The Bitcoin Thesis

Jeremy Allaire: Hello, I'm Jeremy Allaire and this is The Money Movement, a show where we chronicle the issues and ideas driving this brave new world of digital currency and blockchains. Over the past months on the show, we've focused a lot of our attention on stable coins, on digital dollars, and on the broader themes that have to do with those types of digital currencies and their synthesis with blockchains.

The focus has been on how public chains are going to be the foundation of a new mainstream moment for how payments, settlement, commerce, and broader financial applications take place. That overarching theme is really core here on the show, but I think it's really important time to check in on one of the more fundamental thesis that has sat behind the broader digital currency movement, the broader money movement, and really turning our attention back to the origin of all this world, really, which is Bitcoin.

In our view, Bitcoin is running in some ways in parallel to this world of stable coins, of smart contracts, of generalized blockchains, but also is very interwoven with them in terms of the market infrastructure, in terms of the broader thesis that's going on here. Clearly, if you're paying attention, Bitcoin has maintained its role as the dominant digital asset and the dominant store of value in the digital asset space.

We're obviously continuing to see growing levels of awareness, growing levels of adoption, we're seeing, really, significant new categories of support for it as an alternative asset in and of itself. Today, we want to explore how the Bitcoin thesis has evolved over time. We can touch on the current and sort of near term global macro environment.

We've talked about how that's driving stable coins, it's also very much driving the Bitcoin thesis, and we'll talk about that, and what the major drivers are of adoption are looking to be this year, next year, in the coming years. Obviously, think about what this could be and in a few years.

To drive this discussion, we're joined by two OGs of Bitcoin as an asset class with Michael Sonnenshein, who's managing director of Grayscale Investments, one of the largest investment vehicles for Bitcoin in the world. Dan Morehead, the CEO, and Co-Chief Investment Officer of Pantera Capital, which also manages a significant set of funds in the space including Bitcoin-related funds.

Both firms and both Dan and Mike have been driving these investment vehicles and providing retail and institutional investor access to Bitcoin as an asset class for nearly eight years. It's really, really awesome to have you guys on the show. Welcome.

Dan Morehead: Thank you. Great to be here.

Michael Sonnenshein: [unintelligible 00:03:36].

Jeremy: Good. You guys have probably, you have so much perspective on the Bitcoin thesis, and I'm really excited to be able to explore that with you both today. I thought it'd be helpful maybe to kick things off, just to talk a little bit about when you first developed a Bitcoin thesis, and how that emerged and what you thought then.

I like a little bit of an origin story and because you guys had been in this asset class as long as almost anyone and actually professionally in it, and helping other investors be in it for a very, very long time. Maybe just a brief origin story on your own journey into it and what the thesis was that if you had it written down from back then have you looked at it. Maybe I'll start with you, Dan.

Dan: Yes, my career has been investing in these disruptions, whether they're Russian privatization or Middle Eastern equities, Tesla Motors, and that was always kind of my hobby. They weren't the biggest things on earth and I was introduced to Bitcoin in 2011 by my brother and then a year and a half later, [unintelligible 00:04:57] and Mike Novogratz friends of mine from school and from Wall Street and Goldman asked me to talk about Bitcoin with them.

It really catalyzed my looking at it as an opportunity and we basically started out with a coffee and then I haven't left their offices. It's the biggest trade of our generation in my opinion that all these other disruptions that traded in the past, they're interesting, they're kind of regional or they just impact one asset class. This is going after gold and money and cross-border payments. It has gone after these massive literally largest use cases ever.

The kind of the lightbulb moment for me was at our first gathering, we got all the leaders in the Bitcoin industry out to like Thailand in 2013 and I just said, "Hey, bitcoins got the same market cap as Urban Outfitters. I think when they dig up our society, our Planet of the Apes style, it's going to have a bigger impact on the world than Urban Outfitters did.

We're at L'Oreal now. I just think I wouldn't trade Bitcoin for some shampoo. It's just going to have a much bigger impact than it's priced right now.

