Crypto Q2 2026 outlook and what could unlock the next bull run

Transcript

And this has been ongoing trying to find that intersection between AI and crypto. But now AI agents really are emerging as like the, you know, potential use case for this stuff. >> Bitcoin was poised for a short squeeze, but now it seems to be losing a bit of steam. Are we finally going to break down out of this bear flag or is crypto about to shock everyone and explode higher? Hello and welcome to the Milk Road Show, the podcast that knows that bears sound smart and bulls get rich, but everybody gets wrecked sometimes. I'm your host, John Gillan. Today is Thursday, April 30th, and today we are joined by David Duong. David is the global head of investment research at Coinbase Institutional, which is a big fancy job that means he's really smart about crypto. He's also a long-time friend of the Milk Road Show, one of our

favorite guests. In this episode, David is going to fix crypto. So, if that all sounds good to you, make sure you like and subscribe. Share this episode with somebody who's going to enjoy it. Today's episode is brought to you by Cape, the privacy-first mobile carrier, Pharo's, the layer-one built for real fi, and Consensus Miami, where the next cycle starts. And welcome back to the Milk Road Show. David, how are you, sir? I'm good. Thanks for having me. Love making promises I can't keep. >> [snorts] >> Yeah, well, if by the end of this you haven't fixed crypto, I'm going to ask for a refund. Uh, but David, I I I wanted to start with Bitcoin here. Like I said, it's been rejected after tapping its head off of 80K. Bulls are hoping for a break out break out, bears are hoping for a break down. In your monthly

outlook for Coinbase Institutional, you said your official outlook is uh neutral for Q2 of 2026. What's driving this analysis for you and why can't the markets mind here? Yeah, I think that we're in a very headline-driven market right now. And I don't think that would surprise anyone. It feels like everything is being moved by what's happening geopolitically in Iran. Uh, and you could get a headline on on, you know, at breakfast that really won't carry over at the dinner time. And we don't know whether there's actually a deal on the table, whether there will be a military escalation. Any of that could happen over the next two to five weeks. Uh, so it feels like we're kind of like jumping from day to day. But it is interesting that equities is rallying at the moment. The

correlation between Bitcoin and US equities, for example, which actually peaked around 65% in February, it's actually been coming down over the last few weeks. And I think that's really showing that Bitcoin and crypto have more broadly kind of carving out its own narrative. Okay, well, I would like to hear your thoughts about what that narrative is. You said in your monthly report, we are optimistic that the macro situation could shift in a positive direction in the weeks to come, which would help many crypto assets form a bottom in the near term and then recover. Do you think that we are in the process of putting in a bottom on Bitcoin here or do you think we might go lower from from the lows we've already made?

So, it's interesting cuz we ran a investor survey just a couple weeks ago. It was after the start of the uh the conflict in Iran, but kind of before like some of the capitulation we've already seen. And you know, there was this kind of like, you know, divergence between people who thought we are deep in a bear market cycle, yet people very much seeing that Bitcoin was undervalued. Uh, so how do you kind of square that circle? I think that medium-term, long-term, people still think there's an opportunity here in Bitcoin. Probably looks cheap if you have that view. Um, but certainly I think right now Bitcoin's being driven more by some of those liquidity measures, some of those kind of idiosyncratic things that really affect its market plumbing more than anything

else. Whereas equities and other asset classes are being affected by stuff like earnings that are happening this week, for example, or where people believe the AI narrative is going. So, it seems it looks kind of similar, but it's it's different. And I think from that point of view, you know, you have things like, you know, strategy putting out its stretch product, the digital asset credit, for example, which is raising a lot of money. That capital is being utilized for buying Bitcoin. Um, and that's far outpacing the amount of Bitcoin selling we were seeing. Plus, I think the narrative we had in Q4 and probably your early Q1 as well was that we were seeing a lot of long-term holders, the OGs in the space, actually reducing their supply of Bitcoin, which we never really bought into because you

weren't seeing that go on to exchanges, which is where if you were really selling your Bitcoin, you probably like would see that going up. Um, but over the course of Q1, we actually saw that those long-term holders, anything above 155 days, actually increasing the amount of Bitcoin they're holding. If you're not seeing this, you're trading blind right now. There are real moves happening behind the scenes that most people don't see until it's way too late. Inside Milk Road Pro, you can track exactly what our analysts are buying, selling, and what's on their watch list before it moves. You can try it out for just a dollar for 7 days. The link is in the description. Interesting.

