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10 Crypto Predictions for 2026: $1M BTC, Wall Street Onchain & ETF Takeover | Matt Hougan & Ryan Rasmussen from Bitwise
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- [00:00]
A
I think i think crypto twitter has sort of lost its ambition totally the chairman of the sec the most important financial regulator in the us and the world said all us stocks would be on chain in a couple of years for context the tokenized stock market today is six hundred eighty million dollars us stocks are sixty eight trillion dollars i'll save you the math that's a hundred thousand x bigger what are we even talking about i think we've lost sight of how big a deal crypto really is because we've made this regulatory progress it's entering this period where we can move the full financial economy on chain it won't happen overnight but the chairman of the sec is telling you it's going to happen in the next couple of years we're not really bullish enough i think is my take.
- [00:49]
B
Bankless station we've got end of the year predictions going into twenty twenty six what's going to happen in twenty twenty six and the two best predictors we could get on the show today we've got matt hogan and ryan rasmussen both from bitwise.
- [01:03]
A
Guys how you doing doing great thanks for having us on excited to be.
- [01:07]
C
Here is this the the third year that we've done this yeah it's round.
- [01:12]
D
Three i think so i think so.
- [01:13]
C
It'S a tradition if you guys remember twenty twenty five last year's predictions do you guys know how you ranked how how did your predictions hold up ryan said you guys were the best so i would like to actually audit that.
- [01:25]
B
Is that wait which ryan said that.
- [01:27]
C
Did i say my ryan my co.
- [01:28]
B
Host you have to differentiate during this episode david okay we didn't do terrible.
- [01:34]
D
But we didn't do as great as one would have hoped twenty twenty five was just a weird year for crypto so we did we got a number of these correct that we're super excited about i think we're ambitious around some that were directionally accurate perhaps we set the bar too high so i would grade us decently well all things considered matt what would you say i think.
- [01:53]
A
With one glaring exception which was ryan's prediction about meme coins we had all the information right and then some of the price returns didn't line up with the fundamentals of the space i think it's i think the story of crypto writ large was the story of our prediction so i'd give us like a a gentleman c for our gentleman c.
- [02:12]
B
Okay so i actually i ran this through chat gpt all right and you're.
- [02:18]
C
Yeah we grade twenty guys actually yeah.
- [02:19]
B
We rated you guys and of course i'm not going to grade you guys right i mean that's a lot of a lot of effort go fact check but chatgpt was happy to do it and it took about seven minutes on the response which usually it doesn't think for seven minutes okay and so the net of that is drumroll b minus for last year there we go so it said a minus for narrative and regime calls so that's your higher grade you like you got the direction right c plus for the precise numbers and.
- [02:49]
C
Everyone gets precise numbers wrong giving out precise specific numbers is such a mistake.
- [02:54]
B
Just never do it but it said you got four solid like correct three to four partial credit and then three were just clear misses so that's pretty darn good for you know twelve month predictions i think we'll take it i.
- [03:08]
A
Love it i love the b minus from chat that sounds right i'll take it marking myself up do you mind.
- [03:14]
B
If we go through a few of these that you you guys predicted last year one of them is and i'm trying to get into the place into the headspace of the end of last year we were all very bullish in at the end of twenty twenty four weren't we we were very excited we were very bullish seemed like regulatory headwinds were you know disappearing and we'd have tailwinds on our side going into twenty.
- [03:34]
C
Twenty five we had momentum we had.
- [03:36]
B
A lot of momentum we had momentum you guys called the prediction your first prediction last year was bitcoin eth and solana will hit new all time highs with bitcoin trading above two hundred k so we got eth and solana new all time highs i think eth barely like barely clipped it last year it was a close one bitcoin did not hit two hundred k why do you think we didn't get to two hundred k last year or this year i guess i should say twenty twenty five we're still in twenty twenty five so.
- [04:02]
D
Yeah all three hit new all time highs so i so we're happy about that and if you do set the stage for where we were at heading into twenty twenty five we wrote these predictions over the month of november trump had just won the election crypto had just won the election prices were soaring towards new all time highs and the market was overall broadly euphoric and i think that helped inform where we thought things were headed and then as soon as we hit the new year chaos ensued i think it was you know january we had fears of an ai bubble with that with that ai company out of china kind of saying they're going to disrupt at a low cost what was happening in ai in the us and then we had the tariff tantrum and we had more macro shocks and more headwinds and things just went kind of chaotic from a macro factor perspective and so i think that was probably the biggest driver around the volatility that we saw and then you had a number of events happen of course later in the year we had this liquidity flush that happened in october we saw more ai headwinds the government shut down the longest on record i think a number of those things combined with the fact that the clarity act didn't get through congress i think those things all combined led investors to feel uncertain about the outlook for crypto and that led to prices not hitting that two hundred k mark or not sustaining all time highs but overall you know we were headed in the right direction i.
- [05:22]
A
Have another take as well i think what ryan said was right our two hundred k prediction the sort of basis of that was there's this fundamental bull thesis of institutional investment and regulatory that was going to push prices up we thought we would get above one hundred k and go to the next behavioral cell wall which i thought would be two hundred k so that's the next round number i think one fifty thousand foot way to look back at twenty twenty five is to say huh turns out one hundred k was a big behavioral sell wall and it took us a year to get over it i think we will get over it and move on but i think i underestimated the number of people who would sell at one hundred k to get ahead of the four year cycle and that kept prices from releasing from that gravity.
- [06:05]
C
Around there to maybe to put it optimistically none of what you guys said is say is like definitive no or a failure by the industry it's more just a not yet it's like eh we just didn't get it this year you know this timeframe wasn't the right timeframe but the clarity act like ryan said it's still on the menu like this clarity act didn't get denied like that is actually something that we're going to talk about for twenty twenty six a few more predictions to recap twenty twenty five your prediction number four twenty twenty five will be the year of the crypto ipo with at least five crypto unicorns going public in the united states i definitely remember a lot of ipo crypto ipo activity did we achieve the numbers on this one that we.
- [06:47]
A
Needed to yes yeah we did i mean it was it was a big year for crypto ipos we even have twenty one sort of de spacking today as we're recording so there's a there's a there's a lot you know we had what were the biggest ones i mean we had circle we had figure.
- [07:02]
C
Circle is huge yeah we had a.
- [07:04]
A
Huge year it's sort of a year of maturity of crypto equities we run a crypto equity etf and it was the year of replacing like bitfufu with circle and we had this general upgrade of bigger and bigger companies coming into the space which i think shows the.
- [07:19]
C
Direction of the industry yeah gemini was another big one that went public this.
- [07:23]
B
Year as well i think one last prediction that's kind of fun was actually your bonus prediction for last year because it had a longer time range than just one year so it's still in play guys your bonus prediction for for twenty twenty five is still in play you said this in twenty twenty nine bitcoin will overtake the eighteen trillion dollars gold market and trade above one million per bitcoin so we have kind of two predictions embedded in one the first is by twenty twenty nine we have over one million dollars per bitcoin the second is bitcoin overtaking gold now there's that eighteen trillion dollars number there which is what gold was last year and now it's i think it's something closer to like thirty trillion dollars so that goalpost has certainly moved downfield and maybe this is a general question of do you still think twenty twenty nine we get one million per bitcoin and do you do you actually think that there's some catch up here i mean this implies a massive amount of catch up for bitcoin and gold and this year gold put distance on bitcoin it has raced far ahead in the race and what do you make of that i.
