Institutional investors as Bitcoin's next marginal buyer

Transcript

And one thing we've been talking a lot about internally at Bitwise is that DeFi assets have been performing exceptionally well. We have a DeFi index of 10 of the largest assets. It's up 51% over the last 3 months, which has been a terrible period for most of crypto. Usually in the deepest, darkest bare markets, you don't have small cap assets rallying. Why are these assets rallying? Strategy sold a little over $200 million worth of Bitcoin and Bitcoin price shrugged it off like nothing happened. Have we bottomed? Are the bulls back? Or is this just another fake out before another summer of selling pressure?

Hello and welcome to the Milk Road Show, the podcast that knows that buying the dip these days feels like having your tortilla chip break off in the guacamole. I'm your host John Gillan. Today is Wednesday, July 8th, and today we are joined by Matt Hogan and Ryan Rasmusen of Bitwise. Matt is the chief investment officer at Bitwise. Ryan is the head of research and I am going to ask them a lot of questions about crypto. These are two of our favorite guests here at Milk Road. They always share a ton of alpha. So, if that sounds good to you, make sure you like and subscribe. Share this episode with somebody who's going to enjoy it. Before we jump in, I want to make sure that you all know that if you want to see what our analysts here at Milkroad are buying, selling, and researching with

live updates 24/7. Milkroad Pro is 33% off this week only, so check the link in the description to take advantage of that. Come join our community. Today's episode is brought to you by BitGet Stocks 2.0 0 with real liquidity, real dividends, and securitize the regulated rails for tokenization. Without further ado, welcome back to the Mo Show. Matt, Ryan, how are you guys today? >> Oh, it's awesome to be here. Thanks for having us. We're really excited. >> Yes, dude. Yeah. >> Thank you so much. Yes. Yeah, I'm I'm getting getting a little better at these. Um, guys, let's just start the conversation right there. Sailor sold uh or strategy rather sold announced that they sold 200 million of Bitcoin on Monday. Bitcoin seemed to barely notice.

Matt, I wanted to start with you. Your most recent CIO memo from Bitwise was all about strategy STRC. Uh, but that was all before this selling news. Does this update your outlook? What's your reaction to this? What are your thoughts here? >> No, it just convinces me that what I wrote wrote was approximately right. Right. My point of view was that strategy has been a dominant factor in Bitcoin for the last handful of years. It was the largest buyer and I think those days are over. Now, I think it's more of a neutral factor. I'd actually point to two things, John, that I saw over the last week or so. First, when we were at peak strategy stress, when we saw uh stretch trade down to 747 $75, when we saw uh Micro Strategy stock trade actually below its total

enterprise, MNAV, we were at peak stress. Bitcoin didn't care. Bitcoin didn't move at all. I think at one point stretch was down double digits. Strategy was down double digits, and Bitcoin was flat. that told you something which is that strategy is no longer in charge and then indeed as you point out when they actually sold Bitcoin Bitcoin I mean actually rallied on that news. I think the reason it rallied is people were worried that strategy would sort of stick its head in the sand and continue down a pathway of issuing stretch and building up risk in that ecosystem. And it turned out that they're actually what we all knew all along, which is a rational actor in this space that realized it needed to raise capital.

People downrated the probability that they'll be forced into some stressed liquidation event. And so, Bitcoin rallied a little bit on the news. Look, I think I'll go back to what I said in my memo and at the start of this commentary. I think strategy was the largest actor in Bitcoin for the last few years. it will still be important, but it's no longer the primary source of marginal capital. I think that's shifting to institutional investors, and I think that's what we're seeing in the market today. >> Ryan, any thoughts on that? And I want to get your thoughts on is the the fears over strategy and STRC as an overhang, is that behind us or is that still something you're getting conversations about from clients? And what what are your views on this here?