Okay, so I want to ask you about this this thing you've pointed out about this divergence that's happening. Because as you've pointed out, there's a lot of headlines driving the markets, a lot of macro things that aren't really crypto specific. And yet the the crypto specific news has all been really constructive. We've seen a lot of institutions like BlackRock, Goldman Sachs, Morgan Stanley, the list is literally too long to read, but they're all launching new products, all launching new things in crypto, moving into this industry with with talent, with resources. Do you think eventually that this institutional like bull run, for lack of a better word, is going to result in higher prices or are we going to continue to see this languishing sideways action? And like what breaks us out of this?

I think we will. You know, it's interesting because some of those institutional themes are being played out in tokenization or stablecoins. Those are things like the NYSE or Nasdaq kind of announcements that they want to go for example. But yeah, you're also right that, you know, Morgan Stanley launched a crypto ETF. Their RIAs are starting to recommend it for the first time. We haven't really seen like the magnitude of those flows just yet. It's only been like two, three work Excuse me, two, three weeks. So, it's still fairly early and in that process.

Uh, but Goldman, you know, they also are launching like a covered call kind of ETF on Bitcoin. So, I mean, these are definitely like massive themes. At the very least, it shows that, you know, crypto is, you know, not going away anytime soon. It's definitely an established asset class at this point. I mean, I thought that two years ago, but even more so now. Um, granted, you know, some of that is on the expectation that more regulatory clarity is coming. Uh, so I think that that still represents a pretty important theme in the space. But for the most part, yeah, you know, I think that ultimately many of the people we've surveyed and, you know, we've run multiple ones with different kind of tweaks on the

question. Uh, but it shows that more people, I think 65% of the people we polled, uh, and this was in January, still want to allocate or increase their allocation to the crypto. There's been a series of headlines that haven't been positive for crypto recently, mostly around hacks. Obviously, the biggest one is the LayerZero KelpDAO Aave situation. I'm curious if you've heard any changes in investor sentiment based on that. Because Aave's price, the token of Aave's price, has been relatively stable, still around 100. There's this DeFi United movement that's already started to plug that hole. And I'm curious if that has moved the needle or or shaken faith in DeFi or if people are seeing this as sort of like, oh, this is more battle-tested now. They can handle these sorts of things. What's been sort of the takeaway you've had from that? I mean, this is a part of a lot of

discussions. It's interesting though because it's not making its way into concerns around the price action itself. Uh, to your point about, well, Aave has actually looked okay relative to all of this despite suffering the downstream effects of that KelpDAO hack. I think that to some extent, some people are worried when you put it in combination with what's happening with the Mythos moment, for example. Mythos being an, you know, potential AI model that could find a lot more security vulnerabilities. And, you know, there's a lot of stuff in DeFi that was built fast, break things kind of mentality.

And, you know, like this is the concern that, you know, even if you had a good audit of the smart contract code, other things. I mean, Mythos's uh potential is that it could also find things on a composability basis. I.E., it might take three or four steps. It might need to combine a few things, but ultimately, you could use those things to find a way to, you know, potentially exploit a potential protocol or or, you know, some bridge or something. Now, of course, KelpDAO was very specific to the Lazarus Group, what happened with potential North Korea. But I think that, you know, this is still kind of raising concerns around like, well, if I'm an institution that is interested in DeFi, and I think there

are institutions who are interested in either, you know, using this inside of their own infrastructure or or playing with it, you know, like I think many of them are saying, well, how do we get another layer in between there? And I think that technology does exist, you know, somewhere between zero-knowledge proofs and fully homomorphic encryption, um, and decentralized identity. I think there's a path towards having a permissioned DeFi kind of platform, which I get it. Some people who believe in the DeFi ethos might be, you know, kind of put off by that prospect. Uh, but I think if, you know, there's a ton of capital that can be unlocked with institutions getting into the space, uh, that I think that's something we really

