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- [00:00]
Andrew
Foreign.
- [00:03]
Scott Melker
Yesterday's widely anticipated Black Monday turned into more of a nothing burger. Even a green Monday, if you're looking at the charts of most assets. But that does not mean that things are over. The very fact that we saw a 10% move on the S&P in 10 minutes on fake news that Trump was going to delay tariffs 90 minutes should show you everything you need to know about how much volatility we can expect and how eager people are to jump in and out of this market. Right now, when we have to unpack everything that's happening with the markets, we bring on the best. Of course, that is Matt Hogan from Bitwise and our resident Tuesday co hosts, Andrew and Tillman, who actually decided to show up and not embarrass me when I announce him. And then it's a blank screen, which is always nice on a Tuesday. Guys, it's going to be a great show. Let's go.
- [00:59]
Tillman
Let's do, let's do.
- [01:14]
Scott Melker
What is up, everybody? I'm Scott Melker, also known as the Wolf of all streets. Before we get started, please subscribe to the channel and hit that, that like button. What a day. Yesterday, I am 100% convinced that if Jim Cramer had just kept his mouth shut, we would have actually had Black Monday and seen a 20% down candle. But of course, Jim Kramer had to predict a 20% down day, which meant markets were up. Markets were up. But that only gets us through one day. Maybe we'll get Black Tuesday. I have no idea. I'm going to bring on Andrew Tillman and Matt. Our heads were very big there for a brief moment. Hope you're all doing well. I mean, Matt, maybe the TLDR on what's been happening over the past few days, we obviously have talked to death, the tariff, mayhem and all of those things. But from your perspective and for bitcoin more specifically and the products you're offering, has it caused tremendous volatility there as well? Or is this just another Monday and Tuesday in the market?
- [02:13]
Matt Hogan
I love the framing. I think it's mostly another Monday or Tuesday in the market. We didn't see big flows in, we didn't see big flows out. You know, I'm actually impressed by how bitcoin held up. The last time we had economic Armageddon in Covid, bitcoin traded to 5,000 and wicked down to maybe 3,000, depending on what you were looking at. Now we're at 80. That doesn't seem so bad. So I think, like most of you, I spent Monday sort of in a swirl of trying to figure out what was going on, not knowing which way we were headed and then sort of resolved at the end. I think I have a clear picture about what tariffs mean for this asset. That's pretty, pretty positive long term. So all things considered, I woke up this morning feeling pretty great about Bitcoin at 8k.
- [03:01]
Scott Melker
Yeah, I mean we all saw what happened at the end of last week, which was that markets went all over the place and bitcoin just sat there and did nothing. And then of course Sunday sell off people said, see it's, you know, it's a, it's a risk asset again. It's, it's, you know, trading in lockstep with what the market's going to do. But I think to be fair on a weekend, it's the only thing you can sell. When the markets were open on a Thursday and Friday and people could sell anything else they wanted. Bitcoin did nothing.
- [03:32]
Matt Hogan
That's right. It's the canary in the coal mine. It's been doing this for the last four or five months. It's been leading the market. It's the first thing people push the button on. And even then it didn't sell down past the previous all time highs. So I consider it a huge win. And I think that the net effect of the tariff tantrum is we're going to see weaker fiat currencies around the world, which is net positive for bitcoin. So I think long term, I think it's ready to move substantially higher if we get sustained stability for a while. I don't know if we will but when we get sustained stability, I think this thing rips.
- [04:09]
Scott Melker
Yeah, I mean a lot of people are looking for either a V shaped recovery and we're back at, you know, in the, in the mid to high 80s or low 90s on Bitcoin and the stock market recovers this week or the completely other side which is, you know, Larry Fink for their 20% market drop as possible. Right. We, I think we have the breadth of opinions on what's likely to come. And to be fair, that's because the messaging on tariffs I think has been all over the place. So you know, if you believe this is a negotiating tactic, then all systems go. The minute that they actually announce, you know, reduced tariff on a country like Japan, they're discussing. But if this is like, you know, External Revenue Service service full Lutnick, we're going to replace the irs. Well, I think probably more pain to come. But Larry Fink, Andrew, I want to ask you Because I know he's your, your favorite. You're like super Larry Fink Homer. We all know that. Indeed, man love Crush. But yeah, 20 market drop is possible. He also said seize possibility of interest rates hiked. Height not cut. Right. He said zero chance of four to five Fed rate cuts this year. White House policies are more inflationary than markets realize. He also then went on to say for those who missed it, that he thinks we're basically in a recession already.
- [05:22]
Andrew
Yeah. So it should be noted that all of those comments did not move the market at all, didn't do anything to the market. And that's. That in and of itself is a narrative that needs to be evaluated. Are we at a point where markets, you know, as they've always, as they always have taken a life of their own and narratives live for shorter periods of time these days, you know, narrative narratives may take hold for a short period of time. Whereas, you know, oil embargo, 1973, that lived for darn near eight years, right? Black Monday 1987. That, that entire year was very difficult. You know, the dot com bubble that lived for two years. Every single time that this stuff happened, there were, there were shorter and shorter time frames where there was market turbulence to the significant downside. You know, it should be, we should be reminded that in 2022, the S& P went down a little more than 19.4%. And strangely enough, there wasn't widespread panic associated with market movements. So that happened in 2022. And for some reason, you know, we're down 10, 15%. That's going to change here with today's session. It looks like what the futures are doing and, you know, the world is coming to an end. The US And China are bickering about the amount of tariffs associated with your TEMU purchases. So, you know, probably everybody should relax a little bit, see how this stuff plays out. Markets have a way over, you know, protracted time periods of figuring it out. By the way, all those things that I just mentioned. 7387-2000-2001-2008, 2009, 2020, all buying opportunities, it just depended on your time frames.
