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Wall Street’s Matthew Sigel says Bitcoin could reach $180K by 2025, fueled by lower volatility, corporate adoption, and the rise of AI.
In this episode, Matthew Sigel, Head of Digital Assets Research at VanEck, offers a wide-ranging analysis of Bitcoin’s institutional adoption, ETF dynamics, and broader macro forces. He projects Bitcoin could reach $180,000 by late 2025, supported by declining volatility, rising corporate treasury allocations, and expanding advisor participation. Hedge funds initially drove ETF flows, but independent advisors now dominate, signaling more durable interest. While Sigel sees risks for corporate treasury strategies, particularly dilution and NAV compression, he credits MicroStrategy’s model as uniquely robust. Institutional access remains limited by legacy platform constraints, but VanEck is advancing model portfolios to meet demand. On the macro front, Sigel cites AI and pro-growth energy policy as tailwinds, while noting emerging nation-state Bitcoin adoption and the promise (and limits) of products like “Bitbonds.” Ultimately, he argues the real opportunity lies in pairing AI-driven productivity with Bitcoin’s monetary properties as the foundation for long-term structural change.
“The previous smallest cycle ever for bitcoin was 20x... a 10x puts us around $180K. That seems feasible.”
“Corporates have actually added more bitcoin than ETFs this year.”
“Model portfolios with even a 2-3% Bitcoin allocation show better risk-adjusted returns.”
“Every broker dealer will eventually have to touch Bitcoin… or risk losing market share.”
“Strategic Bitcoin Reserve? It’s not real until it’s law.”
“Bitbonds might be too cute by half.”
“You’re wearing a 3% drawdown with Facebook whether you like it or not… Why not an uncorrelated asset like Bitcoin?”
“The quantum question is back. Some are allocating 1-2% of their BTC stack to quantum hedge plays.”
“We’re still early. The AI + Bitcoin productivity flywheel hasn’t even kicked in fully yet.”
This episode presents a compelling vision of Bitcoin’s institutional ascent, with Matthew Sigel outlining how macro trends, ETF adoption, and corporate strategies are converging to embed Bitcoin into the global financial system. His $180K projection stems from structural, not speculative, signals, declining volatility, deepening advisor engagement, and capital-rich corporate players. While challenges remain, like ETF fragility, policy hurdles, and treasury overreach, the direction is clear: Bitcoin is moving from fringe to foundational. The real opportunity, Sigel argues, lies in harnessing AI-driven productivity alongside Bitcoin’s monetary strength, a pairing that could redefine economic infrastructure.
0:00 - Intro
0:51- ETF overview
4:39 - Wealth managers
9:16 - Bitcoin impact on model portfolios
11:25 - Is this a new type of cycle?
16:06 - Bitkey
17:01 - Strategy
21:54 - Bit Bonds and strategic reserve
28:10 - Unchained
28:38 -Bitcoin collateral
34:26 - How does this cycle play
37:59 - Macro landscape, AI
(00:00) the previous smallest cycle ever for bitcoin was 20x from the trough to the peak so a 10x would put us around 180k second half of this year could be very positive the 0ero to one moment is ahead volatility has plummeted this downdraft in in bitcoin ball is giving them an excuse to maybe take a larger initial position in the last year corporates have actually added more bitcoin than the etfs have i think what would really legitimize it is if the strategic bitcoin reserve were actually a law i am captivated by the number of countries that are mining bitcoin with some of
(00:36) their spare energy uh or kind of negotiating against the imf matthew welcome to the show thank you for joining me thanks marty first time long time uh like i was saying uh we've met twice this year in dc we shared an elevator and then in vegas a few weeks ago we were in line waiting to get our our passes into the event and i'd been a big fan of all the research you've been doing at van and your commentary on x for a couple years now so i figured it's it's time to get matthew on the podcast to discuss everything going on um and like i said right before we hit record
(01:21) considering what you guys are doing at vanc and in your position there starting with the bitcoin etfs um they've been extremely hot since they launched uh the fastest growing etf segment ever i'm pretty sure but what are you seeing on your end and how would you describe what's going on uh with the bitcoin etfs especially compared to other the prominent etfs that are out there and that have been launched in the past great yeah it still feels very early from my perspective on the adoption of these etfs for the advisor community uh
(02:03) folks who are running money just for kind of regular high netw worth investors uh a lot of those platforms still can't put the bitcoin etfs into their client portfolios without a reverse inquiry and we're starting to see that change uh so the 0ero to one moment uh is ahead of many advisers and what's been so interesting about the recent price action of bitcoin since kind of the april tariff announcements is volatility has plummeted um bitcoin didn't have the same draw down as the nasdaq and so for the allocators who work on kind of 60/40 type portfolios
(02:51) and look a lot at volatility as a way of uh determining sizing of the position uh this uh downdraft in in bitcoin v is giving them an excuse to maybe take a larger initial position than they otherwise might have um so the the reaction to the etfs from the self-custody crowd is you know sometimes rather polarizing uh but what i think think that crowd misses a bit is um when you're a fiduciary and managing money for a client the temptation to steal the money is just too high if you're self-custodying it you know for them so there's this like separation of powers uh which you
(03:39) know you see at the government with the three branches of government but it also happens in regulated finance where you have to entrust those assets to a to a custodian to hold on to and the bitcoin etfs made that process much more efficient fit into the normal workflow of a money manager uh so yeah the flows have been have been good uh i guess they're being overshadowed by the corporate adoption so uh in the last year corporates have actually added more bitcoin than the etfs have that's a big change so we can get into whether or not
