Fidelity VP: Generational Bitcoin Buying Opportunity As ALL Dominoes Align | Chris Kuiper

本站添加: 2026-05-31

[00:00:00]It comes out as one of the best asset classes in history, but surprisingly a lot of institutional investors are still on zero. Zero starts to become a bit of an active bet against it because you're not even going to be market weight. And that's how institutional investors think. But the point is to say, if you look at this objectively, why aren't you considering it? At least being in the institutional space, seeing attitudes change, perceptives change, and also just a lot of building going on is very exciting. My guess would be for for the Fed this year, they're going to let inflation run and hopefully try to get their debt and their interest rates down without trying to put rates up too high.

[00:00:40]And that would probably be a pretty good environment for Bitcoin wealth transfer.

[00:00:44]It's one of the biggest trends that everybody knows about, but it's still not fully appreciated because of the size. Saturation point or a big one for me will come when certain a certain percent.

[00:00:57]>> Welcome back. Our guest today is vice president of research at Fidelity Digital Assets. He's been studying Bitcoin since 2012, longer than most people knew it existed, quite frankly, and he wrote the research that institutional money actually reads before they allocate. And earlier this year, he dropped an update to his big report uh from a few years ago. I believe this is 2020, so it was a little while ago, believe it or not, that if you have zero Bitcoin, you are not playing a safe. You've already made a bet. Chris Kyper, welcome to the show today.

[00:01:27]>> Thank Thank you. Thank you for having me on.

[00:01:29]>> Absolutely. Absolutely. So again, Chris is the bridge, you know, you know, one of the bridges, not the only bridge, but uh one of the bridges between Wall Street and Bitcoin and the and the research and the reports you guys put out are have been incredible over the years and you just made an update. We talked about this in Vegas a few weeks ago at at the big conference there and I would love for you to just kind of break down. I know some people have seen that a few years ago, might have not seen the most recent one, but we were just talking offline about the, you know, that report, some of the updates, and then now you guys are going through some of your, you know, midyear, almost midyear, uh, findings, what's going on, tracking that. So, I'd love for you to just kind of break that down, uh, the kind of thesis around that, and then we can, you know, get into where we're at now and where we're on track for.

[00:02:11]>> Sure. So, thanks for highlighting the the report. It's called getting off zero and then we added a little addendum um revisiting Bitcoin in 2026 because as you said we put the report out a long time ago but surprisingly a lot of institutional investors are still on zero. So I'm sure listeners to your show are not or this might seem surprising to them but the big money is still on zero.

[00:02:32]Um so we're again revisiting the the case from a principles first or investment thesis perspective. So what is Bitcoin? What what purpose does it serve? But then really most of the report is geared towards those institutional investors that look at the investment metrics. And what we really want to show people is if you just if you just look at this objectively in terms of its return and of course its risk and therefore risk return metrics like sharp ratio, ratio, all these things that CFAs and stuff like us nerds we like to we like to dig into and get get our hands dirty with. um it it comes out as one of the best asset classes in history. Um now of course that is past performance not indicative of future performance but the point is to say if you look at this objectively um why aren't you considering it at least and again some institutions may have a very good reason to be on zero. So I don't want to dismiss that but the the reason can't just be oh we haven't looked at it or we don't believe in it or something like that. you have to have a really solid reason as to why you're explicitly rejecting or taking, you know, basically an active stance at zero. And again, it's still a pretty small asset class, but eventually as it's it's already, you know, one and a half, it's gotten up to $2 trillion or more, it does start to move up the the ladder in terms of even if you were completely agnostic or neutral, um zero starts to become a bit of an active bet against it because you're not even going to be market weight. And that's how institutional investors think. they're always looking at themselves versus some kind of benchmark whatever that benchmark is and they say am I overweight or am I underweight and so in the report we go through we go through it all we go through uh the return the risk uh the investment case once you get past that and you say yeah I think I I need to or should uh create an allocation here zero is not the right amount then we go through some of the next steps that an institutional investor faces uh what's the position size how do I think about position sizing we we provide a models or or guidelines for that. And then um once I have a position size, how do I fund it? I got to take from something else in my portfolio. Do I take it from the risk side, equities? Do I take it from uh the bond side, uh fixed income, something else? We go through that. How do I think about risk?

[00:04:51]How how often should I rebalance it? So that's another thing we we look at with the data. Uh and then finally, my favorite part of the report is looking at institutional portfolios today and especially something like even just the 6040 and how they might be facing a lot of headwinds both we go on the equity side and then on the bond side and say maybe Bitcoin can provide a solution to some of these headwinds or at least give you some diversification from some of these risks that these big buckets are going to be facing. And so that's that's the report uh overview, but we can certainly get into a lot more of that if you'd like.

[00:05:28]>> So you guys now you're you know again like we were saying almost halfway through the year. Um maybe some wins and losses for and again it's tough because we're not through the year but yeah but it's you know good on you guys for you know tracking things already uh and and you know being really prompt with it. But where are we at?

[00:05:44]Where do we stand? I mean, even the macro backdrop, again, we talked about this a few weeks ago and just kind of what's going on the the straits of hormuz there's a lot of Bitcoiners. I know we see it as like, oh, this is amazing. Like, look, look, look, look.

