Bitcoin's new market structure: Bitwise on advisors, allocations and sideways chop

Transcript

If we are actually entering a recession and AI is a bubble and their credit events, I have 100% confidence that the Fed and Treasury will react to that with overwhelming liquidity. What's up everybody? It's LG Doo here and welcome to the Milk Road Show, the daily crypto show where the charts say panic but my guests always somehow say opportunity. Today is December 3rd. Bitcoin is sitting at $92,300. And we've got Matt Hogan and Ryan Rasmmanson from Bitwise back on the show. Last time they came on two weeks ago, the market was kind of falling apart, but they did say that maybe we were near the bottom. And in the last couple days alone, we've had a couple of major bounces down to 83K, back to 93K.

The market can't really decide what's going on. I'm a little bit exhausted, but these these guys always give me energy with with their long-term view, with their 10-year views on crypto, and I'm going to dig into that with them today. Before we start, today's episode is brought to you by Block Trust IRA. Let AI outsmart the market and grow your crypto while you sleep, reserve DTFS, get exposure to the entire crypto market in a single token, and chain link. Break the interoperability barrier and power the future of tokenized finance. Gentlemen, welcome back to the show. Quite the week we're off to. >> It's great to be here. We are optimistic. Market's looking good.

Excited to chat about it. >> Market's looking good. Let's just pause for a second, Matt, because I think if if I told you uh when we first did our f our show together, when I first came on as host six weeks ago, whatever that was, and I said, "Matt, in six weeks, you're going to tell me that 92K the market looks good." Would you have believed that? >> No. We had to go through a journey like everyone. Um it h it has been challenging, but I'll tell you why. I think the market looks good. For sure, it's been a journey. But for those six weeks, the thing that was happening in the market was it was looking straight past good news. We would hear something like Harvard has tripled its exposure to Bitcoin, which we should be shooting off fireworks. The smartest investors in the

world are tripling down on our little asset. That's an incredible fact. The market went down that day. We heard Morgan Stanley went from 0 to 500 miles hour. The market didn't shrug. And then we get like very minor bad news like Bank of Japan woke up with a slight cold and the market would would would die, right? So when you're ignoring good news and overreacting to bad news, you're in this terrible market cycle. The reason I said the market looks good is we had some good news over the last few days. We had the end of QT in the US. We had Vanguard opening up to Bitcoin. We had the $ three.5 trillion dollar financial advisor giant Meil Lynch opening up to

crypto ETPs and the market ripped. And that to me is a signal that the psychology is starting to change that we're starting to look at good news is good, bad news is bad. That's a healthier market. Doesn't mean we go straight up from here, but I do think it's a definite shift and it's making more optimistic for the end of the year. As we get into the show, if you invest in AI or want to, you need to read our free newsletter, Milk Road AI. The first edition dropped this week and it covers the massive drama going on right now between Google, Meta, and Nvidia. So, sign up for free today and get Friday's edition delivered straight to your inbox. I love that take. Ryan, you also wrote a tweet reflecting the same. Let's put it up on the screen. Let's take a

look at this. These ultra bullish factors, uh, basically reflecting what Matt said. So far this week, Vanguard has unleashed 50 million clients on crypto uh Bank of America recommending a 1 to 4% Bitcoin allocation and of course the QT ending. I mean, Ryan, you wrote this tweet, but what what what is the most significant out of these three in your opinion? >> Uh that's a great question. Yeah, I was I was headed to the airport last night and I was reflecting on the past two days news and kind of getting caught up on everything and uh this this just struck me as like it's only Tuesday and this is an incredible amount of news flow that you would be thankful for if it happened over a month or a quarter and it happened in a two-day period with some of the largest financial

institutions in the world across the board for all three of these events. So, it's massive news. The most important out of these, that's a great question. I'm gonna say it's the Fed ending the two and a half year QT program. Although, uh, it's hard for me to do that because each of these is massive on their own. >> I have I have a different take on that question if that's all right. Ryan and I don't always agree. >> I think Meil Lynch is a giant deal. That's $ three and a half trillion dollars, 1 to 4% allocation. You can do the math. That's 35 billion to what is it $140 billion. That's more than ETFs have brought in so far in the last two years. And that is just one company.

There's also Morgan Stanley doing the same thing. There's UBS making strides. There's Wells Fargo. There's like this slow grindy tidal wave of inflows and that is the latest signal. I think it's a really big deal. I agree. QT's a big deal. It's amazing that we rallied for the last two and a half years while the Fed was squashing liquidity, but man, I get excited about uh about those Meil Lynch advisers now being able to allocate and learn about crypto. I think it just is a slow rising tide that lifts us higher.

