WEBVTT - The Gold Versus Bitcoin Debate 0:00:05.880 --> 0:00:06.560 Welcome to Shanes. 0:00:06.600 --> 0:00:08.400 I'm Joel Webber and I'm Eric Belchernas. 0:00:13.000 --> 0:00:17.680 Eric, Bitcoin has had a year, ETF's contributed a huge 0:00:17.760 --> 0:00:21.000 part to that. There's this other asset class though that 0:00:21.239 --> 0:00:24.400 maybe it was the original bitcoin, called. 0:00:24.239 --> 0:00:27.480 Gold, and gold has also had a hell of a year. 0:00:28.080 --> 0:00:31.640 Yeah, bitcoin is called digital gold. They even call it that, 0:00:32.200 --> 0:00:34.880 and it's interesting. These two camps are constantly at war, 0:00:35.560 --> 0:00:37.680 but they have a lot in common in my opinion, 0:00:37.720 --> 0:00:41.680 from my sort of objective view. They're both about storing value. 0:00:42.040 --> 0:00:46.640 They both think the government debasis currency. The one big 0:00:46.680 --> 0:00:50.839 difference is Bitcoin's very volatile. I've always called Bitcoin like 0:00:51.000 --> 0:00:54.480 teenager gold. It's because it's literally sixteen years old and 0:00:54.520 --> 0:00:57.920 gold is four thousand years old, So to me it's weird. 0:00:57.960 --> 0:01:00.240 It's almost like gold is looking at itself as a 0:01:00.240 --> 0:01:03.960 as a little kid. So I think they should get along. 0:01:04.000 --> 0:01:06.480 But in a portfolio they play different roles because they 0:01:06.520 --> 0:01:09.720 move differently to stocks. But this year bitcoin ETFs have 0:01:09.760 --> 0:01:13.080 taken in so much money, right, and gold is up 0:01:13.120 --> 0:01:15.800 a lot but hasn't really taken in flows. So there 0:01:15.880 --> 0:01:18.600 is a bit of like bitcoin stealing gold's thunder as 0:01:18.680 --> 0:01:22.000 like the store of value or it would appear all. 0:01:21.959 --> 0:01:26.600 Right, So to actually debate all of that, Bloomberg hosted 0:01:26.640 --> 0:01:30.319 an ETF's in Depth event here at Bloomberg Headquarters in 0:01:30.360 --> 0:01:33.559 New York on December twelfth, and we moderated a panel. 0:01:34.160 --> 0:01:36.959 On that panel with us was David Lavelle, who's the 0:01:37.000 --> 0:01:40.440 head of Global head of ETFs at Greyscale, George milling 0:01:40.520 --> 0:01:44.440 Stanley who's the chief Gold Advisor at State Street Global Advisors, 0:01:44.720 --> 0:01:48.360 and then Sime and Himan who's the global investment strategist 0:01:48.520 --> 0:01:55.040 and head of Investment Strategy Group at pro Shares, this 0:01:55.160 --> 0:02:00.840 time on trillions the crypto versus gold debate. Today we're 0:02:01.280 --> 0:02:04.800 moderating on knife Fight, so so welcome, We're going to 0:02:04.840 --> 0:02:06.240 talk about gold versus bitcoin. 0:02:06.280 --> 0:02:08.720 We got simeon, David and George. 0:02:09.720 --> 0:02:11.520 So as Eric and I talked about this, we were like, 0:02:11.639 --> 0:02:13.680 how do we have you know that that part of 0:02:13.720 --> 0:02:17.040 Anchorman where the different networks go have like a street fight. 0:02:17.120 --> 0:02:20.160 We're like, let's have a street fight on stage between 0:02:20.160 --> 0:02:20.880 Golden Bitcoin. 0:02:21.320 --> 0:02:22.519 How much you guys hate each other. 0:02:24.200 --> 0:02:25.800 It's really we were just saying, I hope we were 0:02:25.840 --> 0:02:27.440 going to fight. You know, George and I work together 0:02:27.480 --> 0:02:29.559 for a long time and have a deep mutual respectymore, 0:02:30.080 --> 0:02:33.600 not meymore. No, I think it's a mischaracterization. There's a 0:02:33.600 --> 0:02:35.480 spot for golden bitcoin and everyone's portfolio. 