← Coin Stories with Natalie Brunell
Coin Stories with Natalie Brunell
Robbie Mitchnick: Inside BlackRock's Bitcoin Vision, Global Store-of-Value Race & How How BlackRock Builds BTC into Portfolios
00:38:26
Loading summary
Transcript59 lines
- [00:00]
Natalie
Did you have a hand in helping Larry Fink change his perspective on Bitcoin?
- [00:05]
Robby Michnick
But most importantly, when I think about most of these cryptocurrencies, it just identifies how much money laundering there is being done in the world. The credit for that is overwhelmingly with him for doing the work, being open minded. It's funny that we have this tendency in our society today to attack or criticize people who have reversed their positions. And I actually think it's an admirable trait. What would we rather people do, make up their mind in 2017 and then agree to never change it? Larry deserves a lot of credit.
- [00:39]
Natalie
Hey everyone, we have a great show in store for you. Here with me in studio is Robby Michnick. He's the global head of digital assets for BlackRock. Robby, thank you so much for joining me.
- [00:49]
Robby Michnick
Yeah, Natalie, great to be here.
- [00:51]
Natalie
Wow. I can't believe it's been almost two years since IBIT launched and it has had historic inflows. I mean, better than gold, right? Better than all these other asset classes. Can you tell me first of all, your reaction to just how successful the spot Bitcoin ETF MTF has been?
- [01:06]
Robby Michnick
Well, certainly had a lot of belief in what this could be for a long time, but until you actually see it happening, it's always a little bit of a nervous process. So, you know, the first day, first week, first month, first year, all those things, pretty extraordinary and record setting. And that's really a testament to just how much pent up demand there was to be able to hold Bitcoin in a turnkey, convenient, accessible, low cost way from so many different types of investors too. And so that desire to, to leverage the benefits of the ETF wrapper in the context of a Bitcoin has been a pretty powerful combo.
- [01:50]
Natalie
Has this been primarily driven by retail or institutions finally being able to allocate to Bitcoin? Like who is Investing in the ETF?
- [01:58]
Robby Michnick
Yeah, so when we started, think of the first quarter which was Q1 of 2024, it was 80% retail at that point. And every subsequent quarter that retail share has come down. Even though the absolute number is growing. The share has come down to the point where today it's around 50 50. And of that other 50%, about half is wealth advisory, so financial advisors buying for their clients. And the other half is institutional, of which a big chunk is hedge funds. So for hedge funds it's generally not a directional trade, it's long spot short futures. So that's around 10ish percent, but the rest is kind of that capital I institutional that a lot of people have been talking about for a long time as a big deal. When that shows up, think of sovereign wealth funds, family offices, pension funds, et cetera.
- [02:51]
Natalie
That's what I was going to actually say. I've seen pension funds, endowment programs. How important is that for them to get exposure to Bitcoin? What does it mean?
- [03:00]
Robby Michnick
Well, I think it is important. Obviously there's lots that you can say about Bitcoin as a potential addition to portfolios. Obviously historically more than anything, it's been a huge return driver, an alternative source of return, and a lot of return at that. But thinking about it more in the context of how it fits with other assets, risk, return diversification, potential, et cetera, I think there's an argument that one can make that this is a valuable thing to have some modest exposure to as a unique source for diversification, as a potential hedge to some of the kind of left tail risk that exists elsewhere in the portfolio.
- [03:41]
Natalie
Coin Stories is proudly brought to you by Gemini. Start your bitcoin savings account today. Plus investing in bitcoin has never been easier than with Gemini's orange bitcoin credit card. Earn up to 4% back in bitcoin on everyday purchases like gas, dining, groceries and more with no annual fee, no foreign transaction fees and no exchange fees on your rewards. Plus sign up today and get a $200 Bitcoin bonus when you spend 3,000 in your first 90 days. Apply now@gemini.com Natalie if you want to stay on top of Bitcoin without getting lost in all the noise, check out the Weekly CIO Memo from Bitwise Asset Management. CIO Matt Hogan puts together a quick five minute memo that breaks the biggest stories in digital assets in each week. Bitwise has been around since 2017 and manages more than $10 billion across 30 plus strategies. The weekly CIO Memo is bold, sharp and totally free. Just go to bitwiseinvestments.com cio memo and always, of course, carefully consider the extreme risks associated with crypto Coinstories is also brought to you by Leden. Need cash but don't want to sell your bitcoin? Leden is the global leader in Bitcoin backed loans, issuing over $9 billion in loans since 2018 and they were the first to offer proof of reserves. With Leden, you get custody loans, no monthly payments and more. Visit Leden IO Natalie and get a quarter percentage point off your first loan. And finally, make sure to get your copy of my Bitcoin 101 book. Bitcoin is for everyone. The book explains why money is broken and how Bitcoin can help you build lasting wealth and freedom. It makes the perfect gift for those new to bitcoin. I've seen some of the educational materials that BlackRock puts out and it really does frame Bitcoin as this unique asset class that protects against currency debasement. Larry Fink has gone out publicly and discuss that as one of the investment cases. Can you dig into that a little bit? Because we have seen that, you know, we're running multi trillion dollar fiscal deficits. We're probably going to need to print more in this money printing, debt based economy that we have. And so how does someone protect their savings with a tool like Bitcoin?