- [07:20]
Scott Melker
Every dip is a buying opportunity over time, which is, I mean, if you zoom out 10 years, you buy every single dip, you're going to be very happy. Right. But I think the reason to answer your question that there's so much panic this time is a. Because half the country freaks out if it's Trump, period. So I think the very fact that it's Trump has a huge element of it has to be bad to a huge swath of the country. But the other side is that I think they're trying to create this sort of chaotic environment. And so there is a question mark which is probably purposeful, like, how crazy is he and how far can he go? And I think that that's why there's more panic, because you can sort of pinpoint a fundamental thing that's happening that is making markets go down in the short term. And you wonder, if it keeps going, how far could it go? I mean, tell me, what's your take on this before we kind of move on to other topics?
- [08:11]
Tillman
I just think it's noise. I think you have to a lot of times cut through the noise. This volatility that we see is on no volume, relatively, it's relatively low volume. That's more concerning. When you see a market move that wide of a spread in that short of a time period just means there's not a lot of money in there. Fighting for positions no one knows what to take, because either you're against Trump or you're for Trump and you think he's a genius. And there's the long term, you know, interest rate play here and refinancing our debt, and there's, there's all sorts of theories out there. At the end of the day, I will say this. Trump loves to set traps for people to accuse him of things and then be able to pivot those traps into an advantage and say, I told you so, and I wouldn't bet against him in that regard. I have no idea whether it's an actual strategy or not. But I will say, in my opinion, there's one thing that we can count on. They're going to print a lot more money. And when you print a lot more money, there's typically a lot of bad news and this huge lull in the markets where you have this pullback and it's delayed about a month. And then you see this. You know, essentially people start buying stuff when there's more money on the streets. They, they spend the money and they spend it on all sorts of stuff, including bitcoin. So I think that is a constant that I would be betting on. And anything other than that, I think is. Is short term and, and not nearly as powerful as that force. So that would be my take.
- [09:48]
Scott Melker
There's one thing there, though, Matt, I have to ask you about. One of the big theories, obviously, is that they need to get rates down. And Trump constantly says, the Fed needs to cut. The Fed needs to cut the Fed needs to cut but obviously we have about 9 trillion of that 36 ish trillion that's going to come up for refinancing as he just mentioned. And refinancing that at, you know, 3% is better than 4%, 1% is better than 2%. Getting that number down is really important. This is disconcerting. This is the ten year right now like absolutely flying. I mean that candle yesterday, 3.8% all the way back up to 4.225%. The Fed pivoted and interest rates went up. Oops. Bad. Right. Obviously because that means that the bond vigilantes, they're not buying it. Right. The market doesn't believe the Fed. Now you have literally like tariffs and a stock market crash to you know, at least for two days, one of the worst in history. Yields are back well above where that happened. So does this, maybe this just means like China is selling off our bonds, right? I have no idea. Or that much of America funds are selling off bonds ahead of what they think is going to be a clap. But I mean this is crazy. 4.237% today.
- [11:03]
Matt Hogan
That's exactly right. Also the, the probability of a rate cut has round trip to exactly where it was one month ago. I think this speaks to fiscal dominance. I think there's game, set and match. I think there's no way out of the massive debt loads. We're not going to go through the austerity that we need to get those really down. So run rate inflation is going to be higher than it historically was, which is going to make that 10 year sticky. It's going to raise the cost of refinancing the debt and the way we're going to get out of it is by printing more money. I absolutely agree with what Tillman was saying. That is the end game and I think the market is showing you there's no easy path that makes this all work out in a fun way. We built up debt to a massive level over the last 15 years and just like someone running up credit card debt, it's painful to get it back down. Or in the case of what our government can do, we're just going to print our way out of it. I think that's the end game and it gives me a lot of confidence in what we're all focused on here. But I think that's what the market is telling you. There's no, there's no exit. There's just this path towards printing more money to monetize the debt and that's what we're going to end up doing.
- [12:17]
Scott Melker
Yeah, I agree. I don't see any path where we don't print money. Even if we go through austerity and we actually enact all these tariffs and we stick with them. We saw what happened when we had tariffs on China in 2018. United States had to write a check for 29 billion to our farmers to subsidize them. Subsidize them. So we had to, you have to print money in the current system. And if we go even for some sort of austerity, we're going to have to subsidize all of our own industry to build it back up, which is printing money.
- [12:45]
Matt Hogan
We're going to have to print money. And so is China and so is everyone else. You know, if tariffs do introduce more friction into the global economy, every country is going to want to counteract that. They're going to do it by printing more money. There's this incredible speech yesterday by the White House Chairman of the Council of Economic Advisors, Steve Marin. You can find it on the whitehouse.gov, it talks about the dollar being too high, all the issues there. The end game here is printing money. That's where we're going to end up. $down, other assets up. There's just no way out of that box.
