Bitcoin's investment case in 2026: Fidelity Digital Assets on adoption and portfolios

Transcript

But I always come back to fundamentals. Um you know what what can we actually observe fundamentally not in the price or the noise and every day I see more people adopting this. Bitcoin is here to stay but why do so many investors still not have any in their portfolios and what is it going to take for them to get off zero? Hello and welcome to the Milkroad Show the podcast that's always here to remind you that you do not have enough Bitcoin. I'm your host John Gillan. Today is Thursday June 11th and today we are joined by Chris Kyper. Chris is the vice president of research at Fidelity Digital Assets, where he leads the firm's research on digital assets and provides insights on the asset class to institutional investors and to self-directed investors alike.

Previously, Chris built a successful career in equity research and holds a master's degree in economics. Chris is one of my favorite people to talk to about the institutional take on Bitcoin. So, if all that sounds good to you, make sure you like and subscribe, share this episode with somebody who needs to get off zero. And uh as a reminder, the market is chopping. It's kind of nuts right now, but our analysts have been busy at Milk Road Macro Pro. Our analysts have made over 20 trades in the last week. Some are buying the dip, some are waiting for calmer waters, but if you want to see what everybody has been doing, you can check that out for just $1 in Milkroad Pro. Get in there. You can get seven days for just a buck.

Cancel anytime, and we'd love to have you. Um, and if you'd like, you can join our Discord there and ask me any questions about anything you would like. Today's episode is brought to you by Cape, the privacy first mobile carrier, and BitGet stocks 2.0 0 with real liquidity and real dividends. Without further ado, welcome to the Milk Road Show, Chris Kyper. How are you, sir? >> Very good. Thanks for having me on. >> Chris, I'm really excited to talk to you. Every time we have a conversation where you have we have you on the show, I always learn a lot. Um, but before we dig into your recent research and reports, I'd like to get your thoughts on where Bitcoin is today. Do you think that the bare market has bottomed? Are we going to see new lows this summer?

What's your outlook on Bitcoin here? Uh this sentiment is probably the worst I've ever seen or experienced in my career here. So it's it's pretty bad. It's hard to imagine how it could go lower. But that being said, of course things can always get worse before they get better. So certainly I'm not going to be too boldest to make a short-term prediction here. What I will say though is um what I will say is that all the metrics we look at uh they're really all flashing the same thing, which is Bitcoin is in this very depressed uh deep value territory, if you will. Um so meaning at least historically uh when we look at these metrics when Bitcoin was showing these levels before uh these were readings at or near the bottom and then the subsequent 6 12 or sometimes

longer 24 months later Bitcoin has been much higher. Now again that's just historical. These bottoming processes can take a lot of time. They can take months, quarters, maybe even a year or more. Uh so anything can happen in the short term but uh this is certainly one of the lowest uh readings we've gotten on both the sentiment side and just from like a momentum RSI relative strength index side as well. >> Do you fancy yourself an analyst andor a content creator in this space? Well, we want you specifically if you live and breathe tech equities, Milk Road could be the home for you. We're hiring for two positions right now, analyst and content creator. So check out the careers page below. I think those two words depressed and deep value really capture a lot of both sides of the

market here. I I'd like to get your thoughts on why we've seen this weakness from Bitcoin, especially at a time where we've seen such strong bullish momentum, this AIdriven, you know, bull run in the equities markets. Bitcoin has sort of decoupled since October 10th. And I'm wondering if you have any thoughts or insights around why we've seen that in the markets and, you know, what causes it, when does it end? Or just any insights on that you'd like to share. Well, I think one of the major reasons is what you just said. Exactly. The momentum in the stock market, especially amongst some of these AI plays, the chip makers, anything related to that. Um, people want momentum. There's a lot of people that like to ride momentum.

