WEBVTT - At the Money: Crypto Curious 0:00:02.600 --> 0:00:26.640 Bloomberg Audio Studios, podcasts, radio news. 0:00:27.520 --> 0:00:32.879 How should retail investors responsibly think about crypto? Are you 0:00:32.920 --> 0:00:36.880 crypto curious? Are you interested in owning maybe some Bitcoin 0:00:37.000 --> 0:00:41.479 or ethereum or some other crypto coins? How should ordinary 0:00:41.560 --> 0:00:48.479 investors interested in the cryptocurrency space get exposure to that asset. 0:00:49.080 --> 0:00:52.000 I'm Barry Rideltson on today's edition of At the Money. 0:00:52.360 --> 0:00:56.920 We're going to discuss how retail investors can responsibly invest 0:00:56.960 --> 0:00:59.520 in crypto. To help us unpack all of this and 0:00:59.560 --> 0:01:02.840 what it means for your portfolio, let's bring in Matt Hogan. 0:01:02.880 --> 0:01:07.120 He is the chief investment officer at bit Wise Asset Management. 0:01:07.480 --> 0:01:11.520 The firm manages over ten billion dollars in client assets 0:01:11.520 --> 0:01:15.720 in crypto. Let's start with just the basics, Matt. For 0:01:15.800 --> 0:01:20.240 the longest time, it's been challenging and difficult to own crypto. 0:01:20.280 --> 0:01:24.039 There were wallets and coins and crazy passwords, lots of 0:01:24.120 --> 0:01:27.080 hacks and other problems. Tell us about what's going on 0:01:27.160 --> 0:01:30.920 in the world of actually owning cryptocurrencies. 0:01:31.160 --> 0:01:33.480 Oh, it's great to be here, Barry. It's getting a 0:01:33.480 --> 0:01:36.280 lot easier to own crypto. You know, in the past, 0:01:36.319 --> 0:01:39.600 this was a new disruptive market. It was challenging. You 0:01:39.640 --> 0:01:43.360 had to write down your secret password and not lose it. 0:01:43.400 --> 0:01:47.000 There are all these terrible stories about people losing passwords 0:01:47.040 --> 0:01:49.040 that are now you know, would have gotten them one 0:01:49.080 --> 0:01:49.960 hundred million. 0:01:49.720 --> 0:01:50.640 Dollars or whatever. 0:01:51.360 --> 0:01:53.840 But this is just like any other technology. You and 0:01:53.880 --> 0:01:56.440 I remember when the Internet was hard to use. I 0:01:56.480 --> 0:01:59.880 remember looking up websites in a book, which I know 0:02:00.200 --> 0:02:02.280 sounds absolutely insane. 0:02:02.640 --> 0:02:04.200 But technology has advanced. 0:02:04.280 --> 0:02:07.840 It's now easy to get high quality access and secure 0:02:07.880 --> 0:02:10.560 access to crypto if you use the right tools. 0:02:11.120 --> 0:02:14.960 Huh really interesting. So it sounds like the wild West 0:02:14.960 --> 0:02:18.160 of crypto has been tamed a little bit. There certainly 0:02:18.320 --> 0:02:23.520 has been a push by well known financial institutions into 0:02:23.560 --> 0:02:27.440 the space. You can own crypto coins and ETFs, you 0:02:27.480 --> 0:02:30.320 can own them and closed end funds. What are some 0:02:30.400 --> 0:02:34.480 of the advantages and disadvantages of the various ways and 0:02:34.600 --> 0:02:35.880 methodologies of owning this. 0:02:36.680 --> 0:02:38.400 Yeah, I have to say I'm a huge fan of 0:02:38.440 --> 0:02:41.520 the ETFs. You know, obviously we offer them, so I'm 0:02:41.520 --> 0:02:45.800 talking my book, but broadly speaking, the ETFs came out 0:02:45.840 --> 0:02:48.200 in January of this year, and they let you own 0:02:48.360 --> 0:02:52.480 crypto at such low cost and with such institutional quality 0:02:52.560 --> 0:02:56.560 custody and trading. Retail investors today can get the same 0:02:56.639 --> 0:02:59.480 sort of setup that the largest institutions in the world 0:02:59.520 --> 