>> Well, why is that why is that so much more significant? Is it just the sheer amount of money that those people are going to bring to the market? And I'll just I'll just give context to my to my question is that I feel like for the last couple months um we've had positive news and I feel like almost every day we're seeing okay this bank this fund this person blah blah blah the Fidelity recommending 1% Bitcoin in your portfolio that's like what a year and a half ago now a year ago I don't know when that was but that's old. So what what so I feel like we have a bit of like uh institutional good news fatigue if you will or at least I do. So what like you're saying you're saying okay so Marilynch just they're just bringing so much more money than there's already

been Matt like can you just contextualize these different companies for me and why why that's more important now >> it's just like adding a little bit more pressure to the system. Uh yes we've had all these good news and the crypto market has been mixed but it's worth noting that the market is flat this year and the fear and greed index is at 20 which is extreme fear. So we have extreme fear and panic and blood in the streets with a flat market. That's because you have all these slow positives that just play out over a decade lifting the market up. It gets knocked down by the October 10th event, but it comes back up. It gets knocked down by, you know, this or that negative concerns about Micro Strategy being removed from MECI indexes. What's going to all these shortterm news, yes, are

headwinds, but then you have this is like this this tidal wave slowly coming in. And the reason I'm so excited about Meil Lynch, maybe it's because I'm close to it, because I know next year Bitwise will do a thousand meetings with Meil Lynch advisors talking about Bitcoin and crypto and they're going to start allocating a little bit and then more and more and more. And if you're playing the long-term game, it's just it's it's like a door open that won't ever be closed. There is now money moving in and that just makes me really excited.

>> Are you guys in those meetings? How does that work? How does that work a bit wise? You get you guys get called in. Cool. >> Yeah. I mean, we we have 25 salespeople who are in every geography as well as people on the phone and then when they have uh serious questions that go beyond those local experts, they call in Ryan uh or they call in me and we'll we'll show up and answer those questions. So, >> um yeah, I mean that that we do 15,000 meetings a year and when you open and and that's just Bitwise, right? There are other firms doing this too. That's why I mean that there's like an inevitability once those door open. It doesn't mean we get a trillion dollars tomorrow. But it does mean that the flows start to trickle in and they build over time and over time. And maybe

because I'm so close to it, just knowing that that door is open makes me extraordinarily excited. >> I like that, Ryan. Those meetings and I feel like I ask you this sometimes on the show as well. Those meetings, what have they been like lately? And maybe they're not with Meil Lynch yet, but like any of those advisor meetings, any of that stuff, what's what's been the narrative in the last couple months? Has the phone been ringing off the hook in the last 48 hours? What's going on? >> Yeah, it's a good question. It's really incredible. I think we've never been busier at Bitwise than we have been in the past, you know, 3 to 6 months, particularly in terms of meeting with very large wirehouses and large wealth management platforms. And the good news about those meetings is that they're happening more frequently. But I think

the even better news is that the level of engagement in the room of those meetings and the quality of questions is increasing at an exponential rate. So if you think about 3 years ago or two years ago when we would do these meetings, a lot of the questions were around isn't the government just going to regulate this thing out of existence or didn't China just ban mining? So what you know what does that mean? Or isn't Bitcoin horrible for the environment or isn't it just used for money laundering? Now we get maybe one of those questions in a meeting but typically we don't get any of those questions. Instead, we're getting questions about things that you would want to be asked about, including, you know, has volatility of Bitcoin actually declined over the past decade.

Is the correlation of Bitcoin actually low with equities? And what that tells us is that these investors are seriously considering adding Bitcoin to their portfolios alongside other assets like stocks and gold and equities and commodities across the board. And so I think that is a very big signal that they're taking this very seriously and that's very different than it was two years ago in these meetings. >> That makes sense. I love getting I love getting this insight from you guys because I think that's very unique on our show where we get it's like we're really seeing like kind of in a sense like the the institutional flow like like plumbing like what's actually coming through, you know, because I think we just look at the headlines, you stay on crypto Twitter, you think nobody's interested in buying this stuff anymore and yet and yet you guys like

you're saying you're you're busier than ever. So clearly there's demand and it sounds Ryan that you're saying as well that there's there's an increase in knowledge as well, right? That people know a lot more now. >> Certainly that that's definitely the case. I mean Matt goes and presents at these huge conferences every single year and a lot of them are the same conferences like Baron's events and other events. And so I would love Matt's thoughts on how the insight or adoption of crypto or knowledge of crypto has evolved over the years at those events because you're really in the room with some of the leading financial adviserss in the country. Yeah, I mean there there there are a lot of ways to make this point, but maybe this one will come across. For the first five and a half years at Bitwise, I used one deck, one

presentation deck, which was like, what is crypto? And I would walk through the very basics 101. I probably gave it 1,500 times. That's not an exaggeration. Now, we have a full-time person at Bitwise that all he does literally every day is create new decks. We change our narrative on a quarterly or by annual basis. And that reflects the fact that people have moved past 101 and now they want to know the specifics. Now they want to know about stable coins, about tokenization. Now they want to know about prediction markets and digital identity. Now they want to know what's going to happen with quantum computing and Bitcoin. They want to know where it fits in a portfolio. It's really just a dramatic change. you know, we did this

