We saw the fundamental reasons why Cathie Wood is so bullish into 2025 and beyond. But should anyone be worrying about the sudden weakness we've seen in the last few trading days? No, it's great to be on. I think the weakness we've seen over the

last few days is a healthy pullback. If you look at the crypto market, big picture, it's run up substantially since the election. We saw a lot of leverage build up in the system, and this is a natural washing out of leverage. There's been about $2 billion of forced

liquidations over the last two days. This has happened in crypto since its very earliest period. We need to reset the leverage levels, and then we'll build from there. But the long-term drivers are still intact. We're still in a strong bull market.

I think Cathie is right about where this is going. We feel exactly the same. That there was... I mean, you are someone who has seen some highs and lows. You understand the volatility of this asset class, but I'm interested in who

is coming to your asset management company? Oh, we've got some exciting music playing on set. That's thrilling to hear about what you think in terms of institutional money coming in now. But why is this the way it is? Is it still a flood of retail and high-net-worth individuals? What are you seeing in terms of changes?

Yeah, it's really been both so far this year, but I'm aligned with Cathie, thinking that the institutions have now started moving in in size. When you saw the 15 straight days of inflows into the Bitcoin ETFs,

Post-election, I believe that was institutional capital at Bitwise. Every year we survey professional investors and ask them what's keeping them out of the market. And for six straight years, they said a lack of regulatory clarity. Well, that regulatory clarity is coming,

and that's opened the floodgates to institutions. And I would just say, I think most people underestimate the size of this. BlackRock just came out and said most people should have a 1 to 2% allocation to

Bitcoin.
There's $100 trillion of institutional assets out there.
2% is a lot of investment. That still has to happen.
We're going to start seeing that really come in in 2025 into Bitcoin, predominantly. How is this going to broaden out, Matt?
Yeah, you're already seeing it broaden

out.
Actually. A lot of people were worried about the Ethereum ETFs, for instance, which launched this summer and had tepid inflows. But over the last month or so you've seen billions of dollars flow into those

products.
Again, the things that have happened in crypto in the past keep happening.
Historically, most people enter crypto through Bitcoin, and then they discover Ethereum, and then they think about Solana.
There's no reason to assume that the institutions that came into Bitcoin won't move on to other assets in the

future.
In fact, I think in 2025 you're going to see an explosion of interest in index-based strategies that give diversified exposure to crypto.
Of course, something we've been doing at Bitwise since 2017 when we pioneered that concept.

I think 2025 is when that sort of becomes a mainstream way to allocate to the space, the same way it is to stocks and bonds and real estate and everything else. You were talking about how the regulatory picture has got to become clearer.

We've seen new cryptos announced. It's someone who's invested in Bitwise. David Sachs. How much have you been in touch with David? How much have you been ultimately able to steer the conversation from a Bitwise perspective?

Yeah, you know, David is a good friend of Bitwise, has been an investor for a long period of time. The reason it's so important to have someone like David Sachs in that position is these two industries are critical to America's future and they've really been constrained and challenged by regulatory overreach, regulation by

enforcement. I think the market probably doesn't understand how fast these industries can move if there is regulatory clarity. So, you know, Bitwise is involved in Washington. We talk to folks in Washington all the time. It's great to have people who understand crypto now taking office.

I'm just excited to see what happens from here. You went back to something you just said that things happen again and again when it comes to crypto. The dominance of Bitcoin was your pursuit of thought. But what happens again and again is that

all boats rise and all boats are great, and we see meme coins coming out thick and fast, being spun out, and there's fun and there's exuberance and there's an air of being at a seat at the table at blackjack sometimes, and I'm not taking

That's away from the market participants.
But how much is there a worry that meme coins are going to become something that
does ultimately help those who don't understand them enough, the trading
nature of it all? Yeah, I think that's worth being
concerned about.

And again, I think the answer there is
better regulatory clarity. We've sort of taken a hands-off
approach. We're not going to touch this, which
isn't the right way to help investors. We need reasonable rules that allow
crypto to thrive but separate the good

from the bad.
So it's absolutely true, investors moving into crypto should be careful.
There's a big difference between Bitcoin and the latest AI-driven meme coin.
Folks need to understand that. So yeah, we worry about this.
People need to understand why meme coins

exist.
I agree it's an exciting part of the market, but it shouldn't be a huge part
of your portfolio. And let's just talk about the
intersection of TradFi, as people would call it, and crypto and how we're seeing
it fusing together.

Real-world assets are something people
talk a lot about ultimately going onto the blockchain of some sort.
But Matt, there's also new offerings being spun up, whether it's in the
options market, or just other ways institutionally minded players can
access the overall ecosystem.

Is that progressing and maturing the way
that you want to see it? Yeah, absolutely.
We've been talking about crypto as a new asset class for a number of years, and a
new asset class needs all of those pieces to thrive.
It needs options, it needs ETFs, it

needs ETF options, it needs futures. It needs other derivatives. It needs institutional players taking part in this ecosystem. We've been checking every box as an industry, so people who are skeptical that this is going to be a major new asset class that stands alongside stocks

and bonds and commodities and real estate, you just need to look at that track record. So from my perspective, it's been beautiful to see. We've made a huge leap forward in 2024, and I think that's going to accelerate in 2025.

Bitcoin Slumps: Trump Euphoria Gives Way to Fed Wariness

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Bitcoin Slumps: Trump Euphoria Gives Way to Fed Wariness

Bitcoin Slumps: Trump Euphoria Gives Way to Fed Wariness

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