(04:16) that's uh sustainable or not but if i if i think about kind of um several legs to the stool for bitcoin demand there's individuals uh there's institutions corporates and then governments and now with the corporates we've got another pretty strong leg to the stool so that seems to be setting a floor here and so it's funny you mentioned the sort of wealth managers not being able to market the funds they can only put their clients in if their clients come to them and say "hey i want to buy the bitcoin etf." and i my neighbor back in austin
(04:53) was a wealth manager or is a wealth manager at morgan stanley and was describing this to me over the course of the last two years and i we were pretty tight so i'd catch up with him at least once or twice a week on the front lawn um in the mornings and and he was telling me a couple months ago that internally even at at morgan stanley they're beginning to sort of prep the managers for okay here's how you market it here's what you're marketing and getting them prepped to do outbound instead of waiting for inbound and so i
(05:26) mean you said it's still very early days i imagine um once you get the the managers out there hitting the pavement actually marketing these these funds uh you're going to see significant more significant inflows from here on out who's been driving the inflows up until this point is it people that had bit had bitcoin self-custody decided to sell a portion of that and move uh move it to the etf because they just felt more comfortable with sort of diversified exposure that way is it large family offices that have
(06:05) uh been interested in bitcoin but never felt comfortable buying spot and were looking for something like the etf what what is what has the mix been like to date i think it's mostly been um the individuals diversifying like you say uh independent adviserss who aren't owned by these bank holding companies like morgan stanley who kind of hold their themselves to maybe what they perceive to be a higher level of um uh caution um hedge funds was a huge driver because the bitcoin etfs made it much easier for
(06:41) hedge funds to play the the cash and carry trade the basis trade use the futures market to try to earn an arbitrage uh in the first couple quarters uh after the launch of the etfs hedge funds holdings of the bitcoin etfs outnumbered the advisers by more than 2 to one even though advisers manage 10 times the money so it was really this um kind of early fast-moving hedge fund community that drove the institutional adoption but year to date we've seen that reverse and the latest data shows that advisers actually own more of the
(07:20) bitcoin etfs than hedge funds do uh so th that should be you know stickier buyers who don't kind of derisk when funding rates come down um and i think that's been really encouraging um i'm hopeful that these wirehouses morgan stanley morgan stanley's ubs's meil lynches who uh have basically been providing these on a reverse inquiry basis as you say they're starting to do the prep minimums are coming down they're getting they're either soliciting or beginning to solicit um but when you read like sellside research
(07:56) what the uh strategists put out and their 6040 models and model portfolios at these larger bank-owned uh wealth managers they're still not including bitcoin in those model portfolios so i just wonder um if uh adoption by those advisers is going to be a lagging indicator and we at vanc traditionally we uh sponsor etfs and mutual funds but a growing part of our business is just the delivery of these model portfolios so we've noticed that the traditional providers are not being innovative enough in our view not including bitcoin uh so we've started a number number of
(08:42) model portfolios that are highly diversified but include bitcoin you know at uh the appropriate weight you know conservative uh aggressive different models and that's one of the faster growing parts of our business so it's you know there's a huge innovators dilemma here as you know bitcoin is kind of the anti-bank asset it's really hard for them uh culturally i think to get very aggressive uh in this space and maybe that's going to uh turbocharge you know our market share gains and and others like us
(09:15) well staying on the model portfolio like how i mean i' i've seen the data and we've talked about it on the show before but i think it bears reminding people just like what is the impact of adding a bitcoin allocation to these model portfolios at at different sort of waitings it's it's very additive um now of course we're dealing with historical performance and as we like to say uh uh that's not a promise of future performance but um for every uh conceivable position size up to say 20% uh bitcoin um increases the sharp ratio so that's
(10:00) just a fancy way of saying that it it's uh better riskadjusted returns so yes uh it introduces some additional volatility uh bitcoin volatility is depending on the day kind of three to five times that of the s&p 500 but the performance more than makes up for it so you do notice over history that the draw downs tend to be larger of course when you have bitcoin uh but not enough to uh make up for the additional returns that you get uh so most of these advisors are looking at it in the kind of 50 basis points to 3% waiting um the math at least the
(10:46) history of it shows that up to 20% you know it's positive but most folks are are more conservative than that and i like to compare it to a stock like facebook which fell 80% peak to trough in the 2021 2022 bare market um facebook is you know roughly 3% of the s&p 500 so whether you liked it or not you were wearing that 3% draw down do you want to do you want that in something which is correlated with the s&p 500 being a major weight in it or do you want you know an uncorrelated as uh asset and uh i think that argument is resonating
(11:25) yeah and i think that's a big question on everybody's mind is is this time different and you never want to say that it is um however if you i'm sure you've seen the chart that was going semi viral this week of um the sort of price movement in cycles past where you had fomo retail and then the price movement over the last year or two where it seems like a very structured and sort of uh how would i describe it sort of just small step up and to the right pretty consistently as you mentioned volatility is down um but it seems seems like we have massive bids and more importantly a
(12:10) a wider diversity of massive bids that are typically stickier coming from corporates institutions hedge funds nation states individual states here in the united states family offices and i think that's the question on everybody's mind is have we made a phase transition into an era where bitcoin is accepted broadly as something that's here to stay something that makes sense to have at least a small allocation to and if those assumptions hold true does that change the dynamic of of cycles moving forward