sort of six years of this core education and now it's really about implementation. It's it's really remarkable. >> That's awesome. Maybe one day as a sneak peek episode, maybe for our pro members, you can share that original deck. I always I always love seeing the original sales deck from any company that's grown or sector that's grown is like what were you telling people, you know, years and years ago and that still sticks or that now seems hilarious? >> So, yeah, we'll have to do it. >> We'll have to do it. Special special thing for pro members. Yeah. Yeah. Right. >> Yeah. Matt is really good at giving that presentation for what it's worth. And so you can still hear it and be like, "Wow, I've learned something new about Bitcoin even though you've been studying it for for many, many years." So it's interesting to listen to, but the

fatigue of presenting that deck was so real. And we'd be brought into a meeting and they'd be, you know, asked, "What do you what are we here to present?" And it'd be like, "Oh, crypto 101 or what is Bitcoin?" And I was just like, "Oh my gosh, I feel like it's Groundhog's Day," you know, for years and years and years. And so it's incredible that uh that now the questions are so much more in the weeds and intricate and about specific sectors of the crypto industry rather than these very broad skeptical views of Bitcoin or crypto not being a real thing and just being funny money >> from crypto 101 to XRP ETFs.

>> There you go. >> This is the Bitwise story, man. That's that's what we want to know. Guys, I want to circle back to Bitcoin. One narrative that I started to see on on uh on the timeline lately, and even this is something that our our our guest this week, Matt Crosby from Bitcoin Magazine, he pointed this out as part of his TA is that Bitcoin has been in a bare market for a year. And I think that's a new perspective that that's being painted probably largely on TA, but with the idea that, you know, it hasn't really moved that much. Maybe a couple little all-time highs here and there, but no significant uptrend and that it's been in this kind of side chop for a year and that that bare market could maybe end soon. I think that's a little bit of a, you know, looking for for some glimmer

of hope. I'd love to get your take on that. >> I I mean, I'll take a first shot, Ryan. You can follow up. I I think I think I agree with that. My own view of that is that Bitcoin should be trading much higher than it is right now, and it's been held down by this sort of bare market sentiment and those worries. I think the fact that we're at fear and greed of 20 with Bitcoin flat for the year tells you that that is the bare market, right? That the natural price movement in that scenario is down 50. So, we're in this weird market where sideways is bearish and I do think we're closer to the end of that. There's not much more that sort of retail sentiment can fall. So, I it it appeals to me that we've been in this bare market. My view

is that it's been suppressing price from its natural level, which I think should be higher than it is. And I don't know what you think about that, Ryan. >> No, I think that's right. I mean, it's funny to me in a way that Bitcoin is down a couple of percentage points over the past year. And it feels like we're in this deep crypto winter or bare market. That to me reflects kind of the exuberance in crypto of the the need for these double triple quadruple digit returns which I do think uh is just an interesting kind of mental model that a lot of crypto investors have. Look, I want those returns too. So I don't mean to to knock that. I would love a triple digit return uh year. But I just think the fact that

you know we have had all this tremendous news. We've ran up to all-time highs within the past 3 months or so. And so if we are in a bare market, to me I do feel like it's been a muted bare market which is actually what should happen as Bitcoin matures as an asset and as this industry matures as an asset class and we get more institutional adoption. So are we in a bare market? It certainly feels like that from sentiment and sentiment is extremely important. The good news is that all of the fundamental developments, whether they're technical developments, regulatory developments, institutional adoption, and now macro with the end of quantitative tightening, all of those are uh, you know, the these catalysts or these springs that coil during bare markets. And when they release, it's uh it's really incredible.

And you see what that does to price. This is it. This is the chart of the exact last year to the week of what people are saying. So, I don't know. I don't I'm not a big TA person. I'm still learning. I know you guys aren't either, but I guess I guess this kind of looks like a bare market. >> I guess so. That's what people are talking about. It feels like a bare I think that's it. I think you nailed it is that it feels like a bare market. >> Yeah. >> Uh I I think it's a little bit like the broad economy. Like the broad economy is like doing well and people feel terrible about it. And I think that's I think that's sort of vaguely what's happen.

There's almost like two markets in crypto. There's the retail market which is in a deep bare market and then there's the institutional market which is in a bull market. And when you smash them together, you get this sideways chop. And I I think that's really what's happening. There's almost like these two psychologies and two news trends happening at once. U and they're meeting in the middle. Bitcoin changed the investment game. Now AI changes the strategy. Crypto's wild ride demands perfect timing. Selling before drops, buying as it climbs. While most investors panic, sell or hope, a select few leverage a crucial edge, AI. Block Trust IRA's trading platform spots market patterns with precision no human can match. Since 2020, their Animus AI

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Yeah, definitely. I I I would definitely agree with that. Let's let's zoom out to that kind of broader economy. One thing that you guys u pointed out as well uh and you've hammered this drum so many times uh I think or a few times at least on our shows is the rate cuts and the potential that Rapool will replace Jerome Powell. So obviously you're telling me that both of those things will be good. Ryan, what's what's the current expected rate cut? What's the what's the rate cut situation on this present day? >> It's changed so much in the past couple of weeks even. Right now, there's a 90% chance that rates or the market's pricing a 90% probability that rates will be cut. A week from now at the last Fed meeting of the year. That's

particularly interesting because a month ago it was 66%, a week ago was 83%. In between there it fell to 30%. And I think what that indicates is that there's a lot of unknown in the market. And uh, you know, >> that's crazy. >> Oh, great. I love that you're pulling up this poly market here. Uh, I use like the I'm looking at like the CME Fed Watch tool. >> That's right. I know. Yeah, I know. I know that you have like more a more official source, but uh >> feels so archaic when you pull this up like oh yeah, obviously uh uh we're using different tools for this, but I think it sell it tells the same thing.