[00:05:55]I'm I'm sure there's a lot of people out there though that are kind of like whoa, like what's going on and kind of like repel against that. I mean, I would say probably vast majority of people in a way repel and say, hey, why are those people using it? You know, like it, love it, hate it, you know, doesn't matter.

[00:06:08]you know, macro, you know, like gold, we touched on all these different scenarios, oil and what's happening just the so macro backdrop, you know, your guys halfway report like where do we stand uh you know, from some of the predictions you guys are making, but also just maybe, you know, some of your your own thoughts in a sense of just like where where's the puck headed?

[00:06:27]>> Yeah. So, we were going through our 2026 look ahead and we put this out every year. We put it out in early January and so we went back to it and we said, um, where are things shaking out from what we said at the beginning of the year? uh have we got some things right? Have we got it wrong? Um how are things progressing? And one of the sections I wrote was on the macro section and I'm just looking at it here. Um I said we wouldn't be surprised at another strong year for gold. Last year gold was up I think 65%. Uh now of course gold is actually down a year to date. So uh so far wrong on that one. However, I showed a chart where the best performing years of gold like the the top 10 or so best performing years of gold they they come in clusters. So gold moves in these tectonic shifts or or waves or or whatever you want to think about it. And it doesn't just have kind of random walks of up and down years. It's it it has its moments and then it's usually a number of big years. You know, going back to the stagflation era, uh going back to 0708 and now most recently being up 65% last year, we thought momentum works for something like gold. So we wouldn't be surprised if it had another strong year. Now we are down so far, but there's still quite a bit of a year left. I think things got a little overheated, pulling back a little bit.

[00:07:36]Um, but the other point I made was uh we're seeing a broader shift away from the dollar-based system and toward adding exposure to an asset outside of the traditional system. So already we've seen very aggressive central bank buying of gold. Uh gold holdings now surpass um US treasuries as well as US dollars for uh central bank reserves. And so you're starting to see some of that shift away.

[00:08:03]Now, of course, um, years ago, we said we see a central bank buy Bitcoin, or at least that was a thought we had. We did see that last year. Um, that the Czech national bank did buy some, uh, the president of the the Czech National Bank was actually at the Bitcoin conference that we were at. He talked about how they went through the same pro process basically as our getting off zero piece where they went through the data and they found that adding a little bit, just a few percentage points, did not meaningfully increase their risk. And so yes, they did this in a test account, but they did it with real money. They didn't just do an academic paper version. They, you know, they they knew that they had to understand this asset.

[00:08:38]They they messed around with wallets and the blockchain and everything like that.

[00:08:41]So uh I think personally countries, central banks, others are going to start looking at Bitcoin and recognize it as a uh true commodity like uh neutral, geopolitically neutral asset just like gold. And so already you saw gold move because it has a long history.

[00:09:01]It already has all the infrastructure.

[00:09:03]But then more recently what you just alluded to uh a certain com country accepting bitcoin as payment or toll through the straight of hormuz. Um again that's a recognition of this thing as a truly geopolitically neutral um thing.

[00:09:18]Nobody controls it. Uh nobody can stop it. Nobody can censor it. Now of course that has good and bad things depending on what side you're on. But to me, the more important thing to emphasize here is that it is showing that characteristic of of an asset outside of the traditional monetary system. And eventually, people are going to recognize that characteristic is very desirable uh for Bitcoin as well. And so again, it's very very early. Um but again, these are the the data points and things you would think and want to see as this progresses and as it gets adopted for these these purposes. when when do you think we see a a a saturation point in terms of adoption because like you know I don't know if it's you know Bitcoin's viral moment or whatever it is because we we have like you said we had the the Straits of Hermoose you the Canadian Trucker event like there's these different moments where people realize like hey whoa things might not be the way they always used to be type of you learning and it's just that demographic shifts the yarn generation comes up and and so they're looking for a different way to do things you know probably rightfully so in many respects right now because there's a lot of people that can't afford things that are in the younger you know demos but you you know we talked about offline as well just this shift away from the traditional side of things a shift away from the the dollar based system you know we hear about the multipolar world order and you know China Russia and America and these different things that are going on I mean how do you how do you see those big really big macro even like generational shifts decade uh multi-deade shifts uh going forward as well like how when you zoom out and and kind of just look at the whole landscape How do you see things uh moving?

[00:10:52]>> Yeah, I think what you you hit on there is two different vectors of adoption. So there's the the cultural moment or the milestones and we keep we keep passing these milestones of like regulation or a certain um bank has to adopt it or a country has adopted it as legal tender or now we have one uh central bank adopting it. So, those are very important because they're the first and they're um culturally significant or something like that or the first, you know, merchant who adopts it or or whatever it is. Um so, those are very important. I'm not trying to downplay that at all. You have to have those things, but they're all small things happening at the periphery. You know, someone's got to do it first and it's usually a small player. Um uh companies adopting it, right? So, putting on their balance sheet, it's it's only a handful right now doing that. The other vector though is um it's if you think of Bitcoin as a monetary network, you have to think of the the amount of money coming onto the network. And I think Michael Sailor alluded to this before too. It's it's it's different as a from a network for like a social network because um each person is not the same.