Jeremy: It's a great story and obviously, it sounds like when that thesis developed, it was clearly under $100 at the time, and it's been a good thesis since then but that's awesome. Michael?

Michael: Yes, my journey is a little bit different. I also spend time on Wall Street before getting into the crypto space and I had the fortunate pleasure of meeting our founder and CEO Barry Silbert in late 2013, early 2014. When I met Barry, I didn't know much at all about Bitcoin, I wasn't looking to leave the bulge bracket banks I was working for, for a job in the crypto space.

I remember sitting around my office, CNBC was on in the background every day, we'd occasionally see Bitcoin show up on CNBC and have a little laugh or giggle about it, but no one really knew anything or really took it seriously. When I interviewed with Barry to come join what's become now Grayscale, he kind of sold me on this idea that money has just changed so many times throughout society, it's just taking many forms and ultimately, society dictates what constitutes money.

Once he started talking about it in that respect, it started to pique my interest. Then he came up with this analogy that has stuck with me ever since, which is when we think about how transformative the cell phone was to developing communications in the developing world, where there were never landlines, but suddenly, you popped up cell phone towers and gave everybody this little tiny piece of plastic and suddenly everyone was talking, he started to start throwing statistics at me thinking that half the world's adult population didn't have access to financial services, but they all had cell phones.

This idea that you could put a bank in everybody's pocket was this like lightbulb, aha, transformative moment. Now seven years later, Grayscale has become a five-plus billion dollar asset manager, largest in this space, the kind of tailwinds and the people and the human capital and actual capital that's gotten involved.

It's just been unbelievable to see and be a part of. I don't think we're yet at that moment where bitcoin is at that inflection point that does create financial inclusion, but I do think we're well on our way and my faith and thesis around it, still hasn't changed in that initial conversation with Barry.

Jeremy: That's awesome. A lot of people have similar aha moments in developing their thesis. I guess, each of you within this sort of asset class of sort of manage products for investors to people can go buy bitcoin in lots of different ways now, the number of ways that people can do that around the world that it's proliferated greatly, but you've built products that are for large investors, for people who invest in an equity market like fashion, or through electronic markets and so on. Maybe just for a second, Dan, just talk about the Bitcoin funds, you had a thesis then how they performed from that early stage.

Dan: Yes, we've just been trying to help individuals or institutions get exposure to the blockchain space. As you remember back in 2011, 2012, and 2013, it was definitely more of a Wild West feel. [unintelligible 00:10:09] was the custodian of our industry, lot of at least immature incompetent behavior, and we were trying to offer a very professional way for people to invest.

Our Bitcoin fund was the first thing on earth to have Ernst & Young audit it. All the normal law firms and things people would expect. It’s just allowing LPs to get invested in the blockchain space in the vehicle they know and understand. We’re still waiting for an ETF, that was seven years ago.

I still think we still have a good bit of time for that to come to our space. We’ve set all of our products up as hedge funds because it's an easy way for accredited investors to invest in the space either just Bitcoin or crypto generally or venture.

Jeremy: Michael.

Michael: I think we've taken a similar thesis, but a slightly different approach to Pantera. At Grayscale now, we've developed a suite of 10 investment products. Nine of them give investors the ability to gain exposure to a single digital currency and the 10th product is a diversified basket of large-cap funds. Rather than going to the hedge fund route, we have launched these primarily as trust structures.

Similar to the way investors are used to gaining exposure to a commodity, or a lot of other subsets of the market. We've had a lot of success as has Pantera because even though our firms have come along and the space has come along over the last seven years, buying Bitcoin still does not exist in the same places that investors are used to making investments in stocks and bonds and all the other things that they invest in.

By packaging up this exposure inside investment structures, we've really opened access to a lot of folks. For us, we have an ongoing private placement, [inaudible 00:12:15] Bitcoin trust now has north of 2% of the outstanding Bitcoin float inside the product. If you're accredited, you can invest through the private placement. Non-accredited investors can participate and trade shares in the Bitcoin product, on the public market here in the US under the simple GBTC.