- [05:45]
Robby Michnick
Yeah, well, it's interesting because that concept is relatively novel to a lot of Americans and frankly, the older you are, the more outlandish it seems. Because think of someone who's born in the late 40s or 50s or even 60s in the US they enjoyed, they got to enjoy the most incredible run of prosperity, generally peace and stable currency that has ever existed in the history of humanity. Now if you go to other parts of the world where that has not been the norm, you see much higher levels of adoption than we've had historically in the US So think about Latin America, where that's obviously a region that has dealt with a lot of currency crises and sovereign debt challenges and bouts of high inflation. So in Latin America, the rates of bitcoin adoption are far higher than they are in anywhere else in the world. Now we're starting to see in more parts of the world, even in places like the US and Europe where historically people have enjoyed quite stable currencies, democratic institutions, protections, et cetera. But they're seeing the value proposition of this. And so when you think about it, against this backdrop of growing concern over US Fiscal sustainability, for one, there's only two assets that have emerged, maybe three if we count silver in the last multiple thousands of years that became globally adopted as a monetary alternative. Gold, you could say silver at some point, less so today. And bitcoin. So that's an incredible achievement for bitcoin. Obviously bitcoin is newer than gold, it's more volatile than gold, it's risky as a kind of novel technology instrument. But it also has a lot of in its favor as something that is digitally native in an increasingly digital world that is efficient to store and can be moved anywhere in the world in near real time at near zero cost. So bitcoin has registered in the arena as A real competitor, real option in that space of things, of a small space of things that you can use to kind of play this debasement trade. And we've seen that resonate.
- [08:12]
Natalie
There's been a lot of progress in terms of bitcoin adoption at a greater scale, but I feel like there's also still a lot of pushback, especially from the tradfi world. What types of pushback concerns do you get and how do you address them?
- [08:25]
Robby Michnick
Overwhelmingly, it's one big thing, which is why is it trade correlated? Sometimes. And so a lot of the thesis for the marginal adopter today, particularly if we think about a financial advisor, an institution, is about the role it can play in a portfolio. If you look at it, it's a global, decentralized, scarce monetary instrument that exists outside of any one country's economic, political, monetary risk factors. Well, that's something that has a very unique set of return drivers and risk factors. Right. So you put that in a portfolio, should have great diversification and it also has opportunity to shine in some of the most troubling moments for the other assets in the portfolio. Right. You think about inflation, monetary debasement, political and geopolitical instability, et cetera. But what's happened is this absolutely extraordinary own goal that crypto has scored on itself over and over again by deciding to label Bitcoin as a risk asset. And for one, this is a dubious concept at the best of times. It's even worse when you try to apply it to Bitcoin because not all risks are created equal. And Bitcoin is absolutely a risky asset on a standalone basis. As I said, it's, it's emerging technology, it's relatively novel, but very different things count as risks. Two different assets. Right. Instead we see this bundling of a singular concept of risk. Risk on, risk off, risk appetite, makes no fundamental sense, frankly. But if you repeat it enough times, which our industry has, then you start to just program people to reflexively trade like that. And so that's what we started to see now in lots of episodes. And it just become sort of self reinforcing. If you look at any of the crypto sort of daily research that comes out, it's all about, you know, these random macro factors that have absolutely nothing to do with crypto. You know, manufacturing index, non farm, payrolls, whatever. Like now we take those as indicators of where Bitcoin should move. Why? Because we're lacking in otherwise everyday things to talk about as what's going to move the price and drive trading activity. Well, the reality is it's probably only two or three things in an entire year that actually impact the fundamental long term prospects of Bitcoin. That just doesn't give people a lot to write about. But unfortunately the sad consequences of it is we kind of bungled the narrative and confused a lot of people from traditional finance who otherwise would be eagerly.