- [13:22]
Tillman
I would argue that bitcoin is the most accurate indicator of global inflation that's ever been created. And we will see that indicator go much higher after that printing has, has started to happen. I think bitcoin is actually set up pretty nicely from a technical perspective as well. 75 needs to be support and 75 was resistance at one point. We haven't retested that. We're right there. And if, if there's a month of, you know, even a little bit more pullback to, to that, even if there's a liquidity sleep sweep down to 70, let's say, I think we're set up very nicely for then a huge, huge pump. So I'm not worried about bitcoin. I think it's handling the news pretty well. And I think it's actually, you know, uncoupling from some other asset classes that we've seen it coupled to over the last six months to a year, which is, is actually refreshing. It's doing what its intended job is, which is to report inflation.
- [14:29]
Scott Melker
And that's right. I think a lot of people also get defensive when you say it's an inflation hedge. It's not acting as an inflation hedge. But remember when the money printer is actually on you see exactly what Bitcoin does. So it's actually more of a, you know, a QE stimulus, you know, play than it is when the inflation is actually rising. Because we saw when inflation was rising then the Fed has to start raising rates. That's not really helpful for anything. Go ahead, Andrew, any thoughts?
- [14:56]
Andrew
I just like the term uncoupling. You know, I find it both masculine and feminine at the same time. It's, it's.
- [15:03]
Scott Melker
I don't have a decoupling, but I. Uncoupling.
- [15:06]
Tillman
What is the proper term, Andrew? Is it. Decoupling would be, be the appropriate.
- [15:11]
Andrew
I would stay away from D cup.
- [15:13]
Scott Melker
How many times have you been married?
- [15:15]
Andrew
Coupling is just fine, you know.
- [15:16]
Scott Melker
How many times have you been married?
- [15:18]
Andrew
I've been married twice. I, I'm, I'm headed for my third. So the, Would you call that decoupling.
- [15:23]
Scott Melker
Or uncoupling before the recoupling?
- [15:26]
Andrew
Gwenneth Paltrow I think was the, you know, started the whole uncoupling movement and now it's moved to bitcoin. So nice job, GW but yeah, go ahead. Yeah, it is, it is, it is really interesting to watch Bitcoin. And again, because we have an entirely different subset of moneyed folks nibbling around bitcoin this time versus, you know, let's call it the, the, the COVID crash. And then other moments, you know, it's stability in the face of completely unknowns and markets that, you know, again, I, because I come from a tradfi background, you know, I follow a bunch of tradfi accounts and, and they're just screeching commentary, you know, from 6pm on Sunday through the open on, on Monday was just extraordinary. Bloomberg folks, CNBC folks, just anybody and everybody that had lived through other these moments, it's almost as if they're kind of, you know, addicted to a little bit of ptsd. Every five to eight years that's gotta, you know, reset their circuits and there's gotta be this, you know, moment of just real crisis that they can point to that I live through another crisis. Right. And so, yeah, it's, it's interesting to see, you know, futures down 6% the minute that they opened, you know, on Sunday. And then by the end of the day on Monday, we're marginally higher on the indexes that actually matter. Dow doesn't matter. And we're going to be, you know, we're up 3% kind of across the board right now. So in the aggregate, you know, bitcoin sticking in that 80 range versus what happened, as Matt said, at the COVID crash, you know, 5,000 down to 3,000. That's a material change in the way that bitcoin reacts to.
- [17:30]
Scott Melker
You want to know why? Because we don't have Bitmex's liquidation engine this time.
- [17:34]
Andrew
Yeah, well, it's probably true.
- [17:36]
Scott Melker
You guys are absolutely right. But in that specific case also, Bitmex was firing huge liquidation sell orders into an empty order book and literally had to go to maintenance mode and turn off the exchange and not have bitcoin literally go to zero on their exchange because there was just no buy orders and they had to liquidate. So that was a good time. But to your point, I do think it's, it's very, very different this time. Listen, talking about 5 or 3,000 versus 80,000 is absurd. Well, that's it. Listen, we are still at 40 on the Vix today, right? So like, it's important for people to remember just because yesterday was an update and I'm not a harbinger of bad news or a doomer, but just because things were up yesterday and are green today, we know that one tweet back and forth or one comment is 10 right now in, in either direction for every month. The new class, the base ripping bounces also when things are bad.
- [18:32]
Andrew
And Matt can speak to this. But the new class of investors that exists in the Bitcoin ETFs, they have been told for 40 years, you don't buy low and sell high, you buy low and sell when you die. Those are the kind of people that have their hands on Bitcoin in the Bitcoin ETFs. Now that's not going to change. So there's this. There is a significantly different floor associated with Bitcoin price than there have been in previous cycles. And it's because boomers are here, they bought some Bitcoin in Bitwise's Bitcoin ETF or BlackRock or whoever, and they're just, they're not going to sell it.
- [19:12]
Tillman
I also think that the, the leverage products have been expanded since the last bull cycle. You can play there's eight times the cash in the futures market than there is in the spot market playing Bitcoin on any given day, literally eight times as much. So you're able to play like the Wall street is able to place, you know, huge margin bets on Bitcoin and, and support the price with very little cash at, at key strategic levels. And that wasn't available off, you know, Binance or some, you know, offshore exchanges in the last bull run like this is legitimate leverage plays. This is a fully baked vehicle at this point.