Momentum is a well-defined u factor. You know, I come from the the money management world before this and it's one of the persistent factors. It's a bit of anomaly. Almost every academic and market practitioner will tell you momentum is real. It's a thing. There's a lot of disagreement as to why it exists or why it can outperform. Um, but it's definitely there. And so, there's a lot of people that want this momentum. Most people can't hold dollars in more than one thing uh at a time. There's opportunity cost, right? And so, they've rotated out of uh Bitcoin and other digital assets, and they've rotated into the latest thing showing momentum because like we just said, we're at one of the lowest RSI readings for Bitcoin especially. Uh and they're looking over

here at stock market making new all-time highs. Uh a lot of momentum there. And so really it is just as simple as that. There's just been a lot of uh vacuuming or taking the air out of uh digital assets, crypto, bitcoin, everything in between. And everybody's mind space, the the headlines, the attention, the money flows after that. That's all going to these other things. And so one of the silver linings of this though is that we look at correlations. And before Bitcoin was highly correlated to tech stocks. Now it's not correlated to anything.

Everything is going up including things like gold and silver and all these other things. Um but Bitcoin is not. And so I think that's actually a great thing. You don't want high correlations because then you lose a reason to put it in your portfolio. You want to add things that have low correlation or even negative correlation. So uh it's as one person just said, I was on another podcast. They said maybe it wasn't the the decoupling or the the break in correlation that we wanted, but it's the one that we deserved. So, here we are today. >> Yeah. Uh that's a nice silver lining on that. But I think there's also been a lot of frustration that's come from this. And I think, you know, the term rage quitting has been thrown around a lot. U Mark Cuban publicly said that he thinks Bitcoin's lost the plot. He sold

most of his Bitcoin. Michael Sailor sold a little Bitcoin and that got a very sour reaction from the market. Um, what are you making of this like very strong almost like apocalyptic sentiment that we've seen in 2026 and like you said the decoupling we didn't want but we got and when do you think this ends? Do you think Bitcoin eventually does rejoin that bull market? Do you think this divergence continues for longer? What's your thoughts on this? >> I think what you're seeing and not specifically to those those people you mentioned but just in general what you're seeing is uh if I could be b so bold to say is the environment might actually be too good for Bitcoin right now. uh if you just look at this from a macro perspective and I think you know there's a lot to say about the K-shaped

economy and some of these uh indicators underneath all of this but if you take just a very surface level very high aggregate level look at the macroeconomy you've got the stock market at all-time highs you've got inflation relatively low and now it's picking up which is something we're watching very closely and something we've written on unemployment's been been pretty tame and low job reports are pretty good credit spreads narrowest they've ever been. So, this says there's not a lot of stress in the credit markets, which is also what you see when times are very, very good.

And so, people are, you know, somewhat rightly asking, why do I need Bitcoin? Everything else is working out great. Everything is doing well for me. Everything is is going up and performing well. The macro environment is great. Uh why would I need Bitcoin? Um but that's just it. You know, we want it to have that negative correlation. So, we don't want it to be doing well when everything else is doing well. And not that I want bad things or negative things to happen, but as investors, we build portfolios for any any environment we might come across. And so that's of course one of the reasons you might consider putting Bitcoin in your portfolio because maybe you don't need it now. Maybe you don't think um or you're questioning what's what's the point of this now. But I personally believe there will come a time whether that's inflation rearing

its head, credit spreads blowing out. Um, whatever it is, people are once again going to realize that they do need Bitcoin's uh investment characteristics, mainly the fact that it's got absolute scarcity. It's censorship resistant. It's this potential hedge against monetary debasement and inflation. And so eventually those things will will come back and then I do think we will see uh Bitcoin regain some of its footing for sure. When I was at BlackRock, the firm published a piece, a white paper called Bitcoin, a unique diversifier. And I think that resonates a lot with what you're saying here, which is that this uncorrelation we're seeing in Bitcoin kind of does bolster the thesis because it means it's going to be a different kind of an asset in

your portfolio and not just move with the whole rest of the market. Um, Chris, I I I talked about this forever, but I want to get into some of the research you've written recently. Uh, and I wanted to start with a a report that you, I believe, initially wrote on in 2020, but updated recently in 2026 called getting off zero, evaluating Bitcoin in 2026. Um, and this is around the idea of investors who don't have any allocation to Bitcoin, you know, getting to a thesis that makes sense for them, getting off zero. Walk us through uh what's in this report at a high level. But why did you choose to revise this report now in 2026?