>> Uh, yeah, that's a that's a great question and I agree with with Matt's points here. Maybe I'll add some some evidence from from the boots on the ground work that I've been doing this week. Uh this week I've been traveling in the beautiful Pacific Northwest with our distribution team, meeting with clients all around the region. And what's interesting is that I've had several conversations and questions about strategy. Th those questions have ranged from is strategy do they represent a concentration risk for Bitcoin? They've asked is strategy going to blow up? Is it a problem that Sailor sold his Bitcoin? Each time I

articulated essentially what Matt just said. Look, this isn't a major long-term concern for Bitcoin. And I think it's actually good that the market is digesting the fact that strategy is not going to be buying a a million Bitcoin every 5 years into the future and that they will be sellers and buyers of Bitcoin depending on the environment. And what I found interesting was every time we had those conversations, the response from the client after they asked the question I answered, their response was, "Yeah, I agree. I don't think it's a big deal." And that to me was really really interesting because I think that signals exactly what we're talking about. There was a big concern about this a while ago. Today it's no longer a concern. Actually the marginal

buyer are the institutional investors that we are meeting with every single day. One thing we've all learned over the years is that investing is easier when you're not doing it alone. Our analysts have called AI stock winners like Micron, Nebius, and Bloom Energy early as well as crypto winners like Hyperlquid and Lighter. But honestly, that's only half the value. The real benefit is seeing every investment as it happens, understanding the thesis and research behind it, and having a team of five analysts researching the markets every single day. Milk Road Pro is 33% off this week only. Check it out at the link below. Gotcha. Okay. So, I want to ask some questions around this conversation of how this relates to Bitcoin and this bottoming process it's been through here. Um, you know, you talked about that maybe the long-term concerns aren't there, but strategy was

a big buyer in the short term and institutions are coming, but they may not be here yet. Bitcoin did shrug this off. So, how do you guys land on this conversation of is this going to create like a gap where we're trying to find a new buyer in the short term here and we don't know who that's going to be or is this more of a sign that hey, Bitcoin doesn't really need strategy anymore and the market's turning bullish and and we're going to keep climbing from here. Matt, what do you think about that? I mean, look, the history of Bitcoin is a history of the largest buyer handing off the baton to the next group of capital, right? So, before Strategy, it was GBTC who bought a ton of Bitcoin. I think they got up to 600,000 Bitcoin or something absurd like that. Before GBTC,

it was US retail investors. Before US retail investors, it was Asian retail investors. Before Asian real retail investors, it was cipher punks. And even if you go back to that beginning, right, people were like, "Well, who else will buy?" Everyone who's a cipher punk is already in Bitcoin. What is the next marginal buyer? And the answer was there was this series. It was like a a Russian doll of marginal buyers. The good thing about the point we're at right now is we know who the next marginal buyer is. Is the end boss of investing. It's institutional capital, which is talking about trillions upon trillions of money of dollars. and we feel very confident that it's going to come into the market.

In fact, you know, we're meeting every day with financial advisors, with clients, with sovereign wealth funds, uh, and they are all still interested in this space. So, almost unlike all those previous examples where there was really this question of who would be next, right? We weren't talking about digital asset treasuries being the driver of Bitcoin during the peak GBTC days. We were like, I wonder what's next. Uh the answer now is clear, which is institutional capital. I think they're going to take the baton and run with it starting at the end of this year and accelerating for a number of years after that. I think it's going to be a great bull market for Bitcoin.

>> Well, speaking of the final boss of institutional finance, Vanguard is an 11 trillion asset manager that had sworn and they refused to do anything with crypto. They announced, I think just yesterday or the day before that they're going to be hiring a new head of digital assets to to develop the firm strategy for going into crypto and digital assets here. Ryan, let's let's come to you with this question. What does this mean for this baton passing? And what is the market signal that this is sending that Vanguard is coming into crypto? >> Yeah. Well, I think this is a signal of that baton passing. We we've seen it, as Matt mentioned, pass among buyers and now we're seeing it pass among major players in the space. You had uh you had the early exchanges that were offshore

unregulated. Now you have massive onshore US-based exchanges, the Coinbase, the Krakens of the world, publicly traded uh uh companies that are facilitating this stuff. And then you have Black Rockck and Fidelity and Franklin Templeton and of course Vanguard. And I think that's a natural evolution of an asset class that's building out institutional infrastructure. That is the biggest market an addressable market that we could go after. Vanguard is trillions and trillions of assets and you know millions of clients who now are getting access to crypto who now will have had a have a head of digital assets kind of bringing them products and bringing them

access in a way they didn't have access two three four years ago when strategy and DATs and GBTC were the major buyers of Bitcoin. So, I think it's just a continuation of this trend that we're speaking of where we're transitioning into a mainstream era of crypto where institutional investors and institutional infrastructure drives the next wave. And it's not a small wave, it's a tidal wave that's going to drive multi-year tailwinds for the crypto industry at large.

