Matt Hougan on the Great Wealth Transfer

0:00Welcome to the Bitcoin business podcast put on by Sovereign. I'm your host, Brandon Carpolis. And today we have a guest who's a bit out of the norm for the folks we speak here at Sovereign. We are a Bitcoin only business with me is Matt Hogan from Bitwise. Thank you, Matt, for joining me and thank you for being on. Yeah, I'm so excited to be here. This will be fun. Yeah, so you know, one of the things I I like to talk to the people from all different aspects. Normally we're talking with business owners or people working with businesses or that sort of thing, but you have a unique situation where you kind of have a frontline view to what the institutions are looking at, everything out there. And one of one of the things I've always struggled with as

1:05a Bitcoiner is just like, why is this taking so long? Why is this so hard to get? I spent almost 20 years in traditional finance and I spent, you know, the last six years of that career trying to get people in my organization to understand Bitcoin. It was left out of the room. It was I don't get this. However, recently, I've been talking to a lot more of them and I'm giving the exact same pitch the same thing I said five years ago. I've just repeating it. And now they're going, oh, actually, that makes a lot of sense. Actually, oh, I understand it. And it's like, man, this was verbatim what I said to you in your office like four years ago. Now all of a sudden, it makes sense to you. So I'm curious what you're seeing on that front. Is it just that we have a more open, it's in the zeitgeist more and it's more open and so people are willing to actually like

2:08listen to what you're saying as opposed to just dismiss it out of hand, but but curious as to what you're seeing in those circles. Oh, man, it sounds like you've been living my life for the last eight years. I feel exactly the same way. I think there are multiple reasons for it. I've thought about this a lot. One is anchoring bias. So one thing that even us Bitcoiners should admit is the first time many people encounter Bitcoin. It's in a negative context, right? Maybe it was Mt. Gox. Maybe it was associated with FTX. There's been plenty of negative stories in crypto, and so I think a lot of people anchor on that. And as a result, you have to get them not just to the 50-yard line, but to like the 80-yard line before they're willing to admit it. The other thing is I just think, you know, the reason it's sort of moving forward now is that there are more people you can point to that have made the same journey, right? If you're an institutional investor, you can look to Harvard's endowment, which made Bitcoin its single largest liquid holding,

3:09right? You can look at our new incoming Fed share, Kevin Worsh, who is a fan of Bitcoin. You can look at Radalio talking about 50. All of that provides cover for the person in charge to make the jump. The last factor, which I think it's overlooked is demographics. I think it was the case 15 years ago that there were junior associates at Goldman Sachs who were into Bitcoin maybe 10 years ago. But now they're managing directors, right? Now they've been there for 10 years. So even just the aging of people who were early into the space, I think plays a role. I do think it's accelerating, right? We're at that accelerating part of the curve, but I think those are some of the factors that make it so slow. Yeah, I've noticed that too. I look back and think about how one I first heard about Bitcoin, how long I've been in it, how seriously I got into it. Then I look at myself, and I'm old comparatively, but at the same time, I'm young in terms of an institutional position

4:21of authority. Now I did leave that institution and doing our own thing here now. It's sovereign, but that's an interesting thing where you sort of have this maturity. Along those lines, though, it does seem like, I'm curious to get your perspective, too. It does seem like the younger generation is, I don't want to say they're dismissive of Bitcoin, but they're just not is into it as maybe like the older millennials or like the middle millennials kind of up even to Gen X, and then the boomers are just their own, they're just a write-off at this point. Is that something you see as well? Maybe it's just going to have to filter down from these sort of 30 to 50-year-olds that are kind of the ones driving this understanding and adoption.