0:03:02.760 were getting crypto a year or two ago. So these 0:03:02.840 --> 0:03:06.280 ETFs make it easy to buy exposure to bitcoin in 0:03:06.360 --> 0:03:09.760 a brokerage account and know that the crypto is being 0:03:10.240 --> 0:03:13.680 or the bitcoin is being held by an institutional regulated 0:03:13.720 --> 0:03:17.640 custodian with insurance in place, with all the bells and whistles, 0:03:18.000 --> 0:03:20.400 but they don't have to worry about it. Five years ago, 0:03:20.800 --> 0:03:23.200 you had to worry about that personally. The ETFs have 0:03:23.280 --> 0:03:26.440 sort of taken that complexity away and made it cheap 0:03:26.680 --> 0:03:27.680 and safe to own it. 0:03:28.240 --> 0:03:30.760 And you're really a fascinating person to talk to about 0:03:30.800 --> 0:03:34.480 this because you come from the ETF side of the industry. 0:03:35.000 --> 0:03:38.040 You spent how many years twenty years working on atfs. 0:03:39.040 --> 0:03:41.120 Tell us a little bit about your background and what 0:03:41.280 --> 0:03:45.840 led you into the crypto side to come up with 0:03:45.960 --> 0:03:48.200 ways to put coins in ETFs. 0:03:48.480 --> 0:03:51.720 Yeah, absolutely, you know, fifteen twenty years in the ETF industry, 0:03:51.800 --> 0:03:54.400 the CEO of ETF dot com. There are actually so 0:03:54.600 --> 0:03:59.440 many parallels between ETFs and crypto. I know ETFs today 0:03:59.560 --> 0:04:03.720 are the apple pie of investing, everyone's favorite tool, but 0:04:03.840 --> 0:04:07.520 twenty years ago, they were considered risky and disruptive and 0:04:07.600 --> 0:04:10.680 hard to access. The Financial Times called them weapons of 0:04:10.720 --> 0:04:15.920 mass destruction. There were congressional hearings Berry about ETF's destroying 0:04:15.960 --> 0:04:19.200 the American dream, if you can believe it. But ETFs 0:04:19.200 --> 0:04:22.360 had this core advantage, which were they were lower costs, 0:04:22.360 --> 0:04:24.720 they were more tax efficient, they were easier to use, 0:04:25.120 --> 0:04:27.760 and over time the world woke up to the reality. 0:04:28.080 --> 0:04:30.080 The same thing's happening in crypto. You can see it 0:04:30.080 --> 0:04:33.120 before your eyes. A few years ago Larry Fink called 0:04:33.160 --> 0:04:37.760 bitcoin an index of money laundering. Today he's talking about 0:04:37.839 --> 0:04:40.800 it transforming the world of currency. And he holds more 0:04:40.800 --> 0:04:45.040 Bitcoin than almost anyone else, So it's going in that direction. 0:04:45.200 --> 0:04:48.640 And absolutely you're seeing these two worlds come together where 0:04:48.680 --> 0:04:52.000 this new financial innovation of crypto is now being packaged 0:04:52.400 --> 0:04:55.200 in this beautiful package of an ETF and making it 0:04:55.279 --> 0:04:58.640 easy for every investor to access. It's a beautiful thing. 0:04:59.360 --> 0:05:00.920 And I wanted to talk a little bit about the 0:05:01.440 --> 0:05:08.280 safety aspect and the institutionalzation. None of the coins are regulated. 0:05:08.400 --> 0:05:13.000 It very much has been the wild West. But you're 0:05:13.120 --> 0:05:17.880 not a crypto exchange, you're a fund manager, you're a 0:05:17.920 --> 0:05:23.000 financial manager, who is the regulatory authority that supervises bit wise. 0:05:23.440 --> 0:05:27.480 Yeah, all of them, with all the letters, all the 0:05:27.560 --> 0:05:31.520 letters very you know, we're regulated by the SEC because 0:05:31.560 --> 0:05:35.200 even though the crypto assets aren't, the funds that we offer, 0:05:35.240 --> 0:05:38.760 the ETFs that we offer are regulated and passed through 0:05:39.400 --> 0:05:44.000 the SEC. Of course, also the CFTC for products that 0:05:44.040 --> 0:05:49.599 hold futures contracts. FINRA, which is another regulator, has oversight 0:05:49.839 --> 0:05:53.760 over broker dealers, and so our distribution team sits under that. 0:05:53.920 --> 0:05:55.920 All our materials are reviewed. 