It’s been really rewarding. Again, I think anything that firms like Grayscale and Pantera, Circle, anyone that of us can do to really remove those barriers to entry, to make crypto access, avoiding the challenges of sourcing, storing, safekeeping, et cetera, is really helping to draw more capital and more interest into the asset class.

Jeremy: It's mature to-- just looking back over this arc of time from, say, 2013 to today, what’s changed for either of you in your own thesis on Bitcoin? I think there's these narratives, these memes, these themes that have been there and people have certain themes have ebbed and flowed. Is there a dimension of this thesis where the conviction is even deeper than before?

Maybe it's juxtaposition with where we are in the world today. I'd love to hear you both opine a little bit on how the thesis has evolved and I think it's okay for a thesis to not be exactly the same. At one point that there should be a thread that runs through it of course, but how do you feel like that thesis has evolved in articulating this opportunity to investors today?

Michael: I'll jump in. I think it's actually two different pieces, Jeremy. I think the first is the thesis and I think in tandem with that, it's also who is showing up around this thesis and what they're doing. I remember back in 2014, 2015, we had a lot of family offices, a lot of folks that were talking about Bitcoin and Silicon Valley and things like that, but it was still a pretty niche investment that most people were not willing to take that leap of faith into.

There was a lot of pushback given, there might not enough regulatory clarity for them, there might not have been enough of a track record around Bitcoin only been introduced a couple of years prior to then. You really did not start to see much of that until--actually, I think for me, one of the turning points was Goldman Sachs investing in Circle.

I think when you started to see that real institutional participation in digital currency-related businesses, it provided a certain level of air cover that it was okay for other investors to get involved in the space. You quickly started to see people moving away from Bitcoin's a Ponzi scheme, or it's only for criminals and people really started to do their homework.

I think what's emerged now probably over the last call it two and a half plus years is, for now, two narratives. One that we really believe in and understand, the other, that quite frankly drives us crazy. The first is that Bitcoin should be viewed as digital gold or a digital store of value, or perhaps a store of value for a world that's gone ever more digital, and maybe we need to start moving away from historical, and stores of value, inflation, hedges, et cetera.

When a lot of folks examine those overlapping attributes between assets like gold and Bitcoin, they really do start to see that Bitcoin can on many fronts really outshine gold. Now, that has happened and really solidified an investment community. There is this prevalent narrative that somehow Bitcoin is not a success because Jeremy, Dan, and Michael are not buying lattes with Bitcoin and somehow that it has failed. We think that that could not be further from the truth.

This is an asset that didn't even exist 10, 12 years ago, and the amount of development that's gone on around it is truly astounding. Anytime you guys hear that hopefully, you dispel that just as much as we do. I think in a similar fashion, as this thesis has developed, certainly our investor base has shifted ever more into institutional investors.

We deal with a lot of hedge funds, registered investment advisors, pensions, endowments, and really started to see investors that have oftentimes much more stringent investment mandates, really starting to make room in their portfolio allocations for digital currency, which has been super, super validating and really exciting from our perspective to see them getting involved.

Jeremy: One comment and I want to hear Dan's view on this evolution, but I think the monetary policy of Bitcoin and this rapid inflation or distribution over these first 12-plus years, and then this long tail of steady-state inflation, so to speak. I think some of the brightest minds who think about this over the long run, feel like the monetary base needs to grow much, much, much larger into the trillions.

When the monetary base gets into the trillions, the ability to transact in this as a payment medium will really start to take hold. Obviously, the utility value of layer two models and all the things that are evolving, we're still in the early stages of that. I even had a view at one point on this that it might take 30 years to get to that point where it becomes a preferred medium of exchange as a global reserve asset as well, and that's okay.

You can have a thesis that's 30 years on this kind of stuff. You don't have to bet that next week it's used to buy lattes. Dan, I'd love to hear how the thesis has evolved in your mind.

Dan: It’s a great question. I love the way you posed it. I would even say to some extent, what's changed, the answer is, what hasn't changed? Bitcoin. It never changes and that's why it's so powerful. That’s why people want to store $200 billion in it. The gripe is, "Oh, it hasn't evolved or it doesn't do this, or doesn't do that."