5:22I think that's the generation that's driving it. I think that is the right age framework, so I think you have that right. I think for people younger than that, there have been other things that have captured their attention. There has been AI, there's been precious metals, boom, there's been some just equity holding that has captured their attention. They weren't there for the early days of Bitcoin when it was more challenging of the status quo when I hadn't quite made it, and so they're looking at these other disruptive areas of the market, but I think that's actually fine, right? So before I moved into crypto full-time eight years ago, I was in the ETF industry. I saw something similar there, which was the young people in the financial industry, embraced ETFs, the older generation embraced mutual funds, as the young people aged ETFs became ascended, and now maybe they're not as cool, like it's not as neat to move into ETFs. You need to be in a more disruptive area if you're young and really want it. So I think it's natural, but this

6:24is the solid days of growth. This is actually right. I know it doesn't feel like it at the particular moment, but this is the moment where it sort of hockey sticks out, so I think you have the generations correct. Yeah, it's almost like I love listening to 90s music, and despite every kid under the age of 26 wearing a Nirvana shirt, I don't know if any of them have actually ever listened to Nirvana. But at the same time, I get these emails for venues in the city I live in in Chicago, and I'm like, I've heard of one of these artists, maybe. So it's interesting you say that, it's just kind of was this technological disruption. And the irony is that the stuff that's being built on Bitcoin is is mind blowing right now. Like it is crazy how much easier Bitcoin has gotten to use in just the last five years. Like the technological developments and everything on the

7:24the pace of Bitcoin technology improving is so much faster than it was in its early days. It's almost like this weird paradox of there's all this technology and opportunity, but sort of the conception of Bitcoin didn't happen at the at the same time or something like that. Yeah, I think that's right. Well, you're right to point out the UX improvements and that's occurred off, you know, across multiple different segments, but the the user experience of interacting with Bitcoin is so much better. I mean, it was it was really painful in the past. And I think that's how technologies go, right? This sort of like social media, which was not cool once it was embraced in mainstream. That's kind of the phase that we're in. It is going mainstream. It is being embraced. It is entering a much wider sphere. And maybe for that reason, it's it's taken some of the edge off at the core. The technology is fundamentally still disruptive in a revolutionary sense to what

8:30money is. And I do think eventually people will will will come back to that and realize that particularly in these bear markets, you often see to the top layer peel off and people return to the roots of what Bitcoin is really is. And that will bring more people into it than when it's sort of surfing surfing at the highs. And the good news is let's be honest, a lot of these people that got that get washed out at the top, they panic sell, but then they end up coming back later and then they kind of form help form the next the next bottom as we move along this this adoption curve. But yeah, that's a that's a good point. You bring up about the technology. I mean, it's you look at something like even cars, right? 50 years ago, you there was no guarantee you were you can't call your boss and say your car broke down on the way to working. It was what do you talk about this? It's put a hand on the road for 150,000 miles. You like don't even have to change the oil or move a tire or what do you mean it's broken down? But they used to break down all the time

9:35and and now the UX is much better. They're they're way more reliable. I mean, it tells me when I need to put air in my tires, like my my my my grandpa passed away a few years ago and one of the one of the sort of knick-knacks he had lying around was a tire pressure gauge. And it was something you would put on to check your tires. I'm like, I'll never need this because I just have computer that says, you know, it's it's too if fill up your tires, the PSI is too low. So right? Yeah, that's that's that's a that's a big part of it too. So I'm also curious, it as you're as you're talking with more of these sort of institutional investors or people allocating funds on behalf of clients and that sort of thing, is it is it more that you or people in your position are going out and explaining it to them or is it, hey, I've got this, I understand it now I'm now I'm looking for like somewhere to deploy my capital. Yeah, so in the case of

10:41Bitwise, it's more of the the former. So we have a 25% sales team, we do 15,000 meetings a year, mostly with financial advisors and family offices, some with insurance companies and diamonds and institutional trends. And we are going out there and educate often if you're talking to a financial advisor, they'll have one or two or three clients that have advocated to get Bitcoin into their portfolio. So they will have some push. But what we're really looking to do is to get all 100 or 200 of their clients to have an allocation to Bitcoin. And in that case, it's educating that person about what it is. For what it's worth, that process is slow. To go back to the scale of this adoption, our average client allocates to us after eight meetings. And you know in finance that if you can get a meeting quarterly, that's a pretty good cadence for a distribution team. So you do eight meetings quarterly, it's a two year process. Now the good part about at the end of