have to consider. Got you. Okay, so you're expecting there to be some innovations and and solutions iterated on here to try to protect from some of these risks in the future. Interesting perspective there. What about the DeFi United aspect of this? Because I think in TradFi, if there's a bank run or, you know, a theft of some kind, uh, you're kind of on the government to bail you out or the FDIC. But in crypto, that doesn't exist. But this DeFi United thing has shown that the community will come together to support the other investors in the community and in the ecosystem. Has there been any like reaction to that that we've seen this this grassroots movement that's grown?

I think that we have seen this happen in the crypto space before. And people are, you know, I I think it's always seen as a positive for crypto. Um, I don't think that's different here. Uh, but certainly, you're on you're right. It's you know, this is like the the the pros and cons with crypto cuz if you're talking about the traditional market, you have central banks and others like buyers of last resort. Uh you know, beyond that you have marketing departments and all these kinds of things which we don't have inside of crypto. And like some people like love that but other people are like, "Well, this is why like Bitcoin's not getting the traction it has. It doesn't have a marketing department to tell people what we're doing in the space." And that works or worse. And I think that in the case of a community coming together to

actually bail out uh some of these problems that we've seen inside of DeFi, I mean, I think it very much shows that there are uh ways to get towards resiliency. Uh but it looks very different for what you're used to in the traditional world. David, before we go on to I have a lot of questions about the institutional investor survey that you guys recently did. But before we go on to that, I want to ask you about something you said the last time you were on the Milk Road show, which was that ETH is one of the most undervalued assets on the market. We've seen ETH finding some footing. The ETH BTC ratio has seen some strength here recently. What is your outlook on Ethereum here? Do you think that that undervaluation is likely to change? Do you think that Ethereum is faring well in this environment so far in 2026?

What's your outlook on ETH been here? I think that Ethereum is coalescing around a different narrative than the one that we saw 2 years ago. You know, like 2 years ago ETH I think suffered from concerns around whether layer 2s were going to eat its lunch, for example, whether layer 2s were extractive to the activity. And I feel like a lot of those themes have really kind of fallen by the wayside. And it has been reflected in the ETH L1 versus ETH L2 token kind of kind of narrative. You've seen that like Ethereum has actually did perform pretty well in part because I think the fees are also cheaper on the L1 now than they were previously. I think like once upon a time you go back 2 years and you're

like, "Crap, I just need to send like 50 bucks. It shouldn't cost me this this much to send it." Which is of course why the L2s were there and that ecosystem narrative was really attractive cuz I can do it for like a penny or less than a penny. Um but now, you know, it's becoming tolerable again and you could send a fairly decent amount on Ethereum and not feel like you have to pay uh a ton of capital. So, I think the gas concerns around it have kind of moderated. Uh you're seeing that Ethereum has really kind of jumped to the forefront on the uh you know, quantum uh discussion, for example, showing that they're actually trying to tackle this, which I think, you know, smartly they they kind of position that in juxtaposition to what's happening on Bitcoin.

So, I feel like there are those things. Plus, I also like that from an activity perspective, Ethereum's also kind of, you know, leaning into the AI agent narrative by saying like, "You know what? Let's enable that AI agentic commerce kind of environment cuz you have these protocols like ERC-402 and other things." Um but you also need to say have uh AI agents be able to verify other AI agents. So, Ethereum is enabling that in its EIPs. So, I I think that this is a good trajectory for where Ethereum is going. Prior to this, it was somewhat more kind of, you know, uh directionless a little bit because, you know, they were trying to restake it. They were trying like this narrative, composability, and all this

kind of stuff. And I think they were good things from an, you know, academic perspective but not one that I think really resonated with people who were looking for the you know, the investment opportunity uh of ETH. Gotcha. Okay, so the the asset is evolving, the ecosystem's evolving, the narrative is evolving, and all that's generally constructive on Ethereum there. Um one more question about this. Your outlook for Q2 is neutral. Is that across all of crypto or do you think that there will be pockets of outperformance continuing in the crypto industry even though the overall outlook for crypto is neutral right now?