I'll say it's an interesting side thing we could talk about but the thing that really makes Bitcoin a feeling is it doesn't change. It's fixed and it's been proven. It’s 24/7 uptime for 11 years. It's never fallen over, never been hacked. Swift gets hacked, Facebook goes down, everything breaks. Bitcoin never breaks because it's built.

The other thing that's never changed is it's never lost number one status. It's been number one for 11 years. Number two's changed a lot. It’s XRP, Ethereum, Litecoin, everything cycles through. All these things come and go and Bitcoin still 60% of the entire market gap, the entire industry.

If you're talking about evolution, there are some really cool things happening, obviously, stable coins, lot of smart contract things [unintelligible 00:20:06], a lot of cool things happening, but there is a use case for the storage of wealth and a censorship resistant thing. Bitcoin's been doing that great.

Michael: It's fun to hear like there are some people that thought Bitcoin is going to change everything overnight and do a thousand different things. What it's doing, it's doing really well.

Jeremy: Yes, slow and steady. It's obviously really incredible. I think it ties into the thesis that has always existed, which is the Bitcoin was obviously born out of the financial crisis. One could argue that the Great Recession and a view about the grand monetary experiments that kicked off really in 2009, or really in 2008, but very heavily into 2009 and then ongoing.

That drove a lot of the global macro thesis but obviously, today, the current global macro environment has profound implications for Bitcoin in the coming years and arguably in the coming decades. I think, Dan, you obviously have a distinguished career in trading global macro for some really significant firms and this level of monetary invention intervention that's happening, not just in the United States, but every everywhere in the world. What is this going to mean from your perspective in terms of the Bitcoin thesis now?

Dan: No, I think you're right that Bitcoin was born in a financial crisis and it's going to come of age in this one. The thing we put in our, I think main investor letter was quoting Satoshi in the first block of Bitcoin, a Genesis block. He put The Times of London headline about another bank bailout that was outrageous Satoshi. It was £50 billion.

We're throwing around $50 billion, literally every four days in the United States. Satoshi's rolling over and his are grave, whatever. The amount of money's being printed now makes whatever Satoshi was frustrated with just completely irrelevant.

Jeremy: This is this is the United States, right? The trillions and trillions, and that's the full faith and credit of the United States and, Hey, we're eventually going to grow and we're going to pay it back and all that good stuff or maybe we don't have to, maybe it just is monetize out of existence.

There's various arguments about that, but around the world, the United States is whatever it is, 350 million people. It's a small fraction of the world. Every government everywhere is undertaking dramatic fiscal stimulus measure in these dramatic impact on their currencies on their outlook, on the ability for them to operate their treasuries, all these things that we have not yet seen the dominoes fall, but clearly there will be more that fall.

Seems like this is going to continue to five interest around the world, not just from big pension funds in the United States, which is great to see that level of interest starting to emerge, but just to the "man on the street", in a lot of countries. Michael, do you feel like there's a new wave of awareness going to grow out of the current environment around the world?

Michael: I think there actually already is. One of the things that investors tell us that for them makes Bitcoin investible is the fact that it has died. The fact that it has called dead no shortage of times, it has been challenged by other digital currencies, by all kinds of things over the years.

When a lot of them saw the massive de-leveraging in the market in March as the pandemic really took hold in, just pretty much brought the entire world to a grind halt and then saw how Bitcoin snapped back even faster and more fervently than other asset classes, it caused a lot of folks to at least share with us that they were really taking the time to drill into what makes Bitcoin and what has changed about it or not changed about it a overtime.

For a lot of them, one of the very first things that we talk about or that they're self-educating on is the verifiable scarcity of Bitcoin. When you think about Bitcoin's verifiable scarcity in the context of an environment where you have governments domestically and abroad just printing unlimited amounts of money to really, print our way out of the problems that we're now in. It does really shine light on one of the most important attributes about Bitcoin that we all know, that we all love and that we all believe will continue to always be a core attribute of the protocol.

