and you could buy a
traditional money market fund on the old rail, or you
could access the same thing in a crypto enabled format,
except for the crypto one is faster, cheaper, better, and
I think we'll see people migrate there, and then you're
going to see applications that you might not even know
(09:08):
are crypto on the back end, but are you using
crypto to provide services you can't provide in the traditional format.
We actually got a taste of that last one in
this election. Many people heard of Polymarket, the prediction odds
market that was forecasting a Trump victory when the pollsters
were saying it was fifty to fifty. That was at
crypto application. It's built on the Polygon blockchain, which settles
(09:31):
to ethereum. Activity there directly benefits crypto investors. So you're
going to see that time and time again. Sort of
just an application, but in the back end, it's crypto.
That's going to become very commonplace.
Speaker 1 (09:45):
I'm glad you brought that up, because I definitely did
want to touch a little bit on the underlying technology
and some of the use case arguments there besides just
the investment case. What are some of the other things
you mentioned poly market and I was going to ask
about that anyway, So.
Speaker 2 (09:57):
Great deal you brought that up.
Speaker 1 (09:58):
Other things that you're seeing out there, they're kind of
interesting and unique and that you think are going to
be you know, a big story over the next again, year,
year and a half.
Speaker 5 (10:05):
Yeah, sure, poly Market is a great example. But I'll
give you I'll give you two on two different sides
of the spectrum, very serious and very fun because you
get both. On the very serious five Crypto enables frictionless
money and frictionist money that can move internationally. So I
mentioned stable coins. Stable coins are an incredible killer app.
They put a US bank account in the phone of
(10:27):
every person around the world, and if we look in
countries that are facing high inflation, we people see people
using crypto enabled stable coins to get the access to
the dollar that they can't get through a traditional banking account.
If we look in regions that have difficulty moving money efficiently,
like sub Saharan Africa, you increasingly see stable coin used
(10:49):
for business to business payments because it reduces costs by
one two three percent and it speeds up efficiency by
one two, three days or weeks. We have this nice
five financial system in the US, and we forget that
not everyone does. Crypto enables that to be exported to
the world. The other side of the spectrum, which I
would point you to, I bet the most popular video
(11:11):
games next year or the year ahead are going to
be based on blockchain technology. Now, what did blockchains do
for games? If you have any kids, you probably played Fortnite.
They're probably buying skins and other items in Fortnite, but
those are captured within the Fortnite ecosystem. What blockchains allow
you to do is to own property independently of the ecosystem,
(11:34):
so you can move it from let's say Fortnite to
another game or another game. I think that's going to
revolutionize the gaming industry. That's just one example of how
blockchain is more than just money. Yes, major monetary implications, right,
frictionless global money, but also fun applications as well.
Speaker 4 (11:52):
We're going to see both grow substantially. Got it.
Speaker 1 (11:56):
If people are looking to get involved in the cryptospace. Again,
from an investment standpoint, are there any cautions anything? Is
that if somebody's not there yet that they need to
know about when they essentially get onboarded for lack of
a better word.
Speaker 5 (12:08):
Yeah, I would focus on two things. The first is,
this is an extraordinarily volatile asset, right. I do think
we're going mainstream. Volatility is declining, but it's still more
volatile than your average stocker bond, and that means you
need to think about your portfolio sizing. If you're going
to invest one two percent, you can probably hold out
the ups and downs. If you put twenty or thirty
(12:30):
percent in your portfolio and we have a big draw down,
you might panic and sell at the bottom. So I
would keep that very much in mind. The second is
that crypto is still a place where reputation matters. There's
the old saying, you know, don't go to the cheapest
heart surgeon, go to the best. That's still true in crypto.
They're great solutions. ETFs are a great solution for many investors,
(12:53):
but there are also some, let's say, less savory solution
providers in the crypto space. I would just caution to
be careful about that.
Speaker 2 (13:02):
Great, right, Matt.
Speaker 1 (13:03):
As we get here to wrap up, you're going to
be joining us for the twenty five Money Show Traders
Expo Las Vegas and February.
Speaker 2 (13:08):
Can't wait to see you there, can you?