- [11:12]
Natalie
Adopting is one of the drivers for Bitcoin's price liquidity, certainly.
- [11:17]
Robby Michnick
So there are taking my point of this whole risk off risk on framing as being very misleading and not a useful tool in the context of Bitcoin. That said, there's a couple of macro variables where actually it does make some fundamental sense to see a little bit of correlation. And it's all sort of in the family of you can call it liquidity. I prefer to call it real interest rates, US dollar, real interest rates, US dollar strength or weakness. All those things which kind of move together or inversely, right? Liquidity up, US dollar down, real interest rates down, and vice versa. If liquidity's in the other direction, that definitely impacts Bitcoin just as it does gold, just as it does emerging market currencies and just as it does most of the assets in the portfolio. So today, for example, that is what's driving the market basically is there's been a rerating of how likely we are to get a rate cut at the next Fed meeting. That's something you would actually expect Bitcoin to be affected by like the rest of the market. But that's, that's just this type of risk factor, right? When something completely different happens, let's say a geopolitical flare up somewhere in the world, that's a totally different story. That's probably a catalyst for Bitcoin, right? Because again, Bitcoin exists outside of any one country's economic, political, et cetera, risk factors. But people get confused and they start to just program that risk on narrative into everything, right?
- [12:54]
Natalie
Well, sure. Something could happen overnight or on a weekend and Bitcoin's highly liquid and it trades 24,7 so it might sell off immediately, but then it usually recovers and performs really, really well. I think that's been in some of your research as well, is that after some of these play political events or geopolitical rifts and shifts that we've seen, Bitcoin tends to actually outperform. This year we have seen gold perform very, very well. And that's usually a signal for Bitcoin to eventually catch up and outperform gold. Do you think that that's eventually going to happen? What Are the forecasts that you're projecting?
- [13:26]
Robby Michnick
Well, they have a lot of the same risk and return drivers, but they kind of seem to take turns and so early. It started late 2024, a good chunk of 2025. It was Bitcoin that was off the races and gold was only up modestly. Now, gold has had this incredible run and bitcoin has been flat to down for the last month. And I haven't got to the bottom of why they sort of take turns like that. But the thesis for investing in gold and the thesis for investing in bitcoin for a lot of people has a lot of overlap. Now you look at a day like today, gold was off sharply this morning too. Why? Because it's about interest rates. And interest rates are something that all these assets actually, it makes fundamental sense for them to be correlated on.
- [14:19]
Natalie
Do you think bitcoin will reach parity with gold's market cap or exceed it?
- [14:25]
Robby Michnick
Those are the only two options. I like that. I like that framing, I guess in.
- [14:28]
Natalie
The near term, right? Some people say it's just going to be equivalent to gold and some people say it's going to be much, much bigger.
- [14:34]
Robby Michnick
Yeah. Well, I think this is the best way you can do fundamental analysis in this space around bitcoin's price. We're not going to forecast that here today. But that framing of the store of value demand for bitcoin, which is overwhelmingly how gold gets its 26 trillion in market cap today. And thinking about all the individuals and all the institutions around the world, how much they're going to want to hold in bitcoin as a store of value, analogously to how all the individuals, institutions around the world hold some amount of gold as a store of value today, that sums to 26 trillion. And there you can start to break it down into different segments, right? Central banks, huge holders of gold, probably not going to be huge holders of bitcoin, at least not for a while. Right? And to nowhere near realistically the same extent. But there are other segments where bitcoin actually resonates more. If you look at gen zers and millennials, very few are buying gold to the extent they want. That sort of non sovereign diversifier, hedge type play, debasement, trade play, what have you. It's bitcoin for them, right? Similarly, with corporates, which have become a decent sized buyer bitcoin, they're typically not buying much gold. So that's the exercise that people can run through, kind of go segment by segment. How do you expect them to be on a Relative basis, how big are those segments in aggregate as holders of bitcoin or gold? And you can start to build to something that looks like a reasonable, fundamental forecast.