[00:11:55]It depends on how much money they bring into the network, right? And so that's where we haven't seen uh a major inflection point yet where uh a huge amount of money I mean in some ways obviously a huge amount of money has come in and you've got a one and a half trillion dollar asset class here which is no small feat from something being nothing but you zoom out and you look at like you know the the famous Jesse Myers chart of the TAM of four Bitcoin like >> what percent of Bitcoin is compared to all the stocks bonds real estate gold collectibles anything investable out there and it's it's singledigit or less percentage, right? So, there's still a huge amount of adoption in terms of money. One thing that I've always said, and this is just my personal little mile marker in my head for when things become quote saturated, is if you look at, you know, your typical uh uh worker and they might put in 10 15% of their paycheck or or whatever it is uh into their account and that goes into their 401k or IRA, whatever it is. And a lot of these nowadays go to like target date funds where these things get invested for you into different stocks and bonds and you don't have to worry about they're great great products, right? Um the saturation point or a big one for me will come when certain a certain percent of those target date funds allocate to Bitcoin >> and people all over the world, doctors, teachers, nurses, electricians, whoever you are, you're just socking money away in your retirement account and you may not even know that X% is going into Bitcoin. that will be a big saturation point in my mind where it's just become part of the the global menu of things to invest in and who knows how big of a percentage that gets to. So there could still be a wide range within that. Um but that's just one example that I I look at and so you got to have the the people the cultural the first in terms of adoptions but then you have to have uh the money actually coming into the adoption network as well. Is that is that uh are you kind of alluding to like passive funds like passive money coming in like passive versus active that type of thing where it's like hey you're just this is coming out of my paycheck I don't even know and it's come in here because I know this has been like the the sailor thing and the ETFs the last couple years there's been a lot of this talk of like can you just imagine when he's in the S&P or like whatever is that kind of what you're alluding to where people just don't even know what's happening but it is >> yeah that's certainly part of it where you know there's always all these surveys that we're interested on the research side to show how many people actually own crypto or bitcoin or digital assets and it's very hard to to to survey it and find it. But I've seen anywhere from, you know, 1 to maybe 7% of of the world. And then of course, you compare those to things like the adoption of the internet where it's like we're still in the '9s of the internet where very small early adopters are doing it. And so you're seeing people >> um who have their own, you know, the do-it-yourself investors who have their own initiative. they're going out and they they're managing their own investments and they're saying, "I want to buy uh some of these ETs or I want to allocate some portion of my portfolio into that." They have to do that themselves. Now, you're starting to see the news headlines where certain adviserss, we saw a big bank just the last few weeks, um confirm that their adviserss can can and do now recommend an X% allocation to all of their clients. Uh so that's a big step. Um so again that that will be one of those and then like I said before and to your point yes when people are put into certain um funds like target date funds or things where things just automatically get allocated and Bitcoin becomes part of that conversation or part of the thing on that menu because they realize oh it's it's all the things we said in the report. It's got a low correlation. It's got a positive riskadjusted return. it makes sense to put this in a portfolio because you can improve your your results, your returns, and you can ultimately improve your results for things like savings and retirement, whatever else. That will be a big a big moment um that we hopefully will eventually get to.

[00:15:46]>> Yeah. And this this was something that I asked you guys and we couldn't really go into it a ton. So I love your elaboration, you know, slightly, I guess, on the um as we we've we've kind of danced around it here today, too, in the sense of big institutional sovereign wealth funds, you know, nation state adoption, all this because I I you know, there's been brutal sentiment obviously over the last, you know, whatever it is, you know, 6 to 12 months. Uh people expecting things to happen because we've seen all these headlines. We've seen the the PR releases, hey, you know, whoever, you know, whatever big guy is getting in. And you know, as you know, 10 years ago, if if you had one of these announcements for the year, it would be like, you know, earthshattering. It would just be like, what? You know, and and so now you're you're seemingly having these announcements all the time.

[00:16:29]And like Bitcoiners generally, I think, have just tuned a lot of it out because it's like, you know, you're you kind of take for granted like all the all the announcements, but then people expect their, you know, the price to come along and it's like, well, we should be in the hundreds of thousands. We should be at a million already. Could you shed some light on maybe the difference when you guys are doing analysis and me even talking to other guys in the space in the sense of there is a lag you know like there's some there it's not that someone announces hey we're doing this and like all of a sudden they're just going in and buying you know 10,000 Bitcoin that year or something like that like these things happen over time I would imagine so I would love for you to kind of shed some light on this because this this gap here I think has caused a ton of consternation with Bitcoiners and thinking well hey we've heard this stuff for two years yet the price is where it was you know a year ago year and a half ago so what gives >> yeah what gives Um the the biggest insight I can give is someone working at a company like Fidelity and um this is just the fact of the matter for large companies they are like aircraft carriers um they they have to take a ton of time and energy and resources to to move or turn. So if you know a huge advisory business is going to say, "Hey, we're going to consider allocating towards Bitcoin." That that takes months if not years of work in terms of the infrastructure needed, the education, the compliance, the regulation, uh changing all of their workflows and their systems. Um people just don't realize that a lot of Bitcoiners are on the retail side, right? They just go and they just they just buy it. They then and they wonder why nobody else can do the same.