Like look at the the orange line there. Like we've had this massive drop in expectations of a rate cut and then this massive spike that happened. And that I think indicates the uncertainty that we're talking about when we think about there's positive catalyst over here. Then maybe there's tailwinds or headwinds over here and those things smash together and nobody really knows what's going to happen. But yeah, the market thinks that the rates are going to be uh cut multiple uh you know levels over the next 6 months. And that combined with the end of this QT program means that we're no longer going to be fighting the Fed in my opinion. And one thing that I've learned in my investing history is you cannot fight the Fed. And that's why I kind of said like I think that's the ultimate biggest catalyst.

But overall, all of these things are positive. But uh you know, we'll see in about a week from now what's what's going to happen. >> Didn't Pal say that that he wasn't sure about rate cuts in December? >> That's the thing. >> Go ahead, Matt. >> You mean our lame duck Fed chair? Is that that who you >> um >> tell tell it how it is, Matt. >> No, he did. He did. He did. And I think there is uncertainty in the market, right? It is this confusing economy and it's a confusing moment for the Fed. It actually makes me a little bit nervous that we're at 90%. feels like there's there's probably risk in that if we don't get what we expect, but I think the long-term trajectory is down as we enter 2026. I really think that's where the question is, like where will rates

bottom in this rate cutting. >> And you I think we wanted to talk a little bit about who may replace this lame duck that you're you're mentioning. Uh, and I do I do have to take another second just to do a quick Milk Road plug here as well because we did on our macro side, our writer Thomas wrote about this last week as uh I think the the Bloomberg article came out, right, about Kevin Hasset and how he was kind of the prime candidate. And at the time, and this is just back on November 27th, his odds were 60%. I think now they're at 82. So, this seems like pretty clear to me at least that it's going to be Kevin Hasset. Um there's a fantastic article you guys can read on the site, but maybe you guys can tell us a little bit more

about that and how significant that is because this is something personally it's like I've never really paid attention to this uh in my like in years past, but clearly this is this is a big moment for the market, right? >> Yeah, it's a it's a massive market. I will just say that you know drum pal was nominated as fed share eight years ago. So this is a big change in the kind of you know top of the economic food chain uh in a lot of ways and I think that's really important and so I do think one of the reasons perhaps it hasn't been talked about a ton over the past uh near decade is because we've had consistency there in terms of who's leading the Fed and we're finally going to see that change. It it's funny to me that Trump nominated uh Drop Pal in his first term

and now, you know, has a lot of colorful things to say about him. But Matt, would love to hear what you what you think about, you know, the incoming Fed chair once J Pal's term ends in May. >> Yeah, I think it's a pretty important thing. One of the reasons we didn't talk about this eight years ago is not just we didn't pay as much attention to the Fed, but it wasn't as politicized, right? Like we didn't we didn't think about Jerome Pal as like aggressively hawkish or aggressively doubbish. we just thought of him as like an establishment candidate that would be maintain the status quo of the Fed and now it's much more politicized. I think Hassid is certainly on the dovish side of the camp. Uh I do think maybe you could argue he's somewhat beholden to the Trump administration or at least has

been very close to them. The administration is clear that it wants lower rates. I think you've done well just to accept not it's good or bad but the administration has generally gotten what it wants. It wants lower rates. I suspect there will be lower rates. That's my interpretation of this appointment. That's without arguing there should be lower rates or not. I'm I actually don't I don't have a strong view there. But I do have a view that that's what the administration wants. It's likely to get what it wants and Hassid is probably the person who will deliver that.

I guess so. Yeah, I guess the Fed chair used to be a boring position where most people couldn't tell you who it was and now it is. It is the thing, man. This is like the Super Bowl Super Bowl level event finance or like a a royalty level event like who Oh, the the the monarch has passed away. Who will I mean obviously it's it's it's known who's replacing the but some or the pope. It's more like the pope. This is like a papal election which also happened uh in our in our current poly market age. Uh but this this feels like that, right? of like who's it going to be and they need there should be some fanfare for it.