A lot of investors as a result of standing that I think are really saying that there is some part of their portfolio that deserves to have an allocation to an asset that they know will not be intervened with, will not be diluted because more of it won't get created and that they can very predictably know what amount of it is going to be in the supply at any point in time. That's not lost on people.

That's a pretty transformative idea, particularly in this environment. While it's absolutely horrific the amount of loss of life and all the hardships that are going on around the world, it is for sure, shedding light on a very, very important aspect of Bitcoin here and abroad and something that we're really excited that is giving people an opportunity to understand this asset better.

Jeremy: It's been interesting to watch-- obviously, if you zoom out and you go back to 2013 to today, Bitcoin is completely uncorrelated to anything else. Obviously, it's the best performing financial asset over that period of time. Maybe there's some stock I don't know of, that's had a bigger run, and you can't draw a line, there's no chart that matches that.

Now over time, you've had these varying levels of correlation. This year, there's been a higher correlation to gold and gold's really been a safe haven asset. There's a lot of capital there. There was a piece yesterday that was saying the relation between the S&P 500 and Bitcoin's higher than it's been before. You saw the tech sell off last week and you saw a corresponding risk off in the crypto markets.

There's lots of capital at play, lots of pockets of capital at play investing in this space. There's momentum, there's speculative, there's arbitrage, there's long, there's all these different positions. What do you guys think about vis-à-vis that correlation? Does it matter? Does it not matter? Just, I would be interested in your thoughts. Dan, maybe start with you.

Dan: Yes, we've studied this and it is true that for very short periods of time, when there's a steep sell off in the S&P and there's been five in Bitcoin's life, Bitcoin becomes more highly correlated around 0.8 to the S&P, but it's only correlated for about 32 days on average. Then over 70 days, it dissipates. That's what we predicted in our March investor letter.

It's actually pretty much happened that Bitcoin did go down 50% when the S&P went down, it then stayed down there for just a couple of weeks and then has exploded back up. It's way higher than it was in March, way higher than it was at the beginning of the year and yes, it's a little bit off because the text fell off, but that's our views only in very, very short very steep declines in the S&P, is there are correlation?

If you look at it over any longer period, it's around 0.1, which is essentially nothing. There is no other asset like that, that has a 209% compound annual growth rate and essentially zero correlation to everything else. In the short run, it seems like its correlated, but in the long run it isn't. One of the best examples of that is Bitcoin goes way up as we've seen and it also goes down 80%, every couple years, it's had a lot of 80% downdrafts.

It's only had one year out of last nine years where the low for the year was below prior lows. Yes, it goes down 80% a lot, but even at 80% below its peak, it's higher than it was before, because it just went up 1,500% or 16,000% like our big Bitcoin flood. It just keeps going up so high that even it has these admittedly scary downdrafts, it's reaching a higher plateau.

Jeremy: Yes, it's good. Very helpful, Dan. I appreciate that perspective and I think that's right. As we look now, it feels like we've all been in this space for seven, eight years and we've experienced a lot of iterations. It feels to me at least that right now, things are moving incredibly fast. There's unbelievable progress in market infrastructure for Bitcoin, regulatory treatments, a lot clearer and around the world supported. The pace is there. Beyond the global macro environment that part of the thesis, which is on obviously very, very supportive of Bitcoin, what do you believe the biggest drivers are in the next two years?

Michael: I don't know that I have one for the next year or two, but I'll tell you something that my team is paying a lot of attention to. Again, I think in the near term, this idea of thinking about Bitcoin as a store of value is probably in the near term, the killer use case for Bitcoin. We all know and believe Bitcoin can have all kinds of other use cases as time goes on and maybe it develops other killer use cases, maybe it doesn't, but certainly, one audience that is very crucial to this is the younger audience of investors.

Over about the next 25 years or so, I think it's almost $70 trillion is going to pass over to younger generations and from boomers and down to millennials and Gen Z, et cetera. When you think about the way assets that are currently postured today and how they're going to get postured as they get passed down to that younger generation, we're definitely not saying that all of that money is going into crypto, but we'd be hard pressed to believe that crypto does not somehow become the beneficiary of this great generational wealth transfer. We're already starting to see that, but that's one thing we're definitely paying attention to.