(12:49) i still lean towards the this time is not different uh um what you know every cycle tends to end with a leveraged driven blowoff top and last cycle the folks who were providing leverage uh were rather naive from kind of from a financial perspective it was kind of tech companies like celsius and blockfi that got into the balance sheet business um blew themselves up and you can we like to use the the funding rates uh in the futures market as an indication of how hot the animal spirits are uh when funding rates are above 10% for bitcoin for you know more than a month or so the
(13:40) forward returns look really poor uh we had a brief moment of that in december after the election uh and then indeed like the next couple months were um uh were a correction for btc maybe some of that was was gold taking the lead and the two tend to take turns um and and now in this most recent runup to all-time highs we're not seeing uh the type of leverage or overheated funding markets that would typically market top uh i think that instead it's being expressed via dilution in the equity capital markets so um yeah the stock market has completely changed its
(14:23) attitude towards these companies and the number of investment banks who are willing to underwrite uh capital formation in the space has increased dramatically a big part of that is deregulation so i think that gets to your point that something's a bit different here um other parts of wall street are kind of acknowledging that the space is here to say they should get in the business of underwriting these deals um so it could be that uh you know the hangover comes from the equity shareholders of some of these newly
(14:59) formed treasury companies that have you know enormous paper gains and then as their shares become unlocked and available for sale they take profits and um i'm just kind of painting a worst case scenario that you know a lot of these companies end up end up trading at a discount to their bitcoin uh and then the only way to kind of restore some shareholder value is to sell their btc and buy back stock right that's kind of what everyone is worried about uh that's a scenario that sailor uh has kind of taken off the table denied that he's going to do it but you know it might only take one to do it before everyone
(15:38) else feels the the pressure so i i still my gut is that that's ahead of us uh and that a lot of these treasury companies kind of won't sustain the mnav premiums uh that they're trading at um but i also think that an 80% draw down is probably too big and you know each cycle gets smaller both the rallies but also the draw downs um that's that's kind of a wishy-washy answer but directionally that's where i am so freaks this rip at tftc was brought to you by our good friends at bitkey bit key makes bitcoin easy to use and hard to lose it is a
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(17:04) world code tftc20 no cuz i i was discussing this yesterday um with some people as well and that's what i'm i'm not going to claim that this time is different i mean there's definitely different dynamics at play but will i say that this is a super cycle or that we're not going to have massive material draw downs in the future no i would never do that bitcoin has humbled me many times over the last 12 years but like it's just one thing i'm really curious about like is there enough like the the corporate treasury play that we're describing right now obviously it's massive i saw your tweeting the other day mstr plus c plus asst plus
(17:39) semler plus naka plus djt is 76 billion in capital raising ability to buy bitcoin right now 56% of the aum of the etfs and 169% of the net inflows of the etf complex has achieved over the last 16 months that's an immense amount of capital that can come into that uh six companies relatively quickly buy bitcoin keep it on their balance sheet they get over their skis one thing i've um been discussing with john arnold at 10:31 quite a bit too is like sailor i believe was during last year's shareholder meeting described what they're doing now as chapter 1 of
(18:22) strategy's sort of long-term goals which is accumulate as much bitcoin as possible and then he alluded to strategy becoming like a quasi bitcoin bank and if you just look at the the book value of fiat banks that exist today they really trade around that book there's not not like a a big premium on there so like in the long term it makes sense to me that if this is the strategy of the strategy as a company name is a terrible name but the strategy of the the publicly traded bitcoin treasury complex in the long run at some point everything will have to compress to um
(19:00) basically one in terms of nav mnav um and it's just like what is the process between now and then look like like how how high do the the multiples blow out and what does a compression back to one look like is it aggressive is it steady um is it wholly dependent on bitcoin's market cap reaching a certain threshold um and certain bitcoin related financial services coming to market yeah i think that's a a fair analogy um you know right now there's a very wide dispersion of what these companies trade at um you
(19:37) know metaplanet is like seven times the value of its stack uh micro strategy closer to two times and then you've got kind of the some of the smaller names like assembler which is basically trading at at 1x um so the best the banks that reliably trade at a premium to book are uh diversified they're earning spread income and fee income they've got consumer franchises and institutional franchises um and you know how how many really of those are there going to be on the bitcoin side but strategy is the most evolved because they have products that are diversified
(20:18) uh fixed income investors can access the preferreds uh arbitrageers can use the converts um there is significant volatility in the stock that has sustained um and i think that he's done a great job of establishing relationships with some of the convertible bond traders so that the biggest hedge funds in the world all have dedicated people that are involved in that capital stack um you know that's not the same for for some of the smaller names and it may be hard to develop that same ecosystem uh and then