>> They should have done the white smoke. We should get our white smoke equivalent. >> What is the white smoke equivalent for for the >> I don't know but we need it. We need it to be like >> we need some kind of Game of Thrones chair that they sit in or something. It's it is the chair part, right? While we're just on the broader economy, guys, um if you have any thoughts here, the thing that's kind of hang I've seen as a cloud kind of hanging over everything in crypto is AI. And I think I mentioned maybe we talked about this last time. We've heard a lot of like AI is stealing crypto's thunder because that's you know the the the Googles and the NVIDIA and their battle are a much bigger story in a way than is Bitcoin going to 100K or 150K, right? Is something people that

has more news in a sense. would love to get your take on the AI bubble or even just like if that's a thing and what its current impact has been on on our on our dear cryptos. >> Yeah, yeah, happy to take this one. Uh, look, I think that fears of an AI bubble are very overexaggerated. I think AI is going to be one of the and is already one of the biggest technological developments of the 21st century. I think that Bitcoin and crypto is also one of the biggest developments of the 21st century. So the fact that these two things are entering the mainstream at the same time is really remarkable to me. Yes, the AI trade is one of the biggest things that you hear when you look on CNBC or you read any financial trade. It's all a lot of investors and

talking heads are talking about. So it's very important. It has a lot of dollars wrapped up in it and a lot of sentiment around the market as you know most of the uh leading components of the S&P are heavily involved in this AI trade. So do I think it's a big deal? Yes. Do I think that there's a bubble? No. I think that we've washed out some of the fears. And it's more profit taking than fear of a bubble actually happening or the beginning of a bubble bursting. So, I think that it's uh it's it's not a thing. It's a nothing burger. And that AI and crypto combined is going to unlock human productivity and cap and uh capital productivity and technological productivity at a level we've never seen before. And I'm extremely bullish about that.

>> Wow. Love that bullish take. I'll add a Bitcoin specific view on on the macro side. I think we're in like a heads we win tails we win scenario and I don't mean to sound polyiana but I think Bitcoin is somewhat pricing in an economic pullback and some of the uncertainty in the market. I think that's contributed to its pullback over the last six weeks. I think you can see that pretty clearly when you look that its pullback correlated with the pullback in Nvidia and other things to speak to this AI bubble. So if the economy in fact is actually robust and if AI is not a bubble and we recover, I think that's positive for crypto. If we are actually entering a recession and AI is a bubble and their credit events, I

have 100% confidence that the Fed and Treasury will react to that with overwhelming liquidity. I think we've outlawed recessions in the global economy. we respond to them with massive and everinccreasing amounts of stimulus. And I just can't imagine the Trump administration allowing the economy to sort of peter off sideways. So in other words, if we have robust economic growth, I think that's accretive to Bitcoin. If we have a pullback into a recession, I think we have massive stimulus, which is also accretive to Bitcoin. So I do think there's an element of like heads we win, tails we win, uh regardless of which happens here.

>> Love it. Great takes guys. Thank you for sharing that. Uh, one thing I wanted to do on this episode is share questions from our pro community. So, we have a we have Milk Road Pro allpro and they uh and an offering for crypto and macro and AI of course, but u I asked our Milkro Pro crypto community if they had questions for you guys. They love having you guys on. They always ask me questions after you guys come on and I was like, you know what, don't ask me the questions. Let's ask these guys live next time. So, I'm just going to go right into them. This is from Dazed and Confused. When do they you guys bitwise see Bitcoin recapturing its all-time high?

>> Ryan, you go first. Then we'll see if we agree. I love the name Dazy Confused. It's a phenomenal movie. I think Bitcoin will recapture its alltime high in Q1 of 2026. More specifically, my take would be February 2026. >> What date? You can't say the month and not give a specific date. >> February 14th, 2026. >> Wow. Valentine's Day. Wow. So, good luck, guys. You're going to be, you know, refreshing your phone all night on your date. >> You you you you won't believe this, but I was literally going to say Valentine's Day >> uh as that came out. And I have not discussed it. The the reason for it, like I think a lot of the things we're worried about in crypto are petering out

at the end of the year. We're worried about front running the four-year cycle that ends on December 31st. You can't frontr run the four-year cycle in the fourth year. We're worried about wash out from the October 10th le leverage liquidation event. Well, all of those companies want to wrap up by the end of the year. They don't want to have another tax year to report. So that that wash out is is in my view going to end this year. You know, we're we're sort of getting past uncertainty around the Fed. There just a lot that ends at the end of this year and then you're born into the new year where you have Meil Lynch and you have Vanguard and you have Morgan Stanley, you have institutional adoption, you probably have progress on crypto legislation. There just a lot of

catalysts. I think the reason we both anchored around uh Valentine's Day is because it'll take a little bit of time to cure. But I I do think we're going back there because the negatives are ending and the the positives are like ongoing and building and um and I think that's about the right time frame. >> Love it. Valentine's Day. Don't plan to do a different thing for Valentine's Day. Plan to go out the next night or something. >> Tell tell her tell her uh you know it'll be better at the restaurants the next night where it's less busy and we can have more fun.

>> There you go. Yeah. >> Uh okay. We uh I had a we had a few questions about uh Bitcoin bare market. We the the one I asked you earlier about uh Bitcoin's been in a bare market for a year. That came from Zeon 16. So shout out Zeon 16 for that question. I had another question similar from BB and it was I would love to hear Matt and Ryan give their thoughts on Matt Crosby's perspectives and forecast which was our podcast from this past Monday. Uh Matt Crosby told us that I believe the 200E EMA is 56K. Um or and or that that is the average might be the average purchase price of all Bitcoin. It's one of those two. I'll have to check back.