>> Great question. we went back to because number one, a lot of investors, especially institutional investors, I'm sure not your listeners, but a lot of institutional investors, the big money, they're still on zero. So, we still had to come back to this this question or this idea of getting off zero. And second, we just wanted to update the data and say, does this still hold? So, the report goes through Bitcoin's investment thesis, its core investment thesis, which we still view it as an emerging monetary good that is being adopted. And because of that, it's one of its ultimate uh potential functions is as a hedge against currency debasement and then therefore also a hedge against consumer price inflation.

And so we find those are still intact uh from a first principles perspective. And then we go through the actual data if you're just objectively looking at this as an investor would an institutional investor. You're looking at the returns you're looking at uh the the risk the dispersion of of returns. If you're looking at uh the draw downs, if you're looking at how it interacts with other things in your portfolios, the correlation, we go through all of those things. And we really want to flip this on its head where we say to institutional investors, why is your allocation zero? And to be clear, some investors zero may be the right the right allocation for them for for a variety of reasons, but at least they need to do the work and and come up with

a good reason as to why that is uh and actually go through the exercise. So we do all of that. The next section is then more on the mechanics of it. It's like okay I want some exposure. Um where do I take it from? Which bucket bonds or stocks? Uh the risk bucket or not? Uh how big of a position do I take? We provide a historical model as well as a forward-looking model uh on how to look at that. And then some of the other stuff like how do you rebalance or how do you maintain the position and then the final part of the paper is we take more of a forward-looking view. the 6040 portfolio. We look at both the 60 side and the bond 40 side and say uh here's some headwinds that we see coming for both of these and this is why Bitcoin

may make sense uh to add into a portfolio. >> Okay, that that's a really helpful overview Chris and I want to drill down on some of the the details in this report and you mentioned this a little bit but you talk a lot about the 6040 portfolio in this report and you know evaluate how investors think about this allocation where it sits in that. How do you see this evolving? Because a lot of asset managers I've heard say that the 6040 portfolio is just dead. Um but like talk to me about that and where you see this situated in that how you think about it. >> Yeah. So our forward-looking part on the end, we'll take each in turn. So on the 60 side, the equity side, which of course everyone's talking about today, stocks at all-time highs, which is great. It's been one of the the best

runs, the best decade for for stocks in a very long time. And there could be a number of of great reasons for that. But if you look at the valuation of the stock market on a very aggregate basis, uh a a pretty crude measure is the PE ratio. Um we take the the cape this CA cycllically adjusted PE ratio from Professor Robert Schiller at Yale. And it's a pretty simple measure where it's just taking the last 10 years of PE data. So, you're smoothing out some of the fluctuations you get in in earnings. Hopefully, getting you more to towards a true cash uh earnings, not just accounting earnings for these companies.

And it shows that when you've invested, when this this cape ratio is very very high, your subsequent 10-year returns are quite low. And and there's a great chart in the report that you can see this the relationship is very very tight for almost a hundred years. And this should make sense to investors. It's it's the old Warren Buffett adage or whoever said it. Uh in the short term, the stock market is a voting machine. In the long term, it's a weighing machine. So, you've got a lot of sentiment and noise and narrative exactly like we're seeing with digital assets right now. In the short term, but in the long term, the fundamentals usually usually bear out, right? And so, what's really interesting is recently that cape ratio and the subsequent 10 return 10ear returns have diverged and they've

diverged the most they've ever diverged. So, you're left with with a conundrum here as an investor. Uh, number one, you can say the four most dangerous words in finance. This time is different. I'm only half joking about that. Of course, there's good reasons that this time may be different. We're we're in a totally different economy with uh some of these mega corporations. They've got massive moes, great free cash flow. They've they've got network effects like you've never seen. And uh maybe the latest AI capex excluding they've been very fairly capital-like businesses. So you might say, well, well that's the difference here. You know, years ago you were talking about railroad companies or something. So that those those models no longer hold. So that's a fair point.