0:02:35.560 --> 0:02:37.639 I think you just made this so morning, you just 0:02:37.720 --> 0:02:38.000 mad this. 0:02:38.320 --> 0:02:40.960 You do that at the beginning, we were supposed to work 0:02:41.040 --> 0:02:41.320 to it. 0:02:41.440 --> 0:02:44.640 Yeah, well, well I think I think there is. But no, 0:02:44.720 --> 0:02:46.560 I have respect for both of both of these, but. 0:02:46.880 --> 0:02:49.840 There's so many things that you do sort of probably 0:02:49.880 --> 0:02:52.280 see eye to eye on you like both hate the government. 0:02:52.880 --> 0:02:56.720 You're a hedge against inflation, you know, like distrust of everything. 0:02:57.639 --> 0:02:59.880 But then like, what what's the thing that you all? 0:03:00.080 --> 0:03:02.160 You know, really, you know, I can agree on. 0:03:02.080 --> 0:03:05.160 Am I on the right panel here? I'm I'm not 0:03:05.200 --> 0:03:07.120 sure I recognize myself in any of that. 0:03:07.360 --> 0:03:10.320 Okay, Well, it's been a good year. Everything has gone up, 0:03:10.919 --> 0:03:13.240 especially for crypto and gold like. 0:03:13.840 --> 0:03:16.359 Year, yes, and p's up, bitcoins up, Gold's up and 0:03:16.760 --> 0:03:17.480 an amazing year. 0:03:17.600 --> 0:03:17.880 I love it. 0:03:18.040 --> 0:03:21.040 The flows for bitcoin are way bigger than gold. 0:03:21.040 --> 0:03:23.000 How does that feel for this year? Yeah? 0:03:23.160 --> 0:03:25.000 No, Look, I think that there are plenty of other 0:03:25.040 --> 0:03:27.840 ways of investing in gold. There aren't that many ways 0:03:27.840 --> 0:03:30.680 of investing in bitcoin. So I think that that the 0:03:30.720 --> 0:03:33.600 other ways of investing in gold have benefited, probably to 0:03:33.639 --> 0:03:36.440 the detriment of ETFs. But it's interesting to see that 0:03:36.520 --> 0:03:38.640 in the last few months we've started to see some 0:03:38.800 --> 0:03:41.880 sizable inflows coming into gold ETFs, and I think that that, 0:03:42.640 --> 0:03:44.280 to my mind, makes makes a lot of sense. 0:03:44.600 --> 0:03:47.840 And do you view bitcoin flows this year as a 0:03:47.840 --> 0:03:51.680 goal guy as like, oh, it's just you know, shiny object, 0:03:52.000 --> 0:03:55.200 new plaything, or do you think those flows are store 0:03:55.240 --> 0:03:58.760 of value flows that are buying to hedge against currency 0:03:58.800 --> 0:03:59.360 debasement like. 0:03:59.400 --> 0:04:01.840 Gold would I'm not sure I see bitcoin as a 0:04:01.880 --> 0:04:03.840 store of value. I think that's a question that I 0:04:03.880 --> 0:04:05.960 hope that we're going to get into. But I think 0:04:06.040 --> 0:04:08.640 that the main reason why people have been buying bitcoin 0:04:08.920 --> 0:04:09.600 is because. 0:04:09.320 --> 0:04:10.600 They're chasing returns. 0:04:10.840 --> 0:04:13.400 The returns have been stellar in the fifteen years that 0:04:13.440 --> 0:04:16.800 bitcoin has been around. I don't know that that's a 0:04:16.800 --> 0:04:20.599 long enough period to draw statistically significant conclusions on. I 0:04:20.640 --> 0:04:23.600 love representing an asset with a six thousand year track record, 0:04:24.000 --> 0:04:26.479 but I think that gives me a confidence that some 0:04:26.520 --> 0:04:28.359 of the things I say may make more sense. 0:04:29.080 --> 0:04:31.640 Jump right in. Those are fighting words, Listen. 0:04:31.720 --> 0:04:33.479 I'm just glad I'm not on a panel they have 0:04:33.560 --> 0:04:37.200 to talk about spot versus futures ets. However, I would 0:04:37.279 --> 0:04:39.960 like to let everybody know that reports of our demise 0:04:40.000 --> 0:04:42.520 are great leads aggerated. We have five billion dollars in 0:04:42.520 --> 0:04:45.400 our crypto suite. Bidoh is a two and a half, 0:04:45.520 --> 0:04:49.000 and b ITU the two x is over a billion dollars. 0:04:49.040 --> 0:04:50.560 And we even have five hundred million dollars in the 0:04:50.640 --> 0:04:55.320 mutual fund BTCFX. So there's utility there and it's important stuff. 