← Markets Outlook
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- [00:00]
A
If you have a one to two day trade horizon then investing in crypto is a challenging thing to do. A lot of the speculative money in the last month or so has been going into gold. You see silver trading as a meme coin, literally trading as a meme coin that you haven't seen in almost a generation. So a lot of the speculative money that you would typically see go to crypto, you're seeing go to commodities. I think I would tell investors to take a longer term view.
- [00:37]
B
Hey everyone, you're watching markets outlook on CoinDesk. I'm Jen Senates and I'm joined today by SharpLink CEO and former head of digital assets strategy at BlackRock Joseph Shalom as we take a look at the markets this morning and what to watch this week. Hey Joseph.
- [00:52]
A
Good morning Jen from Frigid, New York.
- [00:55]
B
Yes, it is frigid. It looks like you're staying warm as am I, but I haven't been outdoors in at least 24 hours so I'm looking forward to seeing a little bit of sun hopefully soon. Joseph, let's talk about what we're seeing in the markets this morning. Not a lot of movements, they're looking a little bit shaky. Talk to me about how you're watching Bitcoin and ETH price action.
- [01:21]
A
Sure. I take less of a day to day view and just take a step back and ask myself with all the positive news that you've seen around industry tailwinds for the Ethereum ecosystem and frankly for crypto in general, tokenization, stablecoins, more defi activity. I think we need to explain why we're not seeing price action again. We're in some way ways some of the best news we've seen in years and I think the way to explain it is we are in a period of both geopolitical and macro uncertainty. The macro setup is actually stealing wind from the sales from all this great news that we would expect to be reflected in Bitcoin and ether's price. And I think what you're starting to see especially in Bitcoin is it's always been the leader. But if you look closely, we've been seeing some of the OGs sell and sometimes sell in very large blocks partially because of concerns around quantum proof. And you haven't seen the movement you would expect in Bitcoin and Eth given both the market uncertainty and some old holders selling which we hadn't seen in quite a while.
- [02:38]
B
Let's talk a little bit about that. We have retail investors watching on the sidelines. We're seeing big whales sell. I think we saw just this morning that there is a whale that's moved $145 million worth of ETH to a centralized exchange. We're seeing gold hit new highs. For that retail investor that's watching this, they're thinking should I follow these whale wallets? Should I be selling? Should I be worried about Quantum? Should I rather be looking at gold as a safe haven asset? What would you tell them?
- [03:06]
A
I would tell them if you have a one to two day trade horizon then investing in crypto is a challenging thing to do. A lot of the speculative money in the last month or so has been going into gold. You see silver trading as a meme coin, literally trading as a meme coin that you haven't seen in almost a generation. So a lot of the speculative money that you would typically see go to crypto, you're seeing go to commodities. I think I would tell investors to take a longer term view. Actually people in crypto have done better by buying and holding when you have a thesis than in day trading. And I think the news that I would ask them to focus on is you're starting to see the largest financial institutions in the world who own trillions and trillions of dollars of assets, not just hint, not just give breadcrumb. They are announcing at the top of their lungs that all assets are going to be tokenized and it's going to happen on digital Rails. And if you've seen the announcements from the likes of BlackRock and Bank of New York and Goldman Sachs and others, it's happening on Ethereum. So the tailwinds for the Ethereum ecosystem have frankly never been stronger. Davos last week you can argue was dominated by two topics, Greenland and crypto. But on the crypto front you heard Larry Fink and BlackRock essentially say all assets will be tokenized. And they had a beautiful slide that essentially posited with a very strong conviction that Ethereum will be that toll road for tokenization. So I would say to your investors, don't focus on the daily actually invest where the puck is going and the macro is telling you to invest in tokenization stablecoins and you can get that exposure from Ethereum.
- [04:56]
B
I want to talk about that a little more in a second but I want to touch on the comment you just made about silver trading like a meme coin. What do you mean by that?
- [05:04]
A
I think in long term trends, when you have geopolitical risk, when there's worries about war, breakdown of norms and you're starting to See potentially breakdown of norms with Realpolitik, gold has been always the first price mover and you've seen gold almost double in the last year and a half. But very quickly when speculative money comes in, it's often silver that attracts the faster money and has a faster price movement. And you're seeing that. You're seeing I would say the lesser quality commodity trade up because that's where the speculation is going.
