All right, welcome everyone. Really excited to have as part of our first fireside of the day, two titans of industry here. We're going to zoom out a good bit and really talk about the broader state of crypto and even probably a good bit of macro as well. There's certainly a lot going on that is super interesting these days. Dan, welcome back. You were obviously you and I were on the same stage last year. Tom, thank you for joining us. This is your first time, but obviously hopefully not the last. Before we dive into 2026, let's very briefly revisit some of the highlights of 2025. It's really hard to believe it was only a year ago that we were doing this last time. There's been a lot that's happened. Certainly, we saw Bitcoin and Ethereum hit new all-time highs. We've seen significant retracement from that. We've seen tokenization continually moving from theory into practice. Stable coins processing even more volume than I think even some of the most bullish stablecoin people would expect, more IPOs of crypto-based companies, and regulatory headwinds turning into regulatory tailwinds perhaps. So what we're here to talk about is what's next. You were already briefly introduced by Ian on the way in, so I and I think everybody knows who both of you are, so I think we can really just dive right into it. We've all seen multiple cycles. We've all seen the bullish part. We've seen the bearish part. You guys have weathered that extensively. You're also all probably well known for making really great predictions and nailing those predictions far more than people on Wall Street are comfortable predicting first of all and then second of all the actual track record. Certainly volatility is happening right now probably forecasting more for 2026 but what are we thinking about right now like what are we thinking about the market in particular right now? And I guess Dan if you want to take it away we can start with you.
Thanks. Yeah, I'll admit that if you had asked me on New Year's Day 2025 with all the things that Justin mentioned happening, pro crypto SEC, all these great developments, stablecoin legislation, market structure legislation being passed by the house, all of these things, and you would have said crypto up or down. I would have said up and it was down 9% last year. So that is the surprise and I think my takeaway is you know when you're blockchain is going to change the world and so when you have something that important there is a hype cycle to it and sometimes people get ahead of themselves sometimes they get too pessimistic and this is actually our fourth cycle in 13 years of trading and they're actually pretty similar for better or worse is in the bull market we all think we're geniuses and it's all great and then now everyone's like oh it's failed it's terrible and you know the perspective I would have is you know just always be thinking 5 10 years down the road not you know five or 10 minutes down the road and one of the important factors really is the four-year cycle when I first heard about it in 2013 I was like hey if we all know about it it can't happen but it does keep happening and three or so years ago when when Bitcoin was at like 2000 or something we did all our work from our previous four year having cycles and and projected out where Bitcoin would be in this cycle. We said, 'Hey, our forecast would be Bitcoin would hit $117,452 on August 11th of 2025.' And when we said that right after FDX and Teraluna, everyone thought it was super crazy and it did literally that day. And so we had a call with one of our investors who say, 'Hey, great call. You guys should be so proud of yourselves, but doesn't that mean it's going to go down tomorrow?' I was like, 'Oh, no. This time's different.' You know, and it wasn't different. So, you know, I do think we are in that, you know, kind of historically it's been about a year very consistently of a down market and then about 3 years of an up market. And unfortunately, I think we're in that. And the last bit of the kind of historical thing is I, you know, I think that there were two huge inventions that are kind of the same publicly listed ETFs and then publicly listed these asset treasury companies. Really, really cool. and a huge number of people piled into them. Collectively, they bought over 100 billion of crypto and we've kind of run that kind of initial course and so without a 100 billion buyer, you know, it just kind of reset.
Tom, same question to you, I guess.
I might just add to Dan's comments because I largely agree. I know when I was just recently at the end of last year in the Middle East and meeting with a lot of the original Bitcoin folks many think there is a four-year cycle and that is affecting their behavior. So these folks who've made a lot of money in crypto and their life cycles have changed because they might have been 20 you know 15 years ago now they're in their 30s and have other life decisions. they've been acting as if it's a four-year cycle. So, some of it is self-fulfilling. But to me, I think there are differences which maybe want to highlight versus the similarities. You know, the first is usually activity on chain starts to turn down in the four-year cycle and that's not happening. Like if you look at Ethereum, active addresses have actually been accelerating higher. Daily activity has actually been accelerating higher. Even total value locked on chain has been going up. That's not what happened in let's say even the last cycle. And I think that there has been already I think an accelerated deleveraging that's taken place. I think October 10th frontend loaded all the deleveraging. I mean that was a bigger wipeout than November 2022. The thing is November 2022 was the last cycle low but the amount of leverage wiped out was bigger on October 10th. So that was frontloading something a year early. And then the last point I'd make is there is a four-year cycle but then there's also the business cycle. And I think if you look at like ISM for instance, actually no Bitcoin cycle has peaked without the ISM peaking. So in other words, this would be a break of the cycle. But part of it is because the ISM has been below 50 for a record 36 months now. It's the longest in 100 years of data for ISM. It's never been below 50 for this long. And then the second is things like gold versus copper ratio which kind of is a proxy for industrial versus monetary base. Gold copper has been at a cycle low. Every Bitcoin high has actually coincided with copper actually peaking relative to gold. So I think it could be a four-year cycle but then the things that normally link to the four-year cycle actually are different. So I'm going to be in the camp that I don't think it's a four-year cycle. So, I'm not trying to disagree with consensus, but I think we've already frontloaded a lot of it.