- [16:16]
Natalie
People have been so bearish about bitcoin. The sentiment is just really depressed, especially among retail right now, I think, because the price has been so choppy and some people have turned their focus to things like AI or equities that they hope to outperform Bitcoin. Do you think that, that there will be a rotation back to Bitcoin, or do you think bitcoin will always be kind of competing with other asset classes that young people are saying, hey, maybe I'll speculate on this because maybe my returns will be a little bit better than Bitcoin?
- [16:44]
Robby Michnick
Yeah, well, I think that we really shouldn't look at them as competitors because they have very different drivers. And so what's happening, I think, is you have these two layers, really in the bitcoin market. You have a top layer that is smaller by far, but it trades a ton. And it tends to be fairly retail predominant, quite speculative, uses a lot of leverage, trades with high frequency. Right. And for that segment, I would say these things are all interchangeable. They're all about, you know, what has the most turbo boost in the engine to like, go higher fast.
- [17:25]
Natalie
Yeah.
- [17:26]
Robby Michnick
Now for the second layer, the, the bottom layer, which is much bigger layer, but trades way less, think more ultra high net worth, institutional financial advisors, et cetera, they're looking at a very different way. They don't see this as analogous at all to say, AI or whatever else is sort of hot in the market at the time, but rather the way we've talked about it, as this emerging monetary alternative that's part of a potential debasement trade hedge that's a unique diversifier in portfolios with its own set of risk and return drivers that is the bigger segment. But they don't make nearly as much noise on the days when equity markets are whipsawing around.
- [18:10]
Natalie
Cathie Wood recently adjusted her price prediction of bitcoin for from 1.5 million down to 1.2 million. And she said it's because stablecoins are kind of taking some of the role that she thought bitcoin would play. Do you have a take on that?
- [18:23]
Robby Michnick
Well, I think if you think about what bitcoin is, it's sort of a hybrid of a currency and a commodity. Right. And the currency part is this potential for it to be a global payment network. And the commodity part is this idea of it as a store of value and sort of that digital gold vein today, overwhelmingly the way it's being used, where it has huge product market fit, is on the commodity side as a store value now on the currency side. That's not to say it'll never get there and become widely adopted in global payments, but that's a little bit more speculative. There's a lot that needs to happen in terms of Bitcoin scaling, lightning and otherwise. Right. To make that possible. And so I think for us and most of our clients today, they're not really underwriting to that global payment network case that's sort of maybe out of the money option value upside. It's more about that digital gold store value thesis. Stablecoins clearly have been hugely successful and they do have massive product market fit as a payment instrument, as a way of moving value around efficiently. We're excited that stablecoins have the potential to greatly expand where they're used today. Going from beyond just the sort of crypto trading ecosystem in DeFi to actually doing retail remittance payments, corporate, multinational, cross border transactions, capital market settlement activities. Can Bitcoin compete in those segments? Potentially, particularly I'd say more so in the retail remittance opportunity than maybe the other two. But at some point it's possible. But I think it's a more speculative thing to underwrite at this point.
- [20:12]
Natalie
Coin Stories is brought to you by Speed Wallet. Want to win one million sats just by answering Bitcoin trivia? The top 50 players win free sats every week and one lucky winner gets a million sats at the end of the month. Speed Wallet makes Bitcoin simple. It is the fastest growing, most loved wallet that allows you to send and receive instantly, swap to stablecoins, shop gift cards, play games to earn and explore many apps to pay with Bitcoin or Stablecoins. Speed is also driving real adoption. Steak n Shake now accepts Bitcoin nationwide via speed payments, earn cash back and rewards. When you pay with Speed Wallet, head to Speed app coinstories or download the app via the QR code on the screen and use code COINSTORIES10 for 5000 free sats. BitKey is a Bitcoin hardware wallet with multi 6 security inheritance and a recovery system designed for real life. No complex setup and no seed phrases, just true self custody without the stress. It was named one of Time's best inventions in 2024. Use code STORIES for 20% off at BitKey World. Up next, the Bitcoin way. There's only one way to protect your Bitcoin from government politicians and third party risk and that is 100% self custody. My friends at the Bitcoin Way will train you how to do this the right way the first time. No compromises. Go to the Bitcoin way.com Natalie to speak with the experts about making sure your Bitcoin is secure in private. And finally, Coin Stories is brought to you by Genius Group, a bitcoin treasury company listed on the NYSE American Undertaker GNS. Genius is building a 10,000 Bitcoin treasury and just launched the Genius Academy featuring free courses from Safedina, Moose, myself and more. Start learning today at Genius Academy. AI Genius Group. Genius isn't measured in iq. It's measured in Bitcoin as a store of value. Does BlackRock ever offer guidance on how much Bitcoin should be in someone's portfolio?