Maybe this model doesn't hold anymore and this divergence is is not a concern. Um, the other way to look at it though is to say no, there will be some mean reversion here. And even though the stock market's done very well, uh, this tells you that you probably should temper your expectations for the stock market to do as well as it has in the next 10 years. Uh, doesn't mean it has to crash or anything, but it might take a long time of just moving sideways for uh, these earnings and cash flows to to catch up to the valuation. So, in other words, you're you're already priced for perfection here. your price for these companies to continue to deliver absolute stellar excellent results, which they may do, but if they fall short, uh, you're going to see that in

your returns. So, that's that's one headwind we see for the equity markets. And then the bond market, I think, is even more interesting because typically this has been your your ballast, your counterweight in your portfolio. uh it's had low to negative correlation to stocks and um it's its risk in terms of its standard deviation you know how much it moves is very very low and so if you look at the the nominal draw down for bonds it's it goes down maybe you know long-term bonds even you know longer duration which which have even more fluctuation they go down you know a few percent uh every so often and that's why people love them they say you know I can keep my money safe here but the chart we show is that you really need to look at

your bond returns on an inflationadjusted basis because that's what you can take home, that's what you can eat, that's what you can retire on or spend your your your your retirement in. And so that's what really matters. And if you look at that um in periods of high inflation, you had a 4 decade 40-year period where you were underwater on bonds and you had a draw down of 40 50% at one time. Today, you're looking at a 30% draw down for long-term bonds uh because inflation continues to run above the Fed's the Fed's target. And again, we got another hot CPI print this morning or yesterday, was it? Right. So, that's one of the concerns we have with with the 40 portfolio. Again, not to say

that, you know, what's right for people um is to to not allocate at all, but just to start thinking about like we've got a couple big headwinds on the two biggest asset classes. maybe it makes sense to look at uh Bitcoin in varying amounts as an alternative um to help offset or alleviate some of that stress. >> Do you think institutions think of Bitcoin as an alternative? Do they think of it as a tech stock? Do they think of it as something else? How how do they think about that positioning in their portfolio or does it matter at all or like how how do you see those conversations evolving? It >> it does for the institutional investors.

They have to be very clear on how they look at these things. And it really depends on the investor. It's still the case today that a lot of them look at it from a risk perspective. A lot of institutional investors are more concerned about risk than they are return because they they need to preserve capital, especially if you're thinking of like a pension fund or endowment. You do not want to lose that that seed capital, right? You like again Warren Buffett's uh rule number one, don't don't lose all your money or destroy all your capital. Rule number two, don't forget about rule number one. Um so they they look at it from a risk perspective. So they're looking at some of them have a risk budget um where they actually have only so much volatility they can handle and then they look at blending in bitcoin like how much of

that risk budget will it take up. Others of them look at it other ways. I do think characteristically if you look at the the characteristics of the investment asset or class itself it looks a lot more like an alternative. And institutional investors have been investing in alts for for years now decades. They're they're actually a larger percentage of a lot of institutional portfolios um than even bonds now. Um so they'll have 20 30 even up to 40% in the alts bucket, but that can range anything from precious metals, real estate, commodities to really exotic stuff, you know, antiques, art, collectibles, what whatever have you.

The point we like to make though is like if you're already investing in alternatives, uh Bitcoin has the same characteristics that you want in alternative. Why do you invest in alternatives? you want some more return. You want uh non-correlated returns. You want uh some asymmetry or or a potential asymmetry where you've got more upside than downside. Bitcoin has all of those things, but it improves on a lot of the drawbacks of alternatives which are they're not liquid. You can't mark tom market. You have no idea uh its value until you try to go and sell it. You got to store it, transport it, insure it, uh make sure it's not a fake or genuine. Um those are all things that come along especially with the exotic alternatives and Bitcoin has none of those things. So there's you know a couple other little

risks with Bitcoin in terms of the technology. Um but if you look at it compared to alts I think it's a really interesting proposition for institutional investors to consider it from that lens. >> Everyone's tokenizing stocks these days but almost nobody's doing it right. Thin liquidity prices that drift from the real thing dividends that just vanish. Bit stocks 2.0 is different. real NASDAQ and New York Stock Exchange depth through licensed brokers. Price is mapped one to one, dividends paid to your account in real time. Plus, you get the lowest fees in the market at just 0.04%.