- [19:57]
Scott Melker
Okay, Matt, you're looking at this all day, every day. So unpack all that for us. What's actually happening with the ETFs right now and is that the kind of people that you're seeing buying? Have we seen the carry trade unwind, do, do the all thing ETF interest right now?
- [20:13]
Matt Hogan
Yeah, I mean outside of the carry trade, it's absolutely true. These are long term buy and hold investors. What we're seeing a bit wise actually is people upping their allocation from 1 to 2, 3%. We've talked about this before, Scott. The first time you buy bitcoin is never the last time you buy bitcoin. And that is true for the people in the ETF as well. It's also the case. You know what makes that particularly True is the Trad 5 people buying ETFs today are still pioneers, which means that their level of conviction before they push the buy button is not like a 5149, it's like an 80 20. So they have to stick their neck out to buy in. And what we've seen a bit wise since we were founded in 2017. We had net inflows in 2018, we had net inflows in 2022. Right. The people still to this day who are buying from Tradfi are just going to buy more. I'm going to one of Barron's top advisor summits this Wednesday, I guess tomorrow. And my guess is those people are all going to increase their allocations over the next year. So you know, I still think we're going to get record inflows in Bitcoin ETFs this year. I think it's going to be a great year. And that's what we're seeing. We're seeing steady hands, trickling inflows, a lot of interest.
- [21:31]
Andrew
There was a marker, I think it was Thursday or Friday of last week, like one of the huge down days and that was the biggest buying of equities and assets that it was ever recorded in the history of the markets that day. So that day was a massive down day. Again, I forget what day it was, but the headline was that was the biggest purchases of, of equities that had ever flowed into the markets in the history of the markets. Right. So again to my point, buy low and sell when you die. And to Matt's point, he's going to go to the Barron's thing. This is, this is how they've been, you know, learned to deal with markets. When it's down, put a little more in. When it's down, put a little. What they're not doing is when it's down, sell, right? That, that's, that's what, that's not what they're doing. And they've learned over a period of years whether it's the Black Monday crash, whether it's dot com bubble, whether it's, you know, great financial crisis or whether it's the COVID deal, hey, wait a minute. Markets bounce back pretty quick every time. So it would have been dumb for me to sell. So I probably should never do that, right? Unless I need the cash immediately for something tomorrow. You know what? Just put a little more.
- [22:45]
Scott Melker
Especially as we actually get like mature lending. Nobody's gonna, no, no, no person holding a lot of bitcoin is ever gonna sell one again. When you can go to your neighborhood bank or Schwab and you know, take 50% against it or 45, whatever you view as safe LTV against it and just buy, borrow, die.
- [23:03]
Matt Hogan
Yeah, that's exactly right. I'd also add one last thing to what Andrew's saying is money is showing up every day from these people, from retirement accounts, from savings, et cetera. What are they going to buy during a giant tariff war? Are they going to buy US equities? It's a little worrisome. Are they going to buy international equities? They're going to buy emerging market equities. They're going to get crushed by tariffs. Are they going to buy bonds? What are they going to buy? To some degree right now Bitcoin is the cleanest shirt at the laundry. It's the easiest thing to look at and say the long term effect of this insanity is weaker fiat currencies and money printing. Like that's, that's the easy thing to have conviction on the long term effect of this insanity on Apple's share price. Who knows? It's path dependent on how the China negotiates. Like who knows?
- [23:53]
Scott Melker
A lot of these stocks are still like trading at like a 50 to you know, like the ratio. The stocks are overpriced. There's no question about that.
- [24:02]
Matt Hogan
So, and money is still showing up and it has to buy something, right? So what is it going to buy? And what we're, I think we're going to see is some portion of that is going to buy Bitcoin.
- [24:14]
Tillman
Well, it's the perfect asset to fight these regulatory forces. Like if you're going to have a global tariff war Bitcoin, you can't put a tariff on it. It's impossible. So why wouldn't that be the best safe haven asset when all of the other safe haven assets like gold can be tariffed, can be regulated, can be restricted? This is the shining example for moments like this. This is why you are a bitcoin believer. Because there's no outside force that's more powerful than the inside force that bitcoin, you know, has there. It's, it's a, you're, you're gonna, it's kind of like when everybody was getting upset with Trump that he didn't pass the executive order for bitcoin reserve on day one. And it's, it's like I was making the point to people. Let's say he never passes it. Let's say no politician ever believes in bitcoin going forward and they all hate it like they have the last, you know, 10 years. Who cares? Bitcoin can't be stopped. Like it, it may slow it down a little bit, but it cannot be stopped. And so that, that, that is a natural, you know, magnet for money in my opinion. And to Matt's point, money is going to flow there.
- [25:37]
Andrew
So the, the other thing that, that is tethering people to not selling is from 2010 to 2020 there was this massive move in wealth management called securities based lending, right? So securities based lending became this massive, massive thing that was bolted on to people's million, 2 million, 7 million $9 million portfolios, right? So beyond buy low sell when you die, now you've got securities based lended bolting on onto your account. So you're not going to sell, you're just going to continue to add money. It effectively tethers you and locks you into the markets for the long term. And yeah, there are forces here associated with again, a floor underneath the markets. And by the way, a treasury secretary like Scott Besant, he knows all of this, he's aware of all of this. So you know, Bitcoin and Besant in those we trust, right? And that's the way I'm looking at it.