0:04:55.520 --> 0:04:58.240 But you know what I think about everybody says it's 0:04:58.320 --> 0:05:02.440 chasing returns in bit coin is a risk asset, and 0:05:02.640 --> 0:05:06.000 I just go back to the regional bank little mini 0:05:06.080 --> 0:05:09.479 crisis we had, and that was crypto related banks. You 0:05:09.520 --> 0:05:12.240 know that month of March almost two years ago, the 0:05:12.320 --> 0:05:15.280 S and P five hundred financial sector went down twenty percent. 0:05:15.520 --> 0:05:19.159 It bitcoin went up ten go. No, maybe it's not 0:05:19.200 --> 0:05:21.520 a risk asset. Maybe it's a diversifier, which is I 0:05:21.560 --> 0:05:23.840 think what some of some of the folks who maybe 0:05:23.839 --> 0:05:26.440 aren't chasing so much do see it zigging when other 0:05:26.480 --> 0:05:27.640 things zagg Yeah, I. 0:05:27.640 --> 0:05:29.760 Think it depends on the other things that zag I 0:05:29.800 --> 0:05:32.600 think one of the things that I'm a little concerned 0:05:32.600 --> 0:05:35.480 about with bitcoin, it's in its short history is that 0:05:35.560 --> 0:05:37.840 when bitcoin was launched, there didn't seem to be any 0:05:37.880 --> 0:05:40.960 relationship to the stock market. In the last few years, 0:05:40.960 --> 0:05:44.480 I think a significant correlation is developed with the stock market, 0:05:44.680 --> 0:05:48.320 and I find that concerning when the bitcoin guys, you 0:05:48.480 --> 0:05:51.600 and and Dave are out there claiming that it's. 0:05:51.360 --> 0:05:52.039 Old guys too. 0:05:52.080 --> 0:05:53.440 So I'm on your side, Tip. 0:05:53.320 --> 0:05:55.640 I'm delighted to do hear it. You're very welcome on 0:05:55.680 --> 0:05:56.520 my side. 0:05:56.680 --> 0:06:01.520 But it's interesting though, coin and gold aren't correlated. 0:06:01.839 --> 0:06:04.520 No, that's kind of cool. We don't see a relationship 0:06:04.560 --> 0:06:05.800 at all between them, you know. 0:06:06.440 --> 0:06:08.960 I would say that bitcoin means different things to different people, 0:06:09.120 --> 0:06:12.600 and therefore it has a different place in different investors' portfolios. 0:06:13.000 --> 0:06:16.080 And so those no, so those that are those that 0:06:16.120 --> 0:06:18.600 are seeking an opportunity to invest in something they believe 0:06:18.680 --> 0:06:20.800 is that disruptive technology can do that and can make 0:06:20.800 --> 0:06:22.960 an allocation to a spot in their portfolio that's a 0:06:23.040 --> 0:06:25.520 risk asset. And for those that are gold bugs that 0:06:25.600 --> 0:06:27.839 really feel in the basement of currency and all sorts 0:06:27.839 --> 0:06:30.560 of other characteristics of store value, have an opportunity to 0:06:30.600 --> 0:06:33.080 make an allocation in their portfolio that might otherwise be 0:06:33.160 --> 0:06:36.080 put to place where their gold allocation is, So I 0:06:36.080 --> 0:06:39.200 think it's very early in the life of this asset. 0:06:39.400 --> 0:06:40.800 I think when you take a look at some of 0:06:40.800 --> 0:06:43.320 the liquidity characteristics of it, and you know the general 0:06:43.360 --> 0:06:47.200 properties of ETFs, you know, democratizing the investment, validating this 0:06:47.320 --> 0:06:50.320 type of investment, you know, it's incredibly bullish. 0:06:50.320 --> 0:06:51.840 But it's very very early, and. 0:06:51.800 --> 0:06:53.520 So we haven't gotten to the you know, if you 0:06:53.520 --> 0:06:55.120 have dials on a on a radio, you got the 0:06:55.120 --> 0:06:56.880 big deals over here in the little dials. We're still 0:06:56.880 --> 0:06:58.440 in the big dials. Do I want to invest in 0:06:58.480 --> 0:07:00.279 this or don't I want to invest in this? And 0:07:00.320 --> 0:07:02.200 some of the debates that we're willing to have here 0:07:02.279 --> 0:07:05.800 are the smaller dial over here around you know, other characteristics. 