I'm neutral because it's such a hard uh you know, it's it's hard to kind of prognosticate in any environment but especially in this one where we are getting whipsawed by headlines not even on daily basis but on hourly basis. Like it's you know, like it's it's too tough to actually say like, "All right, for the rest of the Q for the rest of Q2, I'm optimistic or, you know, pessimistic." Honestly, that's kind of why I'm playing it like by ear. Uh but I am optimistic short-term. I do think that at least over, let's say the next few weeks, uh we could see a fairly decent environment evolve. That's because I also the macro environment is kind of amenable to it. But also some of

the medium-term risks in terms of where rates are going to be are where like midterm elections are going to put us or how does like AI transform like the labor market, you know, like all those things I think represent medium-term concerns, i.e. not necessarily things that would qualify as downside risks yet or even if they they, you know, whether they present the prospect of that. But at the very least, it's not a now kind of moment. Right now, I would say you've got the US Treasury General Account Balance having built up to about uh a you know, I think a trillion dollars uh over the course of the last 2 weeks because of, you know, US tax receipts.

Now, like that spending is probably going to come in in May. So, that should unlock more liquidity. If some of that goes to say like digital asset credit or other things, then I would say uh you know, the financial conditions are going to look very like like uh like you know, very favorable to risk assets more broadly but crypto in particular. So, that's kind of what I'm looking at when I'm looking at the very short-term. But that also kind of hinges on like I have no idea what's going to happen in Iran. Like you know, all of the Marines have been moved to over from like Guam and Namibia and everything over the last week. Now they're sitting in Iran. Are they going to go in? Are they not? Are we going to get a deal? Like I have no idea what's going to happen on that

side. I appreciate the honesty of the shoulder shrug on this and just be like, "I don't know what's going on, man." Uh cuz I think that's where we all are right now. And I think there's a lot of value in just being authentic about that. Uh David, Coinbase and EY did a joint survey of institutional investors on digital assets. The report you all published on this survey was called Volatility Drives Discipline, Not Retreat. And I really liked that title. So, I wondered if you could just start with that. Explain why you all settled on that title and who exactly you all surveyed for this survey. Yeah. So, I believe we uh got around 350 institutional investors to respond to the survey. And, you know, they had to meet a certain threshold in order to be able to participate. Like so, I can't

remember the the number right now whether it was like 50 billion or something. But like uh effectively you need to have like some capital cuz we wanted to measure like real decision-makers in the space. And I think, you know, in previous cycles we've seen that given the move we had in uh on 1010, like we were expecting that people were going to pull back from wanting to take crypto risk or that, you know, they were going to be, you know, at the very least more reservations about whether the, you know, uh opportunities that they saw in crypto wouldn't necessarily be there. That wasn't the case. Uh it was super interesting the results of the survey because if anything, it showed that people were still very much adamant about trying to invest in the space.

They wanted to be careful about it. Obviously, they were more thoughtful about some of the risks. But I think this is why we chose that title, Volatility Drives Discipline. It's not that they don't want to be participants at all. And quite the opposite, they do. It's just that they're now thinking, "Okay, how do we consider custody? How do we consider like all the back-end stuff that we need in order to be able to trade this?" So, you know, people are not tightening their belts in response to some of the market structure developments that we saw around 1010. If anything, I think they're just kind of leaning into the idea of that like they need to have better risk management.

They need to have better position sizing. Uh so, that's what we mean when we say that we're like seeing people become more disciplined investors when it comes to this stuff. Your phone carrier knows more about you than your best friend [music] does. Where you go, who you call, when you sleep, and they're selling all of it. AT&T, Verizon, T-Mobile, they've all been caught leaking data or cashing in on it. And your VPN, your encrypted messaging app, they can't fix what's broken at the network level. That's where Cape comes in. Cape is America's privacy-first mobile carrier. Same premium coverage you'd expect, built with privacy from day one. Your phone's network identifier rotates every 24 hours, so you look like a different subscriber every day.