- [26:43]
Scott Melker
Matt, there actually was an interesting article today in Bloomberg that was just. You reminded me of it when you were talking about what else, what are you going to buy, right. If all these things happens, actually the world is finding a plausible alternative to Treasuries. Making the point here that even though they're not as high, Germany, now the 10 year bond is at 2.66% and rising. If ours actually does come down, Japan, all of A sudden actually has a yield that there could be a world where at least people in Europe and Japan and in these other countries stop looking to United States treasuries as the only safe haven and buy the one that's available in their country. That all leads to bitcoin.
- [27:21]
Andrew
Right?
- [27:21]
Scott Melker
I mean, because that's de dollarization to some degree. Just a very. What a strange time to be alive here. It really does feel like the entire future of the dollar as a global reserve currency is in the balance to some degree of what happens over the coming years. And even Larry Fink said that.
- [27:39]
Matt Hogan
I absolutely agree. We're moving to a multi reserve world. I think bitcoin will have a seat at the table. But again, I point back to the speech. The Trump administration doesn't like the US Dollar as the world's reserve currency. It puts words up that says it does, but they don't like the overvaluation of the dollar that comes from that position. At least they're neutral to it. So I think we're absolutely moving to a new world. And chaos is a ladder. I think it's a ladder for bitcoin in this example. I just, it's sort of playing out exactly in that direction.
- [28:15]
Tillman
Well, it's a testament to alternative fuels in my opinion, because the, the way that the dollar has maintained its dominance is through the inflate global inflation of its currency against the petrodollar. Right. We've forced the entire world to transact in dollars to buy oil. And because oil during the last hundred years was the most, you know, the easiest way to advance a country. Right. The easiest way to spark innovation, to spark industry, that it was the backbone of growth essentially. And we're seeing a move away from that and that that is going to weaken the dollar's position by definition because that is the control mechanism that it's been tied to. The question is, is what, what's next? What is it tied to next? And you know, I think Matt said something. The word that resonates with me is it's going to be in a basket. I think we're going to be moving towards baskets of commodities that represent fiat and back fiat. And we already see that with the BRICS nations. They've already talked about this at length about basically taking all of the, you know, national commodities that they have and putting it as a backing to the rate in which they inflate their fiat. That's a novel idea. I think it's probably. But it does point to this new generation of thinking that is not so impressed with sticking with the old petrodollar.
- [29:53]
Scott Melker
Well, I mean, Matt, you very well articulated basically the Triffin Dilemma, right? And I guess for those who don't understand what the Triffin dilemma, it's. I think he's Belgian, but economists from the 1960s, I think, who basically pointed out this exact problem with being the global reserve currency is that if you're going to be the global reserve currency, you need to get dollars into the hands of every single country. But that's naturally over time going to cause trade deficits, which you have to have to do that. Hence why I keep saying our export is dollars and that's why we have trade deficits. But then that eventually can only erode confidence and the value of your currency, which is why eventually every global reserve currency dies. You just can't have it both ways. That's to your point. You're saying they, they say they want it, but do they? But you know what? What? Eventually that, that, that, that circle has to end. You just can't print enough.
- [30:43]
Matt Hogan
Exactly right. Trump says he wants to zero out our trade deficits or have a trade surplus that like definitionally, axiomatically, mathematically reduces the dollar's role as the word.
- [30:54]
Scott Melker
It can't be the global reserve currency if you don't have trade deficits.
- [30:58]
Matt Hogan
That's exactly right. And lower dollar better for manufacturing. It fits the policy. I just think all paths lead to lower dollar. We went back to this swirl of everything that was happening and a million takes and tariffs are good and tariffs are bad. Tariffs are maybe. And what I ended up on Monday thinking is there's one piece of certainty out of this which is lower dollar and lower dollar has always meant higher Bitcoin. It's one of the strongest financial relationships that Bitcoin has is a negative correlation to usdx. And I think that's the one thing we know. We don't know how the China negotiations move out. We don't know how fast we'll do bilateral trade deals. But I think we do know this, which is this road ends with lower dollar. And with the world's reserve currency status being more fractured and different than it has been in the past.
- [31:51]
Scott Melker
Crazy. I want to ask you, Matt, before I let you go, just quick summary of what's coming up for Bitwise. You guys have any new products plans? Because I know that now it's like it's ETF palooza.
- [32:04]
Matt Hogan
Yeah.
- [32:04]
Scott Melker
I mean, I should point out we're getting the first XRP ETF in the US sadly, it's not bitwise. You know, who's not launching a 2x leverage long XRP ETF. Sounds like a good idea. Listen, I have nothing. Again, this has nothing to do with XRP. But every one of leveraged futures ETFs or non leveraged futures ETFs has been the top of every single asset in crypto that they've launched. Like, careful out there. But that looks like gratuitous short, not financial advice, nothing to do with xrp. It's just like, remember when the Bitcoin futures launched? Remember when the Ethereum futures launched? I mean, Ethereum has gone back to 2018. Okay. Outside of that, it's clear. My point being that we're going to just start launching shit and seeing what sticks. Right? So what does Bitwise have coming?
- [32:52]
Matt Hogan
Yeah, I mean, I appreciate the question. We've launched a few products I'm really excited about. We have our Bitcoin Treasury ETF OwnB, which holds companies that own bitcoin. I think that's a fun fund. We launched three option overlay strategies on MicroStrategy, Marathon and Coinbase, managed by my good friend Jeff park, who's a scary smart guy.