0:07:06.200 --> 0:07:09.039 So one of the ways to define bitcoin and the 0:07:09.200 --> 0:07:11.160 Gary Gensler and the SEC had to deal with this 0:07:11.320 --> 0:07:13.880 was is it a commodity or a security? 0:07:15.280 --> 0:07:16.360 Dave, what would you say? 0:07:16.520 --> 0:07:17.160 What's commodity? 0:07:18.040 --> 0:07:18.480 Simeon? 0:07:19.000 --> 0:07:22.680 It's a commodity, and it differs from ether because ether's 0:07:22.680 --> 0:07:25.640 got staking yield and that makes it a different animal. 0:07:25.960 --> 0:07:29.560 George Still, I think commodities have practical uses in the world. 0:07:29.640 --> 0:07:32.600 I'm not sure that bitcoin actually does have that. It 0:07:32.600 --> 0:07:35.120 can be a fine investment if return is what you're 0:07:35.160 --> 0:07:38.800 looking for, But I'm not really sure. I tend to 0:07:38.880 --> 0:07:42.720 lean toward the Genstler view, which was that bitcoin is 0:07:42.760 --> 0:07:43.960 probably a security. 0:07:44.120 --> 0:07:46.600 So hang on for a second. So all right, here 0:07:46.600 --> 0:07:48.200 we go, if we finally. 0:07:48.480 --> 0:07:52.920 I don't disagree with you when you talk about the 0:07:52.920 --> 0:07:56.200 properties of bitcoin not really having usefulness when you're in 0:07:56.240 --> 0:08:00.760 a country that has a monetary policy and dollar that 0:08:00.840 --> 0:08:03.360 can be relied upon if you were to go to 0:08:03.960 --> 0:08:06.600 a country that has hyper inflation, or if you were 0:08:06.600 --> 0:08:09.800 somebody who really needed to rely upon a transfer of 0:08:10.120 --> 0:08:13.720 currency across borders with a high degree of confidence, with speed, 0:08:14.200 --> 0:08:17.640 with flexibility, with just an Internet connection, and needed to 0:08:17.680 --> 0:08:19.560 kind of move money to let's say, a family member 0:08:19.560 --> 0:08:22.400 halfway around the world. I think you would probably say 0:08:22.440 --> 0:08:25.320 it has tremendous utility. It just in the US market. 0:08:25.760 --> 0:08:29.520 This happens to be a transformative technology where the first 0:08:29.640 --> 0:08:33.360 application of that transformative technology doesn't have a great utility here. 0:08:33.440 --> 0:08:35.800 So it would be like you know, the Internet showing 0:08:35.880 --> 0:08:39.000 up and you know email being useless to me. It 0:08:39.080 --> 0:08:41.520 just happens to be that the first practical application of 0:08:41.559 --> 0:08:44.400 bitcoin is something that doesn't have utility to you or. 0:08:44.400 --> 0:08:47.040 Me, okay, with respect Dave as always. 0:08:46.720 --> 0:08:48.520 Of course, yeah, the most respectful guy. 0:08:48.559 --> 0:08:50.760 And I'm definitely going to disagree with you there. I 0:08:50.800 --> 0:08:53.080 think it's probably not helpful to your case to bring 0:08:53.080 --> 0:08:56.199 in the L. Salbator example, because the response to L. 0:08:56.240 --> 0:09:00.000 S Aalberta are basically adopting bitcoin in a very very 0:09:00.080 --> 0:09:02.880 big way, was that the IMF said, basically, you are 0:09:02.920 --> 0:09:05.280 never going to get a dollar of IMF help unless 0:09:05.280 --> 0:09:09.319 you actually abandon this stupid policy that you embraced. I'm 0:09:09.360 --> 0:09:11.800 not saying it's a stupid policy, but the IMF is 0:09:11.800 --> 0:09:13.760 somebody that I do pay attention. 0:09:13.480 --> 0:09:16.640 To, respectfully, not saying that it can be utilized as 0:09:16.640 --> 0:09:19.880 a national currency. But if I'm sitting in Buenos Aires 0:09:20.640 --> 0:09:23.480 and you know, essentially I can get a two to 0:09:23.520 --> 0:09:27.640 one you know conversion ratio on the Argentinian pace, well, 0:09:27.640 --> 0:09:30.240 if I use actual US dollars, they need something that 0:09:30.320 --> 0:09:33.160 is going to hold its value much better. I'm not 0:09:33.200 --> 0:09:35.520 suggesting they can utilize as a national currency. I'm just 0:09:35.520 --> 0:09:39.440 saying that despite its volatility characteristics, it is very volatile, 0:09:39.480 --> 0:09:42.280 but it doesn't devalue, and so they have something that 0:09:42.320 --> 0:09:44.559 they would rather have that volatility. But know that it's 0:09:44.600 --> 0:09:46.760 going to have and hold its value properly. 