- [08:29]
A
Think gold racing far ahead is because central banks have been buying gold in size for the last four years and eventually that excess demand overwhelmed available supply i actually think there's a perfect lesson and a reason i'm still optimistic about that million dollar plus price target and that catch up the central bank buying of gold started in twenty twenty two and they bought a lot of gold in twenty two twenty three twenty four it wasn't until twenty five that we had that huge run up and the reason was people were willing to sell to fill that demand for those first few years but eventually we exhausted those sellers and the price went up what's happening in bitcoin right now is that institutions via etf's are buying more than one hundred percent of the supply and they did it in twenty four and they're going to do it in twenty five and they're going to do it in twenty six and in twenty seven and in twenty eight and in twenty nine the reason i think you can get to that million dollar price target is eventually you'll see the same thing that happened in gold which is the price just goes parabolic once the sellers are completely exhausted price skyrockets i do think the next cycle in crypto is the cycle where bitcoin catches up with gold and then it's a question of how much bigger than it gets could twenty twenty nine be optimistic it could be but i think we have a very good shot at that matt you.
- [09:46]
B
Said the next cycle for crypto so you still believe in cycles well i.
- [09:50]
A
Mean the next phase i don't we'll get into that i think the four year cycle is dead i think we're in something like a a five to ten year institutional cycle so there's cycles in everything but i think we're in a new cycle but it's this institutional cycle where we get up to par with gold i think that's the cycle.
- [10:08]
C
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- [10:12]
E
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- [13:03]
C
I think this beautifully transitions transitions us into your guys's ten crypto predictions for twenty twenty six just to talk about that cycle thing bitcoin this is your first prediction bitcoin will break the four year cycle and set new all time highs so i feel like this is an update to your guys prediction number one from last year which is bitcoin will trade above two hundred thousand bitcoin will break the four year cycle and set new all time highs to me this reads we're not done yet the continuation of the bitcoin slow grind up will continue what to what evidence or what rationale do we think that we have to say that the four year.
- [13:38]
A
Cycle is dead yeah all the reasons you would believe the four year cycle it exists are either extraordinarily weak or actually negative so what are the reasons people think it exists one is the having the having is half as important every time it happens so it's just not that much supply being removed so that's dead the other is interest rate cycles they went way up in twenty eighteen they went way up in twenty twenty two no one thinks they're going up in twenty six everyone thinks they're going down so that's moving in the other direction the third is blow ups ftx mount gox icos but in this new regulated era of crypto with etf's and qualified custodians the blow up risk has been much reduced the only other reason the four year cycle could exist that i can think of is chance and i just think chance suggests you know we got three of them we're probably not going to get the fourth at the same time you have these one time generational massive forces of regulatory improvement and institutional adoption and i think they'll just overwhelm whatever lingering tiny forces persist from the old four year cycle they're just things that matter more now than having there's things that matter more than modest interest rate cycles i just don't see it in twenty twenty six i think it's up and to the right there's too much institutional demand matt.
- [15:00]
B
You said interest rates going down that might not be the full global liquidity story though we've had people like matt michael howell on bankless before talking about the global liquidity index and so even in a world where central banks are lowering interest rate you can still have reduction of global liquidity when you broaden it to global liquidity and not just interest rates going down do you think it's still true that we have kind of easy money policy i think we're.
- [15:31]
A
In almost a heads we win tails we win situation i think either we have very strong economic growth in which case risk assets do well and some liquidity gets sucked out of this or we have a pullback in economic growth in which case i think liquidity floods into the system because we banned recessions globally so i think either either way i think bitcoin almost wins and i do think we're in a in in a monetary more liquidity cycle right now the us has ended quantitative tightening i know there's some differences in what's going on in japan but i think those trends paint in the same general direction.
- [16:07]
B
I'Ll note that this is not a two hundred and two hundred k price prediction this is just bitcoin above all time highs what are we all time high one hundred twenty six k something like that so we're looking at just north of one hundred twenty six k so something more modest but i would say it's definitely maybe immodest the opposite of modesty here to claim that four year cycles are broken because that's canon in crypto i think people are expecting that next year will be a down cycle and a down year and perhaps a more painful down year so you guys are predicting otherwise let's see what else you got so number two bitcoin will be less volatile than nvidia that's interesting bitcoin less volatile than nvidia so we're pulling in ai stocks here talk about this prediction yeah i think this.
- [16:57]
D
One'S really interesting we spend so much time at bitwise talking to financial advisors and family offices and professional investors cio's at endowments and pension funds and time and time again what they say to us is i could never invest in bitcoin because it's too volatile i wouldn't touch it my clients can't touch it it's not you know it's against my fiduciary responsibilities to to do this and then when we talk to them about well what do you invest in of course it's equities and it's the s and p and it's the nasdaq and it's all these different index funds that own stocks like nvidia and then we pull up a chart and we show them the volatility of nvidia versus bitcoin and they don't really know what to say because the reality is is that those have been trending against each other for the past few years where bitcoin's getting less volatile as it becomes more adopted by institutions and markets get deeper and nvidia is getting more volatile and we think this trend is going to continue and it's just going to remove another one of those excuses from investors who have been ignoring crypto as too volatile for them to touch and thinking of it as rat poison square like warren buffett says and they're going to have fewer excuses not to allocate to the space so we think this one's increasingly important i don't just think it'll be nvidia i think some of the other max seven will also be more volatile than bitcoin but it's important to note that bitcoin's on this journey to being less volatile than it was you know one two five ten years ago and that is a marked trend as it moves from a retail asset to an institutional driven asset i do find.
- [18:25]
C
That this is interesting that it's not just bitcoin mellowing out but it's actually the stock market getting a little bit more more crazy to what degree is this an nvidia specific property the volatility or is like nvidia kind of like some sort of high water mark relative to the rest of the equities market when it comes to volatility will bitcoin become less volatile than three out of the mag seven maybe in the future as well what do you guys think.
- [18:52]
D
About this yeah that's a really good question there is other popular equities that bitcoin is less volatile than today like tesla for instance is more volatile than bitcoin as well and i think this is indicative as you mentioned david of a trend of equities getting more volatile while bitcoin is getting less volatile and so i think those two trends combined especially when you look at the return profiles of these assets and the lack of correlation between bitcoin and these types of equities bitcoin just becomes a very attractive element to add to a portfolio so i think it's a story of both things bitcoin is getting less volatile as you have institutions coming into the space that means more liquidity that means more institutional traders and hedge funds and participants in the market that dampen volatility and then you have an overall increase in the stock market volatility which i'm sure we've all experienced this year any given day you turn on cnbc they're talking about the s and p up three percent down three percent et cetera and so i think it's both bitcoin getting less volatile equities getting more volatile.
