So let's dive a little bit deeper into Cryptocurrency.
As we reported yesterday after
a post on X for the Securities and Exchange
Commission said that it had approved a Bitcoin spot.
But later the agency said the post was the result of
its account being compromised and the approval had not actually happened.
So joining me now to discuss what it means
for viewers, investors crypto bows in the future of Cryptocurrency is that Hogan,
the Chief investment officer of that wise asset management
and that is great to see you here in the new Year.
Certainly some confusion, but it looks like it's been ironed out for now.
How does this impact Bitcoins?
Yeah.
Well,
I think that what happened yesterday was unfortunate and a wake up
call to governments to enable two factor authentication on their social accounts.
But I don't think it impacts the long term story.
It shouldn't have any influence on the legal effort,
the regulatory effort to bring etfs to market
which a number of firms are still engaged on
for long term business coin bowls. That's the question. Do we get a spot?
Bitcoin ETF does it lower the cost of investing does it make it easier for
more kinds of investors to come into the market if the answers to those are?
Yes. Yes and yes. Those are very good things for Bitcoin long term.
And when realistically, do we expect the approval of spot
Bitcoin
Etfs?
Yeah. Uh bit wise, has a filing live at the SEC.
So I'm limited in terms of what I can say.
Bloomberg has said it could be as soon as this week, potentially even tomorrow.
Uh But again, whether it's immediate, a few days a week,
the big question is, do we get an ETF, there will be an ETF era
that stretches on for years and decades if
we get there and that will change Bitcoin fundamentally
forever. I would say
we've seen quite the run
in Cryptocurrency.
Really,
I think since the FED started broadcasting
that it perhaps does anticipate rate cuts
here in 2024. What is behind the momentum and just how sustainable is it, Matt?
If someone
to trade or invest in Cryptocurrency,
what dynamics do they need to look at to make
sure that they have their money in the right place?
Absolutely.
From a trading perspective,
it's very hard to forecast what will happen to Bitcoin over any day, week or month,
particularly with an event like the potential approval of Bitcoin
ETFS, I would expect volatility.
But from a long term investment perspective,
there are so many positive catalysts for Bitcoin right now,
you have a potential ETF opening up the market to institutional investors.
You have a Bitcoin having coming in, April, you have potential interest rate cuts,
you have continued geopolitical uncertainty and you have
the fact that Bitcoin has historically moved in four
year cycles with three big up years. We're in year two of that cycle.
Those are five major positives that doesn't guarantee a good long term outcome.
But you're stacking a lot of favorable chips on your side of the table.
So I'm very optimistic about Bitcoin's positioning here for the long term. Ok.
So you're certainly a Bitcoin B
so
our viewers can take maybe this next question
with that perspective or through that lens. At least
we do expect that obviously, as the reports have shown that an ETF will be approved.
What's the perspective of the SEC here,
the regulators who are looking at these products.
Yeah, let's give them a lot of credit.
They said no to Bitcoin ETF starting about 10 years ago.
And even as a Bitcoin Bowl, the Bitcoin market was not ready for an ETF 10 years ago,
there weren't institutional custodians,
there weren't institutional trading firms,
there weren't the right disclosures and service providers in place.
The fact that we are closer to a Bitcoin ETF approval tells you that the
underlying market infrastructure behind Bitcoin has matured significantly,
make no mistake.
This would be a major milestone for Bitcoin in its evolution from a small
start up idea to a potentially new major monetary force in the world.
This isn't the end all be all.
But it's an important step and it reflects the maturation of this industry.
It's strictly good from my perspective.
OK.
So in terms of the adoption of Bitcoin in our daily lives,
people using Bitcoin transacting with Bitcoin things of that nature.
Does this have any impact on that?
It moves us down that road? Right?
It moves us down that road in order for Bitcoin to
become that more used alternative currency rail around the world,
it has to get bigger, it has to get more established.
It needs regulatory protections.
So this is a necessary and important step, you know,
bit wise we've been working in this space for more than seven years.
Now, we've seen a few of these important milestones,
checkpoints you have to go through on its way
to where many of us think Bitcoin is going.
This is a big one.
So it doesn't mean we're going to start buying our coffee with Bitcoin tomorrow.
But it does mean that sort of the ideas
and concepts that have been motivating Bitcoin for years,
one step closer to reality.
And why is it for our viewers too, Matt?
That Bitcoin is important that it has a societal function.
I think a lot of people would look at the
US dollar wonder if this threatens the US dollar.
But in terms of that usability, what is the necessary use case
Yeah, there are really two that are critically important.
One,
the existing financial infrastructure is just bad
and slow and serves Americans poorly.
Our banking system is too expensive. Transfers take too long.
It takes multiple days to wire money places. That's ridiculous in the internet era.
The other really critical important reason is
that a fully mature Bitcoin will provide a
check against the over debasement of fiat currencies.
So even if you think we're never moving off
the US dollar and I probably agree with that,
it's important to have something that keeps it honest.
And that's what a mature Bitcoin would do. It provides an apo
currency and payments rail that will keep the fiat systems more honest.
It's a win, win, not there yet. That's still years away.
But that's the long term vision.
That's how Bitcoin makes the world a better place over the long term.
Ok?
Bumps along the way or not.
I mean, for viewers who think they're watching the segment they like, oh,
this makes total sense.
I want to buy some Bitcoin.
Truly. I know we talked about it a little bit earlier.
Ma how do they need to prepare themselves for how the year might play out?
Absolutely. Bumps along the way.
Bitcoin is an extremely volatile asset with an enormous amounts of risk.
The general guidelines that we hear and agree
with is to size your position appropriately.
If you are going to invest most investors, who we work with, at bit wise,
it's between one and 5% of their portfolio.
You have to understand that this is a very risky investment.
So be prepared for bumps if you're
investing,
invest for the long term and don't allocate more than you can afford to lose.
But it is an asset with an interesting, as we say, asymmetric return profile.
In other words, the worst that can happen is it goes to zero.
The best that can happen is what's happened over the last five and
10 years where it's been the best performing asset class in the world.
So be prepared for volatility but study it seriously. It's a real asset class.
OK? I very quickly just about 30 seconds left.
Some people had said that during these past few years
that Bitcoin was almost like a new modern gold,
agree or disagree.
Oh, I definitely agree. It's at least trying to be that a digital store of value.
I think it's better than gold in almost every aspect.
The one that it isn't is it's not as established but things like an ETF approval,
move us up that chain.
There's a digital version of almost everything in the world.
There should be a digital store of value that's Bitcoin
and we're making progress in realizing that every day.
OK. Very informative.
Uh Matt Hogan, a bit wise, asset management chief Investment officer uh Matt,
thank you.
As always