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>> [music] >> Pharo's is. It's a layer-one purpose-built for real fi, a real-world financial infrastructure that lets assets be [music] tokenized, verified, and traded at institutional scale. We're talking parallel execution for serious throughput [music] compliance baked in from day one, and infrastructure that actually connects on-chain and [music] off-chain systems. They've got a $10 million incubator backing builders who want to make real fi a reality. [music] Join the Atlantic Ocean testnet and start building at milkroad.com/pharosnetwork. One of the key takeaways from this report reading it that stood out to me was that 73% of the respondents said they plan to increase their allocation to crypto in 2026. 74% said they're also expecting prices to rise from here. And

you know, like you said, I think it's completely valid outlook to say you're neutral right now. These people seem to be far more bullish. I wonder if you could tell me little bit about where all this conviction is coming from for them, if there's any transparency into that, and you know, just were you surprised to see such high conviction from this investor segment? Yeah. First of all, like I think that the numbers you just cited are staggeringly impressive. And I think I misquoted my misquoted some of that earlier. I think I I thought it was 65% and, you know, 73%. Yeah, it's it's very very high. Uh so >> it down cuz it's so high.

>> [laughter] >> And right there, it tells you that institutions view this, you know, the the volatility we saw in Q4 more as a commercial opportunity rather than a systemic risk, you know, and and that was what surprised me because they didn't give us this impression that like, "Oh, yeah, like we're worried that, you know, we we saw auto deleveraging or all this kind of stuff." You know, quite the opposite, you know, like there's no specific kind of breakout expectation here, but the consensus just kind of pointing towards this recovery that they expect, you know, maybe not in the first half of this year, but potentially in the second half of 2026 because that's where the macro conditions themselves might like normalize.

Maybe the vehicles are have also changed because now we have like ETFs and, you know, digital asset treasuries and other things that allow them to take exposure. Um but it's the way they're doing it that I think really matters to them. It's not necessarily a binary question of like, "Do we or don't we?" Yeah, and so I think that's the the big takeaway for me there was the word discipline you used in the title. There's a lot of just patient capital that is disciplined in not, you know, panicking about the environment that we're in or the price action we've seen. Another thing I wanted to call out you touched on briefly was these investors are very strongly favoring the ETF and the ETP products that have come out for their spot crypto exposure.

What are the flows into the ETPs recently telling you about investor confidence in general, and are you like zeroing in more on ETP flows as a as a metric now knowing this information? Yeah. First of all, I would say over the last couple weeks inflows into spot Bitcoin and spot ETH ETFs have been back on the rise. Now, some of that is because the basis has become a lot more attractive too for anyone who is looking to like buy spot, sell futures, for example, which is a you know, a common expression for a lot of people and you know, typically when you see volatility start to dampen, that's where carry trades like the basis become attractive.

But here, it's interesting because you know, we have a geopolitical conflict, yet we're still seeing people kind of access these such vehicles or structures. But the survey also said that around 66% of investors are now accessing crypto through these ETFs. And, you know, like I think that this means a lot of these vehicles have become institutional on-ramps for many players. So, the steady flows that we've been seeing tells us that, you know, like even though some of that initial hype from, I don't know, I want to say like early 2024 when these ETFs were first approved, really started to bring people in. Even though some of that has moderated, that structural buying is really still at the beginning. And, you know, that's why

headlines like Morgan Stanley's kind of endeavors into the space or Goldman Sachs, I think that's why they're so meaningful because it really shows you that to us who have been here and and crypto just moves so fast that we're kind of just like, "Oh, yeah, like of course ETFs. Like what hasn't anyone everyone already been doing this?" Um there are still a ton of buyers out there who are just getting into this game. Yeah, and so I wanted to ask you about this. Just like you said, there's a ton of buyers who are just getting into this game. It seems like there's a ton of buyers who are just getting products that they feel comfortable engaging with in order to get into this game, meaning there's a lot of capital that wants to come to crypto but hasn't been able to up to now. And I think that Michael