- [05:45]
B
Let's come back to the Ethereum ecosystem. My question for you has to do with the Ethereum versus Solana narrative. We've heard a lot of folks come out and say Solana is the chain for Wall Street. I know that from your writing and hearing you speak in various different outlets. From your perspective, Ethereum is the chain that's going to power Wall Street. Talk to me a little bit about that competition. Is there room for both? And if not, what makes Ethereum the better chain?
- [06:13]
A
Sure. I won't share my perspectives, maybe I'll just share facts. So the fact is that Ethereum has been around for 10 years. It's the secure, trusted and liquid ecosystem. And I talk about both the layer one mainnet as well as the long set of layer twos who help do that roll up strategy. Solana has been fast and cheap, but it has not been secure. It has had downtime. And I think what you're going to end up seeing, and you're seeing it now, is the real institutions who care only about three things, trust, security and liquidity. They're building on Ethereum for high value projects where you're talking about moving money, tokenizing assets representing ownership. It's happening on ethereum. More than 65% of stablecoins and tokenized assets are happening there. 10x what you see on Solana, I do think there's a role for cheap, fast, less secure chains and I think Solana will win in the meme coin, maybe the gaming space where actually security matters a lot less and speed matters more. So it's not my perspective, it's what you're seeing in the industry. Ethereum leads in high quality assets in defi tokenization and stablecoins by a factor of 10 to 1 over Solana and that gap is only getting larger. It's not my perspective. People are voting with their feet.
- [07:38]
B
Coming back to what we were speaking about earlier, when do you think the price of ETH starts to catch up with the action we're seeing on the Ethereum chain and the total value locked?
- [07:49]
A
I think the TVL in action is there and I Think we're at the early stages. We started in tokenization by individual funds. When I was at blackrock, we tokenized the largest fund in the world called Biddle. I think you're going to stop seeing individual funds and stocks being tokenized. You're going to see fund complexes, platforms be tokenized, you know, and that is what's really exciting because you're going to take things that have taken years to grow to 30 billion of tokenized RWA, potentially go to trillions in the next year because of that. I think we need to get through this macro uncertainty in the markets. Some of it is the geopolitical risk, some of it has been a rotation to speculation on AI. I think we're going to see that happen in the next month or two. Typically when you've seen drawdowns, it takes three or four months to get leverage out of the system. That started on October 10th with a consolidation day. We're about three months past that. And in historical cycles, you start seeing the uptrend after that's been worked through. And I think the macro tailwinds, the stories, the adoption is there. We just need to get through some of this geopolitical risk and general markets uncertainty.
- [09:06]
B
Something else everyone is talking about, of course, is market structure legislation in the United States, which is kind of stalled right now. How are you looking at market structure? What if it doesn't pass before midterms? Is that going to have a dynamic effect, do you think, on Bitcoin and Ethereum, or do you think it's going to be business as usual? The builders will continue building, value will continue accruing on both chains.
- [09:31]
A
I think you have a lot of clarity already. Even though the Clarity act hasn't passed, you have favorable government actions. We've seen enforcement actions go down. There's a very clear path. I think the market's already building in the fact that it's going to pass, whether it happens in February or it happens in July. I think fundamentally it's being built into the system. Builders are there, the VCs are back. But I don't think that. I think it's going to have a more of an impact on the winners and losers within the ecosystem, which are going to be the intermediaries who benefit more than others. But I think overall, the path and the tailwind on regulatory clarity is already here. And you're seeing that like you're seeing that because the largest institutions in the world who control $700 trillion of assets are already starting to build into this ecosystem and they're making long term bets because they know it's going to pass. It's less of an issue if it passes this quarter or next.
- [10:33]
B
You mentioned Quantum a few minutes ago and I want to unpack that a little bit with you. Quantum and AI are being seen as threats to crypto ecosystems for similar reasons. Let's start with Quantum. How is Ethereum preparing, I guess, for the threat posed by quantum computing?