Speaker 1 (13:10):
If your viewers of this episode a little bit of
a sneak peak about what you're going to be talking about there.
I know the official of your title is, is Crypto
the Future of Finance?
Speaker 4 (13:18):
Yeah?
Speaker 5 (13:19):
I think we're really going to focus on the outlook
for crypto as an investment and all the different ways
it's going to disrupt the financial ecosystem. I've seen finance
and how we invest changed dramatically.
Speaker 4 (13:31):
Right.
Speaker 5 (13:31):
ETF's surplanted mutual funds, something very few people expected, the
change from traditional finance to crypto enabled finance. It's going
to be even bigger. I'm going to talk about what
exactly that will mean and also what it means for
you as an investor.
Speaker 1 (13:47):
Excellent, well, Matt, thank you so much for insights viewers,
if you'd like to learn more from that. Again, he's
going to be speaking at the Money Show Traders Expel
Las Vegas that runs February seventeen to nineteen of the
Paris Las Vegas. You can find out more details and
click on the way below up you're interested in registering
and Matt exciting times.
Speaker 2 (14:03):
Glad we had some time to chat and I look
forward to seeing you there.
Speaker 4 (14:05):
Can't wait to be there. Take care bye.
Speaker 1 (14:09):
We'll have more interviews for you every week, so I
encourage you to subscribe to The Money Master's podcast so
you can stay up to date with the insights from
top money experts.
Speaker 2 (14:17):
You can follow me on Twitter at real Mike Larson and.
Speaker 1 (14:20):
Follow Money Show for more investing and trading content on Twitter, Instagram,
and YouTube at Money Show.
Speaker 2 (14:26):
Thanks for listening, See you next time.
This is an exciting time for cryptocurrency investors. Bitcoin has
been flirting with the one hundred thousand dollars level. The
incoming president has promised to be much more crypto friendly,
and the influx of mainstream funds has given investors easy
access to a market that.
Speaker 2 (00:17):
Used to be very difficult to target.
Speaker 3 (00:20):
But what comes next for crypto what could follow Bitcoin
one hundred and k Joining me to share some unique
and timely insights is Matt Hogan, his chief investment officer
at Bitwise Asset Management.
Speaker 2 (00:30):
Matt, Welcome to the podcast.
Speaker 4 (00:32):
I'm so excited to be here. Thanks for having me.
Speaker 2 (00:34):
Yeah, I'm glad I can have you on here.
Speaker 1 (00:36):
I know you haven't been on the podcast before, so
I guess to kick things off, I wanted to give
you a minute to talk a little bit about yourself
and your background and what it is Bitwise does.
Speaker 2 (00:43):
If people haven't heard of the company before.
Speaker 5 (00:45):
Sure absolutely. Bitwise is one of the largest specialist crypto
asset managers in the world. We have more than eleven
billion dollars in client assets that we look after across
ETF's funds, staking services, and active strategies. We've been in
this market since twenty seventeen. So we've seen some bull
markets and some bear markets, and some bull markets and
(01:06):
some bear markets. It's wonderful to be where we are today,
with crypto now moving firmly into the mainstream. It's a
very exciting moment. My own background, I've been at bitwise
for six and a half years now. Before bit wise,
I was the CEO of ETF dot com and helped
create the first ETF ratings and analytics and data service,
(01:28):
the largest conference in media space. So my background is
traded by For the last six years, i've been crypto native,
and I hope to put sort of the best of
those two worlds together.
Speaker 1 (01:39):
Excellent and I mean, it really is interesting to see
how things have kind of merged, you know, and what
used to be a niche market that again was hard
to access a lot of people weren't involved with unless
they were a specialist, is now open to the masses.
And I was wondering if you could talk a little
bit about that that transition and your role in that.
Speaker 4 (01:53):
Yeah. Absolutely.