Jeremy: My son is in that group, he's 20. He started to hold investments in 2013 when he was young. When you see something like that happen, his conviction is, of course, where I'm going to invest in crypto. [crosstalk]

Michael: It's the generation raised on Venmo and Tesla and Gmail and it's just apples and oranges and maybe things like gold and other or things just will not ever resonate with that younger audience of investors.

Jeremy: Yes, absolutely. Dan, what are you seeing beyond the global macro piece here as with the acceleration in the space? What do you see as drivers?

Dan: The global macro story is so untrusted and uncompelling, it's easy to focus on that, but the fundamental story of blockchain, as you know well at Circle and USDC, it's happening. When your bank is physically closed because of the pandemic or the other types of payment services you're used to, you need a natively digital thing to get done what you're trying to do.

USDC volumes have tripled over the last few months. We track a index of other portfolio companies like Circle that were invested in and it's up 120% since the pandemic started actual transactions using mainly Bitcoin, but sometimes other cryptocurrencies to do something, move money back home to the Philippines or whatever the use case is people can't get things done.

We're investing a company called Coinme that has physical KIOS in safe-ways. If you Google Bitcoin near me, it's going to pop up 25 different safe-ways or [unintelligible 00:33:41] or whatever in your neighborhood and those are essential businesses, they're open. You can go in, you can feed $300 into the machine and it pops out in Manila. That is why Bitcoin's working.

Then the other thing I'm just talking about catalyst is the three of us been dealing the regulators for eight years. We were so positive on the industry. I'll admit I had no idea the OCC was going to approve Bitcoin as a custodial asset with national degree banks as quickly. That's stuff's great.

Michael: Most people know what the OCC even is before that announcement.

Dan: Yes, but they will. When they walk into their bank branch and there's a sign, you want to buy Bitcoin, our store Bitcoin here. To me, things like that are really showing that it's not a fringe little like-- this is pretty legit, nationally chartered banks is storing your Bitcoin for you.

Jeremy: There's the classic Jeffrey Moore crossing the chasm. There's always been-- I was given speeches in 2014 about when's the mainstream moment for all this stuff and what are all the things that have to happen? Regulatory, market infrastructure, usability, scalability, all this kind of stuff. The early adopter to mainstream phase that chasm, like we are leaping over it as we speak.

Those curves that you see-- the good news is that the part before the chasm is typically 20% of the market. Then the remaining 80% of the market comes in over an extended period of time. It does feel like usage and awareness and all these things are very much there. That is absolutely outside of just this global macro context. It's a great perspective on that.

I want to change to a slightly more abstract, not even necessarily abstract, but a very different question, which is, as this grows as a non sovereign, un-censorable digital store of value as it's recognized as that, do we see it being accumulated as a reserve currency? Do we see it emerging in the next three years as a balance sheet asset in more and more central banks? Do we think that China and Russia maybe already have Bitcoin on their balance sheet, but it's in some tucked away footnote or whatnot?

We know the Russian federation built their own mining infrastructure and what are they doing with that Bitcoin? Is that a reserve that's there and how seriously are that reserve currency status is something that I think people who bright eye bushy tail walking into the space said, "That's going to happen."

That was one of the thing that was perceived to be just preposterous and ludicrous by anyone who is serious at all, but actually it might be happening right now and geopolitical things. I'd love to hear your thoughts on--

Michael: There's what, $200 billion of Bitcoin out there today? I think that when you're already seeing public companies like MicroStrategy, just very publicly put Bitcoin on their balance sheet, I have a hard time believing that state actors either are not already or will soon be doing so in the future. I think--

Jeremy: They got to experiment with it at least to be like, what the hell?

Michael: Absolutely. If anything, it's like a call option for them and whether they're publicly doing things like building mining and infrastructure and things of that nature to support the asset or not, they're going to have to be there because they're-- Bitcoin's infectious. Once you learn about Bitcoin, you can't shut up about it, and then you talk about it to everybody else.