11:43that process, they become clients for life. And we've had inflows even in 2018, we had inflows in 2022 we had inflows last week so they become very good clients. But it's us going out and doing the education. These people are busy. I know in crypto land, we think how can you think about crypto anything less than 24, 7, 365. But you know for a financial advisor, they only spend 10% of their time on investment management, the rest is on client services. And within that 10% sliver, how much time do they have to give to crypto, it's not much. So we have to go out there and tell them what's going on in the market and answer their questions and eventually onboard them into the space. Yeah, I mean that's we're finding that as well. And with business owners and dealing with them, it's it takes a lot of touch points and the people that the people that eventually come in are people we talk to, people we follow it up with, you know, over and over and over. And that's like and that's like anything in life, right? That's every sort of sale cycle, business completion,

12:51deal closing, whatever whatever you want to call it. That's that's just kind of the way it is. But it is I really still am surprised that it's it's just taking taking so long to get going. And and and actually I was talking with someone about this, but at the end of the day, I guess I guess we got to kind of look back at our ourselves and just say you're trying to impose your own timeline on to Bitcoin. Bitcoin imposes its timeline on the world. And the better the faster you accept that, the easier this this journey is going to be for you. That is a very zen-like view of our frustration in in operating. But I think it's absolutely right. The other thing I would add, and you know, I've been doing this for eight years, is we have really narrowed the list of objectives. If you go back eight years ago, I would spend a lot of time talking about self-custody and how to set up a, you know, custody and we would take computers

13:56and remove the speakers and remove the Wi-Fi cards and do all these things to show how to create the air gap computer because people need to understand that at a fundamental basis. Now the technology has improved enough, but you don't really have to do that. Right, self-custody acid like ledgers have been around for a long time and they're proven institutional custodians like Coinbase or Fidelity or Bitcoin have been around for a long time and they're proven you're easier to check that kind of box. And that's been true on a number of different questions. We used to have sort of a lot of questions about tether. We used to answer a lot of questions about how miners work. Now most of those questions are sort of accepted, right? The Bitcoin network has had 100% uptime for 10 years and settled 125 trillion dollars of transactions without a single mistake in transaction. You don't need to spend that much time proving that out. People just accept that is true. So I do think it's getting easier. I think it will accelerate, but yeah, it still is still. Yeah, that's a, that's a good point. It's, it's almost like

14:58back in the day, you really did need to know what under the hood was going on, how it worked and then be able to craft a, a good custody setup and now you have something like a cold card, which is even for advanced users, but I mean, you can watch a YouTube tutorial or nowadays, you just plug it into chat GPT. I've been shocked how much chat GPT knows about hardware wallets. So you can just, you can just ask, you know, where do I find this setting or how do I do this? And it'll just say click here, click here, click here, boom, boom, boom, done. And it's, it's much easier to, and then, you know, that device in the case of the cold card is airgap. There's other airgap hardware wallets out there. Some people just want it to be easier and they plug it into the computer and there's just super simple software that connects them right to it. I mean, I remember locking people through hardware setups like in 2020, 2021. And it was, there were some things

16:02you had to do and know where to go. And now it's like, okay, you got this wallet, get their software or get Sparrow even, open source software. You can just download that, plug in the wallet and everything, everything works very simple. You see the send, you see the receive, it'll ask you to sign and you just do it. And so all these, all these tools have come so far that it is, the user doesn't necessarily need to be an expert and understand those things. Now, in terms of sort of the monetary policy and why the network credibly enforces that, you know, that's really the main thing that people need to understand now to not get shaken out and have a long term view of this. I think that's right. I think the last part of what you said is, is, is importantly right. You, people can allocate with understanding it, but to not get shaken out, they do have to understand it at a core basis. And I think spend some time dwelling with it and thinking about it.

17:05I do think it's an idea that some people get it instantly, but more people, it has to marinate and they have to see it and think about it in the world. But then when it does, it's very sticky. Right, they don't go the other way. Yeah, it's one of those things where it's like the scarcity thing I find people get almost immediately people are like, okay, yeah, that's great. Yes, of course, I would want to money where I knew there were only 21 million. I would rather have a unit of that currency than something we have no idea how many units of that currency are going to be. But then immediately the next thing is, wow, what if they change it to 28 million? What if they someone just writes a new code and it's, of course, there's answers for these things, but it's going through and explaining that to everyone. Yes, I've answered those questions so many times. And look, they're good questions. People should ask them. And Bitcoin has great answers,