- [10:55]
A
Sure. Look, I think if you looked back two years ago, people thought that Quantum would really come in 2035. And I think there's a reality that with recent advances and with AI, the quantum generation is going to happen much quicker. On Friday, the Ethereum foundation did something amazing. They clarified their action plan on quantum resistance. They are in the pole position to be the first and maybe the only decentralized quantum resistant infrastructure you would have seen. Justin Drake announced they have a new post Quantum team that's meeting on a periodic basis. They formalized publicly their plans and more than any other blockchain or network, Ethereum has a track record for over 10 years of delivering multiple major releases. And we have a lot of confidence that that will happen. Much more than what you're seeing in Bitcoin and Solana. With respect to AI, I actually don't see it as a threat. I actually see it as a macro tailwind. And what do I mean by that? If you take a step back, AI has been something that has been introduced in 2025 into just generalized enterprise software. I think what you're going to start seeing this year is task specific agents not only operate in the crypto ecosystem, but operate in conjunction with one another. And I think what you're going to potentially see is because everyone will have a digital twin of their wallet, you're going to see three or four phenomena that we've never seen before in finance. And let me share what those are. With these agentic capabilities being coordinated on your behalf, you're going to start seeing yourself as almost having an asset manager in your wallet. The idea that you can give these agentic agents constraints like yield and risk and tolerance and they can rebalance portfolios. You're going to start seeing automated market making happening from wallets in a way that humans have to do themselves. And I think what's most interesting is this agentic capability, what we call an agentic Ethereum economy, is going to start allowing people to participate in defi in ways that they've never done before. Having your wallet or your app essentially rebalance your staking, look for yield, restake and essentially operate a little bit more autonomously. It's how people in traditional finance will seek returns. And you're going to start seeing in crypto what's really positive about this is you're going to start seeing transaction volumes go up massively and more and more of the activity from DEFI happen on networks like Ethereum. And that's very positive both for TVL and transaction counts that you're going to see on Ethereum. So rather than a threat, I see agentic as one of the tailwinds. And you'll see, if you want to geek out, read ERC 8004. It is a trustless agentic protocol on Ethereum that I think is going to build a new type of machine economy on Ethereum that we've never seen before. So I think we're at the early stages of the transformation of finance and this idea that agentic agents can help individual investors do their investing better for them than they've ever done before.
- [14:21]
B
I've heard a lot of people say that in a way, maybe crypto wasn't developed for humans, maybe it was developed for AI. And that's what's going to. That's what's going to bring us this billion users that everyone has been talking about for, for the last five or so years. Do you agree?
- [14:37]
A
I do, and I think we're underestimating it. You know, we've been talking about AI and crypto for a very long time, but there's a great quote from Bill Gates that we often overestimate what's going to happen with teams or technology in a year. But we fundamentally underestimate the impact of these technological changes. Over a decade we've been building this and I think we've been overestimating it in the short run. Now is the time we're going to start seeing massive adoption of decentralized Rails. And I think you're going to end up seeing both traditional institutions and individual users rely on these decentralized Rails and Agenta capabilities in ways that they had never anticipated. It might start in their consumer life, but it's certainly coming very quickly in their financial lives. And I think it's going to be a step function advance in how money is moved and how people interact with their money over what we've seen, which was really stagnant change over a couple of generations. So I'm bullish and I think we're underestimating the impact and it's going to bring a lot of prosperity.
- [15:42]
B
When I mentioned AI as a threat, some folks have told me that AI allows folks who previously weren't able to act as developers do that, you know, giving them the tools to potentially break smart contracts or break different crypto ecosystems. It sounds like maybe that's something that is not going to affect Ethereum or how are you, do you think about that?
- [16:05]
A
We do. I think Quantum in the long run is the bigger threat and we're quite, quite relieved and excited that Ethereum and the Ethereum foundation is going to take the leading role. I think what's interesting is you can make an argument that AI can potentially beat mechanisms, as you've said, but AI can do things that we've never done before, which is monitor smart contracts in real time for flaws to actually play a defensive role as well. So I think it's going to bring good and bad. I think the ecosystem will stay ahead of it. But I think it's more likely that you're protected in a decentralized, trusted ecosystem like Ethereum than you are in traditional rails where you rely on humans and centralized siloed technology to try to protect you. Ethereum is seeing something remarkable right now, which is the likes of Bitmine and Sharplink, the largest corporate holders of Ethereum, are staking at Ethereum at a scale that they've never seen before and that's adding significant economic security to the network. You're not seeing that in Solana and I think this is going to be a really, really positive force. And when institutions start buying Ether to secure their transactions on chain, it's going to provide even more staked security. So this is a self reinforcing, positive flywheel and we're quite bullish that now is the time to enter this space.
- [17:28]
B
All right, let's talk about Sharplink, second largest corporate holder of Ethereum. Talk to us about your strategy as we get deeper into 2026.