0:05:55.520 --> 0:05:57.480 By FINRA, the NFA. 0:05:58.000 --> 0:06:00.720 It's an alphabet soup of regulators. But it's a good 0:06:00.800 --> 0:06:03.560 thing for investors because one thing that is true about 0:06:03.640 --> 0:06:06.920 crypto is in the early wild wild West days when 0:06:06.920 --> 0:06:11.320 you had offshore exchanges doing shady things, people lost money. 0:06:11.800 --> 0:06:14.280 A great thing that has happened is that has moved 0:06:14.720 --> 0:06:17.640 into these regulated formats like ETF. So you do have 0:06:17.680 --> 0:06:21.800 some protections from the SEC, the CFTC, BINRA, the NFA 0:06:21.920 --> 0:06:25.160 and others, and of course bitwy sits within those protections 0:06:25.200 --> 0:06:25.880 as an RAA. 0:06:26.440 --> 0:06:31.479 That's really interesting. So you're a regulated entity. Where do 0:06:31.560 --> 0:06:37.159 the ETFs and various funds get custodied? How are they held? 0:06:37.680 --> 0:06:42.320 Who does the administrative reporting. I mean, I think of 0:06:42.360 --> 0:06:47.680 these as complex questions for a coin, but really they're 0:06:47.760 --> 0:06:50.640 kind of running the mill questions for an sec regulated 0:06:51.400 --> 0:06:52.560 entity like bitwise. 0:06:52.880 --> 0:06:57.120 It looks exactly like or very similar to any other 0:06:57.320 --> 0:07:00.960 ETF manager. So the crypto acids are held in a 0:07:01.040 --> 0:07:04.679 regulated qualified custodian. In the case of our Bitcoin ETF, 0:07:04.680 --> 0:07:07.880 it's coin based custody, which is the largest crypto custodian 0:07:07.920 --> 0:07:11.320 in the world. The funds are audited by Big four 0:07:11.440 --> 0:07:15.560 auditors in our case it's KPMG. They're administered by firms 0:07:15.600 --> 0:07:18.040 like Bank of New York. If you looked at the 0:07:18.560 --> 0:07:22.360 sort of stack of participants, it would look just like 0:07:22.760 --> 0:07:24.960 you know, a traditional equity ATF and that's what it 0:07:25.000 --> 0:07:25.680 should do, right. 0:07:25.720 --> 0:07:27.120 These are trusted rails that. 0:07:27.040 --> 0:07:29.720 Have been proven over years, and we've just applied them 0:07:29.720 --> 0:07:33.080 to crypto to give the similar protections to crypto investors. 0:07:33.440 --> 0:07:35.800 So the one thing that I find kind of amusing 0:07:36.000 --> 0:07:41.440 and ironic is the whole defying nonsense. The decentralized finance 0:07:41.960 --> 0:07:45.160 turns out to have been a narrative that kind of 0:07:45.160 --> 0:07:50.080 faded away because crypto, for all to talk about outside 0:07:50.120 --> 0:07:54.440 of the financial system, has been dragged, kicking and screaming 0:07:54.960 --> 0:07:56.920 right into the heart of the financial system. 0:07:57.800 --> 0:08:00.160 I admit that there is an irony there, but I 0:08:00.160 --> 0:08:03.480 actually think it's more of a continuum sort of. The 0:08:03.520 --> 0:08:07.440 core idea of DeFi is that the existing financial system 0:08:07.680 --> 0:08:10.600 is too slow, too intermediated. 