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- [00:00]
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- [00:51]
Matt Hogan
There's the SEC pulling back on essentially every lawsuit. There's progress on stablecoin legislation that there's talk of market structure legislation. There was the White House crypto summit. These are game changing positive developments that should put bitcoin trading at 150 or $200,000. Today. It's been suppressed because in the short term, this overhang of the economic uncertainty is weighing on the markets. I think if that is released, we're at new all time highs quickly and we're on our way to where I think we'll be at the end of the year, which is Bitcoin 200,000.
- [01:33]
Host
All eyes are on the Fed this week as we wait to hear how the central bank will respond to economic uncertainty and a potential recession. What happens to the price of bitcoin if the Fed is ready to deploy stimulus? Well, our next guest said bitcoin could more than double by the end of the year, bitwise. Chief Investment Officer Matt Hogan joins us to share his bull case and his bear case. Matt Hogan, welcome to Markets Daily.
- [01:56]
Matt Hogan
Thanks for having me.
- [01:58]
Host
Of course. Well, first episode of the week. So I like to start here. What are you watching and what should we all be paying attention to this week?
- [02:06]
Matt Hogan
Yeah, obviously the big story this week is the prospect for a recession or to be more precise, how the government is going to respond to the prospect of a recession or a weakening economy. So everyone, including me, is parsing the words of whatever government secretary or executive is on TV talking about what's going on. I love it when we can focus specifically on crypto. And I think the story there is very strong. But right now it's the economy, stupid. And that's what people are paying attention to.
- [02:35]
Host
Well, let's talk about what people are saying on tv, we had Treasury Secretary Scott Bessant join NBC News's Meet the Press on Sunday, and he did not rule out the possibility of a recession. So, really backing up with your. What you're saying. Everyone is wondering if we are heading towards a recession. And, Matt, I have to say, you know, I've been talking to economists and analysts on the show for a really long time, and they've all been calling for a recession. And, and this has been happening far before this administration has taken office. Talk to me about the possibility of a recession actually happening and what that means and what that actually looks like. Because I hear people talking about recession, I don't think they actually know what that looks like, practically.
- [03:17]
Matt Hogan
That's right. I mean, I'm, I've. I've said before that I think the government has outlawed recessions. I think what's interesting about this particular moment, because you're right, you know, we've been crying recession for 10 years, and it's never arrived. The reason it's never arrived is every time there's a little wrinkle in the economy, the government steps in. With stimulus, with reduced rates, with other ways of monetary support, we've sort of become allergic to any economic pullback, which is a natural part of the economic cycle. I think the thing that has people freaked out right now is, at least from the outside, the Trump administration is saying we're okay with a little bit of volatility, and so that monetary stimulus may not arrive in the way that it has since 2008. My core belief is that it will arrive. My core belief is that the government will blink, that we really are allergic to these economic pullbacks, that we're not set up anymore to withstand that kind of volatility. So I expect maybe even this week to see the government start to blink, maybe at Jerome Powell's press conference later in the week. But if they don't blink, if we're really going to sort of embrace this pullback, this cleansing pullback, then that'll be a challenge for the equity markets and a challenge short term for the crypto markets. I think we'll be okay long term. But I think that's the game that's being played right now.
- [04:37]
Host
Let's talk about the two different scenarios. So we have the Fed meeting on Wednesday. Everyone's gonna be watching, like you said, for cues on the central bank's readiness to deploy stimulus. If it seems like stimulus is coming to save us from a recession, what do crypto markets look like? I know in the past, crypto markets have reacted nicely to stimulus and cheaper money. What are you expecting to happen?
- [05:02]
Matt Hogan
Yeah, more than nicely is what I'm expecting to happen. The thing that's happened in crypto over the last, let's say six weeks is there has been so much fundamentally positive news and it's just been buried sort of in the background. We've, we've caused ourselves to ignore it. There's the strategic Bitcoin reserve. There's the SEC pulling back on essentially every lawsuit. There's progress on stablecoin legislation. There's talk of market structure legislation. There was the White House crypto summit. These are game changing positive developments that should put bitcoin trading at 150 or $200,000 today. It's been suppressed because in the short term this overhang of the economic uncertainty is weighing on the markets. I think if that is released, we're at new all time highs quickly and we're on our way to where I think we'll be at the end of the year, which is Bitcoin 200,000. So I think there's been this sort of suppression of really good news. If that is, that suppression is removed. I think it's a coiled spring. So in that scenario I think we do exceptionally well.