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and 2FA included in your plan. Plus, SIM swap protection that puts you in control of your number, so no one, not even Cape, can hijack it. Use code milkroad at milkroad.com/cape for 33% off your first 6 months. Yeah, there's a lot of advantages to having Bitcoin as opposed to a Picasso painting. I can I can see why that would be a more liquid market there. Um, okay. So, let me ask you this. You've talked a lot about how to think about this in terms of positioning it in an investor's portfolio. What are the biggest objections you're still hearing? Because after six years to go back to this get off zero thesis, there must still be a lot of friction, a lot of objections.

What What is it that you think is is holding up a lot of institutions right now? Is it regulatory clarity? Is it something else? What are you hearing the most right now? >> The hardest part of this question is we get the reasons or excuses. as I like to say the excuse desour as to why someone's on zero. And it's always hard to tell if that's the real hangup or if they're just saying uh like I said the excuse to because they they know they don't want to or can't for whatever reason and they just want to give uh the latest sophisticated sounding reason for that. And when I first started at at Fidelity almost 5 years ago now, the excuse to jur was was really really elementary. It was like this isn't a real thing. this isn't real technology.

It's just code. There's no value here. It's only used for illicit purposes. And now they've moved to to reasons such as, you know, I don't know how to hold it in a compliant way or I'm not sure about, you know, some of the other technicalities of it. So the goalposts have moved and I think that's a good good thing to see because they're at least taking it more seriously. They're thinking about it more from an actual mechanical perspective, not like just writing the whole thing off. But we still have yet to see a huge amount of movement here. You know, it's always happening at the margin. Um, but eventually I think that will come, especially as we do get more regulatory clarity, as we do get more infrastructure from the major banks being announced and built every single week or day almost that we've seen. Um,

so I think I think it will come, but it just takes a lot of time. >> One of the things that stuck out to me from this report personally was uh a question you answered around how to think about building the position, right? Like should you sell or trade the cycles? should UTCA a line that really stuck out to me was funding choices and rebalancing approaches tend to have marginal impact relative to the initial allocation decision and I wonder if you could just elaborate on that what you mean by that and just tell us a little bit more about what that means for investors. >> Yes, this is directed at some of the people who say okay I want exposure but then they go back and forth over deciding where they they get the funding from. Do they take it from the equity side, the risk side, or the bond side,

or out of the alt sleeve or whatever it is? And then maybe they decide that or another person is going back and forth with their board on how to rebalance. Do you do it quarterly or around certain targets or bands or annually? And what we showed with the data is there's very marginal difference in all of these decisions. So the big decision is not surprisingly get off zero. that's going to make the biggest impact on your portfolio to just get exposure. So again, getting back to that previous example of excusedure, like if you find yourself in a boardroom or someone going back and forth or arguing over these things, just remember this is probably not going to make or break uh whether or not this this outperforms or not. The question will be whether you decide to

get off zero and get exposure in the first place. Chris, you and your team publish a lot of incredible research, not just on Bitcoin, but on all digital assets. Um, another report that you recently published I want to talk to you about is your Q2 signals report. Um, and this is driven a lot by onchain metrics and things like that. Tell our audience a little bit about this report and then uh yeah, we we'll dive into a little bit more what's in this, but like talk to us about the the signals report and the takeaways from Q2. Yeah, we first started this report trying to get the institutional investor base to understand that there's these new data sets, these new signals that can be derived from onchain metrics, onchain data. And that's very new. You know, I come from the traditional equity research world and everyone's familiar