0:08:10.000 --> 0:08:14.600 Too costly, and all of that is true. DeFi offers 0:08:14.640 --> 0:08:16.320 the potential to improve that. 0:08:16.680 --> 0:08:19.360 But of course the two systems have to come together, 0:08:19.720 --> 0:08:22.200 and you're seeing it. So you're seeing, you know, from 0:08:22.240 --> 0:08:25.760 the crypto side, the launch of ETFs moving into the 0:08:25.800 --> 0:08:29.480 traditional financial system. But you also have firms like Blackrock 0:08:29.520 --> 0:08:34.800 and Franklin Templeton issuing money market funds on public blockchains 0:08:34.840 --> 0:08:38.160 like ethereum, So you are seeing this coming together. I 0:08:38.160 --> 0:08:41.640 wouldn't write off DeFi one point zero very I think 0:08:41.640 --> 0:08:44.120 there'll be a DeFi two point zero that is much 0:08:44.160 --> 0:08:45.760 more significant. 0:08:45.520 --> 0:08:49.120 Really interesting. So let's talk about individuals who want to 0:08:49.120 --> 0:08:53.079 own crypto. What sort of strategies do they deploy? Is 0:08:53.120 --> 0:08:57.560 it bitcoin or bust or should they own bitcoin, ethereum 0:08:57.559 --> 0:09:01.600 and a bunch of other coins. Give us some investment strategies. 0:09:01.480 --> 0:09:04.400 Yeah, I mean, without telling anyone exactly what to do. 0:09:04.600 --> 0:09:07.920 I'm an index investor at heart. Right, this is a 0:09:07.960 --> 0:09:12.400 disruptive early market. You know, my family owned a betamax. 0:09:12.840 --> 0:09:15.880 I remember using a BlackBerry. It's hard to know exactly 0:09:15.920 --> 0:09:18.240 how this market will turn out in the future. So 0:09:19.040 --> 0:09:21.920 I think taking a diversified approach to this market is 0:09:22.080 --> 0:09:24.679 probably a sensible approach for many investors. 0:09:24.960 --> 0:09:26.160 There's certainly people who are. 0:09:26.160 --> 0:09:30.000 Bitcoin only, who only care about the monetary aspects of crypto, 0:09:30.400 --> 0:09:33.560 but in any disruptive technology, My history, you know, having 0:09:33.600 --> 0:09:37.120 grown up through the tech bubble, tells me that a 0:09:37.160 --> 0:09:41.000 diversified approach may be a good idea for many investors. 0:09:41.320 --> 0:09:44.520 Makes a lot of sense. Whenever I talk about stocks 0:09:44.559 --> 0:09:48.000 to an investor, I always warn them, hey, listen, you 0:09:48.000 --> 0:09:50.560 know you get a a ten to twenty percent pullback 0:09:50.920 --> 0:09:53.320 two out of every three years. Twenty percent comes along 0:09:53.440 --> 0:09:56.960 just about every third year. With crypto. I love the 0:09:57.000 --> 0:10:00.559 expression crypto winter, and we've had an number of them, 0:10:00.600 --> 0:10:04.120 when for a year or two, cryptocurrencies can be down, 0:10:04.320 --> 0:10:07.440 you know, fifty percent or worse. We've probably had three 0:10:07.440 --> 0:10:09.480 of them over the past you know, ten. 0:10:09.360 --> 0:10:10.080 Or so years. 0:10:10.559 --> 0:10:14.840 So how should investors prepare themselves for what seems to 0:10:14.920 --> 0:10:16.920 be an inevitable drawdown? 0:10:17.360 --> 0:10:20.320 Yeah, it's a really important question. People ask me all 0:10:20.360 --> 0:10:23.560 the time what the biggest risk in crypto? Is it regulatory? 0:10:23.720 --> 0:10:27.439 Is it technical? Is it quantum computing? It's none of 0:10:27.480 --> 0:10:31.760 those things. The biggest risk is behavioral risk by investors 0:10:31.760 --> 0:10:34.800 who either chase prices when they go up or sell 0:10:34.840 --> 0:10:37.280 when prices go down. This is an asset that has 0:10:37.360 --> 0:10:41.320 huge volatility. You're going to get thirty forty fifty percent 0:10:41.440 --> 0:10:44.559 drawdowns in the future. I feel confident about that. As 0:10:44.600 --> 0:10:47.080 you mentioned, we've seen those in the past and there's 0:10:47.120 --> 0:10:50.400 no reason to expect that will change for investors. What 