[00:17:57]>> But these things take these things take a lot of time and and energy. And that's okay. That's that's a lot of this adoption is just going to be the product of time. And um you know if you're a subscriber to something like the power law that that actually makes a lot of sense like this is an organic thing that has to filter out and and permeate through society and all of these changes have to come with with time and that's just one of the ingredients. So you can't be impatient. Um the other little wrinkle though that we've had is uh even though we've had all this positive stuff, we've had really really positive stuff on all these other parts of the economy and markets. You know, the stock market is hitting all-time highs right now. You've got stuff and you've got certain chip makers and manufactury manufacturers putting up five, sevenfold, tenfold returns over a period of a year or two. So, um, that's taking some of the the narrative and the and the air out of it. And people are saying, "Why do I need Bitcoin when I'm doing great in the S&P? I'm doing great in these other stocks." Um, we're doing so good on on all these macro levels in terms of inflation's >> relatively low, although I take a bit of umbrage with that. And um, or or unemployment's lower. You look just look at all these these big macro factors.

[00:19:10]And I think there's maybe some stuff lurking underneath with like the K-shaped economy and stuff, but again at the aggregate level, I'll give it to you. There's there's so much um really good stuff going on. I think that makes a very difficult environment for Bitcoin. And I think we need to be honest about that. And that's not a it's not a bad thing. You don't want the world to be um falling apart and so people are running into Bitcoin. You want them to be adopting it for uh some of the other benefits and and reasons for it, right? So I think that's more recently what's going on too. people saying what gives and um unfortunately there's just a lot of other great performing things right now.

[00:19:45]>> Yeah. Yeah. So I mean so true. It's like what is it that AAMS razor like the simplest answer is almost always the right answer and that's like and you just laid it out perfectly. I mean that's and it's like you said patience and and we did talk about this biggest little bit of just this patience thing where and it's great too because that means for all of us or our friends and family you can keep getting cheaper Bitcoin. If it was at a million that would kind of stink a little bit and it' probably a mad max scenario things of that nature. So, yeah, it's it's it's a trade-off, you know, so it's we get there, but it it takes time. Time does the heavy lifting. And uh what what are your thoughts on the um the transition of the Fed and what's going on here?

[00:20:19]Like I I he was wars was sworn in finally and I was like, "Wow, that really did happen." Like part of me, I think, was just like there's no way.

[00:20:26]Like I it can't be this seamless. Uh and I shouldn't even say seamless because there's been a lot of fighting over it over the last year or two, but um it just like all of a sudden it just like happened. They're like, "Oh, wow." Okay.

[00:20:36]Um, but where do you see that puck going? Like where do you see because the worst thing of, hey, you know, we're going to cut rates. People keep showing we're going to cut um we're going to raise rates. We're going to raise rates.

[00:20:45]You know, I'm going to be a hawk on things. But then, you know, you you kind of read between the lines and you see some other stuff and he's like, uh, well, I don't know. We might be, you know, going the other direction. So, where do you see this puck headed going forward? uh in terms of the Fed, you know, them, you know, not being as independent, quote unquote, Trump, you know, joking about, hey, who knows? The Fed building's not ready, so he might s sit next to me in the Oval Office. So, we've seen these kind of like wink wink nod nod type of things, while at the same time, it feels like they're trying to forward guidance it like hawkish, but at the same time, in the background, it feels like they're trying to do QE a little bit, too. Like, where where do you see all this uh headed? Now that you have your hardware wallet, the key that I generated needs to be stored in something forever that can withstand fire, flood, nuclear fallout, checks, hockey pucks, this is your 12word C plate, your 24word C plate. After a lot of people asking for a 12word Z plate, here it is. stamp seed.com code Brandon for 15% off. After everything that's going on in the world, fires we've seen the Pacific Palisades, what we've seen happen in Hawaii, everything gone.

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[00:22:43]>> Yeah, I I won't comment. I don't get into too much of the weeds of all the the players and everything, but just >> globally or macro lens on the the Fed stuff, I think is important because that does play into a lot of what we look at on the macro side with with Bitcoin. And you're exactly right. You know, people were uh at the beginning of the year, you know, going back to our look ahead, people were expecting this would be a year where we we finally get lower rates uh for a number of reasons. And of course, inflation has remained high.

[00:23:06]Something that we actually pointed out two years ago on our look ahead saying, "Hey, look out. we've had before where it looks like inflation is tamed and then it comes roaring back and you can see some some very similar patterns matching up with the 70s and 80s right now. So, uh we just got, you know, the 3.8% CPI print a few weeks ago here. Uh so that that could be a concern. But now people are saying, well, okay, maybe um yields go up or or they have to uh raise rates because of inflation and that's bad for Bitcoin. And I would agree on one one level or vector that is is bad for Bitcoin in terms of if you can get uh higher yields or or returns from bonds, why do you need Bitcoin? But going back to the inflation point, you got to consider both of them together.