- [33:14]
Scott Melker
Dude. I cannot have him on shows anymore. It's embarrassing to my intellect. I hate looking so dumb. Is he the smartest person on. He's on this show on Tuesdays all the time. Is he the smartest person that's ever walked the planet? Why does he have to remind us all the time?
- [33:30]
Matt Hogan
We all live a little bit intimidated of him here at Bitwise. I. But it's going to be fun to see him running those portfolios. He's really excited about it. So thrilled about that. And then we have, we have more ETFs in the future. It is, it is ETF season, but no 2x or 3x for me. Scott. We don't, we don't believe in, in, in daily leverage. Let other people do that.
- [33:53]
Scott Melker
My God, he's so smart. It's like the Shut up and take my money guy from the Simpsons. You know, like he was, he was.
- [33:58]
Andrew
Born, he was born in the dark of exotic derivatives of Morgan Standing.
- [34:05]
Tillman
I take all of his tweets and I run it through AI so I can understand it and respond, you know, accordingly. It's. Most of them are above my pay grade.
- [34:14]
Matt Hogan
I. I may or may not do the same. Tillman.
- [34:18]
Scott Melker
Unbelievable. It's like, it's so hard to follow his intellect. It's great. He's pretty good at articulating on a show. He's very good at articulating it on Twitter. But like Tillman said, you need a. You know, like my grandmother used to have a Webster's dictionary out when she'd read a book and she'd look up every word in the dictionary. Thank God for Chat GPT Tillman because we would never understand a single thing you had to.
- [34:41]
Tillman
Well, he uses huge words and not just for the sake of using them. They're really poignant words.
- [34:47]
Scott Melker
No, it's the only one that you can use there, right?
- [34:49]
Tillman
Yeah, exactly. It's the only one. And so if you don't know the definition of the word.
- [34:53]
Andrew
I feel like the target of that comment somehow using big words but you don't know what they mean. Strangely, I feel like the target of that comment.
- [35:02]
Tillman
Listen, guilt is a funny thing.
- [35:07]
Scott Melker
We just happen to be on the top of the screen. Matt, anything else before I let you go?
- [35:13]
Matt Hogan
No, that's that, that's all. Thanks for having me today. This was a lot of fun.
- [35:16]
Scott Melker
Thanks Matt. Always a great time. Always amazing to have you guys check out Matt obviously on X and if you're gonna buy ETFs, buy Bitwise ETFs. They actually, I mean we all like Larry Fink here, but come on man. Want to support Bitwise or BlackRock?
- [35:31]
Matt Hogan
I appreciate it. I'll catch you all later.
- [35:34]
Scott Melker
Thanks man. Now we can. Now guys, we'll, we'll talk about, you know the thing on the, the ticky and we got the thing up there, it says times are like we got the. Andrew. I remembered to put it on from the very beginning or helping or giving me a warning.
- [35:50]
Andrew
That's really well done, really well done. You get a gold star for today. You get a gold.
- [35:54]
Scott Melker
Funny thing is though, it's been going the whole time and they're like anyone who's new here is like what Algos, what else? We just got the thing. It's like going across Tillman and Matt's chin the whole time.
- [36:06]
Andrew
Well, we, you know, obviously institutional level tool that people can use for free. We have thousands of folks that are using this, these tools now on Bitcoin, Ethereum and Solana doing extraordinary things using the sole arbitrage to effectively create cash yield and finance more purchases of Bitcoin in an intelligent way that's been very, very popular amongst our customer base. But here in the next couple days we're about to launch an update in a, you know, what we call an optimization to our bitcoin arbitrage strategy. And Tilman, if you want to go ahead and kind of Explain that some of the things we talked about internally yesterday, I think everybody would love to hear about it.
- [36:50]
Tillman
Yeah, sure. So bottom line is the arbitrage strategy allows you to pick movement thresholds both to the upside and the downside. And when those movement thresholds are met, it both enters and exits position. So if Bitcoin moves up by 2.6% in a given day, sell this many dollars of Bitcoin. If Bitcoin moves down by this many percent in a day, sell this or buy this mini Bitcoin and, and you can schedule that on any time period that you want, daily, hourly, monthly. So you can really layer these approaches over a, you know, small time frames and larger time frames. We've just added a feature set that now will keep track of your cost basis on each one of those positions and only trigger the, the, the percentage sell if it's above your cost basis. So it's a way to essentially hold your losing positions and tell their winners and never take a losing position or a losing trade anymore. So any of the price movement that you're buying essentially on the dips that go continue to dip, you're going to hold those positions and that's going to be essentially your, your long term bag. So it's a big improvement. The performance reports over periods, long periods of times and short periods of time both indicate as that it's a massive, massive deal, massive improvement to the software. So gives you that flexibility to keep track of exactly what those cost basis are no matter how many accumulate before the period where they start to sell.