0:10:50.440 --> 0:10:53.280 that means is two things. One, you need a long 0:10:53.400 --> 0:10:56.600 term discipline. If you're buying bitcoin for the next week, 0:10:56.640 --> 0:10:59.240 I have no idea where it's going. I'm optimistic over 0:10:59.280 --> 0:11:02.560 the next handful of years. And the second is you 0:11:02.559 --> 0:11:06.360 need to size your portfolio appropriately. Don't put in so 0:11:06.559 --> 0:11:10.200 much that if it pulls back fifty percent you're going 0:11:10.200 --> 0:11:13.559 to panic and sell, because that is the worst case scenario. 0:11:13.679 --> 0:11:16.120 You're better just sitting on the sidelines. Put in a 0:11:16.160 --> 0:11:18.640 small amount if you're going to invest, so you can 0:11:18.720 --> 0:11:22.160 handle that up and down and it won't overly impact 0:11:22.200 --> 0:11:22.839 what you're doing. 0:11:23.360 --> 0:11:23.480 Uh. 0:11:23.960 --> 0:11:27.280 Really kind of interesting. So you mentioned price. Bitcoin goes 0:11:27.320 --> 0:11:29.960 way up, it goes way down. Is there a way 0:11:30.000 --> 0:11:33.640 of looking at these from a fundamental perspective? How do 0:11:33.720 --> 0:11:37.960 we value coins other than whatever their last trade was? 0:11:38.559 --> 0:11:43.200 Yeah, it's unfortunately a little bit complex. Bitcoin's valuation technique 0:11:43.240 --> 0:11:46.800 is different from other crypto assets like ethereum. When you 0:11:46.840 --> 0:11:50.160 think about bitcoin, what I think bitcoin is trying to 0:11:50.200 --> 0:11:53.439 become is a digital version of gold, a way to 0:11:53.520 --> 0:11:56.800 store money outside of central banks in a digital format. 0:11:56.840 --> 0:11:59.360 And we have digital versions of everything. We have digital 0:11:59.440 --> 0:12:03.040 versions of newspapers, we have digital versions of ads. I 0:12:03.040 --> 0:12:06.000 think the world and younger generations on a digital version 0:12:06.040 --> 0:12:08.400 of gold. The reason I raise that is you can 0:12:08.400 --> 0:12:11.280 look at bitcoin today, it's a little under two trillion dollars. 0:12:11.679 --> 0:12:13.720 You can look at gold it's a little under twenty 0:12:13.760 --> 0:12:17.200 trillion dollars. Do you think it'll get half that market? Well, 0:12:17.360 --> 0:12:19.000 then you think bitcoin will five. 0:12:18.920 --> 0:12:19.360 X from here. 0:12:19.360 --> 0:12:22.679 Do you think it'll get that full market you're more 0:12:22.720 --> 0:12:25.600 optimistic or do you think it'll be less successful? That's 0:12:25.640 --> 0:12:29.400 absolutely the best way to value bitcoin. These other crypto 0:12:29.440 --> 0:12:33.120 assets like ethereum are different. They actually have cash flow 0:12:33.240 --> 0:12:37.040 like characteristics, so they behave a little bit more like stocks, 0:12:37.040 --> 0:12:40.760 they're more sort of fundamentally valued than bitcoin, which is 0:12:40.800 --> 0:12:44.080 this monetary asset, and so you have to think of 0:12:44.120 --> 0:12:46.640 the two different sets of assets a little differently. 0:12:47.040 --> 0:12:49.520 So you and I are both index guys. That's that's 0:12:49.559 --> 0:12:52.520 our background. If I'm an investor and I want to 0:12:52.520 --> 0:12:56.640 put two or three percent of my portfolio into coins, 0:12:57.000 --> 0:12:59.679 what do I do? Dohy tell us about some of 0:12:59.720 --> 0:13:03.080 the options that you guys have. Is it you know, 0:13:03.120 --> 0:13:07.000 should I be going for two X levered bitcoin or 0:13:07.040 --> 0:13:09.720 am I better off with Hey, here are the five 0:13:09.800 --> 0:13:13.199 biggest coins or ten biggest coins and own them all. 0:13:13.679 --> 0:13:17.000 Yeah, I wouldn't go two x levered bitcoin. Uh, you know, 0:13:17.160 --> 0:13:21.360 bitcoin is volatile enough. I think investors can make a choice. 