Whether it's Russia or China or whatever it is around the world, the citizens in all of these geographies are using Bitcoin. It's explosive. I have a hard time seeing how they could ignore it. Not to mention the fact that they are certainly glammed onto this idea of blockchain technology and the emergence of sovereign central bank, digital currencies and things of that nature where they can actually have quite a bit more oversight and control of of their own currency.

Jeremy: Yes. Dan, what do you think? Reserve currency, are we there yet? Not--

Dan: Yes, I totally believe it will be a reserve currency. It's entirely rational to use it as a reserve currency today. Certain countries are complaining about the dollars and [unintelligible 00:38:38] around the world. It's hard to change. There's no other paper currency that's ever going to replace the dollar, but Bitcoin could.

If you wanted to bet on the, over, under, on three years though, unfortunately, I'd say over, I think it's central banks are very slow moving. They've been talking about [unintelligible 00:38:57], or de acquisitioning goal for 20 years. They only move like 3% of it. It's a very slow pace. Of all the things that are going to happen, being reserved currency might be one of the last ones.

Jeremy: Yes, that's the maybe on the 20 to 30 year thesis, but there's pockets of activity, obviously that are there. We're getting close to winding up here and we can't have this episode without price predictions.

Michael: Oh, no.

Jeremy: You guys do this, you can hedge however you want. We're at $10,000 now. Where are we at the end of this year? Where are we in in three years?

Michael: All right. I'm going to go first. I can't give you a price prediction.

Jeremy: You've got this debatable product.

Michael: My lawyers will have a field day, Jeremy. I'll tell you a couple things to look out for. One, the Grayscale team just authored a paper called Valuing Bitcoin. It's on our website, go check it out. A lot of investors say to us, "It's not a cash-flowing asset. How do I value it?" We put together a whole series of metrics that people can look at to identify signals that may lead to certain valuations for Bitcoin. Hopefully, that's a good resource.

In my opinion, Bitcoin is not something that people should be putting more money into than they can afford to lose. Think of it as an early-stage technology, buyer beware. I'm going to flash at everybody. It does have those 80% drawdowns, but from here, Bitcoin either is a hell of a lot higher and a lot more valuable than it is today or something somehow comes along in this place's Bitcoin and we all move on to something else.

Jeremy: That's really helpful. We'll put that you're a link to Valuing Bitcoin in the show notes and stuff. That's great. Dan, you're out in front with price predictions more often. I would just love to hear your thoughts.

Dan: Our predictions are normally the same is that it's got a nine-year, 209% compound annual growth rate, and we think that'll continue. It is just that simple that it has some bubbles as some down trades, but if it got back onto that trend, it would be $100,000 at the end of next year.

In the normal market saying something goes up 10X is ludicrous and you'd be ridiculed, but it happens every three or four years and all the factors are coming together. I think it is a pretty good shot that it hits $100,000 at the end of next year.

Jeremy: I'm right there with you. This is really excellent. Really appreciate both of you, joining, sharing, this long-term perspective, and having been there all along the way, and your outlook and what you're seeing. I think it's really tremendous. Obviously, you guys have done a tremendous service to investors who've participated in this as well. Thanks again for joining The Money Movement this week.

Michael: Awesome. Thanks [crosstalk]

Jeremy: You're welcome. Interesting moment in time, as Bitcoin continues to sit at $10,000 and all of these fundamental supporting thesis continue as well. As we've talked about, the non-sovereign store of value thesis sits alongside the true digitization of reserve currencies through things like US dollar coin, and the adoption of stable coins and blockchain infrastructure as a whole, all these continuing to run very much in parallel, and reinforcing each other in terms of awareness and adoption.

Next week, we're actually taking off and we'll be back soon with more episodes. The following week, we're going to be doing something unique, which is, I'm going to be hosting an AMA on The Money Movement. We'll be talking about how people can participate in live questions, asynchronous questions, and should be a lot of fun. Until next time, stay well, stay safe and stay informed. Thank you.

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