with all the financial ratios, but now all of a sudden you have visibility into actual transactions and and who's holding how much and it's it's a whole new world. And so we really wanted to introduce people to what are these metrics, what are some of the ones to watch. uh we published them in a in a wonderful uh interactive PDF. We explained them and we really threw a ton of metrics in there. And then just most recently, we we revamped this entire report and we said rather than throwing everything out there, let's let's whittle it down to what we think are actual uh signals here. what what are the ones that um if you run them through the statistical analysis uh do some more rigor rigorous work on this statistically which metrics actually show a relationship between where the

readings at and then where um at least historically returns have gone 3 6 12 24 months after that. And so that's what we did. We we filtered it down to those that actually show some statistically significant uh signal or relationships and then we put that in the report as well. So it's like if a reading is at X, uh, historically when it's been at this level, the forward returns have been Y. And so hopefully that gives our investor base a lot more context as to how to read these and actually use them. >> Do you think that the institutional investor community is beginning to understand the value a lot of these onchain analytics and these metrics that you're able to derive from this? Is this still something that's new and foreign

to them or like what's the adoption or just like understanding you've seen the uptake from these reports and all this research you've been doing? >> It varies quite widely. There's some that are barely dipping their toes in and they're they're just understanding Bitcoin first, which we we highly recommend. Not saying you have to buy that one only or first, but u it does make sense to start there. And Bitcoin's, as you know, it's it's in its own unique category, right? So, it's got its own um bucket of onchain metrics. Um, the one where we see more uptick though are institutional investors that come from backgrounds like myself. You know, maybe they're used to analyzing companies and then they start drawing these analogies. They start looking at some of these other chains and especially like L1's and stuff and they say, "Oh, these things have fees. They

have revenue. They have expenses. They're doing token burns. That's somewhat like a stock buyback or something like that." So, they can start to make these these analogies in parallels and that really allows them to to catch on to some of this a lot a lot faster, I think. >> Okay. So the people who are used to research and equities research, a lot of this resonates with them and then some people are still getting up to speed. I think that's where the lot of the market is. You know, some people are still new, some people are experts. Um I want to ask you about this. This stood out to me a lot from this report because this is something I've felt personally. You said that network activity increasingly diverges from price. I think this was referring particularly to Ethereum and Salana. Um but you said this highlights

sustained utility at the protocol level. And I'd love to hear you elaborate a bit more on this. Um, what do you think is causing this divergence between this accelerating protocol usage and sort of this, you know, let's say softness, this bare market that we've seen in some of the prices of these digital assets? >> The basic answer is just sentiment, right? Price is down because everyone is got really negative sentiment. They're going to sell no matter what the fundamentals are doing. But I think there's really two two different layers or levels to this. Number one is uh there are some and of course some who have come out publicly recently saying um this protocol or this chain or whatever has uh no way to capture value.

There's no value acrruel to the token holder. And that's that's a very fundamental view like a first principles view of like there's no way this thing is ever going to be worth anything. Basically they they've come to that decision. Um, but there's there's others though where what you're really just showing or saying is that every one of these, especially if you look at it through an investor lens, um, all of these chains have have embedded expectations in them about their growth and and you're you're signing on to that as an investor whether you realize it or not. It's no different than buying a stock, right? you're the market is forward-looking. So, it's pricing what they think this this company or stock or chain will earn in the future for a certain period of time or indefinitely.

Um, so really what what's going on then is um those expectations that were very very high before are coming down or the fundamentals are not matching those really really high expectations and so the price or the value has to come down. And so that's not necessarily a bad thing. Of course, it's it hurts for anyone who's who's experiencing that, but it's the market at work uh figuring out what these things are worth, right? And so, that's why you can have price coming down and while fundamentals are still going up, um fundamentals might be going up in a positive direction, but if they're not going up as fast or they're not at a high enough level that people thought they were going to be years ago, then those expectations are not matching reality and so price has to come down to

to account for that. Where do you land on this debate? Because I actually got into a debate with a guy named David Hoffman who hosts Ethereum podcast about this exact question. Um, but do you think that prices for things like Ethereum Salana or just generally digital assets are going to resolve higher as this sustained and strengthening fundamentals and protocol adoption continues? Or are you more in the camp that says that these projects are going to add value and create value but not capture a lot of that value? Where do you fall on that spectrum right now? Oh, and how do you think about that question?