- [19:53]
B
It'S interesting that you guys are comparing bitcoin and crypto assets to an ai stock essentially and it has felt from a crypto investor perspective that investor attention has been on ai at the cost maybe of crypto in twenty twenty five wondering if if that's what you guys see right with investors allocating capital now ai is the new shiny toy and crypto has kind of kind of been pushed aside and do you think that changes in twenty twenty six if that's.
- [20:20]
D
The case yeah i do think this changes a bit in twenty twenty six i mean ai is still going to be the front runner for what it's worth and the reality is that most financial advisors and wealth managers spend a pretty small amount of time actually managing their investments and most of the time they spend on gathering new clients and client relations and other elements of operating their businesses so the time they do have to spend on investments is i don't know half of their time and then within that they allocate it to things like equities and bonds and private credit and other things and ai and so crypto is just this tiny little thing i think crypto will grow as a portion of what they think about but ai just consumes so much space because it touches all the biggest stocks in the world that i think it will be the front runner yeah i'll.
- [21:06]
A
Just add in one more note on that something has changed this year with crypto though which is with the advent of stablecoins and tokenization i think traditional investors have started to be able to feel crypto it's almost like they can touch it like they believe it and so i've found that in conversations it's a lot easier to put crypto side by side with ai right because they can now imagine it in their daily lives that wasn't really true when bitcoin was the only narrative that tradfi could get its mind around now that it can get its mind around stablecoins and tokenization it sort of reified it and i think made it sit more evenly so some of that maybe envy that we've had of of the ai attention has been pulled back a little i'm.
- [21:49]
B
Glad you said envy because yeah that's what i was feeling honestly matt so you nailed the emotion let's move on.
- [21:55]
C
To number three etf's will purchase more than one hundred percent of the new supply of bitcoin ethereum and solana as institutional demand accelerates i want to call out what is kind of a unique benchmark here the broad strokes of this prediction is that etf to demand is increasing but you guys benchmark it to the new issuance of the respective blockchains the new mining rewards for bitcoin the new staking rewards for ethereum and solana so i feel like there's two parts here a talk about why you guys think that etf demand accelerates and then also why benchmark it to the new supply of each respective crypto asset yeah.
- [22:33]
A
So first on the why etf demand accelerate there are three real reasons first is it always happens so if you look at any etf in history and i was the ceo of etf dot com before i joined bitwise this is like my old turf year one is typically the smallest year and then it ramps from there if you take the gold etf it did three billion inflows its first year and then five billion then seven billion then ten billion then eighteen billion it ramped for seven straight years so this is just what happens in etf's one of the reasons this happens is a second point which is big advisory platforms like morgan stanley and merrill lynch take a long time to turn on exposure to these etf's in fact it's only been within the last six months that advisors at morgan stanley merrill lynch ubs and wells fargo which control north of ten trillion dollars could even invest in bitcoin or ethereum etf's now those doors are blown wide open so we're dealing with another audience and then the final reason is tradfi is just slow the average bitwise investor on the tradfi side allocates after eight meetings with us if they started those meetings.
- [23:42]
C
Yeah you have to suffer through eight meetings with the same person before they.
- [23:46]
B
Give you money suffering.
- [23:49]
A
Welcome to cryptoland but here's the thing if if you started those meetings when the bitcoin etf launched january twenty twenty four and you did them quarterly guess what your eighth meeting was this quarter right like we're just in the sweet spot of adoption i know that's hard for people to but we've been doing this a bit wise for eight years so that's like.
- [24:06]
C
A i'm so glad you guys have been doing that oh my eight eight.
- [24:10]
A
Years feels like a hundred but but that is true so look i think etf growth will go up the the comparison to the net new supply is because i'm a very simple person like crypto prices are set by supply and demand you have one source of new supply which is blockchain rewards or staking et cetera and then you have this novel source of incredible demand on etf's and if we look into twenty twenty six you can be very precise at current prices the bitcoin network will produce fifteen point one billion dollars worth of new bitcoin etf's did they'll end up doing about twenty three or twenty four billion dollars this year in twenty twenty five and we think that will go up in twenty twenty six so they'll far surpass it ethereum's an even stronger story actually the strongest of the big three assets next year we estimate about three billion dollars in net new supply of eth we've done ten billion dollars in etf inflows this year we'll probably get to eleven billion by year end that could be fifteen or more twenty billion next year so you're talking about five times more demand than there is supply that's an incredibly bullish story for eth prices and solana something similar it's three point six billion dollars solana etf's have only been on the market since october right but in less than two months they pulled in over six hundred million dollars they'll surpass that as well what this means is that there is this gentle tide consistently lifting prices up and for what it's worth you've seen that this year the fear and greed index was at ten and bitcoin was flat with the fear and greed index at ten bitcoin should have been minus sixty it wasn't minus sixty because there's been twenty two billion dollars of institutional money of suit coiners to use the new crypto coiners coming in and buoying this market and and those suit coiners are coming in force in twenty twenty.
- [26:06]
C
Six oh my god that is the greatest term i have heard out of crypto in a long time i guess i was not out of crypto i have an anecdote that i'm pretty sure places itself pretty well into what you're talking about and kind of the recent history of just these etf's ever since the etf's launched i've increasingly run into you know people who are not in the crypto space they're not crypto people but nonetheless they know about crypto and they have invested in crypto and maybe they got in on a previous cycle and they like invested in like denta coin or dogecoin and they like rode the volatility up and down and then they got burned but these same people i've noticed this multiple times especially during my travels down in in argentina which is like kind of a couple years ahead of crypto adoption so many times i have people heard these same people or same archetypes of people who are previously invested in crypto they are now like i'm just going to dollar cost average into bitcoin and forget about it and that's the only thing that i'm doing and that that started me like running into these little stories from you know ex burned out crypto investors crypto speculators a lot of them are just falling into the the pattern of just dollar cost averaging into bitcoin ever since the etf's came online and i would expect that etf's would be actually a fine venue for them to do that in their robinhood or account or their brokerage this is something that i've picked up on how does this fit into what you're talking about matt it's completely.
- [27:32]
A
Right because it's so normal in those crypto in those brokerage accounts people are dollar cost averaging into stocks and bonds it's just what they do they don't even think about it a lot of us save in our retirement accounts just automatically the etf makes it so easy it gives us this institutional credibility so i i think that's exactly right i think people will just continually buy it and buy it and buy it the other thing i didn't mention about why etf flows go up is the most obvious thing and people always ask me do you really think flows will go up ask any crypto investor have they the first time they bought bitcoin or eth have they bought more since then i mean no one goes a hundred percent on day one why do we think it would be true for these etf investors right they're going to leg in and in and in so yeah that that story makes a lot of.