- [38:29]
Andrew
So we mentioned on you know, our social media account at triage public, you know, never take a losing trade again. And this is what we were talking about that in the arbitrage strategy, an optimization coming out where you know you're essentially not going to be selling in any way, shape or form. Whenever you've taken a position of any kind. It's just not going to allow you to sell a position to even create cash yield that's going to be in a quote unquote negative or losing position just in the aggregate folks, as we talk about this, it continues to defy my ability to communicate how unique these products are. How of scale, these products are how you say you wanted to generate, you know, a cash yield type of setup for five different algos at the same time. You literally can do that with our team inside of 30 minutes. Take your hands off and never touch it again and just reap the benefits that doesn't exist anywhere else ever. Anywhere doesn't exist anywhere other than us. And so if Bitwise wanted to use this, if Morgan Stanley wants to use it, if Coinbase wants to use, they have to come talk to us. They, we're the ones that are doing this and have this institutional level tool that we're giving away for free. I can't say it loud enough or with enough passion that this kind of tool is unprecedented. It's a one of one. You have to have it, you have to get it.
- [40:11]
Tillman
The tools have been available for decades.
- [40:13]
Scott Melker
We all sell our wives one of fun man.
- [40:19]
Tillman
The tools have been available for decades. They just haven't been available to the retail folks. And so this is an opportunity to see kind of behind the curtain of automation. And like Andrew said, there's no nothing against using our free version for forever and never coming into our concierge. But we're, we're very convinced at this point, based upon the customer responses that we've had, that people want this tool. People want as as much training on it as they can get because it is that dynamic and allows you to set up that many different instances. Bitcoin, for example, when it's in a price trend, when we're trending like we have been over the last, you know, several months for six months, there's tremendous chop and in that volatility is a awesome opportunity to harvest it. But you most of the time miss those opportunities because they happen very, very quickly and you're not there sitting, waiting for them to happen all day to take advantage of them. Well, automation can sit there all day without you sitting at your computer and monitoring it. You can do your normal life and you can set up as many of those traps as you want or instances as you want. And as the market presents those volatile moments, you know, if, if, if bitcoin goes down by a significant amount in a short period of time, there's a very high probability that when it bounces, it's going to also bounce very volatile to the upside. Just like what we've seen in the markets, the traditional markets that took that massive dive and then boom, it bounced back up to, I think, you know, almost where it started to fall, but then it couldn't sustain that. Well, that is an opportunity, if you have the right tools to take advantage of it. Just like when you're accumulating something, you want as many price entries as you can get because you're getting the best sampling of, of price exposure, you're removing the risk of volatility in doing that. And automation can help do that in a Very disciplined manner that would take somebody a tremendous amount of commitment and time to do on their own or manually.
- [42:24]
Andrew
So the question is how many people bought at 77, 78 or 79 and some of those prices were in the middle of the night? The answer is all of. Yeah, well, yeah, all of our customers did it in an automated way. You have to, you had to choose to do it and you had to push a button. Right. So all of our customers benefited and, and they did. Right. Because they're using a tool that is unemotional, makes the decision for you and boom, you're good to go. And what you just put up there, you know, a guy talking about Solana and I'm having to do this by myself and on my own. I mean, that is, you don't have to do it on your own. Go on vacation, go to sleep, go do your life. And you set it up one time and it just does what it is that you want it to do. Just incredibly diverse.
- [43:15]
Tillman
We'll throw another huge nugget in there. We are going to be launching an XRP algo here very soon.
- [43:23]
Scott Melker
So 2x leverage.
- [43:26]
Tillman
Not 2x leverage, but we have had a ton of people reach out to us requesting an XRP algo. So it is coming down the pike. If you're a big XRP believer, we'd love to show you the tool. It's already ready to go. We'll be launching it here. You know, probably the 15th of this month.
- [43:43]
Scott Melker
I was 10 years old when I found out that Tillman Holloway was once a top what thousand holder of XRP with a huge XRP maxi and is speaking soon at an XRP conference.
- [43:55]
Tillman
I listen, I will tell you this. I think the use case has to change and I haven't seen really that, that mantra in, in a light that makes sense to me. But I will tell you this from a tech perspective, XRP is as good as it gets. It settles quicker, it settles more consistently. It doesn't have downtime like Solana does. Like there's a lot there to unpack as it pertains to the, the network and the protocol and what it, what value, intrinsic value it has. And for example, I'll give you this, this is a out in left field hypothetical. But of an XRP ledger, like they're going after banks. I think banks need a stablecoin to do international settlement. I think that's the best use case personally. But if I'm Disney and I want all of my transactions to be mine on my own private ledger, I just Set up like a bank would the XRP ledger. And I run every internal transaction through xrp like that use case, I think would be fantastic because I don't think there's another protocol that could meet that demand in real time at the gate, at the ride and settle quick enough to, to get the job done. And I think that would be, you know, you always lean into your strengths and you know, XRP strength is 3, 3 second settlement and as cheap as.
- [45:24]
Scott Melker
It gets, I would say that their strength is having the most congenial, pleasant, non confrontational community.
- [45:32]
Tillman
I would agree. I would agree.
- [45:35]
Scott Melker
World not at all schizophrenic as to who they like or hate on any given day. Not overreactive to any tweet that mentions them. Not at all defensive.
- [45:50]
Tillman
Listen, I think there's so much toxicity inside the crypto space. I think every he who has no sin cast the first stone.
- [46:02]
Scott Melker
Yeah, I mean you can't, you can't, you can't rank them. It's just the way it is. I mean, get on the wrong side of some Bitcoin maxis or some link, God help you. God forbid, some hexagons, those guys from Hexaco, down below the Gulf of Hexago, get on the wrong side of those guys, man.
- [46:19]
Andrew
Yeah, yeah.