(20:54) there's just going to be the the digestion of all of this paper that's coming to market right these are a lot of private investments in public equities uh where the shares are locked up for some period of time and then over the next few months those unlocks are going to hit kind of like the altcoin market uh and a lot of folks will be selling out i saw that there was a filing from one of the solana treasury companies last night uh and they disclosed that as a result of some of these convertibles being exercised uh the share count is going to grow by
(21:33) 50% and they listed like 30 different vcs who all they assume are going to sell to zero right not holding even one share uh once the lockup occurs that you know that's going to be a lot of paper to digest for for the market um i think a lot of the stocks will be lower in three months yeah that's that's fascinating and and i think that's a big question going back to what i was saying earlier like this corporate treasury play is just one theme of many that are beginning to materialize obviously we mentioned the etfs i've you've written a research paper on bit bonds obviously
(22:12) they're not to market yet but they're being discussed not only at the federal level um mayor adams would like to do one whether or not his comproller will play ball with him is another question but you have to imagine that somewhere in the world a product like this will materialize materialize at some point in the next 5 years uh and then one thing we're really interested in a 1031 is this intersection of credit particularly traditional financable credit and bitcoin as collateral so commercial real estate um residential real estate eventually um being able to refinance
(22:53) commercial real estate loans uh residential real estate loans and introduce bitcoin as collateral um and put them stuff them in these longer duration products that could be very interesting in terms of if those strategies reach scale in size being able to have like a forward-looking duration curve of look here's all the bitcoin locked up in these 10-year duration products these 30-year duration products um the corporate treasuries can say we're going to hold forever but there's uh they're beholden to the whims of of their stock price at any given
(23:27) point in time and that decision could be forced to change um whereas these credit products seem a bit stickier obviously they come with bankruptcy risk but i i'm sure that's limited compared to um what could happen with the corporate treasury strategies and then obviously the nation state race that seems to be incited in terms of these nations trying to accumulate bitcoin strategic reserves too and i don't have an answer but it's just like trying to think like okay is the corporate treasury strategy isolated
(23:59) enough in the forest of all these different themes that are materializing that uh a company or multiple companies getting over their skis and being for sellers of bitcoin is sort of that that supply is easily soaked up by those other demand factors yeah i mean it may be that one of these treasury companies if they can manage to sustain the premium will acquire some of these kind of you know lenders that we've seen emerge who want to use bitcoin as as collateral like one of the funky things about bitcoin doesn't have a yield so um
(24:41) it's kind of tough to gro like how it fits in a fixed income portfolio the way that folks are using it right now is like the lender a lender with particular conviction in bitcoin says "hey i'd feel a lot better if part of my collateral for this loan were in bitcoin not only in the commercial real estate that i'm lending against.
(25:04) " um the the tricky part about that is like the sophisticated lender can just structure that product himself he doesn't need to necessarily combine the bitcoin with the real estate um sometimes it's cheaper just to strip it out uh so the same thing is true of of of bit bonds um the the way that it's been floated is that instead of the government selling the 10-year bond at at at 4% they'd be able to sell it cheaper because part of the proceeds are going into bitcoin which has higher upside but then that the the end buyer of the bond has to split the upside above a certain cap so
(25:46) if you're the the the lender to the government why wouldn't you just you know lend in a straight treasury bond and then just buy bitcoin yourself and keep a 100% of the upside um so that like there's a certain cuteness to it that might be too cute by by half i think what would really legitimize it this is an obvious statement is if uh the uh strategic bitcoin reserve were actually a law uh because if the government is uh or the fed or the central bank uh actually holds bitcoin in reserve then they can kind of combine them into one um combo asset um so yeah
(26:27) that's kind of my my thought on it i am captivated by the what's going on around the world and the number of countries that are uh mining bitcoin with some of their spare energy uh or kind of negotiating against the imf um by either threatening or enacting like bitcoin reserves and that may be a more a bigger driver for the price than these kind of bit bond products which you know they may be like a next cycle story i think yeah that would be fascinating do you are you hopeful that a strategic reserve will get signed into law or is that a
(27:03) pipe dream in your opinion um i think the pretty low quite low probability uh and i also think that a lot of people have hatched on to this revenue neutral um condition for acquiring bitcoin in the strategic reserve but just because something is revenue neutral doesn't mean that you can do it without legislation right like i could say hey let's raise taxes to 100% on you know everyone making a million dollars a year but then cut it for everyone else it might end up revenue neutral but it's still a material change to people's lives that needs legislation and the
(27:40) same thing is true for for bitcoin so i think there could be some type of um experimental purchase very small you know just small number of zeros that uh they can kind of sneak through uh in existing structures like the exchange stabilization fund or the treasury where there is some leeway to get creative uh but i think the numbers will be very small uh so whether whether like a poly market counts a $10 million purchase as a as a bitcoin reserve i'm not sure is bitcoin's next parabolic move already starting two of the strongest historical
(28:15) indicators global end to liquidity and the copper to gold ratio are flashing green again unchained and techv break it all down in the new report bitcoin's next parabolic move could liquidity lead the way if you care about the macro forces shaping bitcoin's trajectory now's the time to pay attention visit unchained.