- [28:20]
C
Sense to me i'll also say anecdotally there was another anecdote me this is me my own story i was down down in argentina somewhere and the the crypto prices were plummeting and i didn't have any money on coinbase and i didn't want to wait for it to arrive but i wanted to buy the dip right in that particular moment and i went on to robinhood which is where i get my brokerage and i went to the crypto section i wanted to buy like pretty pretty substantial amount of it was either bitcoin or ether maybe a little both and the fees on robinhood were so goddamn high and i was like there's no way i'm paying these fees to buy bitcoin and ether on robinhood why would i do that i guess i'll just have to wait for my transfer to go through and i'll take whatever the price i'll get in like one one day when it shows up on coinbase and then i realized oh i can just buy the etf which has no fees on robinhood and i can just dollar cost into that built based on my my robinhood account and so the access that was the first time i've truly experienced the privilege of the access of the etf in a very easy to access way inside inside of robinhood and i'm the bankless guy i'm the guy who like self custody is all my eth and so even myself i'm finding value in the etf's just being at my fingertips way more accessible than the actual on chain stuff i love that story.
- [29:40]
B
All about it number four crypto equities will outperform tech equities it feels like this year was the first time we actually got some big crypto equities talk about this one what do you think is going to happen next year i.
- [29:53]
D
Think we're going to continue to see a trend that we've seen over the past three plus years which is that crypto equities have outperformed tech equities in the aggregate by multiple orders of magnitude you know we have this widening group of crypto equities that we spoke about a bit earlier you now have circle and figure and other pure play crypto equities that we didn't really have one two or three years ago i think we're going to have more crypto equity companies going public or more crypto companies going public so the universe is going to continue to grow and again those companies are going to become more high quality more pure play but i think fundamentally why crypto equities continue to outperform traditional tech equities is because wall street and traders just don't understand crypto equities they write them off as like these crazy companies that are tiny and only operate in the context of crypto's crazy space but in reality these are massive businesses coinbase is part of the s and p strategy is part of the nasdaq one hundred and these companies have many different business lines i mean coinbase alone operates in every single corner of the crypto ecosystem and is continuing to expand i think wall street just writes them off and that's a huge mistake and that's why we continue to see the growth of these companies surprise wall street and you see the companies continue to run up in price over the long term is because there's alpha in understanding that these are real companies that are growing very quickly and often more quickly than a lot of traditional equities so we think this trend will continue over time it's also easier to allocate to crypto equities for a lot of investors we work with a lot of these massive wealth management platforms and many of them won't allow their wealth managers to to allocate to crypto etf's like bitcoin or ethereum etf's in their client accounts but they have no restrictions on their ability to invest in something like coinbase or strategy or crypto equities index fund that we manage and so i think that's another reason why we think we continue to see flows into crypto equities it's investors that want a proxy to crypto aren't allowed to invest in crypto because their committees won't let them or their their risk teams won't let them and so they buy crypto equities and it's great exposure it's high beta and it's outperformed tech equities over the past three years by multiple multiple hundreds.
- [32:08]
B
Of percentage points i think what's interesting about this is this is the first year it felt like crypto natives realized they needed some off chain assets as well in order to capture the full upside of crypto and so that's weird oh shoot i need a brokerage i need to own some stocks in order to get an upside on some of these crypto native companies and i'm wondering next year and maybe the year after whether the opposite might start to become true whether the institutions might be like oh i actually need some crypto native tokens in order to capture the upside of crypto that aren't available in my you know brokerage tradfi account and this is kind of a i guess an additional question on what about our tokens i know bitwise has long been bullish on defi tokens revenue generating tokens for instance it's felt like they have taken a backseat in twenty twenty five and i don't see anything in your predictions that say twenty twenty six might be a good year for our crypto native tokens but i think you're still bullish on them long term and i'm wondering if you could make the case and like what's missing from them do we need better investor protection do we need higher quality assets and projects and teams what would you say to this matt.
- [33:19]
A
I mean look tokens were bad because we had a extraordinarily aggressive regulator that said if you attach economic rights to a token you go to jail and so that had two effects one it meant many of the tokens didn't have economic rights and two it meant many entrepreneurs didn't enter the space because they could build somewhere else and not go to jail that's been released so what do we need for these revenue driven tokens to sort of gain more traction we need them to approve improvement the economic capture of those tokens now that they're allowed to we're starting to see that with things like fee switches and increased burns and other things they need investor relations from the protocols to help investors understand that and then they need continued traction of the apps but it's absolutely going to happen the line between equities and tokens is blurring we've presented it as this binary it's completely a spectrum and investors need to allocate across all of it earlier today i was meeting with a sovereign wealth fund they asked me what is the beta of crypto what does it mean to own the market to own the market in crypto you need crypto assets and you need crypto equities that's what i explained to them you're going to need these tokens as well because we don't know where all the value will accrue but i think i think you're starting to see it i think better economic capture better tokens better teams new apps we're going to see the explosion of that in the year to come these are.
- [34:45]
C
All words that i thoroughly enjoy let's.
- [34:47]
E
Move on to number five introducing frax usd the genius aligned digital dollar from frax it's a secure stable and fully backed by institutional grade real world assets custody by blackrock superstate and fidelity it's always redeemable one to one transparently audited and built for payments defi and banking the best of all worlds at the core is fraxnet an on chain fintech platform built to align with emerging us regulatory frameworks where you can mint redeem and use frax usd with just a few clicks deposit usdc send a bank wire or tokenized treasuries and receive programmable digital dollars straight to your wallet fraxnet users benefits from the underlying return of us treasuries and earn just by using the system whether you're bridging minting or holding your frax usd works for you frax isn't just a protocol it's a digital nation powered by the frax token and governed by its global communities join that community and help shape frax nation's future by going to frax dot com slash r slash bankless frax designed for the future of compliant digital finance token launches are making a comeback but things have changed since the twenty seventeen ico era now we have eight years of research on how to fairly distribute tokens to the market all that progress culminates in the uniswap continuous clearing auction no sniping no timing games no whale advantages just fair transparent on chain price discovery here's how it works a project sets aside an allotment of tokens the continuous clearing auction sells them continuously block by block over a customizable window typically a few days supply is fixed across the auction and as demand comes in the clearing price adjusts if new bids arrive the price moves up if they don't it holds steady since bids are filled gradually over over the entire window early participants often end up with a lower average price while still giving everyone time to place orders when the auction ends the proceeds can seed a uniswap v four pool giving you day one liquidity without exchange fees or market maker contracts but while the uniswap continuous clearing auction is perfect for launching new tokens it's also an extremely flexible protocol and can be leveraged for price discovery bootstrapping and auctioning of existing low liquidity assets as well if you're launching a token and want an on chain transparent sale that gets tokens into the hands of real believers the uniswap continuous clearing auction is the way to do it check it out at cca dot uniswap dot org.
- [37:02]
C
Polymarket open interest will set a new all time high surpassing twenty twenty four election levels the twenty twenty four election level for polymarket volumes is an incredibly high benchmark that was when polymarket mania everyone was saying polymarket polymarket polymarket all over tradmedia i can't remember off the top of my head where we are in comparison to those numbers right now but we're somewhere like one third to one half of where we hit about.
- [37:24]
B
I think we hit about five hundred million in open interest at this spike yeah yeah and now we're at about two hundred million perfect so we have.
- [37:32]
C
A two point five x in like non donald trump election related prediction markets that need to happen in order for this in order for this prediction to come true what gives you such conviction in the growth of poly market and.