18:05but you do have to give them answers and they have to reflect on it. They have to come back a few months later and ask the next series of questions. You know, what happens when they're no more Bitcoin to be issued and what if the security, they have to ask all those questions. So you need people to sort of walk down all those steps and yeah, it takes a while, but they do get there. They do eventually. That is the good thing. And it's funny. Like I said at the beginning, same conversations I have, but for some reason, it's like, oh, now it clicks. Now I get it. And maybe even it's just hearing about it more or something. I don't know. Yeah, I think that's right. I would also add the other side of the equation, the flip side of Bitcoin, the pair that we quote on the dollar side has become more dire. And I do think that is open up people's minds as well. You have more people seriously talking about Fiat debatement and you have Ray Dalio talking about sort of the end of that process and

19:07debt monetization. That is something that wasn't on CNBC three years ago. And now it's on CNBC all the time. And I do think that maybe it primes people to consider something like Bitcoin, right? If they hadn't been thinking about that risk, now they're thinking about that risk. And so they're open to solutions. I think that's been another major change. Well, and we just printed so much money in response to COVID that it's like, it's impossible to ignore it. And I really do think there's a large cohort of people that were kind of like, I'm okay getting debased a few percent every year. And I will suffer through the purchasing power decline of my currency and my assets because I'm still earning money. I'm still out earning inflation. And that's good enough for me. The thing kind of works. And I can deal with a little increase in the cost of things. And that's fine. And that worked for a majority of people.

20:12But now it's the the cost increase of things is just so astronomical. It's like, whoa, I did not increase my income enough to do account for this. And people are people are starting to say like, okay, there's there's something something's wrong here. Something's not making sense. Maybe I don't know what it is. But I do need to start maybe looking for some solutions on that front because just because it's so pervasive in society after 2021. So yeah, I couldn't agree more. And the reality is, you know, go back to demographic thing. You have almost no one working today remembers the world on the gold standard. Right. You have to be what 85 or something like that. We have all only lived in this fiat exclusive world. And that I think is why we needed something like the COVID shock to wake us up because that incremental boil flow frog 2% inflation, you know, steady slope on M2. You can sleepwalk through that because you're busy. You have other things to do, right? You have

21:15trying to increase your your salary in other ways. Maybe it's not the pressing thing. But the yeah, the shock of COVID on the back of the shop of the global financial crisis and the dramatic increase too big to ignore. And even if you've only lived in fiat waters for your whole life, it's like, whoa, maybe there's maybe there's something wrong with these waters. And maybe I need to look outside of it. Yeah. And I'm curious too, is that is that a sentiment? You're are people coming to you with a preemptive like, okay, um, you know, we saw how much money they created in 0809. We saw how much money they created during Zerp era now 2021 was just like parabolic. They're trying to rain it in. It doesn't seem like they're doing a great job. We're out there exploring solutions. Or is it, uh, or is it more of just, hey, this is a cool new innovation that I think we should keep an eye on. Um, I'm curious to which one you're seeing.

22:21We definitely, I mean, we definitely hear the former, right? The word debatement, again, was not said in polite circles in investment industry. Fiat wasn't either. You know, we were dismissive of those people pre Bitcoin. They were like, you know, gold bugs. Right. They were, they were really cast into a corner. Yeah. No one talked about Fiat was a car company until two years ago. Um, and I, I do think I do think now those eventually, yeah, bad one. Well, well, maybe it was the day just inherited it, inherently flawed. But yeah, we do give people coming to us. They're concerned about the basement. They realized, you know, in the case of financial professionals, 100% of their portfolio is exposed to Fiat risk. Uh, and that idea that maybe you don't want 100% of your eggs in a single basket, which throughout history has been a bad basket at some point over time for everything.

23:21I do think that is resonating with people. We do, we do have people come to us and, and, and want to hedge that, want to add some diversification, want to add some insurance. And they're looking for the best way to do that. And obviously Bitcoin fits the bill. Yeah, having that, having money outside of the current rails, having it, having a monetary network where you don't have to trust anyone to move money around the last few years. I mean, there's been all sorts of censorship online. And of course, there was the Canadian trucker protest. And then we had bank closures and some banks got bailed out. Others didn't. And it's just, just the ability to have that optionality of a system where you're guaranteed, you're going to be able to send money to someone is something that I think is starting to resonate with, with a lot more people. And it sounds a lot more attractive than it did maybe a decade ago. I couldn't agree more. And I actually think it's on both sides of the political divide, for sure.