Makes sense. I guess maybe we can dive in a little bit more into sort of what's going on with some of the other dollar devaluation, debasement type things that are going on more broadly on Wall Street, namely gold, silver, other metals. You hinted on copper a little bit. Do you think there's merit to that as being some sort of moving away from you know the very common thing is people call Bitcoin digital gold. We've had a divergence of the behavior of those assets here in the short term. Is that something that you think is has something really changed or is this just a temporary thing?
Well, you know crypto is reflexive prices. I mean and I think it's changing because now the blockchain as Dan said is actually become finding a lot of utility. I think there's a lot actually being built on the blockchain. But if we look at historically crypto drew a lot of its legions of users and actually traders because of price so when crypto's price isn't working crypto traders are trying to find things that are working and I think the biggest trade over the last 6 months and I've can see it from our institutional engagement and of course you know if you can see it on social media or even just go to Reddit and look at Wall Street Bets the two most traded tickers are gold and silver by a country mile. Like just just Google Wall Street bets, you know, most active and it's like it's exponentially 10x anything else. And so I think gold and silver's rise and there could be fundamental reasons, but the price momentum there has I think drawn money away from crypto. That being said, I don't know if it's really scary signal because I think a lot of our institutional clients at Fundstrat think that this is a sign that the dollar is about to crash or there's geopolitical risk or you know something something's wrong with the plumbing like that there's going to be some bodies floating and a lot of people think it's going to be a commodity dealer or a major bank that's short one of these things that's about to have a huge capital Well, I personally just think it's more price is creating momentum, but I'd love to hear Dan's take on this.
Thanks. Yeah, I think I really do think there's a big macro shift happening. The willingness of all constituents just to print money is just off the charts now. 10, 20, 30 years ago, we had an independent Federal Reserve. We had a Congress that want balanced the budget, you know, in the 90s. And it seems like both parties and you know kind of all the constituents in the US and then often in foreign countries are willing just to print. That's so bullish for crypto and it's bullish for gold too. And I think you know the perspective I have is you know it's funny our current president is negative on Jerome Powell and we've been very negative on him since 2021 for not hiking rates high enough and the president's complaining they're not low enough and paper money is being debased at 3% every year and that's called stable money now over your lifetime that's 90%. you know, so it's totally rational to invest in something with a fixed quantity like gold or bitcoin. So, you know, I really think there is a big kind of change in people's mindsets with this new, you know, kind of ease at watching paper money be debased. And we once did a cool graphic that I think is still in our Twitter feed of essentially the price of paper money in so it's US dollar priced in bushels of corn, barrels of oil, ounces of gold, you know, Bitcoin. And that's really the story is paper money is crashing. Not that real estate's at a record high or that S&P's at a record high. Bitcoin's near a record high. It's really paper money is at a local low, but over the next 10, 20 years, it'll keep going down. So people keep cycling through and we do track the gold to Bitcoin ratio and yeah, gold got way ahead. But they do alternate back and forth and actually I think it's kind of cool that the total inflows to ETFs for both gold, old school gold and digital gold, Bitcoin are about the same over the last couple years. So, you know, markets, you know, they kind of get excited about one thing, it goes up a bit more, and then I think it'll cycle back into Bitcoin, and it'll catch back up to gold. And 10 years from now, Bitcoin will massively outperform gold. That's very obvious.
So, do we think that the new nominee for Fed Chair Walsh is going to exacerbate that, continue the current trend?
To be determined. That might I think Dan may know more than me.
Yeah, I've met with him a handful of times over the years. It's definitely super smart. But it is really hard to know you know kind of what you know what the stance is now. You know obviously the Fed should be independent and should make its own choices and countries that have governments that get involved in their central banks end up being banana republics.
With that, let's turn a little bit towards the more institutional side of the question here. I think over the years, we've seen institutional adoption of both crypto and tokenization increasing. Certainly the Bitcoin ETF was a major event, you know, largest ETF launch of all time. How do we feel about where they're at in terms of their adoption cycle? To some extent we have pretty material deregulation. I think if you chat with major bank executives in a private room or asset managers or really anybody with traditional finance, I think they're actually largely relatively prepared. You know, they've been looking at this stuff for a while. They've been doing pet projects for a while. Do we see that side bet turning into more of a larger scale bet? And what really does that mean? Is that something that's positive, you know, from a crypto perspective, or is that something where you know, they're going to try to sort of co-opt the narrative perhaps?