[00:23:50]>> So if if uh you say like the one I think the one six month, one year, they're all at uh 3.8% or below and inflation is now at 3.8%. We're getting negative real yields again. Yeah.

[00:24:02]>> And that's usually when Bitcoin does very well because if you are guaranteed to lose money in real purchasing power terms and this is one of the um reports, one of the charts in our report and then something I I gave a talk on at Consensus. U people think bonds are always the safe place to go. But if you consider things like bonds on a real basis and that's what matters, right?

[00:24:22]What you can actually take home and eat and spend and use for retirement and whatever else you need. um they have a a they are in a draw down right now of 20 to 30% depending on how you measure it.

[00:24:33]And right now it's going the opposite way again. We're getting negative real yields and that's typically when Bitcoin does well um because you're not uh you're not going to get your debt inflated away, right? And I think you alluded to what the the tricky spot the Fed is in where it's got to do this dance >> where it seems strong on inflation to keep inflation down, >> but they also can't and probably don't want to raise rates because our interest expense is so high right now. It's now surpassed defense spending. I think we're on track for $1.4 trillion a year in interest expense. So, if those rates go up and they got a lot of short-term debt to roll over on the fiscal side, that's going to blow out the budget um on on in terms of servicing our debt.

[00:25:16]So, they're in a very tough spot here.

[00:25:18]And historically, what we've seen with other countries in this spot and again doesn't necessarily have to be this way.

[00:25:25]Um but you have papers like we've cited academic papers from the IMF saying the way you get out of this situation is negative real yields suppressing uh people's savings power and inflating your debt away. So >> that's the playbook that we see them doing because the other two of of um fiscal restraint or higher taxes are politically unpalatable. M uh not to say they couldn't do it, but we know from history that's pretty pretty unpalable and unpopular. So most of the time countries have chosen this third third way of getting out of debt. And so that's what it seems like we're in right now. So uh my guess would be for for the Fed this year would be and this is just my personal opinion, they're going to let inflation run and hopefully try to get their debt and their interest uh rates down without uh trying to put rates up too high. And that would probably be a pretty good environment for Bitcoin because it's this scarce asset. But we will see. You know, a lot of other factors can can come into play as well.

[00:26:26]>> Isn't that the truth? Um, all right. In a minute, I want to talk to you about stable coins here, but what you're kind of tying a loop on this or a bow on this. What are you what are some of the metrics you look at when it's you know you people talk about M2? Um, you know, like you know, I know people are talking about PCE now. uh you know we talk about CPI like some of these different things where it's inflation or liquidity metrics with you know M2 um you know the uh producers u PPI um producers price index uh Michigan you know sentiment survey you know what are some of the different things you look at just like warning lights uh that they that give you some kind of flags of which way the wind's blowing uh the liquidity metrics like what are some of those dashboard things that you know Chris looks at when he's you know waking up in the morning or for the week and say okay where where we at in the world right now Yeah. So, as it relates to to digital assets and specifically Bitcoin, it really is like we talked about on stage, M2 uh global liquidity. So, over the a long term, we find uh the change in M2 has an R square of 0.9 with the change in price of Bitcoin. So, in other words, that means 90% of Bitcoin's price change over the long term, at least historically, 90% of Bitcoin's price change can be explained by the change in the money supply. And again, um, you mentioned AAM's razor before, like let's keep this simple. If you're measuring Bitcoin in dollars and you create a whole bunch more dollars, trillions of dollars more, why would that ratio not change where now your Bitcoin is worth more of those dollars, right? It's just it's just a ratio of one thing versus the other. Now, over the short term, even months, quarters, years, anything can happen.

[00:28:02]>> But if you're investing for the long term, that's one of the number one drivers. The other one we find that is very statistically significant is inflation expectations and that's a key expectations. The Bitcoin market is forward-looking just like any other financial market.

[00:28:18]>> So don't look at CPI which is backwards looking in terms of of what Bitcoin may do. Look at people's expectations. Are they >> anchored to low inflation or they becoming unanchored? That's going to be a key one coming up here as inflation has ticked higher uh as we're going to see the effects of the energy market rolling into almost every single uh price component as there's all these downstream effects. Um so that's the other big one. And then of course things like secondary things that that really come after this or downstream of it are things like fiscal deficits, uh fiscal spending, quantitative easing. Those are all uh money creation actions. right now. Not saying anything political about him. You can you can say that's good or bad. I'm just purely stating >> those things require more money creation. And so again, if you're measuring Bitcoin in terms of of dollars, uh you would expect that ratio to change in Bitcoin to go up over the long term. So I try to keep it simple of like what do we know over the long term?

[00:29:16]That's how you put some of the odds in your favor. In the short term, anything can happen. Um but again if you're allocating for uh a portfolio of 5 10 plus years or more those are the big macro factors you would be watching you know and to be honest I I say to people like look if if money creation got rained in uh fiscal deficits got rained inflation came down that would probably be pretty bad for Bitcoin because then there wouldn't be as much of a need for it right uh but it's hard to see how that would happen given our current situation here.

[00:29:48]>> Yeah. Yeah. Well said. So well said. So stable coins, we talked about this a little bit too toward the end of our talk in Vegas and you know they're here, they're growing.