- [37:45]
A
Prediction markets oh man i thought you were going to say we sandbagged this one i actually thought it was going to be a different intro to this one this seems like a gimme poly is opening in the us right the us is the world's largest market it couldn't even invest during that previous boom it's demonstrating traction in everything from sports to entertainment to economics etc it has huge investment net new capital at which it can do outreach to people and build itself build its its its understanding and twenty twenty six is an election year and a lot of people are focused on the midterms i think when you smash all those together like you could see this go to a billion dollars i wouldn't be shocked to see that so i think this one is is pretty easy when you combine all those things together i don't know if ryan has a different take no i.
- [38:36]
D
Agree i actually you know two years ago or following the twenty twenty four election i guess so a year ago i was pretty bearish on what was going to happen to open interest on polymarket if you look at the polymarket open interest chart it almost mirrors the famous tulip bubble chart like exactly it's this crazy spike and then it falls off a cliff and i just felt the same thing was going to happen until the next election matt and i debated this a lot heading into twenty twenty five and i'm not afraid to throw my hands up and say i was i was wrong about this we've seen open interest continue to climb and i think the fact that you know most us users just simply weren't using polymarket but it's one of the fastest growing and largest betting you know online gambling or sports betting markets in the world and now poly market's opening new categories and you just have this like degen gambling appetite in the us and i think that's fun to just drive open interest much much higher you have the world cup coming in twenty twenty six we have the super bowl coming in early twenty twenty six we have the midterms i just think all of those things as poly market expands are going to drive open interest yeah like matt said probably significantly higher than five.
- [39:40]
A
Hundred million yes yeah that is right can i add one more thing on this that i think is maybe maybe important a thing we don't talk enough about in twenty twenty five in crypto is that we went from this one narrative of bitcoin to three narratives bitcoin stablecoin and tokenization we sort of just feel today like those narratives have always been there but from a public perception crypto was a one trick pony until maybe this year and now it's a three trick pony one thing that i like about this prediction is it's going to be crypto's going to be a ten trick pony maybe next year prediction markets is probably the fourth leg but we're also going to see privacy and defi and deepin and all of these things and i think this is sort of the signal that we're expanding from these three giant narratives to something like ten and i think that will make crypto significantly you know more important more understood feel more real in people's day to day lives that's the special thing.
- [40:35]
C
That i really feel about polymarket is yeah it's on a blockchain it's got stablecoins but it's really it created its own category in of itself and that's finally crypto coming through on a promise of just like you'll be able to use crypto infrastructure to build out entirely new categories of things and we're finally starting to see some of that as you said but one question i have for you matt as i'm sure investors come to you and being like you know i saw maybe the value of bitcoin but beyond bitcoin i didn't really see anything until i found polymarket how do i get exposure to polymarket or prediction markets and you as like the etf guy i don't know what answer you tell them because you know poly market is privately owned and the prediction market category as like an indice sector is probably not all that strong so when people come to you and say hey i want exposure to prediction markets.
- [41:25]
A
What do you tell them man that's a great question do you have a good answer i don't know you can get tangential exposure by owning things related to stable coins because that will of course have to scale as poly market scales you can get tangential exposure by owning layer one blockchains because those things start to scale but it's hard to get direct exposure without underlying exposure to the equity as far as i know i do think it's good broadly for crypto but the specific tie in you know we're gonna you know get two in the weeds the specific tie in is is relatively limited it just grows.
- [41:57]
C
It up do do people actually ask that question are they are they expressing that level of interest in prediction marcus or is that just my imagination i.
- [42:04]
A
I haven't heard them express that level of interest i think those people are probably talking to the vc side of the equation an analogy back to the internet it's it's it's sort of like taking one narrow piece of the internet and saying how does that benefit the internet it actually helps that it's everything that you can stream that you can do teams et cetera et cetera so i think of it in that in that case it's broadly positive i love.
- [42:26]
B
The idea of crypto having a dozen different use cases like the internet does today right it wasn't just e commerce or just like one thing it's just it's all of the things certainly and that's the internet of value meme that we've been talking about and now it's coming true let's talk about prediction number six which is a somewhat political prediction let's call it stablecoins will be blamed for destabilizing an emerging market currency oh that's interesting so what do you mean by this well we we always love.
- [42:56]
A
To throw in one or two predictions that have this sort of negative tinge to them because i think it's important to be realistic everyone talks about stablecoins dollarizing the world from a positive perspective because it is a positive story you think about people in countries facing high levels of inflation escaping that inflation with their savings and into the relative stability of dollars escaping the high fees that banks charge into the relative efficiency of stablecoin based payments that's a wonderful story from an individual perspective but for the people running the central banks in that country it's less of a wonderful story right it's capital flight it's dollarization it's escaping and putting pressure on the local currency would you say it's also it's.
- [43:39]
B
Loss of sovereignty isn't it it's loss.
- [43:41]
A
Of sovereignty it's loss of control over currency which is like one of the fundamental things that many governments do so i think not enough people think about it from that perspective we've seen some emerging market economies form tasks forced to study stablecoins they're now getting of a size where you're talking about hundreds of billions of dollars where you're really talking about high impacts on commercial activity i'm sure david you saw in argentina significant stablecoin use it's really penetrated there it's penetrated in places like nigeria you see it in other places i think we we might see someone blame stablecoins for harming their current we might see countries try to ban stable coins i think we've gotten to the size that we're big enough that we matter and i think you'll start to see the other side of that come into the equation.
- [44:30]
B
Well if you project that a little bit further you wonder how successful they will actually be i mean stablecoins and crypto adoption is very much a bottom up phenomenon that's what the bankless thing is it's about creating self sovereign individuals then leave their banks and go bankless there's a small version of this with if you you guys were following kind of the everything going on in nepal and the overthrow of the nepalese government prior to that the i guess revolutionaries maybe we'll call them were using crypto assets because bank accounts were frozen you know communication was frozen all of these things and there you know that was made illegal by the government in charge and you could imagine that happening in other countries as well as they acknowledge the existence of this threat of stablecoins that they impose capital controls and flat out make it illegal but then will they be successful i mean don't you have to de facto ban the internet in order to get these freedom tools.
- [45:28]
A
Out of your country that's the thing you can't really do it and it's the wrong thing to point the blame at the blame is not the stablecoin the blame is you're destroying your currency.
- [45:38]
C
Your mismanaged government account that's exactly right.
- [45:42]
A
That is where the play so i think they will try i do think broadly they will fail because you can't ban the internet at least it's very difficult and ultimately the the optimistic version is what you want to see is better government controls on their spending and their their currencies like that's how they should actually fight it is to get their house house in order from an inflationary perspective and then people won't feel the need to take on this alternative approach the thing that i love about.
- [46:10]
D
This prediction is that the people who lose if this prediction is true are the central banks and the government leaders who are abusing their currencies and are viewing abusing their citizens and the people that win are the sovereign individuals and stablecoins when and so to me this is like a beautiful prediction because it sounds scary stablecoins will be blamed for destabilizing an emerging market currency that seems dark and ominous but it's actually a function of the individual and the sovereign individual winning and that to me is really really powerful and is what crypto is here to do and why all of us got into crypto in the.