(28:34) com/tc to read the full report that's unchained.com/tc what are um what are your thoughts on the headline that came out of jp morgan last week uh about them basically saying all right we will um allow our customers to use the bitcoin etfs as collateral to take out loans against uh not only that we will recognize crypto holdings as assets that play into how we underwrite um credit for mortgages whatever that may be any any other type of loan you want to take out i mean considering how jaime diamond has postured toward bitcoin over the last 10 plus years i
(29:15) thought that was fascinating that and correct me if i'm wrong but it was a signal to me that despite jaime diamond's personal beliefs or view on bitcoin at the end of the day jp morgan has a fiduciary responsibility to their shareholders as the largest bank in the world and publicly traded company and that sort of bitcoin forced their hand and they're sort of forced to bend the knee to bitcoin's will because if they didn't you could make a argument they were making a lapse in fiduciary duties yeah uh jp morgan has been making markets in the etfs since they launched
(29:55) so they've been an authorized participant for some of these etfs um now the etfs are right now they're all created in cash you can't deliver bitcoin and receive shares of the etf without first going through cash so that means that a lot of us broker dealers didn't actually have to touch the bitcoin directly they were having their kind of offshore affiliates touch the bitcoin that goes to some of the um uh lack of clarity around custody for institutions that's all being solved and many of these products will now be um able to be created and redeemed in kind
(30:37) that means that the broker dealers will be touching bitcoin that means it's integrated into their balance sheet so it was kind of i i think that jp morgan probably had a um a special policy to exclude the etf the bitcoin etfs from customer balances because think about a prime broker like they have look through to your holdings of securities and those securities can include all types of things that would get different leverage levels from treasuries to corporate bonds to equities to super risky equities and the amount you can get in margin depends on the volatility of the
(31:14) product etc so those etfs presumably they've been looking through and seeing that you know for the last two years and they had they made an active decision to not count it uh and now with these products going inkind and every broker dealer touching them directly like they would just lose market share if they didn't offer some type of leverage on them so not uh not surprised but it's great to see it uh i think it's a positive headline yeah i mean and a lot of people are focused on the sort of collateral
(31:46) collateralization of of the etf shares but i think just as importantly is the recogn recognition of crypto as assets that can be accounted in somebody's net worth because for the longest time if you've had bitcoin you've gone to get a mortgage you go to the mortgage broker and you say "well we recognize this bitcoin as assets.
(32:14) " some will do it but most don't they typically want you to sell a portion of the bitcoin put the cash in a bank account and have it sit there for a period of time before it's recognized as as assets that count towards your net worth and i think being able to recognize bitcoin without having to sell it as an asset on your personal balance sheet is massive too yeah the next step will be hopefully changing some of these basil rules that uh assigned a huge risk waiting to any type of crypto held on bank balance sheets so still uh very difficult for banks to hold it directly but uh that could be something to look forward to
(32:52) and does sab 122 sort of set the stage for that it's like okay you can uh i maybe maybe it's a little different because sab 122 is even about holding client bitcoin uh so um under under that law or rule rather from the sec even if someone like a state street which is a custody bank held client bitcoin they would have to count it as an asset and corresponding liability on their balance sheet uh which is very rare they don't have to do that when they're holding uh customer securities um i'm i'm referring
(33:30) to if a bank wanted to hold it for their own account on their balance sheet under current kind of uh global banking framework um cryptos uh assigned a a a hugely punitive risk waiting that makes it um impossible to hold yeah so it would have to be because gold i believe next month is it is officially recognized as tier one asset on balance sheets so right so it to be something like that is needed for for bitcoin as well yeah and who is it the czech republic the uh governor of the central bank is assigned his staff to do a study on possibly holding
(34:10) bitcoin as a reserve on the czech central bank balance sheet i think those are the types of moves that if we see them say yes uh then uh the bis standards could maybe get discussed mhm it's there's so much going on it's incredibly bullish all around and i mean going back to what we were discussing earlier about a lot of these wealth managers being able to to market these funds corporate treasury strategy think we're still in the early innings of that so i think they're going to go tap the capital markets and shovel tens of billions of dollars into bitcoin how how
(34:52) do you see this cycle playing moving forward because that's one thing i think uh a lot of longtime bitcoiners sort of haven't intuited yet is as we're sitting at a 2.1 2.2 trillion market they'll look at these billion dollar buys $10 billion buys and they'll look at the price and say "why isn't it going up?" but i i think it's important to also recognize as the market cap of bitcoin grows it gets harder and harder to push push that up the amount of inflows necessary to do another 10x from here are pretty significant and so how do you could you explain the dynamics of that
(35:30) and whether or not you see those type of flows coming to the market over the next year few years sure um my base case is that uh the four-year cycle uh holds enough so that second half of this year could be very positive as long as uh the inflation continues to come in light as it did this week when we just got ppi this morning um deceleration lower than expectations uh once and if the fed commits to that rate cutting cycle uh my expectations would be bitcoin would react very favorably to that uh the previous