[00:29:57]Uh they people need dollars all over the world obviously and so there's obviously a huge a huge unlock for it. You know unfortunately Chris and Brandon didn't didn't figure out this scenario and how to do this uh like Paulo did years ago and tether and you know what things they were building. Um, so we we talked about it being okay, you know, looking at it from the perspective of could it teach people wallet usage because again the volatility of Bitcoin. We kind of briefly mentioned this. People get scared about Bitcoin because a lot of people are adverse to that. They're they're like, you know, I don't I don't want the volatility. They might understand Bitcoin to a large extent, but they they just don't. They're a different time in life. They're, you know, they this has, you know, I want less volatility, whatever it might be.

[00:30:39]So stable coins offer one of those things where it's it's the digital dollar, but you have this world where bridging these two worlds of the old world to the new world of Bitcoin of a finite money that can hold infinite value, but people don't want the volatility, but could change it could teach them wallets and it could teach them, you know, using exchanges and all of these things. So, um, where where do you see the stable coin market going, expanding, growing, uh, like when you zoom out there and, you know, some some of the the positives that that could come from it, I guess.

[00:31:14]>> Yeah. And your first point there, I'll bring back the story I think I I gave on stage in Vegas was my children had a lemonade stand and of course, >> nobody carries cash with them. So, even though they had some cash on hand to hopefully teach them how to make change and everything, nobody carried cash.

[00:31:29]Everyone's got their phone with them though as they're as they're walking by our house to the park. And so we put on the sign um Venmo accepted, PayPal accepted um and Bitcoin accepted along with cash.

[00:31:42]And of course people came by and it's like oh do you have Venmo? Okay. Yes.

[00:31:45]Good. Okay. Do you have No, I don't have that. But I have PayPal. Okay, good.

[00:31:48]Which is just mindboggling in it in its own because I used to be an equity analyst that covered PayPal and they acquired Venmo and they still don't talk to each other. At least as far as I know.

[00:31:59]Yeah. And so and and one person we went through all the options and and I finally said, "Oh, I think I have a Cash App account, too." "Oh, yeah, I have Cash App." So, to your point, it will teach people how this technology works and that it's a protocol.

[00:32:10]>> Like, it seems um interoperability.

[00:32:13]>> Exactly. It seems so bizarre to us that you you would you would get looked at so weird if you said, "I want to send you an email. Do you have Gmail?" Like, doesn't matter which email you have.

[00:32:21]Email's just email. I want to send you a text message. What what are you on Verizon or AT&T? It doesn't matter. It's all interoperable, right? It's a protocol. We're so used to this in technology. But then when it comes to sending money, we are we are like 30 40 years behind, right?

[00:32:36]>> And so I love that idea that you had with with teaching people wallets, like when when they get a stable coin, it doesn't matter what phone or app or wallet they have, it will just work, right? Um so I think that is it is really instructive for people. And you know, my kids are young, they'll grow up that they won't think anything of this by the time they're old enough. They're like, "Wait, there was a time when you couldn't send money to people if they didn't have the right bank account or or app or thing." It's like, yeah, it was very very hard. And sometimes you had to wait three to five days and business days and all this stuff. So, that that will obviously be a big one, a big unlock for a lot of people. Um, I don't know if it will if it will bridge uh people into Bitcoin as much as as we hope like I would hope it would, but they're they're so very separate, right?

[00:33:23]But hopefully it does get people thinking about it. And then um bring in the savings technology, you've got the cashlike uh power of stable coins and then if you bring in the savings technology of Bitcoin, uh those two together can be a killer combo in my my opinion. But to your earlier question, yeah, I mean the stable coins killer app use case. We've seen they're mostly used for trading pairs, uh, remittances, global money movement, payments. Uh, that will only grow over time as well, I'm sure. And and we're continuing to monitor just the the the break neck pace of of the growth of these things.

[00:33:55]>> Yeah. Do you And so that kind of brings a bunch of these things full circle in a way. We we talked about the power law, we talked about the demographics, like all these things. It feels like to me just like the Spidey sense and covering this up, thinking about it for 20 years that it feels like we're 10 to 20 years away. It feels like we in the sense of Bitcoin really being this big global really like reserve currency asset uh money where like you said you're going to have the the stable coins where there like these trading pairs these things that are this dayto-day where and then you have the the contrast of Bitcoin where people are learning this they have these two systems and and they work pretty in interoperably and it's just a click or two here and there to go back and forth but you have the the Bitcoin that's keeping things at bay. I guess we'll say they're keeping things honest, more honest, keeping countries, central banks honest because people have learned the system. They see the mirror. They see the mirror of Bitcoin kind of reflecting and they're saving in Bitcoin kind of like what you just alluded to, but they're maybe using these global currency or the dollar, the stable coins to to trade. Number one, I guess, is that how you kind of see it going forward for a little while? And then at what point where do you see how far into the future where you the tide turn? I always think of the iceberg flipping. It just it looks like there's nothing going on. All of a sudden day the one the thing flips and then it looks like nothing happened again almost like it's just like there like no one really noticed. We wake up one day 20 years from now it's like oh wow like we really have this hyper bitcoinized world and it was kind of aided on by these two things kind of working in conjunction together actually because it's government currencies aren't going away tomorrow like I know a lot of people think that but it's like come on guys that's not happening. So how do you see that that p you know coming around and moving throughout the the coming years here?