0:13:21.360 --> 0:13:23.600 Within the ETF space. The only coins that we have 0:13:23.640 --> 0:13:26.760 access to are Bitcoin and ethereum. And the good news 0:13:26.880 --> 0:13:29.439 is there the two largest assets. They're the leaders in 0:13:29.480 --> 0:13:32.480 their spaces. So you can do worse than go two 0:13:32.520 --> 0:13:35.960 parts bitcoin in one part ether and have at least 0:13:36.240 --> 0:13:39.640 broad based exposure. If you want to be more diversified 0:13:39.679 --> 0:13:42.520 and take an index based approach. You know, we a 0:13:42.520 --> 0:13:45.840 bit wise have the largest crypto index fund. It's available 0:13:45.880 --> 0:13:48.000 in a rapper, but that rapper is more like a 0:13:48.080 --> 0:13:51.920 closed end fund, so it can trade it premiums and discounts, 0:13:52.200 --> 0:13:53.960 and you have to be aware that you have that 0:13:54.160 --> 0:13:58.480 extra layer of volatility. So either approach can make sense 0:13:58.520 --> 0:14:00.680 for the right investor, as long as you understand what 0:14:00.720 --> 0:14:01.480 you're getting into. 0:14:02.120 --> 0:14:05.840 So I want to not get too lost in the 0:14:05.880 --> 0:14:09.920 weeds on the technical issues, but I keep hearing about 0:14:09.960 --> 0:14:13.400 the HAVING that's coming up and what does that mean 0:14:13.480 --> 0:14:16.439 to what should lay people understand about this? 0:14:16.800 --> 0:14:18.720 Yeah, So if you think about bitcoin, when it was 0:14:18.760 --> 0:14:21.120 created way back in two thousand and eight, two thousand 0:14:21.160 --> 0:14:23.760 and nine, there were no bitcoin in existence, and we 0:14:23.840 --> 0:14:26.360 all know, or many of us know, that eventually there'll 0:14:26.400 --> 0:14:29.080 be twenty one million bitcoin. The way we get from 0:14:29.160 --> 0:14:32.040 zero to twenty one million is every day a little 0:14:32.040 --> 0:14:35.400 bit more bitcoin is issued. What the Having refers to 0:14:35.520 --> 0:14:38.840 Barry is that every four years the amount of bitcoin 0:14:38.880 --> 0:14:42.760 that's issued falls in half, and the last having was 0:14:42.840 --> 0:14:46.320 earlier this year, right, it dropped in half. What that 0:14:46.440 --> 0:14:50.320 means is there's less new supply coming into the market. 0:14:51.000 --> 0:14:53.920 In the end, bitcoin's price is set by supply and demand. 0:14:54.120 --> 0:14:56.800 You have all these people buying bitcoin through the ETF 0:14:56.840 --> 0:14:59.920 and other means and then you have supply and so 0:15:00.000 --> 0:15:04.360 applies either this newly developed bitcoin or existing people selling it. 0:15:04.800 --> 0:15:07.640 So what the having does is it reduces the amount 0:15:07.720 --> 0:15:10.080 of supply in the market. If I told you that 0:15:10.160 --> 0:15:12.160 the amount of oil coming out of the ground would 0:15:12.200 --> 0:15:15.200 fall in half tomorrow, you might be bullish on oil. 0:15:15.720 --> 0:15:17.800 The same sort of narrative is true in bitcoin. The 0:15:17.840 --> 0:15:20.440 amount of bitcoin coming out of the ground, if you will, 0:15:20.800 --> 0:15:22.880 falls in half every four years, and we're just sort 0:15:22.920 --> 0:15:26.040 of starting to feel the impact of the most recent having. 0:15:26.120 --> 0:15:30.040 Now, So all of these challenges, whether it's the limited 0:15:30.040 --> 0:15:34.440 amount of supply that having should be fairly well known 0:15:35.480 --> 0:15:38.240 by investors. None of these are surprise. It's not like 0:15:38.280 --> 0:15:43.120 an earning surprise. Hey, everybody who's a bitcoin investor understands these. 