>> Yeah, if I can just toss one thing onto this, we've seen this before, right? We talked today about Black Rockck being this huge positive force for crypto. We're a handful of years removed from Larry Frink calling Bitcoin an index for moneyaundering. So this conversion process is something we've seen before. And what happens is once they're converted, it's a one-way door and they begin to build in this space. I'm not surprised at all by this Vanguard announcement. I come from the ETF industry. Vanguard originally hated ETFs. Now I think they're the second largest ETF manager in the world. So, look, they were going to come around to crypto and digital assets eventually.

This doesn't mean they're yet all in on Bitcoin, but it is a one-way door as we've seen with Black Rockck, as we've seen with other institutions. To go back to our original conversations, as we saw with Michael Sailor himself, which famously tweeted in 2013 that he hated Bitcoin, and now we're talking about him being the most largest buyer for a handful of years. So, this is a tale as true as time. Eventually, Bitcoin conquers and crypto and digital asset conquers the entirety of finance. This is the way finance will work in the future.

>> Oh boy, I'm getting bullish. Okay, I want to ask a question around this. In the past, there was something people would call career risk on Wall Street of getting involved in crypto and sort of being seen as a pariah. Do you think now in this next cycle that this is flipped that conversation to where now there's career risk to not having a strategy around digital assets? What does that look like as as this starts to play out in this continuing institutional bull run we're seeing? >> Either one of you go this way. >> I would love to jump in there. Uh yeah, I hit my I hit my uh you know, Jeff, >> I'm impressed. Go ahead.

>> Yeah. Um no, I would just say look, I I mentioned this earlier. I've been on the road with with clients this week in particular. There's been a few points of evidence around the fact that it it is becoming increasingly something that financial advisors and and RAS in particular need to offer clients in order to retain and grow their business. Now, it's not the end all beall. Of course, clients are worried about a number of different things and they'll grow their businesses in a number of different areas. But what we have heard directly from our clients is that they have clients of their own who are asking for crypto exposure. Some just want Bitcoin. Some say they want Bitcoin but actually want crypto. But what's important is that they are asking their financial advisors and money managers

about getting exposure to the space. And if you're a financial adviser and your clients are coming to you and saying, "Hey, I want to own Bitcoin. Do I own Bitcoin?" And you say, "Uh, no, I don't believe in that." Or worse, you say, "I believe in it, but actually we don't have any products that we use to get exposure to it." You risk losing that client and losing those assets. And that's a real problem for money managers. So I think from that perspective there is certainly risk. And then I would just add one other piece of evidence here is that we've been speaking a lot recently with allocators. These are pension funds and endowments and other large allocators of institutional capital. And what they've said is that as more and more peers allocate to crypto, it reduces the

career risk of them allocating to crypto themselves. And it's not this linear relationship. every time one major endowment allocates to crypto, it makes it more likely that the next five will allocate and so on. And so I do think the career risk element uh is real, but it's actually a positive tailwind now whereas five years ago it was a headwind. >> Yeah, I think that's absolutely right. If I can throw on one other headwind which I doesn't tailwind which doesn't get spoken enough about. you look at that Vanguard offering, they're asking for 10 years of experience in uh in financial services and digital assets.

Uh you know, that was actually impossible to ask for a handful of years ago because we weren't 10 years old. The other thing I think about is you you think about when most sort of traditional investors got their first whiff of Bitcoin, which is really 2017. uh you had a whole rash of people on Wall Street who were 25 to 30 years old who learned about Bitcoin in 2017 and been following it now for 9 years. When they learned about it, they were a junior associate at Morgan Stanley or Goldman Sachs or whatever. Now they're 37 years old and they're managing directors and these are the people who have grown up with crypto for 10 years.

We've never had this experience. So I do think it's now a risk to be anti- uh digital assets. you look like you have your head in the sand, but also we have sort of a class of financial executives that are prepared to lead these initiatives at major firms uh who have been following the space for 10 years and that demographic trend will only strengthen for another 101 15 years uh which is why part of why I'm confident it will take over sort of huge chunks of the financial ecosystem. >> Matt, I'm very glad to hear that you've read the job description. And I just want you to know that when you put you sign the contract, make sure there's a clause that says you can keep doing the interviews at Milk Road while you're running things at Vanguard. Um because

I'd be heartbroken if we lost you. Ryan, do you want to go with you? >> I'm glad you picked up on that, John, because that that was a little concerning. >> Come on, boys. >> You'll cry me out of Bitwise when I'm dead. Uh Bitwise for life. Um >> but I I do I love I love finding uh I love reading those. I do think it's instructive, right? like you really uh you really uh you you you didn't have the possibility to even ask for that a handful of years ago and now that's what they're looking for. I think it's a a an important signal moment.