Either way, great podcast. Anybody wants to check it out. He's saying that 56K would be the bottom if we got there. Uh gentlemen, would love to get your take on that. Maybe we'll start Maybe we'll start with Ryan again. >> Great. I think that's an edge case. Uh, and if it happens, it will, this is going to sound insensitive, but be a gift to long-term investors. That being said, I don't think that's going to happen, cuz I think the market is fundamentally different today than it was when that 56k uh metric was measured on the chart. And the reason I think that's the case is for all the things we've spoken about today, the macro environment is significantly different than it was at that point in time. the or you know when you use all the uh data to aggregate that data point. The Bitcoin market is so fundamentally

different today than it was over the period that was used to aggregate that data point. And I think those are the reasons why we are unlikely to hit that level. I think you have more institutional investors, more professional investors, more hedge funds, just overall more allocators are coming in to buy up dips and to dampen volatility. And so for that reason, I think the volatility of Bitcoin's volatility is going to continue to compress over time in a way it hasn't historically. So I think that's the reason why I feel it's unlikely. That's not to say there won't be a pullback. We had talked about an 80Kish pullback about a month ago during this liquidation event in October and in the uh fallout afterwards saying that we think or wouldn't be surprised if Bitcoin falls to that level. And we saw

it do that and we've seen it rebound. That doesn't mean that we're going straight to all-time highs. I think we'll see a little bit more volatility uh particularly around the the Fed meeting next week, but overall I think it's unlikely we hit 56K. I wouldn't be surprised to see us trade sideways in the 80s towards year end. But I do believe that those massive draw downs that we've seen historically around average data points or median data points is unlikely to occur in the future because the market's fundamentally different today. >> So, so hold on Matt. So, Ryan is telling me that it is that's an edge case that could happen. So, what I'm understanding, guys, is that we could go to 56K and back to all-time high between now and Valentine's Day. Would that be is that possible?

>> If we get to 56K, I think the Valentine's Day uh date is off and we're having we're having ramen in the household. >> Oh, boy. >> Look, my marketing team hates these conditionals. They tell me I should just be direct, but they're not here, so I'm going to do it the way I like to do it. I think we can get to 56k if three things happened, right? If the global economy severely slows down and we enter a riskoff market. If it becomes clear that the Clarity Act will not pass in the US Congress and if a relatively major body floats to the surface from October 10th. If we got all three of those things, I could see us pulling

back to those levels. But that would be a severe pullback from 126. That would be sort of a classic bare market. I think we're past that. I think the more realistic negative scenario, if we have a few negative shocks as we go back to about where it was before the Trump election, which is like 72, uh, which Chris Berniski and a few other people have called sort of sort of the bottom. So, I think 56K is unlikely, but if we get all three of those, you know, fast balls uh, in the wrong way, then we could have a significant um, a significant pullback. I just think that's that's a vanishing unlikely parlay to get all three of those events happen.

>> That makes sense. Yeah. I want to talk about the market structure, Bill, because we have a question from Sapna. Um that is is an enormous question. Subna there's eight questions in this giant paragraph. Okay. So, I'm just going to ask the first one. Um and this this is this the question was asked like a he asked a week ago and he wanted me to ask every single podcast guest this. So, Subnot, we're gonna ask some people this this massive question. Okay. Um, Subnot is saying that the market structure bill may it he's asking they are asking how people expect that to impact and where allocation and investment dollars flow. And the drop deadad simple version of the question would be is it a sell the news event or not?

>> No. If it happens, it's all-time highs for Bitcoin, Ethan, Salana. >> I don't think it's a sellatter no matter what. I don't think it's a sell the news event at all because I think the market expectation of it's happening is lower than 50% right now. So the market isn't pricing it in because the market is uncertain that it will happen and I really have a strong view that solidifying the regulatory environment in the US which for better or worse the world's largest financial market will unleash a really significant wave of Wall Street investment and entrepreneurial activity. So I think the market is probably underestimating the impact of a market structure bill because unless you've worked in crypto, you haven't felt the true depth of the

pain from the regulatory uncertainty and it's underestimating it because it's not sure it will happen. So again, if I if it does happen, if we see that signed into law, I I think 2026 is a a massive up year for crypto and uh I'm really bullish about a lot of categories. >> Love it. Everyone okay this question is from TPAN everyone is bullish on the institutional coming into the blockchain buying using tokenization potential inflows but how fast are they actually moving compared to narrative and perception is it a top priority and even if it is what does that really mean uh timelines regulatory and etc go ahead >> yeah slow slower than you think >> uh I'll tell you two depressing facts

about the financial advisor part of the market >> and the reason this is a slow burn. Um, one is that the average Bitwise client allocates to us after eight meetings. And many clients operate on a quarterly meeting cycle. So eight meetings is two years, which means if you started talking to us when Bitcoin ETFs went out and you didn't know anything about Bitcoin, you're just now about ready to make your first allocation. So that's depressing. And then the other thing is people imagine these institutional managers spending a 100% of their time managing portfolios. What the studies show is that financial advisors spend five hours a week on investment management. Five hours a week and then crypto is 2% of their portfolio. What is