- [06:07]
Host
Is there anything else that needs to happen to get us to Bitcoin at 200k by the end of the year?
- [06:12]
Matt Hogan
I don't think so. You have these three horsemen of insatiable demand for Bitcoin. You have ETFs, which I continue to think will have strong net flows this year. You have companies. We saw MicroStrategy buying more Bitcoin. I think the number of companies buying bitcoin is going to triple this year. I think the game theory is on. It's slower than people maybe want in this impatient crypto world. But I think countries around the world are going to be buying bitcoin. So there is structurally more demand than supply in bitcoin. I think all we need is to release this sort of economic gloom that's hanging over us. If we do that, I think it's straight to the races.
- [06:51]
Host
Okay, now if we get to Wednesday's meeting and it looks like it's still going to be rocky roads ahead, the we're not going to see much relief from the government here in the United States. What happens?
- [07:04]
Matt Hogan
Yeah, if it's, if it's sort of the tough parent, you know, stiff upper lip thing, I think it's going to be more market uncertainty. You could see bitcoin go back to, you know, 72,000 to its previous all time highs. I don't think there's downside really below that. I think there's a great deal of support right there. In the long term, this good news is not going to remain suppressed. In the long term, the good news will make its way into the market and we will eventually get to where we're going. But yeah, if government officials hold the line that they're okay with economic volatility, they're okay with a short term significant pullback in the economy, that they're not going to come to the rescue with at least more relaxed monetary or fiscal policies, then I think, you know, volatility, we're going to chop sideways, we're all going to be frustrated and, and that's, that's the game that we're playing. But again, for long term investors, I'm not sure it matters. You know, bitcoin is going to get there eventually. Crypto assets more broadly are going to get there eventually. But whether it's like a very exciting spring or a very frustrating spring could depend on what said, you know, later this week.
- [08:13]
Host
All right, so your bull case is 200k by the end of the year. You've kind of hinted at what your bear case is, but do you have a number where, where do you see us going in terms of bitcoin price.
- [08:25]
Matt Hogan
If the latter happens in the negative scenario? Look, I think we could chop sideways back to all time highs. I think previous all time highs when we were at like 72, we saw us trade there from about March through November. I think there's a reasonable amount of support there. I'd be surprised if we went much lower than that. But who knows? It depends on how stiff the government is in refusing to respond to this economic uncertainty. But again, I go back to this core point which there is this structural mismatch between demand and supply. The bitcoin network is only producing 165,000 bitcoin per year. Last year the ETF spot 5, 500,000. Even if they buy half of that this year, that's more than the new demand. So there is this structural imbalance that I think puts a floor on bitcoin that's higher than many people sort of expect. I think institutions are still moving in, governments are moving in, corporations are moving in. So there is some space to the downside. But I'd be very surprised and as a long term investor, very excited if we had the opportunity to buy below that. Because long term I think the story is in, there's just Too much demand coming into the market, the asset is too small.
- [09:37]
Host
So really is a buy the dip case then is what I'm hearing.
- [09:40]
Matt Hogan
Yeah, yeah. Dip and rip I think is the story here. If we get negative news, I think it's a pullback. But I think there's so much good news that's been sort of stored as dried powder that eventually that will be released. Eventually. It can't be held down forever. Right. We have to step back and remember that a year ago we had Gary Gensler in a very challenging environment and today we have a strategic bitcoin reserve and probably market structure, regulation. I don't think the market is priced in at all how different those two scenarios are. So yes, if it pulls back, I think it's dip and rip and eventually we will get to where we're going. Just whether it'll be a frustrating spring or an exciting spring is probably the question in the market right now.