I was on a panel with the heads of a bunch of big huge publicly listed alts firms and almost all of them were super negative on Bitcoin and crypto and had no exposure whatsoever. And this is within the last 12 months. And it's like that's why I'm so bullish. Like all these hundred billion dollar crypto or alts firms have zero Bitcoin or crypto and that's why I'm still so bullish and that's why I think the next 10 years are so good. And I was on a CNBC thing once and they were like, 'Hey, Bitcoin's a bubble.' I'm like, 'How can you have a bubble nobody owns?' Like you can't have a bubble when the median holding for institutional investors of both cryptocurrencies themselves or blockchain venture is literally 0.0. So that's you know that is why I'm so bullish. And then you know Tom and I have been doing this for a long time and the list of reasons to say no to crypto used to be super long. No custodian and no this no that no regulatory stuff. The SEC is trying to kill it. They're pretty much all crossed off right. And so that is, you know, such a huge inflection point. We, you know, still need one more bill in the United States, you know, but from then on there really aren't reasons for institutions to say no given they have, you know, very little exposure. And then, you know, blockchain as an asset class has a 12 year 80% IRR with a 0.2 correlation to the S&P 500. Like there's never been a better asset class in history. So it takes time and everyone's reactionary and it you know grinding them down takes a while but it's inevitable that big institutions will come into our industry and I think the regulatory stuff in the US is kind of the last big you know reason to say no that'll help them get in and then one of the things that's helping institutions is there used to be this perspective that you know crypto is super risky and we all grew up in the capital asset pricing model era where volatility equals risk. And crypto is super volatile. Not going to lie, it's super volatile. But it's actually not that risky. Anyone's ever owned cryptocurrencies for four years has doubled their money or more. And then our venture investing over 12 years, we've only lost money on 14% of the companies we've invested in, which is crazy compared to the real world where 70% go broke. And partly it's our team's good and we work really hard, but partly it's crypto is just so awesome that it, you know, makes most things work.
Dan, by the way, what do you mean by alt firms? Are you talking about alternative asset managers?
Yeah, you know, the big listed alternative asset managers. I want to add to Dan's comments, but take it from a different angle, which is you know, are Wall Street firms embracing crypto? And we have our chief operating officer from Bitmine here, Young, who's sitting right there. I'm calling him out because he's going to be working with a lot of traditional Wall Street firms to understand really blockchain. But I have two observations to make. Number one, I don't think crypto is viewed as legitimate within most of the key decision makers of an organization. So there's evangelists like at JP Morgan, anybody from JP Morgan here? That's my old firm, but I'd say like, you know, there's obviously a blockchain team, but like at the senior level, the top 20 managing directors and executive team members, I don't think there's buy-in into crypto. And it reminds me of like I used to be a wireless analyst from 1994 to 2007 from when wireless was only 75 million users to over four billion. And I remember once Bill Harrison asked me to do a Chase board meeting where I talked about wireless. And I was I think I was like 29 at the time. And I went in and I said, like, see this Blackberry? This is going to be more important than that phone at people's desks. And Chase is going to spend more money on cellular than landline. And Bill looked at me like you know like I kind of like was saying something like heretic because, you know, the telecom companies were big clients at JP Morgan and Chase. And so I never got invited back actually at the board. But that as you know like that was the reality because like wireless basically was a better business than landline and I think that's true today like if someone went into a bank and said blockchain offers finality and speed that your current systems and can prevent fraud at such at scale and speed that your systems can't handle. I think you'd get the same look in a board meeting. But there's already proof because take a company like Tether which is basically a simple it's a monoline company. It's a stable coin issuer but basically operates as a bank. They only have 180 billion of stable coins tokenized dollars. It's not even 1% of M1 and their profit this year. Okay. And I'm projecting because I don't actually have their numbers, but I think if you look at their GAAP net income in 2026, it might be 20 billion, which would make them a top five most profitable bank in the world. And just put a I don't know 15 multiple on it, 300 billion or 20 multiple, 400 billion. That would make it top five most valuable bank in the world. The thing is they have 300 employees because they do everything else on the blockchain. JP Morgan, which is the largest bank in the world, has 330,000 employees. So to me, like it's, you know, crypto isn't accepted. Things are changing, as Justin said, but I think Wall Street wants to hijack that narrative, but I think native blockchain companies are like open source. They, you know, they may end up being better businesses.
Can you go into that a little bit more? What do you mean hijack that narrative? That sounds very interesting.