Saylor's STRC his stretch product kind of shows that. It's it's unlocked unlocked a lot of capital that's come into Bitcoin and into crypto in a bear market that, you know, is coming in with bull market sizing. Do you think that we're going to continue to see that as we get more products coming to market, more innovations, more clarity in in regulation and so forth, that there is just a lot more capital that wants to come to crypto but hasn't been able to that's going to get unlocked in the near future here? Yeah. I think this is where the real world meets crypto. Not that crypto's in the real world, you know what I mean. Like the traditional finance space and and you know, and crypto intersect because, you know, like some of those things that I mentioned earlier in terms of where is liquidity getting unlocked in Q2. And,

you know, we've seen some of that happen already. Like the TGA balance, the Treasury General Account balance, for example, that $1 trillion will start migrating its way out of that balance sheet into the real economy. And as that happens, I think that people are going to be looking around for opportunities. And stretch offers, I believe, like a variable rate, but right now it's paying around 11 and 1/2%. So, it's capable of raising like $5 billion at at a phenomenal clip, which is, you know, then like making its way into the market. And, you know, the amount of buying power that gives you relative to what's being sold into it, you know, like who are the non-discretionary sellers? Well, like Bitcoin miners, others, for example, like I think that

you're talking about something like 1,200, 1,300 Bitcoin a day that is being purchased through the use of you know, strategies like, you know, bonds, the stretch product, other things like it's equity. So, you know, it's a staggering amount when you really think about it. But other things, too. The fact is that like people are also like, you know, if they you haven't received your, you know, tax return check already in the US, like you'll probably notice it's a lot higher than it was last year in part because of the one big beautiful bill that was passed in July 2025. So, that's also stimulus that's making its way into the economy, but a lot of people forgot about it because that was almost a year ago now when that happened. But like

you're probably feeling the real effects of that at the moment. The Federal Reserve, and we just got the Federal Reserve meeting yesterday, but you know, granted it was Powell's last meeting, but I don't think anyone's expecting rates to be hiked in 2026. You might not expect further rate cuts because of where energy prices are or where inflation might be going, but at the very least like we're talking about real rates that are still very accommodating for taking risk at the moment. So, I think that those things are definitely going to converge and you'll really feel it probably in May or in the, you know, back half of Q2.

Again though, you know, it's predicated on where real rates are going, whether that be influenced by what happens with the war in Iran. You know, that's the stuff you can't predict, but for now, all those conditions still look very favorable. Got you. So, there's a lot of things changing in the market, but they're favorable for for crypto and for Bitcoin, and that longer-term setup's getting stronger. David, another thing that stood out to me from this was 78% of respondents said that they believe that regulatory clarity and the Clarity Act is the most important thing that they need to get more involved, whether that's as an investor or launching their products.

The Clarity Act's been delayed several times, but the SEC and the CFTC have been very proactive about trying to bring regulatory clarity to the market. And I'm curious if you've seen any impact from this at all because there's been a lot of coordination between these agencies to sort of give the market a lot of clarity here, and I'm wondering if that's moving the needle on your side or if you have any thoughts on that and how that impacts the investment landscape here. Yeah. I I think it absolutely does. And it's interesting because, you know, we saw in the high 70s like the response rate for what is driving people into the market, it's regulation. But also where are people most concerned about? It's regulation.

And those numbers score almost like comparably. And it's really interesting. Now, how do you you, you know, reconcile those two things? You know, I think that yes, the regulatory clarity coming is absolutely why a lot of these institutions are now stepping in the space. No one None of them wanted to be early. We rolled it back 5 years ago, you were still getting like comments from very high-profile banking figures saying like, "Ah, I don't believe in that. That's all speculative and we don't you know, and and I don't have to tell you like our name names. You know who I'm talking about." But like they've completely changed their tune. And some of them are saying like, "Oh, we always believed in blockchain. We believe in tokenization." Like some who even go further.