[00:35:36]Yeah, I think that's a great point on how nothing seems to happen then all of a sudden, you know, gradually then suddenly is a favorite phrase. We used an analogy in in our look ahead two years ago where um I've lived in cities for the last quite a few number of years and one of my favorite things to see is how when a new building goes up, particularly a very tall building or skyscraper, they spend months if not a year or more on the foundation >> and all you you just hear all these trucks and noises, machines, but nothing seems to be happening, right? It's just a a hole in the ground. You can't see what's going on. And then when they start to finally emerge and build on this foundation that they've spent so long building, they add like a floor every day or more. It just, you know, the the building just all of a sudden rises out of nowhere and there's a skyscraper one day where one week it wasn't there. It's it's incredible. So I like that analogy a lot. I think I agree with you where um >> these things take time. Like we said, it's a product of time. It's a product of reworking the infrastructure and the plumbing. And that's one thing you see on the institutional side here. uh it takes a long time to get that right, to get the the plumbing right, the compliance right, but then once it's built and hopefully it's built well with a good foundation, um things can take off from there. So, it'll take a while.

[00:36:52]The the demographics that you brought up was an interesting one too because that's something we talked about at Vegas, the wealth transfer.

[00:36:58]>> And I think I said something to the effect of it's one of the biggest trends that everybody knows about, but it's still not fully >> appreciated because of the size. Yes, I >> I did some digging though and not to walk it back, but I I did get a new found um angle on this in that even though it will happen, it's going to even that's going to happen slower than we think >> because there's still um you know boomers retiring every single day, but it's that's still like a very long window of people generation.

[00:37:28]>> Yeah.

[00:37:28]>> And living longer. And then of course they're going to pass it down um to to their kids and they might be older and then eventually it will get down towards another generation. So you know some of these these people who pass away they they >> they're passing on to people who are still 60 70 years old. So you got to wait like a whole another generation yet if you're talking about this wealth transfer going to more of a digitally native cohort.

[00:37:51]>> Um so I think that's an interesting thing think about too like everybody talks about it. It is huge. I do still think it's under representative it. But even I may have overestimated how quickly that can happen as well.

[00:38:03]>> Interesting. I Well, I I'm in your camp then because you're right. That's that's a great analysis. I have not heard anyone talk about that. So that's super interesting because yeah, I just kind of made the assumption in the next 120 years because you know we've always heard obviously what was it 10 years ago that the first baby boomer turned 70. So you you already heard these like well guess what things are the pensions everything's really in trouble. Not to say that, you know, mathematically maybe they're not in trouble, but just there's a lot of games behind the scenes like we already talked about the Fed things that are going on. That's another talk for a different day in a way, but that's um we always make this assumption. I'm guilty of it of like, hey, this is just going to happen. They're going to pass it down in the coming years. Baby boomers, they they go into the sunset and here we are.

[00:38:43]But yeah, man, that's that's really interesting, Chris. Um dang. H interesting. Hey, more time to stack sats. Uh cheap stats. Um that's for sure. What um what what big what big things are you excited for in the space in in Bitcoin in this in this world that we are entering whether whether we're going quickly or slowly whatever uh people want to kind of take out of our talk um or and things that maybe scare you too. So I love your thoughts on things that you're really excited for moving forward because again the last couple months the Straits of Hormuz all these things as a Bitcoiner you're you're excited. I mean, you're just kind like this is unbelievable.

[00:39:18]Like, this is the use case of Bitcoin in real life, having to keep people honest, having to keep countries honest, everything. And it's like beautiful to see. I know not everyone sees it that way, but what things are really what scare you and what things are you excited for are coming forward?

[00:39:31]>> Yeah, on the excited front, um, just being at in the institutional space, seeing attitudes change, perceptives change, and also just a lot of building going on is very exciting. Again, this all takes time. It takes a lot of work, but once it's there, uh, things can can accelerate quickly from there. Um, what scares me is one thing that's always scared me. We we have on our website, one of the research pieces we did was common criticisms and concerns of Bitcoin. And we go through a lot of the the FUD that Bitcoiners talk about, but we also added a section of what do we think are true concerns. And the one that's always outstanding for me is is just pure apathy. This is a market. It's a free market. And if people don't see the value of something like Bitcoin as a savings technology, as a censorship resistant uh money technology, something outside of the traditional financial system, and if they say, "Hey, what we already have is fine or works great. Um why do I need this? Why should I bother with it? Why should I allocate my time and attention and money to it?" Let's be honest, that's a big concern. And it's not a bad thing that um all these other macro factors and sectors and stocks are doing great. we're hitting new all-time highs in the market. That's that's wonderful, obviously. Um, but like I alluded to before, it's taking a bit of the the air out of the the narratives here for for something like Bitcoin. And so, um, I just hope people don't get get apathetic about it. You know, that they still get excited by this. Uh, they still get, um, energized by it. And so, that would be one thing that that's always been on my >> consistent worry. Uh, not not high up there. I don't think it will happen just because it's hard to ignore the benefits once you see it. Um but something that we keep have to we we have to keep working on every day.