0:09:46.920 --> 0:09:50.240 I forgot to bring the popcorn. This is like there. 0:09:50.280 --> 0:09:52.080 You can carry gold bars around and try that. 0:09:52.160 --> 0:09:56.440 Yeah, ask your alternative the aluminum SAMSONI briefcase. It's like very. 0:09:58.200 --> 0:10:01.480 I've almost told you that I want to ask prisoner 0:10:01.520 --> 0:10:04.120 like Trump is indicated that there could be something resembling 0:10:04.120 --> 0:10:09.439 a bitcoin stockpile. George, do we put that right next 0:10:09.480 --> 0:10:12.000 to Fort Knox or or is there another place that 0:10:12.120 --> 0:10:12.880 it goes? 0:10:12.920 --> 0:10:13.959 It's much easier to store. 0:10:14.120 --> 0:10:16.240 Is there an it that you need to put somewhere? 0:10:16.320 --> 0:10:19.840 I mean, isn't this all up in the air, George, George, George, 0:10:19.880 --> 0:10:22.560 come on twenty years and for like the past fifteen years, 0:10:22.559 --> 0:10:24.320 people are saying, is there gold in the ball? For 0:10:24.400 --> 0:10:26.959 GLD and g LDM. We have pitches of you in 0:10:27.040 --> 0:10:29.040 the vall. We know there's gold in the ball. It's 0:10:29.040 --> 0:10:31.600 a thirty three Act dellow grant tor trusts exchange trader 0:10:31.640 --> 0:10:33.360 product that holds the bitcoin. 0:10:33.920 --> 0:10:37.000 An argument I've set us because we're a forty act 0:10:37.000 --> 0:10:39.200 fund and in case you can't use a grant or trust, 0:10:39.280 --> 0:10:41.480 then you should know that b it t O BIDDO 0:10:41.640 --> 0:10:43.040 is indeed a forty act fund. 0:10:43.920 --> 0:10:46.600 I don't worry. Is that the weirdest knife fight I've 0:10:46.600 --> 0:10:50.680 ever been to. It's very cerebral nerds knife fighting. Okay, 0:10:50.960 --> 0:10:52.120 leave back to this. 0:10:52.200 --> 0:10:54.960 I think what George is saying is that not we 0:10:54.960 --> 0:10:56.880 don't know if the bitcoin's there, and I know you guys, 0:10:57.000 --> 0:10:58.240 you have something in common there. 0:10:58.360 --> 0:10:59.720 The hardcore people question that. 0:11:00.400 --> 0:11:03.160 I think he's saying it isn't even a thing, so 0:11:03.240 --> 0:11:04.640 why on earth could it be a reserve? 0:11:05.240 --> 0:11:05.440 Right? 0:11:06.679 --> 0:11:09.679 Look, I'm not saying that it's a bad idea. I 0:11:09.920 --> 0:11:11.880 think the problem is a lot of people have taken 0:11:11.920 --> 0:11:15.760 what the President elect said out of context completely, not 0:11:15.920 --> 0:11:18.719 for the first time in his case. A lot of 0:11:18.760 --> 0:11:21.840 people have suggested that maybe he's planning to sell some 0:11:21.880 --> 0:11:24.240 of our gold reserve out of Fort Knox and replace 0:11:24.320 --> 0:11:26.880 it with bitcoin. He never said that. I hope he 0:11:26.960 --> 0:11:29.440 never does. I don't think that would be a good idea. 0:11:29.480 --> 0:11:31.440 But if he thinks it's a good idea to just 0:11:31.480 --> 0:11:34.240 stockpile some bitcoins, I'm certainly not going to be the 0:11:34.240 --> 0:11:35.840 person to argue with him. 0:11:36.600 --> 0:11:39.199 There's more analogous stuff here than there are differences, I think, 0:11:39.200 --> 0:11:41.240 which is going back to how you started and sort 0:11:41.240 --> 0:11:42.000 of front ran it. 0:11:43.080 --> 0:11:45.280 Gold is the thing that I really have time out. 0:11:45.280 --> 0:11:46.360 I didn't front run anything. 