- [22:04]
Robby Michnick
Yeah, well we did put out a piece actually earlier in the year and that was around the time that the first BlackRock model portfolios made an allocation to Bitcoin and that was in the 1 to 2% range as a target. One way you can look at it, and this isn't the only way to look at it, it's not necessarily a scientifically precise way to look at it, but I think it's a useful framework is if you think about the implicit holding that you have in the individual names of the mag 7. If you own a sort of typical global diversified portfolio, what is the size that you actually own? Well, it's actually for the largest names like Nvidia, it's over 3%. For smaller names like Tesla, it's kind of in the, you know, 1 to 2% range. And the average contribution to volatility of those seven names is between 4 and 5% each of the portfolio. So if you constrain Bitcoin to say, even though I know remember different set of risk factors, but if I want the percentage of the portfolio's risk, percentage of portfolio's volatility to be equivalent to what I'm already getting from each of the MAG7 names. What portfolio sizing does that map to? And the answer is it's about 1 to 2%. Now this is where the correlation piece is really interesting, right? And people will sometimes say, robbie, why are you always ranting about correlation correlation like who cares? Bitcoin, why can't it just go up all the time? And there's a table in every institutional investor's analysis of Bitcoin that looks something like on the one column is your assumption of the go forward correlation of Bitcoin and the other Column is the optimal portfolio allocation as a result of whatever you assume the correlation to be. And if that correlation is close to zero, it's actually a pretty sizable number in terms of the target allocation. As that correlation assumption gets higher and as it approaches 1, the optimal portfolio allocation that the math says that goes down towards zero. And so it is a critical input that every single institutional allocator has some form of as they look at Bitcoin.
- [24:24]
Natalie
Yeah, A non zero position is what you want now.
- [24:26]
Robby Michnick
Well, yeah, I think there's a lot of folks who have made that conclusion that you're seeing this growing adoption. But the thing that makes that conclusion much more compelling for a institutional investor goes back to that same concept, which is if this is highly correlated, then it's its own sort of novel risk tech play. And they're saying, is this too risky for us? If the correlation is close to zero, it goes completely on its head. It becomes, is it risky not to own any?
- [25:05]
Natalie
That's right. How did you get into Bitcoin?
- [25:08]
Robby Michnick
That was 2016. I was at business school at Stanford and I learned about it through classmates. And then I got lucky with the internship that I had that summer. And that was summer 2017 at that point, which was the third crypto market cycle. Right.
- [25:27]
Natalie
That's when I got in.
- [25:28]
Robby Michnick
Right. We're now in the fifth. The third was a fun one. They're all fun for a while at least. And so from that, once I got into it, it was clear that this is what I would be a fool to not pursue once I finished my grad degree and got back into working. And there was an opportunity at blackrock to come in and help build out the program around blockchain and digital assets. And so I did that starting in August of 2018, and it's been quite a fun journey since that.
- [26:05]
Natalie
And did you have a hand in helping Larry Fink change his perspective on bitcoin? Because we all know that at one point he was one of the greatest skeptics and critics, but has since done a complete 180 and now is one of bitcoin's biggest advocates.
- [26:18]
Robby Michnick
Yeah, well, it's funny. First, the credit for that is overwhelmingly with him for doing the work, being open minded, and he's also a great student of technology in the market. So once he studied it, he really got it in a deep way. It's funny that we have this tendency in our society today to kind of attack or criticize people who have reversed their positions. And I actually think it's a admirable trait. What would we rather people do, make up their mind in 2017 and then agree to never change it, regardless of the facts? Unfortunately, there's way too many people who do think like that. They've decided how they feel about a certain thing and they're totally uninterested in learning anything new about it. I think Larry deserves a lot of credit.
- [27:13]
Natalie
Do you have any more of the backstory? Did someone go up to him and say, hey, have you looked into bitcoin or there certain books that you guys gave him? What was his actual orange pilling journey? Because for so many of us it took years.