0:15:43.560 --> 0:15:46.680 So the question becomes, what are going to be the 0:15:46.720 --> 0:15:51.840 future drivers of bitcoin returns? Should we be thinking about 0:15:51.880 --> 0:15:56.040 bitcoin like a commodity? Like a currency? You know? You 0:15:56.160 --> 0:16:01.160 mentioned you know, just under two billion dollars trillion dollars 0:16:01.160 --> 0:16:06.040 in marketcap for bitcoin. That puts it somewhere between meta 0:16:06.120 --> 0:16:09.680 and alphabet, Facebook and Google. Do we think about this 0:16:09.920 --> 0:16:13.640 like a large tech company? How should we contextualize the 0:16:13.720 --> 0:16:14.680 coins themselves. 0:16:15.160 --> 0:16:18.920 Yeah, I mean I think of bitcoin specifically as a commodity. 0:16:19.080 --> 0:16:22.000 It's a commodity with scarce supply, and its price is 0:16:22.040 --> 0:16:24.880 set by supply and demand. One of the reasons I'm 0:16:24.880 --> 0:16:28.400 so optimistic about bitcoin right now is we have major 0:16:28.520 --> 0:16:33.400 new sources of demand. Institutional investors are just now buying bitcoin. 0:16:33.680 --> 0:16:37.360 There's talk of the US government acquiring one million bitcoin. 0:16:37.840 --> 0:16:42.520 Corporations are acquiring bitcoin. None of that was true in 0:16:42.560 --> 0:16:45.040 a major way a year ago or two years ago. 0:16:45.400 --> 0:16:48.480 And so you have all this new demand. But unlike 0:16:48.560 --> 0:16:53.320 other commodities, unlike gold, unlike oil, unlike copper, you can 0:16:53.360 --> 0:16:55.280 have all the demand in the world, you don't get 0:16:55.320 --> 0:16:59.200 any more supply. The supply is literally fixed, it's pre programmed. 0:16:59.800 --> 0:17:03.400 When you think about are you optimistic or pessimistic on bitcoin, 0:17:03.920 --> 0:17:07.679 I like to think about that supply demand dynamic, and 0:17:07.760 --> 0:17:10.560 from what I see, there's a lot more demand coming 0:17:10.600 --> 0:17:15.399 online and limited new supply coming online. That makes me optimistic. 0:17:15.520 --> 0:17:17.760 It's not a guarantee. We can see some of those 0:17:17.800 --> 0:17:21.160 things not materialize. We could see investors scared off. 0:17:21.600 --> 0:17:22.440 But I like the. 0:17:22.440 --> 0:17:26.480 Long term framing of it from that simple supply demand perspective. 0:17:26.440 --> 0:17:30.520 So to wrap up. Investors who are crypto curious can 0:17:30.680 --> 0:17:34.000 buy various coins today much more easily than it used 0:17:34.080 --> 0:17:36.920 to be. If you wanted to own any sort of coin, 0:17:37.000 --> 0:17:39.199 you could buy it in a closed end fund or 0:17:39.320 --> 0:17:44.080 even easier in an ETF. Be very aware that you 0:17:44.240 --> 0:17:48.000 have to position size appropriately. Hey, if you want to 0:17:48.040 --> 0:17:51.960 own a percent or three in your portfolio and your 0:17:52.000 --> 0:17:55.960 liquid net worth, the responsible way to do this is 0:17:56.040 --> 0:17:59.840 not through a leverage product, not in anything that's reflective 0:17:59.840 --> 0:18:03.600 of the old wild West ethos of crypto, but a 0:18:03.680 --> 0:18:07.320 traditionally TF You have a small position as you would 0:18:07.359 --> 0:18:10.600 for any particular company, and be aware of your own 0:18:10.640 --> 0:18:16.160 behavior when it comes to managing yourself around the volatility 0:18:16.200 --> 0:18:20.920 of bitcoin. I'm Barry Ridolts. You're listening to Bloomberg's At 0:18:20.920 --> 0:18:42.560 the Money.