0:11:48.240 --> 0:11:48.439 I don't. 0:11:49.840 --> 0:11:53.640 Perhaps it suggested a unifying his lawyers here at the 0:11:53.679 --> 0:11:56.520 front end of our conversation. But gold is the thing 0:11:56.559 --> 0:11:58.640 that doesn't have the industrial use for the most part. 0:11:58.720 --> 0:12:01.880 It's not copper, it's not so it's a store of value. 0:12:02.679 --> 0:12:05.000 It happens to have a physical thing. And if you 0:12:05.040 --> 0:12:08.439 went through the financial crisis, then you were wondering, did 0:12:08.480 --> 0:12:09.880 you have your own bar of gold? Did it have 0:12:09.960 --> 0:12:11.920 your initials on it? And all that crazy stuff. But 0:12:11.960 --> 0:12:13.480 it's around for a long time. And one of the 0:12:13.480 --> 0:12:18.120 ways that you can see how well functioning gold is 0:12:18.120 --> 0:12:21.600 is if you look at the gold futures market and 0:12:21.640 --> 0:12:26.160 you've got the Bloomberg Index, the Gold sub index. If 0:12:26.160 --> 0:12:27.720 you look at it just a little in the weeds. 0:12:28.000 --> 0:12:29.880 You can look at the regular one, but look at 0:12:29.880 --> 0:12:31.760 the one that says t r on it your on 0:12:31.800 --> 0:12:35.440 your terminal. That's the fully collateralized guy and it and 0:12:35.480 --> 0:12:38.720 that means you hold cash with your futures track spot 0:12:39.000 --> 0:12:42.680 absolutely spot on. What does that mean? Gold is the 0:12:42.720 --> 0:12:43.600 future of bitcoin? 0:12:43.760 --> 0:12:44.800 Like they are? 0:12:44.840 --> 0:12:47.079 They are so similar. I would argue they're much more 0:12:47.120 --> 0:12:51.400 similar than you than you guys are suggesting. But what 0:12:51.640 --> 0:12:53.960 is cool right now is that they really aren't correlating. 0:12:54.080 --> 0:12:56.680 Bitcoin's got a point three correlation to the stock market, 0:12:56.920 --> 0:12:59.640 something like point two to bonds and point one to gold. 0:13:01.200 --> 0:13:03.160 That seems to me kind of a useful thing in 0:13:03.200 --> 0:13:03.880 a portfolio. 0:13:03.960 --> 0:13:06.679 Yeah, point three correlation the stock market would worry me. 0:13:06.760 --> 0:13:09.680 Goals correlation to the stock Markey's point zero three. In 0:13:09.720 --> 0:13:13.600 other words, statistically nothing correlation with the bond market is bigger. 0:13:13.679 --> 0:13:17.160 It's point zero nine. Statistically that's still zero. That's what 0:13:17.240 --> 0:13:20.120 I like about Gold's a lack of correlation with the 0:13:20.160 --> 0:13:23.520 assets that you'd find in a typical portfolio. Bitcoin, I'm afraid, 0:13:23.559 --> 0:13:25.959 does correlate a bit more so, I don't think it's 0:13:26.000 --> 0:13:28.320 offering you the same kind of protections. And I think 0:13:28.400 --> 0:13:30.800 the first reason why people turn to gold as an 0:13:30.840 --> 0:13:34.520 investment is because of its protective capabilities. It's a good 0:13:34.520 --> 0:13:37.880 diversifier in a portfolio. It has a long track record 0:13:38.160 --> 0:13:42.560 of offering some protection against sustained high inflation. Not sudden 0:13:42.640 --> 0:13:45.680 moves in the rate of inflation, but sustained high inflation. 0:13:46.000 --> 0:13:48.360 It's got a good track record is offering some protection 0:13:48.760 --> 0:13:51.600 against a sudden downturn in the equity market. Think of 0:13:51.640 --> 0:13:54.440 Black Monday in nineteen eighty seven, dot Com bubble bursting 0:13:54.480 --> 0:13:57.280 in two thousand, think of the global financial crisis two 0:13:57.360 --> 0:14:00.880 thousand and eight, COVID in twenty twenty, plenty of examples. 