>> Yeah. I also think I would just add to that like think about the experience someone who's been in crypto for 10 years and in financial services for much longer can bring to someone like Vanguard. They're not hiring someone who has no crypto experience and saying, "Hey, we need to catch up in digital assets. Go do something." they're going to hire someone like Matt who's been in the space for a decade or so and understands crypto intimately at every single level, importantly understands the history of crypto, the trajectory that it's on and that it's been on. And I think that will inform how they approach the space. And that just means we're going to have more sophisticated and better products and companies and access points overall as an industry. I

think that's that's really important. >> Okay, so I want to follow this thread of this progression and institutions coming to crypto. Matt, I saw you tweeted this out just this morning that DeFi has been showing a lot more strength than a lot of people expected with the recent hacks and so forth. You said that the a lot of people thought that the total addressable market of DeFi was crypto, which is around two trillion, but it's really more like all of finance, which is closer to 400 trillion. Walk us through a little bit of this thesis here and and just yeah, your thought process on this. Well, I mean, think about what the biggest news in finance is this month. It's probably Robin Hood launching its own layer 2 and people accessing tokenized stocks and, you know, getting prepared to borrow and lend them on platforms like Morpho.

Think about the largest story in finance last month. It was Hyperlquid challenging CME and ICE and other futures markets on perpetual futures and how finance will work in the in the future. not about trading Bitcoin pers about trading oil pers. And one thing we've been talking a lot about internally at Bitwise is that DeFi assets have been performing exceptionally well. We have a DeFi index of 10 of the largest assets. It's up 51% over the last 3 months, which has been a terrible period for most of crypto.

Usually in the deepest, darkest bare markets, you don't have small cap assets rallying. Why are these assets rallying? They're because of what I wrote. People are rerating this market upward 200x, right? It's tackling a much bigger market. Unis swap is not about trading ETH versus Salana. It's about trading stocks versus commodities versus crypto versus bonds. That's a 200x bigger market. And I think people are going to continue to rerate these assets upward.

The total market cap of the DeFi space is way too small for the market it's going after. Once you get beyond hyperlquid, the next largest DeFi assets are like two billion dollar protocols. I think that could look just absurd in a year or so if it continues on the progression that it's been on. >> Ryan, I want to ask you a question that has come up over and over again. Our audience is mostly self-directed investors. Obviously, there's a huge market here and a lot of capital, but with things like stable coins, for example, maybe there's a trillion dollar market there or multi-t trillion dollar market there, but it's difficult for self-directed investors to capture the value. As we see this onchain migration happening, onchain finance, DeFi for for Wall Street, where do you think that value acres? Is it into some of these

smaller protocols? Is it going to be mostly with the institutions and the companies themselves? How do you see that playing out? >> Yeah, I mean, it's a really good question. And it's one that that we get all the time is look, if stable coins are going to grow 10x over the next 3 years, how do I get exposure to that as an investor? And I think it the answer is that it's several different areas of the technology stack or the stable coin stack where investors want to have exposure to capture, you know, some relative portion of that growth. And so I think the layer one blockchains are inevitably going to benefit from this.

all of that activity that happens with stable coins settles on top of blockchains like Salana or Ethereum or Hyperlquid. So I think that's one way to to gain exposure and to express your your view as an investor that stable coins are going to generate a lot of value. Another area is the the other the a level up in the infrastructure like chain link for instance or oracles that are necessary for all these applications to speak to each other and blockchains to speak to each other and defy apps to work in the way that they do or prediction markets to work in the way that they do as stable coins grow as they're in their usage in in prediction markets. So I think th those will also be areas to capture value. Then of

course stable coin issuers I think will be large you know beneficiaries from the growth of stable coins and that you know is is relatively clear but like think about the size of these markets. US stable or stable coin issuers are the 15th largest holder of US treasuries right that's like an insane number. It's more than Germany and Norway and UAE. And that means that they control an incredible amount of capital that's only going to grow. And they're earning a large margin today on the interest those reserves generate. Now, maybe it'll shrink over time, but I believe that the assets they manage or the reserves they