(36:20) smallest cycle ever for bitcoin was 20x from the trough to the peak so a 10x would put us around 180k um and that seems feasible to me right the volatility has fallen it hasn't fallen by 50% so it doesn't seem crazy to haircut the rally by 50% and say 10x to 180 uh you know that's the blowoff top and then re-evaluate for next year whether um you know it maybe re inflation's reacelerated by then maybe something in the macro has changed um but that that's kind of my base case if you you know i mentioned that we use the funding rates as a kind of a tactical gauge for when things are overheated or
(37:09) really um washed out we also use the unrealized profit ratio uh so although nearly everyone in bitcoin is profitable um they're not profitable enough to spark kind of widespread selling um so there's that net unrealized profit ratio um above you know 7 you really start to the forward returns really deteriorate we got close to that in december indeed like jan feb were tough but we're not back in a range that says oh there's a whole bunch of like uh unrealized profits that are likely to to be unloaded it feels like what you said
(37:49) there's more new buyers uh especially the corporates so um on lookout for that to change but that's my that's my base case mhm and since you alluded to like what are your thoughts on just the broader macro geopolitical landscape as it stands today obviously it's been a somewhat chaotic start first half of the year trump too um taking taking the reigns again and obviously with liberation day and all the saber rattling that's going on around the world uh a lot of pressure on jerome pow to lower rates the 10 year and the 30-year staying relatively elevated
(38:31) what's the macro backdrop looking like in your perspective yeah um i think that the uh the policy changes not just in crypto but just the generally uh kind of progrowth policy with regards to energy energy infrastructure ai um those are big tailwinds uh for bitcoin as well uh you know like to the extent we have cheap abundant energy uh with whose infrastructure you know doesn't require a ton of red tape to set up um that should be positive for the investment cycle for bitcoin you when you hear president trump talk about bitcoin he usually mentions ai and energy in the same breath uh and all the i'm tracking
(39:22) these bitcoin miners pretty carefully because we have a new u etf that owns the equities in the space and they've all not all many of them have stopped buying as6 have paused their bitcoin mining expansion plans pivoting over to ai um you know in in the process bringing down their cost of capital uh but also maybe putting a little bit of a lid on on hash rate growth and reallocating some of that market share to uh smaller more nimble companies uh the us share of hash rate which grew so dramatically in the last 2 years has has
(40:01) leveled off and started falling a little bit um i'm not directly answering your question except to just say that like the progrowth policy is having a lot of impacts beyond just bitcoin uh we've got some exposure to nuclear stocks we've got exposure to these data center companies they're feeling the tailwinds as well and i think that's part of what has catalyzed this equity rally uh when you look at some of the miners like um the core scientific or uh applied digital which is a a bitcoin mining hosting company that hosts a lot of marathon's infrastructure and they've
(40:36) been looking for an ai deal looking for an ai deal running out of cash and then boom they just got one with coreweave and the stock like basically doubled um that's positive for the ecosystem so i i'm pretty um yeah feel you know decent about uh the next half of this year the weaker dollar would would help uh sentiment on that feels you know quite onesided uh so that that would be a risk um but uh yeah let's let's see how it plays out what do you think i uh i'm pretty bullish about like i think uh i've been playing around with ai a lot
(41:20) just here at tftc and doing research for 1031 and it is abundantly clear to me that it is increasing productivity at least for my business like the things that i've been able to do with ai to um increase the productivity at tftc is incred incredible we just launched a browser extension opportunity cost um yesterday or 2 days ago now at this point that 2 years ago probably would not have been built because i wouldn't have been able to build the prototype i built it with ai tools and then was like able to
(41:55) validate myself so like oh this is something worth building and should get traction and it's been a very successful um launch the first two days like over a thousand users and which is to me a great success and that has increased the exposure of our company and increase the top of funnel we've seen a bunch of newsletter signups and this is just a small media company leveraging this when you think about these tools applied to many of the larger companies and everything that's going on across the fang companies particularly meta um
(42:30) tesla uh apple apple may be a little bit of a lagard here but um it seems clear to me that ai is being implemented by the people who are on the cutting edge is creating these productivity gains and i i am bought in and i'm to the ai story in the sense that it's going to increase productivity and hopefully increase profit margins for companies which should allow them to stomach higher rates for longer um what that does for the job market is another question but um i think there's incredible productivity there obviously like you mentioned it's also pushing us to to
(43:10) expand our energy infrastructure um quickly and um at a at a scale that we haven't seen in decades which is bullish uh i think and then obviously bitcoin benefits from all this um because i think it's going to be an intricral part of energy expansion but not only that i think the government's going to continue to um go into more debt and obviously trump is berating uh jerome pal to lower rates and so if inflation stays um you begins to pick up again but bitcoin's going to benefit but i'm overall optimistic i think the conditions to