- [27:27]
Robby Michnick
Well, I wish I could say there was one fun light bulb moment anecdote for you, but it really was much more gradual and methodical than that. Just as you described, for many people it can take years. It's a process of progressively learning, getting exposure to more really sophisticated, thoughtful folks in the space, seeing how the market evolves. Because the market also matured a lot in those intervening years. Right. And so more of our clients became interested in it and focused on it. I would say that long before the last election, there was a shift in the political and regulatory climate as well towards this as something that became recognized as here to stay as opposed to like, what do we do about this? Should we ban it? Like, you know, the political discussion then became how do we, how do we embrace this? How do we regulate it? What's the. The right approach to something that, that clearly has real staying power and resonance with, with millions and millions of Americans and same thing all over the world. And the space became more institutionalized. Right. You had infrastructure that on the back of $100 billion of venture capital money that came in since 2020, and with it a lot of really high quality people into the space and they built things, they built things to an institutional grade. So all those things kind of congregated in a way that not just Larry but blackrock was able to get comfort and get conviction that we could build things in a blackrock in an iShares quality way and offer those as solutions to clients.
- [29:12]
Natalie
Bitcoin was really born out of this cypherpunk libertarian movement. And some people don't like that institutions are getting involved and they think that it changes the eth of bitcoin. What do you say to that?
- [29:25]
Robby Michnick
Well, I think for one, it's kind of funny. You sometimes see people who, you know, they want bitcoin to be a million dollars, but they don't really want any new people in it because new people don't get it or whatever. And I think that the reality is Bitcoin's an idea with tremendous resonance to so many people around the world, including a lot of people who haven't still yet quite gotten the chance to sink their teeth into it and to understand it and appreciate it, but who will. And I think that there's lots of different ways of propagating this idea outward in the world. There's lots of people and lots of vehicles who can be useful to that cause. And I think we've shown that institutions and the ETF wrapper as just one instrument amongst many out there that have helped bring people into the fold to understand and appreciate this. I think that's a cause for good for bitcoin, frankly.
- [30:28]
Natalie
Could tokenization ever happen on Bitcoin as opposed to the proof of stake protocols?
- [30:35]
Robby Michnick
In theory, yes. But I think bitcoin has this incredible product market fit in this sort of prospective digital gold vein as a novel emerging monetary alternative. That's a powerful thing to be, right? Gold sitting there at $26 trillion in market cap. And it has a couple use cases in industrial and jewelry. But the vast majority of that 26 trillion is in the monetary premium it commands. Because thousands of years ago it was decided that this was the precious metal that we would elevate and that would be sort of a monetary standard. So that's a big market, that's a big use case that bitcoin is serving. And then you add some of the payment utility on top of it. That's pretty powerful. Now you start to think about its suitability for some of these other more flexible applications that Ethereum and other blockchains are targeting. Those blockchains have the advantage of. They're not trying to be this hard, scarce, absolutely rigid, robust form of money in the way that Bitcoin is. That comes with trade offs. And so these other protocols don't have to commit to some of those trade offs that bitcoin does to be really, really good at. What it's being is this digital gold monetary instrument. So it's always going to be, I think, at a little bit of a disadvantage for some of these other use cases like tokenization. And I think that should be completely okay.
- [32:00]
Natalie
What do you think is the biggest misconception about Bitcoin?
- [32:02]
Robby Michnick
I think the way people think about it from an investment thesis perspective of late in particular is so unfortunate because before you had all these talking heads, you know, publishing daily crypto research and saying, you know, cpi, ppi, manufacturing index, non farm payrolls, whatever all these things that are relevant to bitcoin, but all of a sudden we've decided they matter because we need something to trade every day. Is that fundamentally in the. In a lot of the folks that I see when it goes down, because they've never experienced necessarily the cycles of bitcoin before. It feels like the sky is falling. Right. I was at Dan Morehead yesterday. He was one of the great OG bitcoin guys, obviously, and just a great person, too. But he, you know, it's kind of. For someone who's been through all the cycles like he's been through, it's almost a little bit amusing, right? I mean, he's seen bitcoin go down 85% or almost 80% three different times. Right. And so once you've been through it, you know, the nature of the cycles and the resilience that this has. But we bring a lot of new people into the space. A lot of new people have come to adopt bitcoin for the first time in the last two years, and it seems harrowing when it goes down 20% like it's done in the last month.