>> I'll be um I'm always careful to not get out of my circle of competence or or wheelhouse. So, I'll definitely have one of our analysts on or or point you to some of our research by them because this is something they are really in the weeds on. And not to put words in their mouth, but I think they're certainly in the camp of look, these things these things obviously have value. People are using them. We can see that people are paying to use them uh of real hard money, whether that's a token or not, that's worth something. Um, and so obviously there's value being created, but I think it's it's more a question of what is that value worth? What is what are the embedded expectations? So I think it's more of the the latter part of just differences in in valuation versus the former of the debate of like,

oh, this thing has no value whatsoever. Right now, it does get really nuanced, right? Like how does it actually capture that? And that's where I think it gets really interesting. And I'm not going to stray too far out of what I know only to say that um a lot of this is changing like we we've seen Ethereum change both its narratives and through its upgrades as to what it does with L2s and and who gets to capture that, right? So, um this is why you have to stay on top of this stuff because uh it does change and some of it is narrative based and some of it is fundamental based. Um but you know this is what the market does and this is what we do. We try to we try to figure this stuff out.

Chris, I appreciate you being so candid about these things and I think it's really helpful because we are all trying to figure this out. So, thanks for sharing your thoughts on that. Um, we're getting towards time here, but I wanted to ask you about one more thing you wrote about uh a research report you did sort of like a midyear check-in on 2026. We're halfway through the year. A lot of people had a lot of wild predictions for what would happen in 2026. Um, but halfway through the year, uh, how do you feel about what you what your expectations were for 2026? What has surprised you? what are you still expecting for the rest of the year and yeah just what's your outlook for the rest of 2026 and and where we are so far in in terms of what you expected for 2026. Yeah, we don't put, you know, big

big price targets or anything like that, but obviously as people working in the space and believing it, I think uh myself, speaking for myself and and a little bit for the team, I think we were a lot more positive at the beginning of the year. And of course, the the negative sentiment has has weighed on us all, but I always come back to fundamentals. Um, you know, what what can we actually observe fundamentally, not in the price or the noise. And every day I see more people adopting this. I see more institutional players, large banks, brokerages, uh you name it, adding capabilities, announcing, actually rolling out product. And that's what I think a lot of people don't see, especially on the retail side. They don't see that these institutions take years uh to plan and build these

products, especially if they're building them in-house. And they're making multi-year bets. They're not making these decisions uh on based on what the price is today. they're looking ahead and saying, "Yes, this is real technology. This is really going to uh to help us in in whatever way depending on the on the institution." And so they're um they're putting real capex into it, right? And they're they're starting to change their workflow around these and and roll out new products. So that's what I look at. And really um that would be the marker, right? if these things start to to roll back or you see less activity on these chains or less adoption or just more apathy which you know in all honesty I think is one of the greatest risks to Bitcoin

especially in the space at large is if people just just throw up their hands and say why do we need this I don't care about this um that is one of the biggest risks but again going back to our our conversation at the top of this I think as good as things are and as much as some of all this other stuff is is taking up taking up the narrative right now. People are going to come back and and rediscover or remember all of these these characteristics about Bitcoin and other digital assets that make them unique and make them have such a good value proposition. >> Uh Chris, the standout line from this report for me again was 2026's digital assets landscape reflects a balance between near-term pressure and longer term progress. And I think that speaks

to what you just said in your answer there. But I think what a lot of people are wondering, especially people in our our ARC pro community have asked me a lot about this is how far is long-term? How long of a wait is this? You know, like you said, institutions make their plans in years, but it feels like, you know, you're writing a report on getting off zero that you first wrote in 2020. It feels like it's just been a much longer wait than I think a lot of self-directed or or cryptonative investors expected. What does that time horizon look like for you? Is this a six-month thing, a six-year thing, a 10-year thing? um what what does that timeline look like for you and and when do we get to the promised land so to speak?