(43:52) for anybody any individual or company to sort of bring value and productivity to the economy has never been stronger than they are today and then you pair those productivity gains with the hardest money the world has ever seen those that take advantage of that combination i think are going to be very well off yeah it's like for those the there are ai bears out there and to those bears i would just say imagine what's going to happen once chat gbt introduces an adup supported like delayed response free
(44:24) version uh they're going to take so much market share from google and they're going to make a lot of these remote data centers uh a lot more economic right if you if you're on a budget and you're willing to wait half an hour or 8 hours for your response or watch a twominute ad reel it's going to dramatically change the return on capital equation for some of these heavy investors um and so that's one of the catalysts that i'm looking forward to yeah i don't know if i buy into agi being around the corner but i think as it stands today the tools are
(45:03) good enough to to increase productivity um and then i mean you just you just look at what's happening around the world things seem pretty tense geopolitically but my again idealist eternal optimist i hope all these productivity gains and i i like to think that trump certainly has his flaws but i think even bring trump out of the equation like an america that is reinvigorated to grow expand and um be become extremely productive and lead in terms of innovation and um leaning into the continued transition in the digital age is hopefully inspiring for others and around the world and just leads to
(45:51) competition at the market level and not at the kinetic warfare level agree with that take maybe maybe too optimistic there what are um what are some things we haven't touched on that are on your mind that that you think the audience should be aware of as it pertains to bitcoin capital markets these trends in corporate uh treasury strategies etf flows um structure credit and bitcoin any anything else that you think um is being under reportported or underappreciated right now in the world of bitcoin um i mean the the questions that i'm
(46:29) getting in recent weeks i guess um are about quantum uh you know it's just it's hard to avoid uh i guess when black rockck updated the risk disclosures to include uh quantum threat and those equities have done really well uh so in some of our equity strategies we're we're digging into that as a possible hedge on bitcoin volatility um you know if you just kind of put one or two% uh of your bitcoin stack into maybe some of these quantum leaders and um you know you could they're kind of they're correlated for the moment in terms of like oh these are leading edge tech type of assets um but it it's so
(47:17) the capital markets have um accelerated so much now you get these etfs right away you get these 2x single stock etfs and it can entrench the early leaders because it runs up their stock price to such a level that now they have this really expensive currency to do deals uh and they can maybe um you know cement an early market share lead that for for a company like myspace for example like they didn't have that so they lost even though they were the the early leader um so it'll just be really interesting to watch that market develop and to what
(47:55) extent uh the bitcoin community can come together and suggest uh and implement you know signature schemes for the wallets that could be uh quantum resistant um so that's something that we're noodling around uh i don't think there's like a near-term impact except on the equities themselves um let's see yeah just focused i guess it luckily uh we got focused on equities uh here a bit early when we saw the token runups in december and some of our tactical indicators flashing uh we took some risk off in some of the um kind of altcoin
(48:40) and leverage part of the markets and looked for opportunities and stocks and we've launched this new uh etf that buys uh equities across the um ecosystem so not just the leveraged players but also complementing that exposure with some of the lower volatility kind of data center energy energy infrastructure nuclear names uh and it's an interesting like barbell approach i think that can appeal to the advisers who are still freaked by uh like bitcoin's volatility and by if you look at some of the um crypto equity indices they're really leveraged you know it's
(49:24) like just a lot of beta uh a lot of exposure to leverage names and the performance since inception of these indices has not been good so um institutions are kind of spooked by the pure play equities i think and uh maybe we can find some interest in this more diversified approach um so that strategy includes like some utilities some midstream energy and mlps uh reits data centers there's all types of new of companies that are now mentioning bitcoin and blockchain in their sec filings in their investor relations
(50:01) materials where the stock right now exhibits very low sensitivity to the bitcoin price but over time if we're right uh and bitcoin can grow you know continue to grow that uh beta and vault to bitcoin might increase and we could end up with some excess returns from stocks that don't seem to be crypto stocks u so that's i guess the the new bets some of the new bets that we're making we're also um we've brought a tokenized money market fund to market uh to try to find some liquidity there uh you know yield bearing uh money market
(50:41) fund in tokenized form across a bunch of blockchains and you'll see some uh early customer announcements for that product uh over the next couple quarters so um still wonder about the end market there uh it's very very fragmented uh it may be that bitcoin has to do another you know 10x before uh that really there's a consolidation of the liquidity that drives activity uh onchain instead of just doing the same thing in tradi but we have really after the election uh yan vanak who owns the firm kind of clapped
(51:17) his hands and said hey product development team like get back to work uh the pipeline's open you know the regulatory path is clearing uh let's be more aggressive in in bringing products to market and we're doing that uh you may have seen we we're going slower on the single token etf side we've only filed for two um kind of new single token products this year because we're just seeing better performance out of our active strategies our hedge funds uh hopefully this new active etf that just launched um so we're kind of doubling down a venture fund we have a new early