2% of five hours? It is nothing. It's a handful of minutes. So these guys have a few minutes each week to think about crypto. They move on a glacial pace. that you should think of these as very slow move like a decadel long trend of accelerating interest. The good news is it only compounds and goes up. But the bad news is yes it is slow. Tokenization is going to be slow. Stable coin adoption I think will happen faster because that's sort of commercially driven. But tokenization and investment is painful. Uh painfully slow. It's really positive, really strong, but painfully slow.

>> I think that's one of the best insights I've heard so far on the show. The eight meeting the eight meeting requirement and where the meetings are quarterly. >> Yes. >> Oh, boy. Okay. Okay. That's I think that's a fantastic perspective. So, thank you Matt. Uh this is from Zoshi. What is the op what is the opinion on macros such as ISM factors, copper gold ratio, US plus China liquidity, and whether the Bank of Japan ratio can curb growth or is it just rehash? What macro macro factor is worth paying attention to according to Bitwise? >> Oh, Brian, you want to take that one?

>> Sure. Yeah, happy to take that one. Uh, I mean, I think I've talked about it a little bit today, but the Fed, uh, and the, you know, end of quantitative tightening and the reduction of interest rates plays a huge role. I think it's interesting that the the world has gotten so used to low interest rates. that actually wasn't the case pre208 but now it seems to be the thing that all investors are demanding all consumers are expecting and I think that weighs heavily on sentiment but it also impacts liquidity dynamics very in a very real way and so I think that is the largest macro factor that I'm watching I also think that interest rates is influenced by so many other kind of sub macro factors that roll into that that it's just a good gauge for kind of where

we're at from the economy perspective where is employment where is inflation etc. Where where is liquidity? And so that to me is the big thing that I'm watching. Of course, we're monitoring a number of macro elements here at Bitwise. We we do every day. We have traders, portfolio managers, option strategies. We're long-term oriented in nature, but we work with investors with all time frames. So macro is very important to us. But I I'm paying very close attention to liquidity, monetary supply, interest rate policy, and think that's going to uh play a very big role in the um months and years to come.

>> And this last question, oh sorry, Matt, did you have something to add in there? No. Okay, he's happy with it. Okay, last question from Rob Warrior. So many of the original, this is a different question. So many of the original onchain businesses were built to service retail customers. What can they do to entice retail to get back in the game? Pretty broadstroke question. >> That's a really good question. >> Oh, shout out Robert Warrior. Nice question. >> Yeah, Ryan, what do you got? I'm gonna think about it. Make you talk first. >> There's Yeah, definitely. There's two things that come to mind immediately. And one is around reducing prices to be more competitive with emerging alternatives. And what I mean by that is that you have ETFs that charge 20 basis points, which is 2% management fee for

an entire year. And you don't you're not impacted by trading fees and spreads to the extent that you are on a centralized exchange where you're paying fees for every single trade. And often those fees are 1% or more of the transaction value. And I think that really does start to play a role in investors minds the more popular and widespread access to ETFs becomes. And you just have to compete on a cost basis. For what it's worth, I think that's good because it means it's going to cost less to get exposure to crypto as an asset class. and that's net positive for end investors and that's coming from an asset manager who uh makes their money in charging fees on these products. So I think it's net positive. The other thing I would say is to improve the user experience. I've

been in crypto for many many years and I still get frustrated with the user experience of many of these onchain applications or mobile uh crypto applications. It's just frustrating sometimes. the stuff does not work when you want it to often or uh the interfaces maybe seem sophisticated to those designing them, but they're confusing to end users. And if we're going to take crypto from this early niche thing to mainstream adoption, you have to do the same thing that happened with the internet, which is went from these websites and forums that people didn't really know how to use to mobile applications that are so userfriendly that my grandma can pull up her phone and order a Whimo without having to ask me a single question. I think crypto is

so early in that part of its journey. And uh there's a reason that people are averse to adopting crypto from a mainstream perspective. It's hard to use. >> Yeah, I I love that answer. I was thinking of three things. UX was first. UX is really terrible and it is the key to onboarding everything. Always has been in tech. Um you can think of a million examples where that's true. And crypto UX still is really bad. I think crypto uses way too many buzzwords and the buzzwords are terrible. Uh Rick Edelman points this out. You say something like trustless, people like trust. You say zero knowledge proofs, people like knowledge. These are terrible buzzwords that turn people off and uh we should scratch them from uh