>> Oh boy. Like I don't I don't want to to make a prediction like what's the the old adage like make a prediction but don't say the the the timing of it or the level at the same time. Um I I do think this space grows. It gets bigger from here. We we will uh in my person this is just me personally talking. We will again get to new all-time highs in in Bitcoin and maybe other things as well. um because I see the fundamentals, the adoption going on and the short term again, it's that voting machine, it's the narrative, it's the noise that's short-term. The the good news is to give you a little more specificity to your question, not not evaded here. Um Bitcoin has very short cycles and and this is something that's very underappreciated in the institutional investment community. They look at the

draw downs in Bitcoin. 80 85% 70%. This last one was 50, which you know, if we stop at this, it'll be shallower than all the other ones. So, let's let's also mark that as as a potential milestone here. As we mature and get bigger, we'll we'll have shallower draw downs. They look at those draw downs and they say, "How could how could anyone ever own that?" But they don't look at from the the absolute bottom to the next all-time high as as on average been only a couple of years. So again, going back to my point about bonds, you were underwater on a real basis for 40 years. That's most people's investing lifetime. Stocks as well on a real basis. You've sometimes been underwater for even a couple decades with stocks which have

even, you know, a shorter uh uh uh time frame from the draw down to the next high. So people forget that that's the other part of this equation. Yes, the draw down is steep. It's harsh. It's it's really hard to endure, but at least historically, we have come out of that so quickly that that changes a lot of the metrics and uh how Bitcoin would interact in your portfolio. And I think that's one of the things people people are are underappreciating about this, underappreciating about all of this. And so again, I look at the long time horizon. I think that's a sobering point. You said we wrote the report in 2020 and then we wrote it again and I'm saying not a lot has changed. That's partly true, but we've actually seen, you know, a lot more. We have, you know,

way more clients and and assets today than before. And then you just zoom out and say, "Wait a minute. I've got hanging on my wall here a picture of the white paper in late 2008, October of 2008, and we're already here talking about this, talking about every major bank in the United States adding some kind of capability." Um, I don't think Satoshi or anyone else at that point would have thought we would have been here, you know, 15, 16 years later. So, it's all relative. Uh, zooming out to see how far we've come in only only a decade and a half is is actually quite sobering the other way for me.

>> I really appreciate that p perspective and I think a lot of people need to hear that at this time. So, thank you for that. Uh, Chris, you and your team write I think among the best, if not the best research reports in the whole digital asset space. You guys are data driven and very clear about articulating these things. I'm really curious what you're working on next. Are there any reports that you're excited about that are coming up? What are you and you guys looking into right now that you're excited about? give us a little preview of what's next from Fidelity Digital Assets Research. >> All right. Well, I guess you'll just have to stay tuned, but we're we're always looking at the latest. Um, we've been researching uh quantum quite a bit on our side, so expect to see something on that soon. And, you know, we've been

doing a lot of internal work making sure we understand it, but we'd love to to help educate our institutional clients on that. So, that's maybe one preview I can give you. Um, but we're we're also expanding to, you know, uh, getting institutions up to speed on things like tokenization. We obviously just came out with our a three-part series all on stable coins. Um, so there there's another um a bit of a preview of our arc here of how things are expanding as well. >> Gotcha. Okay. Well, I guess we'll have to stay tuned for the alpha, but I always got to ask because I'm here to get the the inside scoop. Um, Chris, thanks so much for being on the Milk Road Show. Where can we send our audience to find more of you and your work online?

>> Yes, we put all of our research online for free on our website.com. Click on the research tab there and you can uh either view it or download it if it's a report. And then for myself, you can find me on Twitter or now Xrisjkyper. >> Chris, thank you so much for being here. I really do genuinely enjoy these conversations. I learn so much from you. I know our audience does too. So, thanks for being on the Milkroach Show. >> Thank you. My pleasure. >> Thank you all for joining us. I hope you all learned something today. I hope you go check out some of Chris's amazing free research. Um, but until next time, stay safe, stay educated, stay bullish, and we will see you all in the next episode of the Milkro Show. Thanks for being here, everyone. Bye. Want insights on what's moving crypto markets and how

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