- [33:28]
Natalie
Have you been surprised with the success of ibit? I mean, it kind of blew all expectations out of the water. Right.
- [33:35]
Robby Michnick
Not surprised to see it be very successful. But to be this successful, I think even, you know, I. I had very high expectations. We as a firm had high expectations because we'd seen the client, the signals of client demand and the frustration they had with not being able to get a pure turnkey, low cost, convenient exposure vehicle. But to be this large and sort of this far ahead of any precedent that it existed in terms of how fast the assets have accumulated. No, I wouldn't have thought that.
- [34:07]
Natalie
I saw an interview with Larry Fink where he said that one of the most concerning statistics that he read recently was about people no longer having hope for the future. And he talked about bitcoin as offering hope. And I think that that's a really important message, especially today where a lot of people are struggling, things are less and less affordable, the cost of housing's going up, the cost of health care, and people are looking for a lifeline. Can. Can you maybe talk about that? Is that something that's concerned you as well? And does bitcoin offer hope?
- [34:42]
Robby Michnick
Well, I think hope and confidence is a huge component of what allows us to have economic prosperity. Right. And so I think it's such an important point that. That Larry makes there. And, you know, with bitcoin, getting back to what we talked about a little Bit earlier on, a lot of people who've had the benefit of sort of unfettered peace and prosperity and stable currency, sometimes a harder time appreciating why something like bitcoin can be so powerful from an economic lifeline perspective. But we have to remember 2 billion people around the world live in hyperinflation or perennially unstable currency regimes. Four billion people live in authoritarian regimes. Right. And to those people, the value proposition of bitcoin and what it brings is incredibly powerful.
- [35:39]
Natalie
I know you can't give a price prediction, but for people looking out, wanting a little bit of a forecast, what you expect or what people should be looking at, what do you want to offer?
- [35:47]
Robby Michnick
Well, I think when people are at their greatest despair tends to be a pretty good positive indicator in this space. I think if you looked at all the times that bitcoin has been written off for dead over the years, probably a lot of those times where it's concentrated turned out to be pretty good buying opportunities. So we'll see. I think that we're still in a natural hangover from what was an ugly, ugly episode on October 10th. We can't brush that aside. 20 billion in liquidations, a lot of people got wiped out. That's the danger of how much leverage there is in this space. I think people, bitcoin and crypto more broadly would do well before they cheerlead all these things that kind of create a short term sugar rush and might pop the price for a bit. Should ask the question of whether this is something that's actually going to make bitcoin or make any other crypto asset valuable in the long run. If you watch people, I forget which exchange it was that said they were going to offer 200x leverage instead of merely 100x leverage. And all the group chats I was in, it was like pom poms out and celebration fireworks, confetti, whatever. I don't understand why that's healthy for the market. And so these things, I think hopefully some lessons were learned on October 10th, but you can't just go through a flash crash of that nature and expect things to pick right back up and rebound. There's some time that recovery needs to happen and that's a normal part of this market. It's volatile. We generally don't recommend clients try to market time. Bitcoin generally, if you've held it for three plus years, it's been quite, quite good historically. But in any given year or any given quarter, it can be a volatile journey.
- [37:32]
Natalie
Yeah, the pullbacks are really good. Opportunities, especially when the fundamentals are as strong as they are right now for Bitcoin. Well, thanks so much, Robbie. Anything else you want to share or mention?
- [37:41]
Robby Michnick
No, thank you, Natalie. This was fun.
- [37:42]
Natalie
Yeah, this is exciting.
- [37:43]
Robby Michnick
Congrats on the book.
- [37:43]
Natalie
Thank you so much. And thanks for putting out all the great educational information. I know I've been following it and we'll be looking out for more reports from you guys. Thank you.
- [37:51]
Robby Michnick
Perfect.
- [37:52]
Natalie
Thank you so much for checking out this episode of Coin Stories. Make sure you're subscribed to the show so you don't miss any new episodes. And if you can turn on those notifications and leave us a positive review, they really help the show grow organically with new listeners. We have a free weekly newsletter. You can sign up@thenewsblock.substack.com this show is for educational and entertainment purposes only. Nothing should constitute as official investment advice, and you should always do your own research. I'm always open to feedback and guest suggestions, so please feel free to reach out at info@talkingbitcoin.com. i'll see you next time.