- [46:47]
C
First place we actually definitely saw a canary of this this year if people remember the nigeria jailed arrested this binance cryptocurrency executive tigran gambiren he was a us citizen oh we get a quote from this bbc article the forty year old was in charge of financial crime compliance at binance the world's largest crypto exchange that nigeria blames for much of its recent economic turmoil are these maybe some of the words that you guys might expect to be thrown at stablecoins.
- [47:17]
A
In twenty twenty six yeah that's precisely right i think that is the canary in the coal mine and now we're of a sufficient size where we're going to start to see those ramifications you know more broadly in some of these countries that face really challenging conditions well.
- [47:31]
C
Like ryan said crypto represents an escape valve for a lot of the economic activity going on in these countries to escape oppressive regimes like this and so i don't necessarily think this is actually a pessimistic prediction i actually think it's an optimistic one let's move on to number seven on chain vaults aka etf's two point zero will double in aum.
- [47:53]
E
I think we might need a lesson.
- [47:54]
C
Here matt what is an on chain vault and why do you guys think it's going whatever they are think that.
- [48:00]
A
They double yeah absolutely ryan you want me to take this you want to.
- [48:03]
D
Take it you have more love for etf's than anybody i have love for.
- [48:08]
A
Etf'S we we we we both love so an onchain vault is like a fund but it exists on chain so users will deposit assets typically a stablecoin like usdc into a vault and then third party managers we call them asset managers in tradfi they're called curators in crypto it's a pretty highbrow term curators allocate the funds in various ways often to generate yield but sometime just to generate total returns in the same way a traditional asset manager like a blackrock will take in dollars and then invest in yield bearing bonds or invest in stocks that might deliver total returns a vault curator will take in stable coins and invest in yield bearing defi protocols or generate total returns through some sort of strategy we think it's the way that asset management will exist when we are in this fully on chain world we think bitwise will be a vault manager as much as it is an etf manager and vault sort of emerged in twenty twenty four from effectively nothing and assets ramped to about two billion they continued to run up in twenty twenty five they hit almost nine billion dollars that's a pretty reasonable size and then they washed out in the october volatility spike and a few of the poorly managed strategies by weak curators had issues and aum is down we think they come roaring back we think large high quality professional crypto managers will come into the space as curators and this will be seen as an institutional way to get diversified exposure to yield or total return i love calling them etf's two point zero because of course etf's were a disruptive technology when they were created in nineteen ninety three they they replaced effectively mutual funds which is how people invested until etf's came along now etf's have replaced mutual funds i think the next version of that is volts someday we'll be sitting here talking about multiple trillions of dollars in volts you know today there's twenty trillion dollars in etf's someday we'll get to twenty trillion dollars in vaults i think it's that big of a deal it's a really.
- [50:18]
C
Big idea well when the etf guys tell me that the etf two point zero the on chain version of etf's faults are going to be trillions of dollars i think you guys have a little bit better more informed of a perspective than the average person here so that is supremely interesting to me if i'm reading between the lines and the etf guys are super bullish on on chain etf's aka vaults this would go it goes to follow that y' all would be wanting to be building directly in this space maybe i maybe i won't pin you down for anything specific here but if theoretically bitwise would be building on chain vaults and would be growing out that business line to what year this is a prediction that you didn't put in but i'm asking you for one what year do you think that the on chain vault aum would flip bitwise's off chain etf aum i.
- [51:11]
A
Don'T know i'm bullish on both i'm not going to be able to be pinned down on that i do think this is a really big deal it is something that we're looking at no commitments from bitwise here i do think it is one of the ways asset management works in the future so maybe maybe we'll come back on the show next year with a prediction like that.
- [51:27]
C
All right we're just not ready for.
- [51:28]
D
That one i would just add to that to your point david you know bitwise is already on managing assets on chain we have been now for a number of years through our onchain staking solutions business and that already is a decent size in terms of aum and it's expanding from ethereum to salon and other crypto assets which is one of the ways that we can offer staking in our etf's in kind of a vertically integrated way so we are and i'm very happy about this because when i joined bitwise as a defi analyst in twenty twenty one we weren't really doing anything on chain and over the past five years we have started doing a lot of things on chain and it's grown to be a sizable amount of our overall a so i wouldn't be surprised at some point in the future those two things are split fifty fifty or if on chain assets gets the tilt but but you know we already do that for staking and so vaults is a natural evolution of what we do on chain well speaking of.
- [52:22]
B
Tilt number eight talks about tilt for ethereum and solana ethereum and solana will set new all time highs but there is a contingency here in parentheses if the clarity act passes eth and sol new all time highs dependent on the clarity act passing you already called for bitcoin all time highs this year so clearly we've discussed do not believe in the four year cycle believe that next year twenty twenty six will be bullish eth and solana won't just hit all time highs they'll only do so if the clarity act passes talk about that why is there contingency on the clarity act and then of course we all have the follow up question is well is the clarity act going to pass.
- [53:09]
A
The clarity act passing would be like a starter's gun for ethan soul to run into trillions of dollars of value what we have from a regulatory framework in the us right now is we got the genius act encoded you know written in stone stable coins are regulated they can exist they can be used for payments the rest of the regulatory progress we've made over the last year is written in pencil because it's all regulatory decision making and it could be reversed in a new administration so we feel really good about the state of regulation but that could be reversed and that prevents some high quality entrepreneurs some high quality vc some wall street firms from building on this because you're not building on the most sound robust foundation if the clarity act passes we have the full regulatory spectrum to build the future of finance to build a bankless world to build real defi disrupting all financial action and i think you're going to see just an incredible explosion of entrepreneurial activity of wall street investment of investor interest of a thousand different themes so if we get it you see this massive explosion i think we pushed really higher if we don't get it i think it'll be a real negative shock to the ecosystem i think the market expects us to get it there's some risk that that won't happen and i think it would be a psychological setback i don't i'm not saying that ethan sowell can't get to all time highs if we don't get the clarity act but i do think it will be a big setback and it'll take some time for the industry to work.
- [54:45]
B
Through it's interesting it's almost like you're saying matt the clarity act is like the genius bill but for tokenization and if you're talking about the three things that crypto is doing right now it's sort of the store of value thing and it's stablecoins and then clarity would be the tokenization lever i do have to ask you though i'm sure you're monitoring the situation in dc what do you think are we going to get the clarity act done next year yeah.
- [55:11]
A
I think we it's a great question i think we have better than even odds but they're not at one hundred percent to some extent it's become personal to some extent it's hung up on how many limitations there are on white house activity in the crypto market and that makes me worried because that can be a place where the two parties just butt heads for reasons that have nothing to do with what's best for america and instead are sort of personal bias issues i'm hopeful we can get it through if you if you had me to put odds i'd put it like something like sixty percent some people say it's a little bit higher than that but it's not a guarantee we need to continue focusing on it because it's really existentially important i love how you framed it as sort of the regulatory pillar supporting tokenization i would add defi underneath that as well and i think it's i think if it passes it's it's going to be great prediction.