- [46:20]
Tillman
And if you run into a Tron lover, he's on Justin's payroll, so he will be.
- [46:27]
Scott Melker
I've never gotten into any confrontation with the Tron community. Don't know if they exist. But I will tell you that the one that still Tron, man, people are just, people are just pushing stable coins, $10 transactions on TRON in South America like it's nothing. Just dominating all the credit in the world there.
- [46:45]
Andrew
Yeah, it's interesting that stable coins will end up being the initial killer app, let's call it, of crypto. But remember that the, you know, the Internet's killer app when it first came out was that it just existed, right. That the Internet now exists and you can do weird stuff on it. And at some point there was a pivot and another pivot and another pivot and then it became something entirely different. So I think, you know, over the next 20 years there will be different, quote, unquote, use cases and killer apps associated with crypto. The stable coins will just be the first version of the Internet exists. Right. And then we'll go to something else and something else and something else.
- [47:24]
Scott Melker
They're asking for a referral code. You just go sign up. This isn't an affiliate marketing scam. It's Not Amway. Just go say that. Oh wow. I accidentally clicked on something about bitcoin cash. Let's talk about that. No, I'm just kidding. Were you ever a bitcoin cash Mac? Okay, no, we're gonna stop any, any final thoughts before I like.
- [47:46]
Andrew
Yeah, the final thought is, is we're going to announce the winner of the, you know, bitcoin conference giveaway. Two industry passes we're giving away to somebody so they can come and bring a plus one. All you have to do is sign up for the big free bitcoin algorithm and follow. Try Arch Public and.
- [48:06]
Scott Melker
Yeah, how much are they charging for?
- [48:09]
Andrew
I think right now. Right now the industry passes. Yeah, right now the industry passes are two grand but they go up significantly as you get closer to the deal. Right?
- [48:21]
Scott Melker
Yeah. And it's pretty cool to be there that day. It's way cooler to, I will say like having gone to you know, four of the last five or three, whatever it is, whatever. The, the day two and three are shit shows because it's full retail. Especially when like we were in that peak bull market in Miami and It was like 25, 000 people. But industry day is literally like they have generally some of the best speakers. You have access to everything. There's a tenth of the people there and it's like there's sailor sitting on the couch, let me go say hi. And you just sit down.
- [48:53]
Matt Hogan
It's.
- [48:53]
Scott Melker
It's really, really cool access. It's really awesome.
- [48:57]
Tillman
Yeah. Arch Public and Jim and I are going to be taking over the sponsorship at the conference for the Whale Lounge and the Whale Stage. So we'll have a lot of our employees there and if you're a customer of ours, we'd love to see you come find us and we'll shake your hand and talk, talk shop.
- [49:13]
Scott Melker
So you guys are going big. This is big.
- [49:16]
Tillman
We're excited. Yeah, we've got over. We had 1500 plus people sign up for the Algo last month. So we've got a large portion of people that are seeing value in it and telling people about it. And you know, it's, it goes back to the products productization of bitcoin. You know, we've been in the space long enough to remember the evolution of ease that has. We've, we've been on like bitcoin at the very beginning was incredibly hard to manage in steep learning curve, lots of mistakes and companies have done a lot to, to, to make it easier and so now you can own, you know, Bitcoin ETFs in all shapes and sizes and never even have a cold storage wallet or never even get on a. A crypto exchange. Well, ours. If you do want to acquire physical Bitcoin, if you want to own Bitcoin itself, this is a productization of that process. It makes it a lot easier to do so, and you can do it with tools that are institutional and in grade.
- [50:19]
Scott Melker
All right, guys. Well, look at this scrolly thing. Check out the algos. Archpublic.com and I've been super wavering on conferences. I was supposed to be in Paris, literally for Paris Blockchain today, and no. And then I'm supposed to go to Dubai in, like, three weeks, and I'm kind of. I haven't booked the ticket, and we're seeing. And I was also the same way about the bitcoin conference, but I think you guys have officially convinced me that I need to be there.
- [50:45]
Andrew
Yes. Right. Right.
- [50:48]
Scott Melker
You know what I am doing tomorrow? You know what I am doing tomorrow morning?
- [50:51]
Andrew
What are you doing?
- [50:52]
Scott Melker
Dana White.
- [50:53]
Tillman
Oh, wow.
- [50:54]
Scott Melker
In person. In person on an island in Miami.
- [50:57]
Andrew
Oh, wow.
- [50:58]
Tillman
Wow, that is awesome.
- [51:00]
Scott Melker
You know what I think? Sorry?
- [51:02]
Tillman
I think he's. He's. He's an incredible person. I've always been a fan of him just because I've been a UFC fan, but the way that he's been influential in politics over the last, you know, year or so, I think he's made a real difference and given a segment of our populace a voice that didn't feel like they had a voice, it's kudos to him and congrats. I'm going to be watching that interview for sure.
- [51:26]
Scott Melker
It's gonna be sweet. So I won't be here tomorrow, but I will be back Thursday and Friday, guys. Otherwise, that's all we got. Andrew Tillman. Thank you. Matt Hogan. What a legend, right?
- [51:34]
Tillman
He's incredible.
- [51:35]
Scott Melker
That old bit, that's it. Jeff Park's too smart for all of us. See you later. Bye.
- [51:41]
Tillman
Let's go. Let's dope.