Speaker 5 (01:55):
The real key mark of that transition was the launch
of spot Bitcoin ETFs in January this year. You know,
before that you could buy crypto through an app. You
could buy crypto on your phone, but you couldn't access
it in the same way you access traditional stocks and bonds,
which is through your brokerage account. In ETFs and funds
that have the protection of regulators and so Bitwise, amongst others,
(02:19):
launched spot Bitcoin ETFs in January and the response has
been overwhelming. As I mentioned, I was the CEO of
etf dot com prior to the Bitcoin ETF launched. The
fastest growing ETF of all time was the Cues the
Nasdaq one hundred cues that many people use to invest
in technology that launched in nineteen ninety nine and pulled
in about five billion dollars in its first year. On
(02:42):
these bitcoin ETFs, we're up to thirty billion dollars in flows,
so not just the fastest of all time, but six
times bigger than number two. It just shows that there's
tremendous demand to access crypto in a safe, low cost,
familiar format like an ETFE.
Speaker 1 (03:01):
Let me talk a little bit about the lineup of
products that you offer. I mean it's not just bitcoin, right,
and both the private fund public trade and see the
fund market and private funds.
Speaker 5 (03:09):
Correct, that's exactly right, you know, Our first product, the
one that we consider our flagship, is actually an index
space product. It's called the Bitwise ten. It holds the
ten largest crypto assets, weighted by market cap and rebalanced
every month. Our view of crypto is that this is
a new disruptive technology. It's hard to know exactly how
(03:29):
it will turn out.
Speaker 4 (03:30):
Right.
Speaker 5 (03:31):
One of these could be Facebook and one of them
could be MySpace. And so we launched this index product
so you could have exposure to crypto without having to
pick and choose winners. That product still exists today. It's
about a billion and a half dollars, but it's not
yet available in an ETF. We also offer a variety
of other strategies. We have spot ethereum ETFs, we have
(03:53):
futures based ETFs, we have crypto equity ETFs, we have
an active hedge fund, we have private solutions. The goal
is investors want someone they can trust in crypto. Bitwise
has been in this market for seven plus years now,
with the stirling track record of shepherding billions of dollars
in client assets. Whether they want just bitcoin, an index
(04:15):
strategy and active strategy, Bitwise wants to be there for
them absolutely.
Speaker 1 (04:20):
Matt I want to ask you about this a really
incredible trading action we've seen in the bitcoin cryptocurrency space
recently post election, but really throughout twenty twenty four.
Speaker 2 (04:29):
What's driving that?
Speaker 1 (04:30):
What are some of the key drivers that have given
us such a powerful market for bitcoin and for crypto
in general.
Speaker 5 (04:36):
Yeah, you know, we've been surveying investors for seven years
about what's kept them from accessing crypto, and you might say,
or you might imagine, it's the volatility, it's the negative headlines.
I don't know how to value it. All those things
are very real. But the number one thing people said
for the sit in past six or seven years has
(04:57):
been regulatory uncertainty. People didn't want to stick their neck
out and invest in an asset that sure has had
spectacular returns, but where the sec and Treasury in the
government is not certain it has a place in our
financial future. That's completely changed. It started to change with
the launch of an ETF. Once you have ETFs and
(05:18):
you have firms like black Rock building in the space,
it's probably not going away anytime soon. But as you
mentioned in the kickoff, the election was a game changer.
We have a pro crypto president, we have a pro
crypto Congress, We're going to have a pro crypto leader
of the SEC. All of that regulatory uncertainty is stripped away,
and that means investors can look at this asset and say, well,
(05:41):
on a fair playing field, do I want some exposure
to it? And what we're seeing is a lot of
people are looking at an asset that has low correlations
with stocks and bonds, high historical returns. They can add
to their portfolio at like a one or two percent level,
and it can increase their risk adjuster returns at least
on a historical basis, and that's driven billions in flows.
Speaker 3 (06:03):
Now.
Speaker 1 (06:03):
I know it's all a little bit of a crystal
ball at this point because the new administration hasn't even
taken office yet officially, but it's going to happen in
twenty five. So what are some of the concrete ways
that regulatory structure or the investment landscape for people individual
investors is going to change as the next twelve to
eighteen months kind of unfolds.
Speaker 4 (06:19):
Yeah.