- [56:04]
C
Number nine half of ivy league endowments will invest in crypto i want to again zoom out a little bit on this one and why ask why do in ivy league endowments matter i know that they're very large but do is that is that why they matter do they matter for other reasons and what's the overall the significance of them half of them investing in crypto and then also maybe how many of them are invested in crypto right now so all of the context please great context i'm.
- [56:30]
A
Sorry to keep talking but this is this is one that i was a big fan of there are eight ivy leagues two of them are invested in crypto brown and harvard the reason it matters is not just because they're large that matters they manage whatever you know sixty seventy billion dollars in assets that's a big deal maybe more actually i think more i just don't have the numbers in front of me but the reason they matter is because they set the tone for institutional investors for instance we all think of hedge funds as like one of the primary way institutions around the world invest and that is true today but it wasn't always true thirty years ago hedge funds were this like tiny corner of the market where family offices and a few rich guys invested and then yale started investing a huge amount of its portfolio into hedge funds they delivered exceptional returns david swensen became like the best investor in the world in most people's eyes he wrote a book that everyone read every major institution wanted to follow the yale model which is what it was called which was to concentrate in privates and hedge funds and that industry became a giant industry i think if we get half or more of the ivies investing in bitcoin it validates it for every institutional investor the fact that harvard allocated was brought up in my conversation with a sovereign wealth fund today the fact that harvard allocated was brought up the last time i was on a national accounts platform it really does matter because it's seen as a leading light so this is a big deal so they're institutional.
- [58:01]
B
Kols basically that's exactly what they are.
- [58:04]
A
That'S exactly what they are well said.
- [58:07]
B
Yes okay all the influencers on board all right let's talk about number ten and then spoiler alert there is a bonus prediction all right but number ten first more than a hundred crypto linked etps will launch in the us so this would be an etp explosion ryan why why do you think this will.
- [58:28]
D
Happen you know part of what's so interesting about crypto etps is that it's been it's been almost fifteen years since the first crypto etp application was filed by the winklevoss twins and we just now only have a handful of spot crypto etps which is insane it's taken so long to get where we're at today and i think from here we're going to just accelerate forward at ridiculous speeds something huge happened in october and that's that the sec published what's called generic listing standards which was essentially a playbook letting etp issuers like bitwise know that if an asset meets certain criteria then you can list an etp and we no longer have this two hundred and forty day listing period or waiting period that we all went through and probably came on and talked to you guys about for bitcoin etps and ethereum etps and what that means and what we've already started to see since these generic listing standards came out is that etf issuers can now just launch all kinds of single asset etps we're going to see more and more more and more etps that look and feel like traditional equities etps index funds momentum strategies smart beta indexes and things like that and so it really matters that we have this regulatory clarity that we all talk about as this kind of big term over and over and again but this is what it looks like actually written in paper and provided to the players in the field like etf issuers is now we know what we can and what we can do and we have that roadmap and we're marching down that roadmap we think over a hundred crypto linked etps will launch next year i think those will be spot crypto index equities smart beta momentum all kinds of things and it matters for investors because now they have a big menu to choose from on how they want to allocate you can imagine investors like going to a restaurant and having like two things on the menu they're not going to be very excited about it and it's not going to be a very great experience but now they're going to go and have a menu that's like the cheesecake factory of etps where it's like more than you could possibly choose from and we're super excited about.
- [60:33]
C
It the cool thing with this is that when you get a sufficiently large number of crypto assets being put into etps etf's you start to get permutations and different combinations that might be interesting to people something that you guys launched today or announced today is that the bitwise ten crypto index etf is now is now an etf trading on the new york stock exchange talk about what this milestone is and what it means for just the etf sector of crypto.
- [61:03]
A
Oh man i'm so excited about this this is actually why i joined bitwise in twenty eighteen so this is like an eight year story in the making and yeah it uplifted into an etf format it's a market cap weighted index of the ten largest crypto assets starting with bitcoin and eth and then it screens out assets with significant risks right so as an example today it doesn't hold tron you know in the past it didn't hold luna even though that became the fourth largest asset the reason it's important is because most traditional investors financial advisors just want to invest in crypto they don't have an opinion about eth versus solana they probably can't even pronounce solana they just want to own crypto and a market cap weighted index lets them own crypto with the push of a button index funds are the primary way people invest in stocks they buy the s and p five hundred they're the primary way people invest in bonds they buy the bloomberg aggregate index i think they're going to be one of the primary ways people invest in crypto i think this fund will eventually be tens of billions maybe even more could be the second largest category and it's going to mean inflows into high quality top tier projects so we're really.
- [62:13]
B
Excited about it wait that's really cool because this is a product i can tell my family when they ask the question of like ryan should i buy xrp which everybody always asks right and i'm just like well let's talk about that okay but now i can just direct them to something like an etf that holds top ten market cap adjusted filters out sort of the high risk i'll call them the scams filters out the scams and then you get just the top ten and that's just going to be market adjusted and they don't have to text me and ask me for specific crypto asset picks right that's.
- [62:47]
A
What this product is for that's exactly right it's the easy button bitw it's the easy button for crypto and if a new coin comes along that's legitimate and bubbles up it goes into the index but it's always screened by the professional team at bitwise so i love it yeah it's the solution to the pesky relative who wants to ask you.
- [63:06]
B
About cardano yes is cardano in there.
- [63:09]
A
By the way you have to go.
- [63:11]
B
Look at the assets it is cardano is in there litecoin's in there chain links in there so you capture a few things i wouldn't necessarily recommend but yeah you know they're in there for index purposes all right that's great let's talk about maybe the bonus prediction so we've covered ten these all been fantastic this is bonus prediction bitcoin's correlation to equities will fall talk to us about the correlation at this point in time they've been highly correlated i believe i mean there are times when there it when it's not times when it is but bitcoin is kind of trading like a risk on asset the way equities are as well mostly despite our best efforts to tell the market otherwise talk.
- [63:56]
A
About this so the correlation between bitcoin and stocks is higher than it's been it's still relatively low like statistically it's zero four ish in in statistical terms when you're below zero point five it's considered a low correlation but it's not.
- [64:12]
B
Zero which is what's gold just for a benchmark let's say gold correlation with.
- [64:16]
A
Stocks is very low probably like zero point one okay very low so bitcoin is much more correlated to stocks than gold is but it's less correlated than like different stocks if the correlation between us stocks and emerging market stocks is probably like zero point seven right so there's your spectrum us and emerging market stocks zero point seven stocks and bitcoin zero point four stocks and gold zero point one it's like rough numbers and it's been going up a little bit we think it's going to go down substantially not not too much but somewhat in twenty twenty six for a simple reason which is that correlations don't just appear out of nowhere they're driven by what drives each asset the reason the correlation between bitcoin and equities exists is because they're both influenced by macro conditions right macro conditions drive stocks macro conditions drive bitcoin so when macro conditions are primary you see them moving together but bitcoin is also driven by crypto specific factors by regulation by institutional adoption by things that only matter to the crypto market i think one big meta for twenty twenty six in crypto is that crypto specific factors will be more important than they were in the past things specific to bitcoin will drive bitcoin things specific to eth will drive eth things specific to chainlink will drive chainlink i think those will be more important than they have been in the past when what really mattered the most was just the macro liquidity conditions so if you think the relative importance of the real world use of crypto is rising then you think correlations are going down and just to put a pin on this conversation about why this matters we've covered sort of three things about crypto's returns in twenty twenty six we started by saying returns are going to go up four year cycle is dead price is going in a positive direction because there's more demand than supply we've talked about volatility going down because risks have been squeezed out of the system right by increasing regulation liquidity stability in the market and now we're talking about correlations going lower good returns lower volatility lower correlations is sort of a magical mix and that's part of the reason we think institutional adoption will continue to increase because those are the three ingredients they're really looking for you can get them all in a single investment in crypto i think it's a pretty good pretty good.