[00:41:14]>> Yeah, such a good point. Um I know we have a couple minutes left, so I would like uh one or two um thoughts on or a thought on one or two last things before we wrap here. Clar your the clarity act and and kind of where we where we are on that, what your thoughts are just kind of and what's going on there. And then I will um an an endgame question. So we've kind of talked about the short term and then some of this medium-term with the demographics stuff like that, but I would like to zoom out aken back or you hearken back to Jesse Myers chart which you brought up earlier and with a question on that. So you start on clarity act and then I'll I'll hit you with this next question. Yeah, sorry to disappoint. I don't have a lot of stuff on the Clarity Act other than, you know, this is just another milestone of of it working through the the process and of adoption and recognizing it, hopefully getting, you know, no pun intended, some clarity between how these things are treated, the different regulators. So, we're excited about that at Fidelity.

[00:42:07]It's something we've publicly come out and said of of how we're supportive and excited for it. So, hopefully, you know, we see some some progress there by this summer. Uh, and hopefully that can get done. And I I think it will be overall a good thing. But then of course there's still a long process after that of of putting all these rules into practice and what all the details are and everything there as well.

[00:42:28]>> Yeah. And then so for you know people that haven't uh and maybe I'll try to link to it as well along with you know Chris's information but the Jesse Myers chart um going back to that where do you see the endgame? So all this you know at the end of the day it could be a thousand years from now. I mean I don't even care what time frame it is necessarily. I always try to ask this right at the end with people of where what's the total addressable market for Bitcoin in your mind? Like where does the train finally stop? What is Bitcoin ultimately going to account for at the end of the day? Is it all 900 trillion in assets and it's it's money so it has to account for everything on earth or is it somewhere you know 450 trillion? It's one half of every trade like where do you see that final resting place for Bitcoin?

[00:43:06]>> That is such a tough question.

[00:43:09]It's a great question and obviously yeah and obviously anyone who has the the answer to it um will could really really use that but >> I think of Bitcoin as an emerging monetary good. So if it fully ascends as money and it becomes this massive network effect which money tends to do because you always want to use it uh the money that other people are using. It's obviously very very large. However, and maybe this is my bias as a as an investor, an equity analyst and whatnot, it's not going to fully replace all equity and and credit and debt out there because there's still uh those things still offer other things that just a pure monetary good doesn't, right? You still are going to want to invest in companies that do something useful, that create wealth by serving people. And so, uh, a great company is one that serves the needs of its customers. And if you can invest in them and help them grow and get a return on that, why would why would Bitcoin interfere with that? You know, it could actually help that obviously, but if you're thinking way down the road, and who knows how long that is, and Bitcoin is just money. And maybe maybe it's even the unit of account like we're pricing stocks in Bitcoin and they're keeping their books and records in Bitcoin, there's still going to be companies, right? There's still going to be companies issuing equity and debt. So that doesn't completely go away. What does happen though, and this is what I am a subscriber to, is that the monetary premium of these assets gets transferred to Bitcoin. Why would you need to stick all of your savings in um equities that have a risk premium? So, you're taking on additional risk of that company going bankrupt and and all these other things that can happen to companies. Why would you do that just to save uh some portion of your money when you can save it in a better savings technology? And then if you want more return and more, you have to take on more risk and invest in a company. So all of those things don't go away, but they certainly shrink in size and certainly shrink relative to Bitcoin because the monetary premiums coming out of it. And that especially goes with uh real estate, >> collectibles, yeah, maybe even some gold depending on how people view that. But we have our chart in our re research like how does gold stack up to Bitcoin?

[00:45:23]Bitcoin exceeds on a lot of the great characteristics of gold. So why wouldn't you see some of that uh monetary premium move out of gold and into Bitcoin? And let's be real, almost all of gold is monetary premium because only a small fraction of it is used for actually electronics and jewelry and all that stuff. Um so that's what I would expect and that's where I would see that chart going, if you will.

[00:45:46]>> Yeah. Yeah. And I I I love how you said that because the the the coolest part about all that is the monetary premium goes away out of all those assets and we just talked about younger generation not being able to afford things. Well, guess what? When the monetary premium is gone with a lot of those assets, all those prices start coming down and younger generation can start affording things again. So, pretty pretty cool. Um amazing talk, Chris. This is this was a blast. Um just thank you for coming on.

[00:46:08]Any anything we missed? Anything you want to touch on really quick? And uh where can people find you at?

[00:46:13]>> No, this has been great. Thanks for having me. Uh, you can find us at fidelitydigitalassassets.com.

[00:46:18]We put all of our public research there.

[00:46:20]And then me personally, I'm on XCrisjkyper.

[00:46:24]>> Amazing. Mr. Chris Kyper, thank you so much for joining us here today.

[00:46:28]Appreciate you.

[00:46:29]>> My pleasure. Thank you.

[00:46:30]>> If you like that episode, then you're going to love the playlist we put together for you with our most recent podcast with the top Bitcoiners, sound money, liberty advocates in the world.

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