So, I do think that that has shifted. But the, you know, a lot of the activity is coming from executive agencies like the SEC, like the CFTC. They are actively trying to provide clarity for the crypto markets and fill in an area that they know legislators haven't quite stepped into just yet. So, I think that many of them are kind of, you know, institutions, you know, that institutional capital is kind of waiting for the permission slip, but at the same time, you know, they are already kind of plan forward for the eventual clarity that they believe is going to take place. So, I absolutely think there is a wave of capital that's kind of waiting in the wings. In the

meantime, we can rely on those executive agencies to kind of provide that taxonomy for crypto, for example, or provide more clarity around perpetual futures, other things. And incrementally, I think that even if, you know, we still need the legislation to come in the form of a clarity bill or market structure bill, I think those incremental pieces are starting to be put in place so that a lot of these institutions can actually operate. >> Where in the market do you see a need for legislative action that this sort of regulatory guidance hasn't really covered yet, right? Like is it your example of is it purps? Is it DeFi activity? Is it, you know, some other kind of product around tokenization? Or are there specific like sticking points that you're hearing a lot from people in

these conversations saying like, you know, "I'm interested in this aspect of digital assets and I'm blocked cuz I don't have clarity there." Like where do you think that those biggest like I guess choke points are or next places of innovation that can be unlocked by by legislative action? >> Yeah, I think that's the perennial question because I think you know, the way people want to frame it from an investment perspective is like, well, what sectors does the, you know, market structure bill actually unlock for me because that's where I want to put my money, right? I think that's how a lot of people are thinking about things. And we have iterated on a number of those because early on people thought that, well, it's going to be where like there's no regulatory clarity for the tokens themselves, ala like Uniswap or other DeFi tokens, which is

why like, you know, Uniswap back in December 2025 finally had the fee switch vote, you know, I think it was once upon a time the concern that a lot of people had that you couldn't actually access the revenues that these projects had because there wasn't regulatory clarity. And you know, to like the, you know, the case of Uniswap or even like, you know, Aave's governance conversations that have been ongoing over the last couple months, a lot of people were trying to figure out, well, where does this all fall in line? And are we going to see like a, like further like a, you know, propagation of tokens or is there going to be a migration over to equity instead?

How is it going to be managed because if you are a decentralized project and you like are required to provide an, you know, an earning statement every quarter, who's going to do that? And so there were these questions, outstanding questions still, about like, well, I don't know, like, where do you go from like a decentralized project to a like or centralized project or decentralized one? And I think that those are the the the places that I think that clarity bill were supposed to finally settle. But there's new stuff down too, you know, perps are becoming a huge thing. It's a huge market. People really want to know like, how do I trade this stuff because getting access to it in the US, it's, you know, near impossible, which is why all of it's done abroad.

And we have perp like products like at Coinbase, but you know, like still people want more choices when it comes to stuff or tokenized equities. So I do think that, you know, more and more like there's newer sectors that are coming up that are going to need to be addressed by something like a clarity bill. Wall Street is here, the White House is here, all of crypto is here. We're talking about Consensus, the world's longest-running and most influential digital assets conference happening in Miami, May 5th [music] through 7th. This is where 20,000 plus decision-makers from 100 plus countries gather to shape the future of finance. 72% are director level or above, representing over 4 trillion in crypto AUM. Three days, six stages, 500 plus speakers including

Michael Saylor, Brad Garlinghouse, Anatoly Yakovenko, and Eric Trump tackling the three forces driving trillions on chain, crypto at scale, institutional integration, and agentic [music] commerce. Deals get signed here, funds get raised here, the next cycle starts here. Register and [music] save 20% with code milkroad at consensus.coindesk.com. I think it's nice to be in an industry though where we're seeing so much innovation that there's always more and more regulatory clarity needed. And that kind of goes back to your point about the biggest thing that's brought in capital is regulatory clarity and the biggest thing that's holding back capital is also regulatory clarity.