- [10:26]
Host
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- [11:22]
Matt Hogan
No, it's totally crazy. Absolutely not. I sort of envisioned that it could get better from what it was. Maybe we could get from sort of a 50 mile hour tailwind to still air. Right. Neutral. I really didn't even in my wildest imaginations think that we went from that to, you know, a full gale force tailwind pushing us forward. Right. It's really hard to imagine. I mean, a strategic bitcoin reserve. Saying those words before August of last last year would get you laughed out of polite company. No one would take you seriously. There's no way the US government's going to hold bitcoin on its balance sheet until the bitcoin conference of last year, where that sort of started to enter polite conversation. And now we've gotten that and more. We have a crypto czar. We have Paul Atkins maybe coming into the SEC, who, you know, worked in the crypto market as a, as a lobbyist. It's an unbelievable positive trend. It's way. And I think the market hasn't accepted it. They haven't realized how big a deal it is, and eventually they will.
- [12:28]
Host
I want to talk a little bit more about bitcoin before I let you go. You know, gold really outperforming bitcoin in the current economic climate. What do you think that means for this narrative as bitcoin as digital gold? It's really being treated as a risk asset right now. Talk to me about the bitcoin narrative. Do you think it's changing and, and shifting, or is this just something that's happening because of the broader economic environment?
- [12:51]
Matt Hogan
Yeah, no, I think gold is telling you everything about where the market goes. Right? So the thing about bitcoin, which is really challenging for people to accept, is it's a risk on asset in the short term, and it's this hedge in the long term. If you look at how bitcoin has historically responded to market pullbacks, on days when the S&P 500 is down 2% or more, Bitcoin on average falls more than the S&P 500. It falls about 2.6%. But if you hold it for a year after that, on average, it's up 190% again. It pulls back in the short term because it reacts to these risk on risk off conditions. But over the long term, its story prevails. What gold is telling you right now is that the world's demand for a store of value asset outside of the fiat system is bigger than it's ever been before. Bitcoin will eventually get its share of that market. So as gold expands the size of the store of value market, for me, the price target for bitcoin gets higher. Right. We talk about bitcoin matching gold. A few years ago, that meant $800,000 bitcoin. Now it means $1.1 million bitcoin. So let bitcoin lead. I mean, let gold lead the way. In the short term, fine, it's a safe asset. But what it's telling you long term is bitcoin is an even bigger deal than you thought it was, and it's going to eventually catch up to that. Reality.
- [14:12]
Host
Matt, I know I said I was going to let you go, but I have to ask you about, about Ether. You know, we hardly ever talk about Ether anymore. Correct me if I'm wrong, but I think the last time I looked, Ether was down over 50% on, on the year. And I want to ask you about it because I had a guest on the show months back now that said Ether is going to turn out to be the BlackBerry of the crypto industry. And I want to get there. What's going to happen to Ether? What are you watching? Are we going to see it rebound? Are we going to see this ecosystem pick up steam again? Or are all of these competitors going to maybe wipe Ethereum out and we'll be talking about some other cryptocurrency when it comes to the second largest crypto by market cap in the future?
- [14:54]
Matt Hogan
Yeah, I mean, look, when I look at things outside of Bitcoin that people are excited about, what are they excited about? They're excited about stable coins, they're excited about tokenization, they're excited about agentic AI. If I look at who's the market leader in those three areas, Ethereum has the largest share of stablecoin issuance. It has by far the largest share in the tokenization market. It's the leader in the agentic AI space. If you just look at where the demand is bubbling up, it's still bubbling up on ETH and ETH layer twos, I'm excited about a lot of the other alt layer ones. If I were investing in this space, and I do, I would own a basket of them because you don't know who will win long term. But anyone writing off Ether is ignoring the fact that that's where the users still are in the things people think are going to be multi trillion dollar markets in the near term. I don't worry about ETH's ability to monetize them. I think one of the reasons that ETH has struggled is it sort of monetized too early. We got 1599 and we started talking about, you know, revenue and volume and buybacks too early. It'd be like Facebook if it, it adds two years after it was formed. It was too early. What I worry about is are the things that are going to be multi trillion dollar markets being built at least in part on eth. And when I look at those three things, ETH is the leader. So I think it will be fine long term. It could continue to struggle short term, but long term, that's where the users still are by and large in these real world economic entities are going to be a big part of sort of our blockchain future. So I like ETH from here. If you're holding for the next five years, I don't know where it goes over the next five weeks.
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Host
Matt, it's always a pleasure having you on the show and hearing your insights. Thanks so much for joining us.
- [16:42]
Matt Hogan
Thanks for having me.