our vocabulary. And then the third thing that I think crypto uh natives always get wrong is that they focus on the reward when what most of the people coming into crypto will focus on first is the risk. If I go and pitch to an investor about Bitcoin, they don't really care that much if Bitcoin goes up 50% or 100% next year. That's not the deciding factor. What they first want to know is will you lose my Bitcoin? Will it blow up? Uh what is the correlation? What is the risk? So putting risk first in the riskreward equation, I think would be uh very effective uh in in on onboarding a lot of people. Matt, we're get you're

you're dishing some great insight today. Just just things I feel like we haven't heard about like these institutional people, right? That it's like that's I think that's a great perspective of like, you know, we all think about, well, what if I buy Bitcoin, it gets outlawed and it goes to zero, but it's like they're not thinking about that. They're thinking about like, are you going to lose that? Like, is that money? Like, is the Bitcoin going to disappear? Because I read about people looking in landfills for their hard drives. Like, is that going to happen to you? No, but really stock the stock won't disappear. No one will steal your stock. It's yours. You know, so that I think that's a really interesting perspective.

>> Yeah. Just to just to endpoint that Matt Matt referenced earlier that financial advisors spend about 5 hours a week on managing investments. And if you assume that they spend 2% of that on crypto, that's 6 minutes a week on crypto. So, when they open up their computer and they Google Bitcoin and the headlines that they see are someone looking for a billion dollars worth of Bitcoin in a landfill for the past decade, of course, they're going to be like, "That sounds kind of crazy. I don't want my clients to know that I invested in something and it ended up in a landfill because my wife accidentally threw out my computer, whatever that story is." So, so I think that is uh is very real. the amount of attention span that they have on this

thing, they're going to focus on the risks as Matt mentioned and the the amount of focus they have on this is very very finite. And so it's important that we put the right things in front of them and we answer their questions and we don't bury the the most important factor to investors. Sure, tokenized financial products are the future, but there is a big sticking point. They all need to speak to each other. This is a tough problem to solve, but chain link does exactly that. It's the universal language for financial markets, linking Wall Street to web3, banks to blockchain, and so much more. See how Chainlink is linking the world by going to milkroad.com/chainlink.

Beautiful. That's a great answer. Thank you guys. Another fantastic podcast in the books. And it wouldn't be right to end a Milk Road show. Matt knows where I'm going with this without circling back on, I quote, the best bet you can make this year, which was wicked for good. And just for anybody who hasn't been listening, uh the first show I did with these guys and with Jay a couple weeks back or two months back, we talked about Poly Market, we're very excited about Prediction Markets and Matt made the bold prediction that Wicked for Good would be the top grossing film of the year. At the time it was at 40% chance on Poly Market. It peaked two weeks ago.

It was at 79 or something like that. So you would have made a 2x but it's looks like its second opening weekend has disappointed and now it is at 1%. Minecraft has taken over as the top the clear frontr runner unless Avatar blows us away uh with a huge box office over Christmas which it it only have like seven days to make it. So Matt, it was a it was it was a fantastic bet. If we got an in and out, we would have made uh some nice coin there. But looks like Wicked is is totally cooked.

>> That's right. Yeah, as we were saying, bulls and bears make money, pigs get slaughtered. If you're looking for that last little bit, you suffered this. You know, I I did say I I think what we overlooked, Ryan and I, is that most people hate musicals. And we didn't bake that into our analysis and now added it to my personal maxims. And um yeah, you can't short Minecraft, I guess. Look at that thing. To the moon. We should have known. Listen, I haven't seen anybody I haven't seen any viral trends of people going totally berserk in the theater during Wicked and bringing chickens with them, which is what we saw at the start of the summer for Minecraft where they had to shut down screenings all over the world because people were coming in and going it was like a total crazy party.

So, that should have been a pretty good indicator. Clearly, we could have gotten Minecraft at a at a pretty nice discount a couple weeks back, but live and learn, man. A new year starts soon, Matt. And a whole new slate of movies is set to come out. I'll be ready and better next year. >> All right, gentlemen. Thank you so much for another fantastic episode. Always a pleasure to have you guys on. Uh and I feel like we will be seeing Ryan again before the end of the year for some 2026 predictions. Matt, we won't we'll see you hopefully next year as well. Thank you for all the great shows uh so far this year. I think it's been a huge boon to to Milk Road and also to our audience. I think they love hearing you guys. Um so we will definitely have you

guys back. >> Thanks. >> Thank you. If y'all are making swaps or trades right now, highly recommend you check out Milkroad Swap. This is a DEX that we built in partnership with Cow Protocol. Why did we build it? Not to make money, just honestly so we could have a place to do our swaps for the lowest fees that we could find. This is the fees on Ethereum, Arbitum, and Bass are only.15% fees. Uh this is a huge difference from uh other centralized exchanges that charge half a percent or even up to 1.2% fees on their swaps. Also, you can swap on Salana all at swap.mmillgro.com.

Check it out today. You won't be upset. And you can join me in my favorite place to make swaps on chain. Want insights on what's moving crypto markets and how we're trading each event? Subscribe to our channel and join the Milkro Daily and Pro Newsletters and start investing like the top 1%. This show is for educational purposes only. Nothing we say is financial advice. Investing is risky.