- [17:37]
A
Sure. I think last summer you saw the treasury, the digital asset, treasury space, explode across Bitcoin, Ether, Solana and other chains. That was that first phase of formation and initial capital gathering. We raised a little over $3 billion, but we've built the most institutional team of any debt. And I would say we're the most focused of any of the digital asset treasuries in the Ethereum space because we're run by people who have traditional finance backgrounds who came from crypto as well, who understand risk management. And we've been staking 100% nearly of our ETH from foundation because ETH is a productive asset, unlike Bitcoin. You need to be putting it to work to earn that two and a half to three and a half percent yield. We've also been innovating in this space. We like to think of ourselves as pioneers. While others have either not been staking or just earning the native staking yield, we have been composing institutional defi solutions to drive even more returns to our investors. We announced earlier this month that we deployed $170 million of our ETH, the largest public company deployment into DeFi, in conjunction with Consensus, the Linea chain, Etherfi and Eigencloud to essentially do restaking capabilities on chain earn incentives beyond the yield rate. But we did something that no one had done before as a public company keep this DEFI investment within a qualified custodian at Anchorage. So think about what we're doing. We're allowing investors to get DEFI level yields while keeping it within the protection of a regulated custodian had never been done before. And that's part of what we're trying to do to pioneer, extend into DeFi, but not take the risks that you would see in a Web3 wallet. So we're quite excited. This is great for investors.
- [19:38]
B
You mentioned digital asset treasuries really kind of took over the spotlight last year. Heading into 2026 it feels like some of the air has been sucked from the room. Of course there are strategies like the one that you just outlined that are showing some innovation when it comes to some of these digital asset treasuries. I have to ask you, I was listening to Anthony Scaramucci's podcast recently. Mike Novogr was on there. He said he thinks that a lot of these digital asset Treasuries are going to be trading below their net asset value unless they can come up with some real business operations. How do you respond to that? And can you tell us a little bit more about the sustainability of Sharp Link? What are those business operations that are going to take you beyond 2026 and bring investors the value that they're expecting?
- [20:22]
A
Sure. So I said the first phase is formation. You had to do it right. Many dats did not form with the right teams or the right incentives. Second is you have to make your ETH productive. And we've been doing that. The beautiful thing about having permanent capital and what do I mean by that? We have a clean balance sheet. We are not a fund where you have daily liquidity. We're just a stock that you can buy and sell every day. The billions of dollars of ETH we own, we take a decade long approach to making it productive. And so our plans are to do two things. One is to take that certainty into the ecosystem and offer them these protocols multi year locks to allow them to grow their protocol knowing that they can use our ETH in a productive manner. Crypto has never seen permanent capital and that's a really good thing. Second, because of our strategic partnership with Consensys and having Joe Lubin on our board, we now have entree to some of the newest and smartest protocols and we will find some of them who will give us token value which could 2x5x10x because we're early into the new institutional defi cycle. And then without sharing anything that I shouldn't as a public company CEO, we will build operations and businesses in the Ethereum ecosystem that will kick off ETH denominated revenue so it becomes a a virtuous cycle. That said, we have to recognize that the valuations have consolidated. I think in the long run they will mean revert because if you own billions of dollars of eth, you're generating staking revenue and you can build ETH denominated businesses. I think public markets will reward that. So we're built for upcycles and down cycles because we have permanent capital and a really great institutional management team who understands both opportunities and risk. So we're bullish on the sector even though right now we're in a bit of a consolidation phase.
- [22:25]
B
And Joseph, the last thing I'm going to ask you. I know that you recently outlined four reasons why you think ETH's total value locked is going to 10x this year. I think we hit all of them during our interview. But do you have a price target by end of year?
- [22:38]
A
I don't have a price target. I'll let others tell us where the price of silver, gold, Eth, Bitcoin are going in the next month. I have a very strong macro view that the more activity that is coming to the ethereum ecosystem, the L1 and the L2s will drive demand for Ether and drive the price of Ether up. I can't tell you whether we're going to get out of this bit of a consolidated period this month or next month. But I'm sharing with you. If you're a long term investor and you believe that decentralized Rails are going to rewrite the Wall street market structure, now is the time to be owning Ether at this price. And Sharplink offers that really smart exposure vehicle without a management fee that you see in the ETFs. Now is a great time to enter, especially since the price seems to be poised for an increase. But I'll allow others who are wonderful builders and speculators to pick the price for next week. I don't know what it is. I know the price will be higher quarters from now.
- [23:41]
B
Joseph, thanks so much for joining the show.
- [23:43]
A
Ken, thanks for having me. Stay warm.