manage backing the stable coins will grow at a much faster pace over the long term. And so I think it's stable coin issuers and infrastructure companies like Coinbase and Circle. I think it's the middleware companies like Chain Link and other oracles and the layer 1 blockchains like Ethereum, Solana, Hyperlquid and others. >> Matt, anything to add on that? Is that kind of how you view this as well? >> Well, I think it's a big piece of it. I also think just the direct apps are going to be an incredible, you know, Robin Hood launched a chain and Uniswap is integrated on it. I'm not sure that that's something that people expected, right? It almost doesn't make sense.

Robin Hood is a brokerage. UNIS swap is a disruptor of brokerage services and yet it's one of the beneficiaries of that. Uh I think people need to to to reconsider uh these applications specifically. I also think you know historically under the previous regulatory guidance applications couldn't acrue value to their tokens. I think that has been suspended and uh they're increasingly capturing value. Probably today is the worst they'll ever be in the future. I think they're going to continue to capture more and more value. So the only thing I would add on to what Brian said is I think I think people have misunderstand trillion and second the value capture

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>> Gotcha. Okay. So, there's a lot of places where value is going to acrue. people can kind of like find their own way to articulate that thesis, but there's just a lot of levels to this and a lot of value that's going to be created. I want to ask you guys about Hyperlid. We saw a lot of outflows from ETF products for Bitcoin, for Ethereum, but also have held up reasonably well. And I think you're you're correct me if I'm wrong on this, but Bitwise's uh Hyperlid ETF product had over $300 million of inflows. Really strong demand for an altcoin here. What's the signal you're seeing on this? Do you think this means that Wall Street or like investors are voting for the disruptor platform or what's what's the signal on this particular um the strength we're seeing for this particular hyperlquid product

here? Ryan, let's start with you on this one. >> Yeah, I think you know there's a natural relationship between flows and price which which which makes sense and speaks to you know hyperlquid is up 100% or something over year to date. Uh, and so of course there's going to be flows into the ETF which then drives the price higher and and so forth. And then you have the the counter factual happening to things like Bitcoin. But I think the broader picture actually is investors sitting back and saying, "What do I want to own for this next bull run, right? If crypto is repeating the four-year cycle, which clearly it is, what do I want to buy today that three years from now will have done remarkably well?" And I think Hyperlid stands out as one of those kind

of super apps that Matt's speaking about that is purposebuilt to acrue value to the token in a way that you couldn't do three years ago or two years ago. And I think that's what investors are seeing. I mean, if you look at how much revenue Hyperlid generates, it's like a billion dollars a year and 99% of that goes to buying and burning the token. And so that creates an incredible amount of demand from a buyback perspective, higher than most companies in the S&P 500. And they're just getting started. I mean, these oil futures started 3 months ago, four months ago. The the first preIPO where they saw a lot of traction was SpaceX, but you have OpenAI,

Anthropic, and a bunch of others coming over the next few years. You now have the S&P index licensed on Hyperlid. You have hip 4 and the growth of prediction markets on hyperlquid. So I think what investors are doing is taking a step back and saying well I want to own this asset that has incredible tokconomics is shipping new features and new products and is on this incredible growth trajectory. >> Gotcha. Okay. Uh I want to ask you a question Matt about something you brought up which was Robin Hood's uh announcement about their crypto involvement. They had this event called the world is flat. They launched all these new products for PERPS. They partnered with Lighter, not with Hyperlid. And I'm curious your thoughts on this because Hyperlid obviously had enormous success, but there is a big

market. A lot of people are offering per and it seems like there's going to be sort of like this uh let's say fight for market share. What do you think that investors should take away from that? Do you think that there's a signal that the the per space is about to get more crowded, more competitive? What is this alliance between lighter and Robin Hood signal? What are your thoughts on this? Yeah. Well, I think everything you said is true. It's going to get more competitive. They're going to be more providers. It's not going to be a winner take all. Most of these markets settle into something like an oligopic distribution where one firm has 60% share, another has 30, another has 10, and then there are a few residual startups. That's like what we see throughout history. I wouldn't be shocked to see that repeat here. I think

the mistake most people make though is they focus more on market share than market size. The bigger story here than market share is that the size of this market could 10x or 100x in the future. Right? That's that's what we've seen. We often say, you know, since Black Rockck came into the crypto market, I guess our share of AUM as an asset manager in crypto is smaller. No surprise. Black Rockck's an amazing firm, but our assets are up like 15x, so I'll take it. I think the same thing is happening here.