Um so it's an interesting interesting developing area and we'll we'll kind of have to keep on top of that. David, I really enjoyed this conversation, learned a lot on this. I want to ask you about what you're working on next because you know, we've talked about some of your recent reporting, your recent outlook for Q2, this survey you've done with institutional investors. You know, you're the head of research for Coinbase Institutional. What are you looking at next? What's on your radar and what are you focusing your research on now? So AI agents is a very big one for me. I think that this is a sector that, you know, if you are deep into the space, you probably already know it, you know, like we have a lot of projects and this has been ongoing trying to find the intersection between AI and crypto and

there have been a few iterations on that thus far in terms of how do we use crypto plat projects as a platform to sandbox and test different AI models, things like that. But now AI agents really are emerging as like the, you know, potential use case for this stuff because, you know, you have things like X402 at Coinbase, one of the, you know, protocols that allows these AI agents to have a microeconomy for the most part in terms of being able to send these microtransactions to each other. Like if, you know, you tell an AI agent, hey, write me a paper on, I don't know, like quantum computing, they'll say like, okay, I can do that, but then I'll need to like go to Stanford's databases to like access some random paper. You don't

have a subscription or access to it. They'll be like, well, just just just buy it. And you know, how do you instruct it to do it? You know, now you can give an AI agent a wallet, they can say like, okay, we'll just pay like like $2 to like whatever third-party platform we need to and we'll be able to access it. And that's where kind of like Ethereum also comes in because what if an AI agent needs to interact with another AI agent? I mean, this whole idea of agentic commerce really I think is a is a whole new sector. And you know, it's it's starting to grab headlines right now, but you can really only do it using blockchain rails. So it's very very specific to what crypto can offer the AI space. So I'm very much trying to figure out, you know, what's investable, what's

not, like how's this all going to grow. Yeah, well, I'm I have a lot of questions around this. I don't want to push you too much to say like, you know, name names specifically, but I I think at Milkroad, you know, we've launched Milkroad AI as well because we're very focused on this intersection between AI and crypto. And you know, maybe just around that, right? Like you've said these AI agents, this agentic economy is is a new rising thing. A lot of energy and capital is going towards that and it seems like a natural partnership between crypto and AI. Have you seen anything at that intersection that you think is particularly interesting or, you know, like you mentioned X402, but anything else at that intersection that's caught your attention because there's there's so many people trying to figure this out and it's very early days, but I just

wondered if there's anything else you could say about the intersection between those two. Yeah, I I can't name names unfortunately. [laughter] Well, you said Ethereum, that's good enough. There is one that I'm thinking about right now, which is paired with a stablecoin, which I think is very interesting and maybe some people who will will hear that and then they know what I'm talking about, but I think that that's the probably the front runner in my mind in terms of what's been interesting. I mean, you know, like once upon a time there were projects like BitTensor, which I think for a while were were doing very well, but for separate reasons not having to do with, you know, like the the growth of this sector.

I I think it was it was kind of taken down a little bit, but I think that it's worth watching to see like, well, how are people actually trying to tackle this space because, you know, there's so many things that have now been put in place and even like non-AI specific stuff like Worldcoin and other things of that that project that could be folded into the space. I think that that for me, like that intersection where like all these kind of like moving parts are now starting to like gravitate towards one another. Like I think that you don't really need much to like, you know, just put them together and have something new. So that's that's kind of what I'm looking for when it comes to the AI agent space. Well, when you publish a report on that, I hope you'll

come back on the Milkroad show and talk to us about it because I know we'll be very interested to hear. David Duong, Global Head of Research at Coinbase Institutional. Thank you so much for being on the Milkroad show. It's great to have you again. It was my pleasure. Thank you. Thank you all for joining us. I hope you all learned something today. So until next time, stay safe, stay educated, stay bullish, and we will see you all on the next episode of the Milkroad show. Thanks for being here everyone. Bye. Want insights on what's moving crypto markets and how we're [music] trading each event? Subscribe to our channel and join the Milkroad daily and pro newsletters and start investing like the top [music] 1%. This show is for educational purposes only. Nothing we say is financial advice. Investing is risky. Never invest more than you can

afford to lose.