0:14:01.000 --> 0:14:04.040 It also has a good long historical track record offering 0:14:04.080 --> 0:14:07.640 some protection against currency depreciation. So all of those things 0:14:07.640 --> 0:14:11.760 put together, I think that that's the principal reason why 0:14:11.800 --> 0:14:14.839 people turn to gold. Now, sometimes God will and offer 0:14:14.920 --> 0:14:17.520 you not just protection, but it will offer you protection 0:14:17.679 --> 0:14:20.800 plus performance. And in my defense here I would cite 0:14:21.360 --> 0:14:23.840 twenty twenty four when the goal price is up thirty 0:14:23.880 --> 0:14:27.080 three percent year to date. I think protection plus performance 0:14:27.360 --> 0:14:30.120 is a very very powerful mantra, and I don't think 0:14:30.160 --> 0:14:32.720 the bitcoin cur actually matched that mantra right now. 0:14:33.000 --> 0:14:37.400 I think protection plus performance is actually exactly what bitcoin 0:14:37.440 --> 0:14:40.320 would would provide you. And I would say that all 0:14:40.320 --> 0:14:44.560 those characters you talked about, inflation, protection, currency debase, and protection, 0:14:44.680 --> 0:14:46.840 all those things are properties that bitcoin actually does. In 0:14:46.840 --> 0:14:49.120 the case of inflation, I think the inflation properties of 0:14:49.160 --> 0:14:52.040 bitcoin is half of that of gold. You know, doing 0:14:52.040 --> 0:14:56.080 a better job of protecting against inflation. And I think 0:14:56.120 --> 0:14:57.400 that you know there. 0:14:57.240 --> 0:15:00.440 Any evidence for this thing my research. That's su your thing. 0:15:00.680 --> 0:15:02.440 One percent versus two percent is what I've got for 0:15:02.520 --> 0:15:05.400 my research team. But we should have to talk about 0:15:05.400 --> 0:15:05.720 that more. 0:15:05.760 --> 0:15:09.080 I guess when I say inflation, I did stress sustained 0:15:09.160 --> 0:15:12.320 high inflation. Gold comes into its own when we have 0:15:12.400 --> 0:15:14.920 inflation for more than two years at more than five 0:15:14.960 --> 0:15:17.280 percent a year. We didn't have that in the most 0:15:17.320 --> 0:15:20.520 recent round of inflation. Gold was going up for different reasons. 0:15:20.720 --> 0:15:21.800 It wasn't chasing inflation. 0:15:21.920 --> 0:15:24.560 So let's take two If two year is a time prime, 0:15:25.040 --> 0:15:26.680 two years, minimum two years, So let's take a look 0:15:26.680 --> 0:15:28.720 at the return profile of a minimum two years against 0:15:28.760 --> 0:15:31.120 gold against bitcoin. I don't think you're going to find a. 0:15:31.080 --> 0:15:31.680 Two year period. 0:15:31.680 --> 0:15:33.120 I haven't looked at this, but I suspect you're not 0:15:33.120 --> 0:15:34.560 going to take a two year period where you have 0:15:34.600 --> 0:15:35.360 gold that's out before. 0:15:35.360 --> 0:15:35.800 In bitcoin. 0:15:35.920 --> 0:15:39.680 I'm happy to accept with respect that that bitcoin does 0:15:39.720 --> 0:15:43.360 in fact demonstrate superior returns to go in the short 0:15:43.400 --> 0:15:46.040 life that it's had provided. Of course, we leave out 0:15:46.040 --> 0:15:47.880 twenty twenty two, which nobody really wants to talk. 0:15:48.040 --> 0:15:50.160 Two year period the on the bitcoin, we've gotten a 0:15:50.160 --> 0:15:52.120 couple of bad years, don't get me wrong eight the 0:15:52.120 --> 0:15:53.760 past eleven has been number one performance. 0:15:53.840 --> 0:15:56.120 Like somebody said about the Chicago Cubs. Any team can 0:15:56.240 --> 0:15:57.040 have a bad centure. 0:15:57.560 --> 0:15:59.960 Okay, and Eric and I asked a question. 