- [66:40]
C
Service as we look backwards on the year of twenty twenty five is a big year it's kind of just like a messy year but overall it was a big year how does twenty twenty five rank i know this is kind of a complex question but just you know give me your gut take how does twenty twenty five rank in terms of just like industry progress how much did we get done this year how far forward did we move collectively as.
- [67:06]
D
An industry i would argue that twenty twenty five is the most important year so far in crypto's history it doesn't feel like that from a price perspective but if you just think about all the things that have happened over the past year it really is remarkable we've had continued adoption of etf's we've had an overthrow of an sec regime that was trying to outlaw crypto in the us we've also had a number of executive orders and legislative pieces be finalized and solidified to help push the regulatory framework forward for crypto we've had crypto companies that have gone public we've had harvard double down on bitcoin a number of central banks and sovereign wealth funds allocate to bitcoin stable coins and tokenization became mainstream terms across wall street i think all of those things are incredibly important for the long term growth of crypto i think sometimes people get too hung up on price and can't look one layer beneath that and the foundation of crypto has never been stronger and if you would have said all of these things that i just mentioned have happened over the past year when we were in mid twenty twenty four i would have said you were crazy there's no way all of that could happen yet here we are talking about it as if it's no big deal so i think twenty twenty five was the most important year in crypto's history yeah.
- [68:26]
C
I do agree that there seems to be a massive dislocation between some of the fundamental progress and institutional acceptance and cultural acceptance of crypto as an industry mixed with the kind of mediocre price action maybe with the exception of bitcoin mediocre price action and kind of like just like sentiment of despair at least on crypto twitter and on the crypto side of things but don't listen to them i don't listen to them anyways so hopefully hopefully the price relocates with the fundamental progress that we made this year in twenty twenty six i would.
- [68:57]
A
Just add i think crypto twitter has sort of lost its ambition just to put a pin on what ryan just said the other day the chairman of the sec the most important financial regulator in the us and the world said all us stocks would be on chain in a couple of years for context the tokenized stock market today is six hundred eighty million dollars us stocks are sixty eight trillion dollars i'll save you the math that's a hundred thousand x bigger right what are we even talking about right this is the chairman of the sec saying the tokenized stock market is going to one hundred thousand x in the next couple of years i think we've lost sight of how big a deal crypto really is it's really entering this period the reason what ryan said is true is because we've made this regulatory progress it's entering this period where we can move the full financial economy on chain it won't happen overnight but the chairman of the sec is telling you it's going to happen in the next couple of years we're not really bullish enough i think is my.
- [69:58]
C
Take yeah he's probably worthwhile to listen to so take note i have one question which is just irrelevant to all these predictions but it seems like an okay point to ask this question i think you guys are the right people to ask this question when i was getting into crypto twenty seventeen through twenty twenty one of the big the big narrative catalysts for like why crypto is going to get adopted was intergenerational cross generational wealth transfer it's like eventually you know back in twenty eighteen to twenty twenty we're talking about the millennials are going to grow up they're going to come into wealth and what are they going to do are they going to buy the stock market which is at all time highs or are they going to buy bitcoin which is at you know eight thousand dollars and that was the narrative at the time and like that that worked for me i felt resonant with that and i haven't really heard the conversation of generational wealth transfer being a catalyst for crypto in at least a handful of years so you guys talk to investors across all ages when you guys talk about or just you know think about wealth transfer from the old to the young how update me on that conversation is that a big deal is that a little deal maybe that's in the rearview mirror and we're kind of in a in a lull period update me on where we.
- [71:09]
A
Are with this i think it's another one of those steady drips in the bucket lifting the industry higher i mean it happens it happens every day when we talk to family offices they talk about it a lot when we talk to financial advisors they mention that they need to get into crypto and understand crypto because they're worried when their existing clients pass away that the new generation will fire them if they don't understand this space so it is very resonant with us there's actually another sort of aging of crypto phenomenon that's also equally important is you know the people who were early and interested in crypto in twenty fifteen twenty sixteen are now you know many of them in their mid thirties and forties taking senior roles at large wall street institutions that's one of the reasons wall street is coming into crypto because you're seeing the people who were interested in crypto back in twenty seventeen have moved up in their positions in those banks so all of these are on the side of lifting crypto slowly slowly higher this is this has.
- [72:10]
B
Been great guys and matt i notice you've been calling it crypto throughout this conversation of course that's what we call it crypto is it now okay to talk to institutions and use the term crypto or like what's the accepted language i know we've went through renditions of this oh we should we should call it web three or you know i don't know some people have said we should just call the whole thing bitcoin or whatever is crypto the the term.
- [72:30]
A
Used yeah crypto's no longer a four letter word in traditional finance it's we're back baby on crypto i do think it's safe now i think it's been defanged it is the term some people use digital assets but most of the people i speak to talk about investing in crypto it's been normalized i think the etf's have done a lot of that work they've brought it into the normal course of conversation but yeah it's crypto and i think it'll be crypto.
- [72:56]
B
Going forward do you know what's so funny is you guys were talking about crypto twitter sort of losing its i don't be being depressed more depressed than the progress would dictate that they should be i see maybe the opposite among the i'll use the term suit coiners the suit coiners seem so bullish going into next year and they're more bullish on crypto than some of the crypto natives ironically which is an interesting place.
- [73:19]
A
To be i think that's totally true but what they see is the next generation of buyer if you go back to like when crypto twitter was insanely bullish in twenty sixteen what they saw was that there are these additional people who are going to come into the space as soon as they learned about bitcoin the suit coiners are looking around and they're like everyone we talk to now is starting to engage with this so they're they're at the frontier of adoption they can see it and that's why they're more bullish the people on crypto twitter aren't having those meetings they can't see that frontier but it's it's really really there ryan and i see it in our meetings every day incredible.
- [73:57]
B
The su coiners are bullish their peers are bullish ryan and matt thank you so much for joining us today on these predictions we will be sure to score them next year as well and very excited about what twenty twenty six.
- [74:10]
A
Will bring thanks for having us thank.
- [74:12]
B
You guys bankless nation got to let you know none of this has been financial advice we have no idea how these predictions will hold but we are excited going into the next year crypto is risky as you know you could lose what you put in but we are headed west this is the frontier it's not for everyone but we're glad you're with us on the bankless journey thanks a lot.