(51:51) stage uh venture fund which just had its first close uh so a active is we're mostly a passive shop in the traditional etf market but for crypto we found uh the active performance has been a lot better no one's really cracked the passive nut except for the simple bitcoin etf yeah many comments there first for all of you institutional investors who came to the show because matthew is our guest the quantum stuff definitely something to be on your radar but i will say that having been to a couple of bit bitcoin developer meetups over the last couple
(52:27) months across the country the devs have it top of mind they're working on it i actually like uh ethan hailman hileman he had a really interesting post on the bitcoin dev mailing list a couple months ago um i will say there's a lot of creative solutions being talked about obviously none have been picked but something to be aware of and i'm confident in the sort of vigilance and competence of the developers focused on this problem to to make sure it isn't an existential threat to bitcoin in in the long run um likewise or not likewise but um building
(53:08) on that just commenting on what you were some of the things you were just saying like the energy play like that was somebody who started a bitcoin mining company in 2018 doing flare gas mitigation um it became very clear to me in 2019 2020 like once these oil and gas producers where it's midstream upstream producers um become privy to it like they are best positioned to mine bitcoin because they own the infrastructure and they own the minerals most importantly and so vertically integrating um their operations to take advantage of their wasted resources makes a lot of sense
(53:44) and it seems like they're opening up to it and i think stone ridg's annual letter from ron loss last year really signaled obviously stone ridge and naid are ahead of the curve in terms of institutions playing in these intersections of bitcoin uh debt markets and energy markets but i i think what they're doing with the strand of gas play and signaling at the end of last year that they would like to monetize these stranded gas assets with bitcoin is something that will be picked up by mid- majors majors and will become a
(54:17) growing trend in the united states and getting proxy exposure to bitcoin via energy companies is extremely exciting to me as well and just makes a lot of like right now uh at least in the strategy that i'm involved in uh there's there's kind of only one upstream energy company um ypf in argentina the stateowned energy company and they after malay won they hired uh the ceo from the largest private oil and gas company in argentina tech patrol which had mining bitcoin and now ypf is reportedly mining some bitcoin as well um in the us more of the exposure is like midstream and
(55:00) downstream um there were reportedly some pilots with like exxon and chevron those haven't materialized into anything larger but um i'm i'm definitely on the lookout for that right now it's more at the utility level and at the pipeline level and i think that makes them interesting stocks to hold in an equity strategy because the volatility profile of those downstream utilities and pipelines is much much lower than the upstream explorers and so when you combine that with bitcoin miners it's it's kind of a barbell approach that leaves you very well prepared to buy bitcoin washouts because these utilities
(55:38) really outperform in the down markets yeah the that was the other thing like upstream flare gas mitigation or mining on the well pad it's like logistically hard and there's a lot of sort of operational execution risks that come with that and it always made sense to us at great american mining like ultimately at scale or when the market really figures this out it makes sense just to put a large mining operation at the midstream and you essentially suck the flare in from midstream so you take advantage of the economies is a scale of the supply of the gas at the midstream and you allow the producer to keep
(56:17) drilling for more oil and just creating pipeline capacity by mining at midstream as like a pressure release valve for pipeline capacity um and the other play is the stranded well play in america particularly is a massive opportunity which as i mentioned earlier seems like stone ridge and i digger going after um yeah it's so it's like reading these conference calls you're you're having pipeline companies talk about data center deals like that is a brand new dynamic uh new end market for those companies so some execution risk but it's a growth driver for what has historically been a very sleepy sector
(56:55) yeah it's a beautiful thing i'm optimistic there's a lot of doomerism out there right now matthew we got incredible opportunities it's never been easier to to get on the internet build a brand leverage tools that can enable you to build a product do something productive get some profits shovel them into the hardest money that's ever existed and and keep going about your way so i'm very optimistic this was an absolute pleasure matthew where can anybody who's listening find out more about the research that you're doing what you guys are doing at vanc more
(57:30) broadly um where should we uh so on our website van.com there's a digital assets uh section where we publish uh monthly on bitcoin and then a separate piece on the rest of the digital assets ecosystem so you can uh subscribe there for email updates or just follow me on twitter matthew_seagull and we put out all our work there as well awesome well thank you for your time hopefully this is the first of uh many conversations we should do this uh every once in a while yeah look forward to it marty all right peace and love freaks okay freaks thank you for listening to
(58:06) the show i hope you liked it if you did like it please make sure you subscribe rate review the show it helps us out a lot and also if you like these conversations i've come to realize that many people listen to the podcast they don't know we have another sort of layer of this media company we have the newsletter the bitcoin brief go to tftc.
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