Speaker 5 (06:20):
I think there's probably two things to focus on. The
first is that the crypto industry made huge progress over
the last four years. Prices in bitcoin are up four
hundred plus percent. We've seen Blackrockets and others enter the field,
but it's faced such aggressive regulatory headwinds that it's kind
of been constrained. If you were an entrepreneur looking to
build in crypto, you might have chosen to go somewhere
(06:43):
else because of the regulatory risk in that space.
Speaker 4 (06:46):
That's been washed away. So I talk about us entering
a golden age of crypto.
Speaker 5 (06:51):
That's because all the entrepreneurs and all the vcs who
were tempted but on the sidelines are now going to
come onto the field of play, and I think you're
going to see a million applications unfold. The other thing
I would expect is, look, we now have access to
spot bitcoin and spot ethereum in ETFs, but there's a
lot more in crypto. There are many exciting crypto assets
(07:14):
with their unique value propositions making their own traction in
the market. My guess is that assets beyond bitcoin and
ethereum will start to become available to everyday investors and
institutional investors, and you'll see some excitement in those areas
as well. So we're finally going to see what crypto
can really do when it's on a level regulatory playing field.
Speaker 1 (07:36):
How mainstream do you think crypto is going to become
over the years. Is it going to be one of
those things that always a sort of you know, relegated
to put two, three percent or four percent above your portfolio.
Speaker 2 (07:45):
Is that's going to be one of those.
Speaker 1 (07:46):
Things that ultimately in your mind becomes like stocks, bonds,
and other mainstream assets.
Speaker 5 (07:51):
It's going to become like stocks, bonds, and other mainstream assets.
And let me give you three quick examples of what
I mean. For one, I think bitcoin is going to
become and common as common in portfolios as gold. Bitcoin
is like gold, but has many advantages and some disadvantages.
But if you look at people under the age of
forty or forty five, they vastly prefer bitcoin to gold.
(08:15):
So I think bitcoin's going to become, you know, fill
that same role as gold, but an increasing.
Speaker 4 (08:20):
Number of portfolios.
Speaker 5 (08:22):
I also think you're going to see Wall Street banks
building aggressively in this space and taking assets that we're
previously in the traditional finance world and moving them into
the crypto world. We're already seeing this through money market funds,
which in crypto we call stable coins. They're not quite
the same but very similar. That's become one hundred and
seventy billion dollar market. We're also seeing them tokenize funds
(08:46):
and move them on blockchain rails. It could be someday
you're in your Schwab account and you could buy a
traditional money market fund on the old rail, or you
could access the same thing in a crypto enabled format,
except for the crypto one is faster, cheaper, better, and
I think we'll see people migrate there, and then you're
going to see applications that you might not even know
(09:08):
are crypto on the back end, but are you using
crypto to provide services you can't provide in the traditional format.
We actually got a taste of that last one in
this election. Many people heard of Polymarket, the prediction odds
market that was forecasting a Trump victory when the pollsters
were saying it was fifty to fifty. That was at
crypto application. It's built on the Polygon blockchain, which settles
(09:31):
to ethereum. Activity there directly benefits crypto investors. So you're
going to see that time and time again. Sort of
just an application, but in the back end, it's crypto.
That's going to become very commonplace.
Speaker 1 (09:45):
I'm glad you brought that up, because I definitely did
want to touch a little bit on the underlying technology
and some of the use case arguments there besides just
the investment case. What are some of the other things
you mentioned poly market and I was going to ask
about that anyway, So.
Speaker 2 (09:57):
Great deal you brought that up.
Speaker 1 (09:58):
Other things that you're seeing out there, they're kind of
interesting and unique and that you think are going to
be you know, a big story over the next again, year,
year and a half.
Speaker 5 (10:05):
Yeah, sure, poly Market is a great example. But I'll
give you I'll give you two on two different sides
of the spectrum, very serious and very fun because you
get both. On the very serious five Crypto enables frictionless
money and frictionist money that can move internationally. So I
mentioned stable coins. Stable coins are an incredible killer app.
They put a US bank account in the phone of
(10:27):
every person around the world, and if we look in
countries that are facing high inflation, we people see people
using crypto enabled stable coins to get the access to
the dollar that they can't get through a traditional banking account.