0:16:00.480 --> 0:16:05.080 No, I'm so glad there wasn't you're carrying a knife joke? 0:16:05.960 --> 0:16:13.920 Probably let's check them. 0:16:14.080 --> 0:16:17.240 Okay, So let's talk a little bit about, uh, this 0:16:17.360 --> 0:16:19.280 idea of putting this stuff into an ETF. 0:16:19.320 --> 0:16:20.160 You know, oh yeah. 0:16:20.400 --> 0:16:23.600 What I found is when I tweet about bitcoin, there 0:16:23.640 --> 0:16:25.760 are definitely people who come in and go, oh, this 0:16:25.880 --> 0:16:29.520 is like against the whole idea. You're centralizing something that's 0:16:29.520 --> 0:16:33.000 supposed to be decentralized. And the same with gold. Okay, 0:16:33.120 --> 0:16:35.800 I think that there's going to be like real like 0:16:36.040 --> 0:16:39.400 apocalyptic scenes out there. Society is going to collapse. I 0:16:39.440 --> 0:16:41.880 want gold in my basement and a lot of bitcoin people. 0:16:41.880 --> 0:16:45.000 I will call these the extreme types. The ETF defeats 0:16:45.000 --> 0:16:47.840 all that purpose in that the government could just tell, 0:16:47.880 --> 0:16:51.760 you know, confiscate it. I guess my point is how much. 0:16:52.240 --> 0:16:54.960 Is by the way, Yes, that's right. 0:16:56.200 --> 0:16:58.320 Well there's one Goldie TF that keeps it in Switzerland, 0:16:58.320 --> 0:16:59.360 which is like next level. 0:16:59.760 --> 0:17:01.720 But what about this idea of. 0:17:01.840 --> 0:17:05.959 Is an ETF against the spiritual foundation of both of Europe. 0:17:06.040 --> 0:17:07.880 So I think we are going to be really really lying. 0:17:07.960 --> 0:17:09.200 So that this guy was in the room when it 0:17:09.280 --> 0:17:12.000 happened twenty years ago, I have me in the room 0:17:12.000 --> 0:17:16.080 when it happened when Bitcoin spot products came to market, 0:17:16.280 --> 0:17:19.040 and I think there were naysayers, and we've talked about this. Naysayers. 0:17:19.040 --> 0:17:20.840 The gold bugs were like, this is insane, and there 0:17:20.880 --> 0:17:22.960 are lots of naysayers and the bitcoin market saying this 0:17:23.040 --> 0:17:25.840 is also insane. But what the gold bugs and the 0:17:25.840 --> 0:17:27.919 bitcoin has really loved is that as a result of 0:17:27.920 --> 0:17:30.919 this democratization asset and putting it in this wrapper, that 0:17:30.960 --> 0:17:33.119 the price performance as a result of it, because of 0:17:33.119 --> 0:17:35.200 that democratization, was incredibly bullish. 0:17:35.400 --> 0:17:36.840 And I think that they would both agree. 0:17:36.880 --> 0:17:39.800 They wouldn't want to admit that it helped, but I 0:17:39.800 --> 0:17:41.240 think the reality is that it did. 0:17:41.640 --> 0:17:43.640 I don't think anybody made that sort of complain when 0:17:43.640 --> 0:17:45.920 we launched gold twenty years ago. I think most people 0:17:46.000 --> 0:17:48.800 were very happy that what we had done, in the 0:17:48.840 --> 0:17:53.159 words of Bob Pisani if I mentioned his name in 0:17:53.160 --> 0:17:56.480 these Allied precincts, we had taken the friction out of 0:17:56.520 --> 0:17:57.359 investing in gold. 0:17:57.359 --> 0:17:58.120 That was what Bob. 0:17:57.920 --> 0:18:00.560 Pisani said, we democratized it this same way that the 0:18:00.600 --> 0:18:04.159 launch of spot bitcoin ETFs, I think helped to democratize that. 0:18:04.680 --> 0:18:07.520 It was an advance on what you guys have. Let 0:18:07.560 --> 0:18:10.040 me put it that way. 0:18:10.200 --> 0:18:13.960 You don't need to be using the utility of the 0:18:14.040 --> 0:18:17.400 underlying investment for the ETF to be meaningful. I don't 0:18:17.480 --> 0:18:19.399 drive a tractor, but I might want to invest in 0:18:19.480 --> 0:18:23.000 John Deere. Like the fact that it has an important use. 0:18:23.080 --> 0:18:26.000 And we're having a little debate here, but if for 0:18:26.080 --> 0:18:28.680 those of us who believe that there's an underlying use 0:18:28.720 --> 0:18:32.280 for the blockchain for bitcoin as a store value, remember 0:18:32.320 --> 0:18:35.640 it's got fixed supply and all that stuff. Whether you're 0:18:35.640 --> 0:18:38.680 going to use it in an apocalypse, it doesn't matter 0:18:38.680 --> 0:18:40.679 to me as an investor. There's lots of things you 0:18:40.760 --> 0:18:43.280