This is like a giant stamp of approval that pers are a huge part of the the future that they don't have to be on traditional regulated platforms that you can have large regulated entities with huge customer bases working with a project like lighter. That's bullish purp uh broadly speaking. So again, I would focus as much actually more on market size than market share. And I think there'll be a couple of winners here. And right now, both Hyperliquid and Lighter look well positioned. I can be bullish on both. I know that sort of crypto tribalism says I have to pick sides. Uh but I love all three of my kids. I love multiple different crypto projects. Uh I'm good with that.

Well, I I don't know about you, but I think one one team has to win and everybody else has to lose. No, I completely agree. You know, I think this has been a mistake in crypto for a long time is like this this uh I don't know, just like a winner or take all mindset and everyone has to lose in order for me to succeed. Ryan, I want to ask you a question about something I saw you say on a podcast recently. You said that Hyperlid is punching above its weight class. And I thought that was interesting because the the question that comes to mind is is Hyperlid going to grow into that weight class or do you think a lot of these big incumbents are going to be able to beat them down and sort of like, you know, break their moat and and take per and run with it

themselves? How do you see that resolving? >> Yeah. Yeah. A great question and thanks for being a listener. Um but but no, I I think that I think that it's going to continue to punch above its weight and it will grow into that kind of higher tier, right? I mean what you see is this smaller market cap asset generating hundreds of millions of inflows into ETFs within the first few months of launching which is an incredible amount of inflows into any kind of ETF crypto or not over the first few years. We've gotten used to it in crypto and and that was kind of my point. We've gotten used to the fact that ETFs see hundreds of millions of inflows when they launch in the crypto space. But Matt will tell you more than anyone with his ETF experience

that that's pretty abnormal. And and so when you think about what Hyperliquid's done on a relative market cap basis to something like Salana or Ethereum or Bitcoin, I think that's very remarkable and speaks to the demand for this asset and the adoption of crypto ETFs relative to to other industry ETFs. So, I do think that Hyperliquid is doing remarkably well for a relatively young project and a smaller market cap asset in terms of flows and growth and adoption. Uh, and I don't think that it's going to be beat down by its larger competitors. I think it's going to continue to perform well. And all I see

are more people asking about it, more people becoming aware of it, and more people finding ways to use Hyperlquid. I think that's bullish for it over the long term. >> Gotcha. Yeah. And I agree. And I think, you know, Matt, your point about the pie growing as all these things grow, hyperl doesn't have to unseat everybody. As long as per keep growing the way they are, like everybody can can benefit from that. Okay, we're getting close to time here, but I do want to ask a question around these new Ethereum uh nonprofits that have been launched. Matt, I saw you tweeted this out. You said it's kind of awesome to watch a decentralized system heal itself and find ways to make progress, inspiring stuff. And I think this is in reference to the launch of ETH institutional. You guys walk the institutional client beat more than

anybody else in crypto, I think. Um, and I'm curious what you're hoping to see from this new organization and and what what this means for for the future of Ethereum in your eyes. Just, you know, either one of you, I guess both of you guys on this one. >> Yeah, sure. I mean, I'll take a first stab. I think what we saw ETH do, it went through this sort of uh personality crisis where the Ethereum Foundation became very market focused. The market loved it. It felt like ETH had its mojo back and then the ETH foundation pivoted. Some of those leaders left or were uh encouraged to leave. Uh ETH focused down, the foundation focused down on some core principles and you saw just a deflation in the environment that surrounded ETH and that was reflected in

price but it was also reflected in vibes and crypto Twitter and I think it got pretty sad. But the beauty of a decentralized system is that the leaders can emerge organically. And so what did the investment community that cares about ETH, not just from a principles perspective, but from a price perspective do as well? They funded new institutions to take over that mantle. Not to supplant what the ETH foundation is doing around crops and core principles, but to take other parts of the ecosystem and move it forward. And that's like what you would write on a paper, right? You would say there are all these people who are economically incented to grow the the size of the ecosystem, make sure price goes up, make

sure we do institutional BD, make sure we get messaging right into the market, give people valuation frameworks. That would you you would write on paper that they should coalesce to contribute money to a new platform that makes that happen. But so often those theoretical exercises don't manifest. What was amazing to me is that this manifested toot sweet. I mean, people recognized the problem and before it got too bad, before ETH sort of spiraled, the community lost energy, it lost momentum, they took action to form these different pieces. So, what do I hope that they do?