If we look in regions that have difficulty moving money efficiently,
like sub Saharan Africa, you increasingly see stable coin used
(10:49):
for business to business payments because it reduces costs by
one two three percent and it speeds up efficiency by
one two, three days or weeks. We have this nice
five financial system in the US, and we forget that
not everyone does. Crypto enables that to be exported to
the world. The other side of the spectrum, which I
would point you to, I bet the most popular video
(11:11):
games next year or the year ahead are going to
be based on blockchain technology. Now, what did blockchains do
for games? If you have any kids, you probably played Fortnite.
They're probably buying skins and other items in Fortnite, but
those are captured within the Fortnite ecosystem. What blockchains allow
you to do is to own property independently of the ecosystem,
(11:34):
so you can move it from let's say Fortnite to
another game or another game. I think that's going to
revolutionize the gaming industry. That's just one example of how
blockchain is more than just money. Yes, major monetary implications, right,
frictionless global money, but also fun applications as well.
Speaker 4 (11:52):
We're going to see both grow substantially. Got it.
Speaker 1 (11:56):
If people are looking to get involved in the cryptospace. Again,
from an investment standpoint, are there any cautions anything? Is
that if somebody's not there yet that they need to
know about when they essentially get onboarded for lack of
a better word.
Speaker 5 (12:08):
Yeah, I would focus on two things. The first is,
this is an extraordinarily volatile asset, right. I do think
we're going mainstream. Volatility is declining, but it's still more
volatile than your average stocker bond, and that means you
need to think about your portfolio sizing. If you're going
to invest one two percent, you can probably hold out
the ups and downs. If you put twenty or thirty
(12:30):
percent in your portfolio and we have a big draw down,
you might panic and sell at the bottom. So I
would keep that very much in mind. The second is
that crypto is still a place where reputation matters. There's
the old saying, you know, don't go to the cheapest
heart surgeon, go to the best. That's still true in crypto.
They're great solutions. ETFs are a great solution for many investors,
(12:53):
but there are also some, let's say, less savory solution
providers in the crypto space. I would just caution to
be careful about that.
Speaker 2 (13:02):
Great, right, Matt.
Speaker 1 (13:03):
As we get here to wrap up, you're going to
be joining us for the twenty five Money Show Traders
Expo Las Vegas and February.
Speaker 2 (13:08):
Can't wait to see you there, can you?
Speaker 1 (13:10):
If your viewers of this episode a little bit of
a sneak peak about what you're going to be talking about there.
I know the official of your title is, is Crypto
the Future of Finance?
Speaker 4 (13:18):
Yeah?
Speaker 5 (13:19):
I think we're really going to focus on the outlook
for crypto as an investment and all the different ways
it's going to disrupt the financial ecosystem. I've seen finance
and how we invest changed dramatically.
Speaker 4 (13:31):
Right.
Speaker 5 (13:31):
ETF's surplanted mutual funds, something very few people expected, the
change from traditional finance to crypto enabled finance. It's going
to be even bigger. I'm going to talk about what
exactly that will mean and also what it means for
you as an investor.
Speaker 1 (13:47):
Excellent, well, Matt, thank you so much for insights viewers,
if you'd like to learn more from that. Again, he's
going to be speaking at the Money Show Traders Expel
Las Vegas that runs February seventeen to nineteen of the
Paris Las Vegas. You can find out more details and
click on the way below up you're interested in registering
and Matt exciting times.
Speaker 2 (14:03):
Glad we had some time to chat and I look
forward to seeing you there.
Speaker 4 (14:05):
Can't wait to be there. Take care bye.
Speaker 1 (14:09):
We'll have more interviews for you every week, so I
encourage you to subscribe to The Money Master's podcast so
you can stay up to date with the insights from
top money experts.
Speaker 2 (14:17):
You can follow me on Twitter at real Mike Larson and.
Speaker 1 (14:20):
Follow Money Show for more investing and trading content on Twitter, Instagram,
and YouTube at Money Show.
Speaker 2 (14:26):
Thanks for listening, See you next time.
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