I hope they do kind of what the ETH foundation was doing before the pivot, kind of what you see from the Salana Foundations and other market focused institutions. I hope they drive BD. I hope they incentivize projects and investment. I hope they communicate about the investment opportunity and they provide another voice talking to institutions about why ETH is exciting. Uh I would be, you know, we we're we own ETH in our index funds. We run ETFs. I was enormously pleased to see this because as I said, I really do think was a beautiful example of uh capitalism and incentives working in a decentralized format. And I think it shows how these decentralized formats can compete in a

harshly competitive rule world really effectively. I I I kind of loved it to be honest. >> It makes me want to stand up and salute. Ryan, what about you? Do you see this institution as a peer, as an ally, as a resource? How do you think they're going to enter into the the framework that's already going in this dialogue with institutions? Yeah. Well, I hope that this is a phoenix rising from the ashes scenario for Ethereum because what we've seen time and time again over the past few years is the Ethereum Foundation alter its course or say it's altering its course and then you never really know what that means or see that reflected in their actions or rather developments and price action of Ethereum. Now, this sounds ultra

critical of the folks that are contributing to the Ethereum development, and it's actually not. But what I think has been missing is this urgency to commercialize Ethereum, particularly when you have competitors that are highly focused on doing that, right? And five years ago, Ethereum dominated by such a large magnitude that it didn't have to focus on commercialization and finding ways to ship new competitive features, maybe raising fees, which sounds crazy, and I know some people are going to hate because it's against the values of why Ethereum was built. Great. But as an investor in Ethereum, you you you want

to see some elements of monetization and commercialization. I think they really need to focus on that. And when you start to think about these institutional focused uh Ethereum nonprofits, uh you can start to see a world where they're thinking about it from a capitalistic point of view. So I think that's really important. I hope this is a phoenix rising from the ashes moment from Ethereum. On Monday, I did a podcast with uh Joe Shalom, who's the CEO of Sharlink, one of the largest Ethereum DATs, and uh Joe Luben, who's the co-founder of Ethereum, and we talked through a lot of this. So, I I agree with you guys. I'm hoping that this is a turning point for them, uh because I think it'd be good for all of crypto. Guys, I'm going to land the plane there because I got in trouble this week for going over an hour with

somebody. So, I'm going to stop here, but I want to end with one last question. Ryan, where can we send our audience to find more of you and your work online? >> Yeah. Well, well, thanks for having us, and this was a lot of fun to chat with you. Uh uh you can find any of the research or content that Bitwise produces at bitweisinvestments.com. Matt writes a weekly memo called our CIO memo that's five minute or less read on how he sees the market. And we produce all of our research including quarterly reports and white papers. My content can be found on Twitter at Rasterly Rock. That is a a Game of Thrones uh uh reference that uh that I can't escape seemingly. But uh then so Matt, why don't you you go from there?

>> No, you should definitely give Ryan a follow. He is the brains of the organization. Uh look, I'm online on Twitter or XMatt_hogan. It's got a U in it. That's H O U G- N which is odd. And one shout out on the CIO memo is next week's is a special edition, I believe, written by Mr. Rasterly Rock if I'm not uh not wrong. Right Ryan? >> This is true. This is true. >> So don't miss that. That's that's uh it's going to be gonna be epic. >> This is huge breaking news. If anybody is not following the the weekly CIO memo from Bitwise. It's one of the most important reads in crypto and it's the best way to sound smart without actually knowing what's going on. So, I definitely recommend you check that out.

Uh gentlemen, thank you so much for being on the Milk Road Show. I always enjoy these episodes. Our audience loves you guys. So, thank you so much for being here. >> Thank you. Appreciate it. >> 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 Milk Road Show. Thanks for being here, everyone. Bye. Want insights on what's moving crypto markets and how we're trading each event? Subscribe to our channel and join the Milk Road 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. Never invest more than you can afford to lose.