24:25If you've lived in the US for the last 10 years, doesn't matter if you're left or right, you can imagine a scenario where your rights would be restricted because it's been such polar swings. And so I think the idea that, yeah, maybe we need a neutral third party rail where it's on us. Maybe that's good. And I think it's really important that it's been on both sides. And I do think, despite what you read in the headlines, I think that that is a realization that a lot of people have come to that we need, we need a non-political form of money. Money is being weaponized around the world by different countries and by different factions within those countries. And having an ability to opt out at least a portion of that is a fundamental right pretty important. Yeah, each team gets their chance to weaponize the money against their opponent. And yeah, it's just this constant back and forth of, all right, you're our representative.

25:29So these guys beat us up. Now we want you to go beat them up. And it's like, I mean, that's going to turn on you the second, the other side gets in power. Like every all the power you wanted to project onto the other side is going to be turned right back on you. And I mean, there's been tons of these go-fund mes and gifts and goes and all this kind of stuff that has just been pulled down because they didn't even like it. And I don't know if you heard, but there's all this stuff coming out, individuals talking about not being able to get money through chase to get into different platforms. I know Jack Mollers came out. He said he a few months ago. He said he was completely, he was kicked out of the bank. Other people have complained of stuff. Of course, we had the whole advanced rate adjustment against strategy and then all the sudden chase couldn't

26:32deliver the shares and all this kind of other stuff. And now like people are posting online, their individual experiences of I can't send money to crack in, I can't send it to strike, I can't send it to river, I can't send it to coin. You know, people are just not being able to connect to these rails. And now all this sudden, your money's trapped. Like it's, you know, I'm sure I don't need to tell you, but when you put your money into a bank, it's not actually your money. It's an IOU that you hope you get your money back one day. And guess what? The bank doesn't have all of it. So you don't have all of everyone's together. So there's it's wild. It is an opportunity that you're not getting that back. And now we're starting to see doors close from, you know, I probably, if not the biggest bank, I don't maybe the VA or city or something's bigger, but one of the biggest three banks in the country for sure is just starting to lock people

27:35out. That could be anyone any day you wake up and try to do this. So it's wild. Yeah, anyone who thinks it hasn't or can't happened the last 15 years just rife with it, right? Yeah, what you're talking about, the massive debanking that took place under the Biden administration, which was really caustic to those of us within crypto. And we had experience of that a bit wise, you mentioned the Canadian truckers, which is still just incredible to imagine a government taking those steps, but there it is. The data is there, right? And I think it points to the long-term importance of what Bitcoin is building. Yeah. So are you dealing it all with businesses as well or just is it all pretty much wealth advisors, RIAs and that sort of thing? Yeah. So our primary audiences is wealth advisors and RIAs and family offices and institutions. We have a couple

28:36corporate clients for sort of SMA style products that we offer separately managed accounts, but it's not the primary thing we do. It's not a focus of what we've reached out to at this point. We're more of a traditional asset management firm in that perspective. Yeah. Yeah. We're hearing more and more that businesses and people are just looking, they're kind of price agnostic, but I need some exposure to some money that I can move around and not be beholden to someone clicking yes that my transaction will go through. Yeah. Absolutely. I think it's a growth area. I think all of those things that I just outlined are on their own similar trajectory. They're at different points. I think business is for sure a significant growth area and it's maybe just a little bit earlier than where the advisor

29:40community is, but that's these things move in building waves. I think that's what we see from our perspective. Yeah. You just look at like a stake in shake, for example, this year that implemented a Bitcoin strategy. I think they said they saved 50% in fees on the transactions where Bitcoin was used to pay over the lightning network. They saw 15% growth, same store sales, which is I was someone who used to deal with franchises a lot in my previous life. 15% same store sales in a quarter is, I mean, that's unheard of. Like, I see. Yeah. Franchises don't do 15% same store sales increase in like a decky, you know. Half a percent, a percent, those are like good numbers in a year and so to see that it's it's it's it's shocking and again, it's just back to like you can stare out there. You can

30:41you can look at something like a strategy and you know, they're not my favorite example of you know, businesses going out there being a profitable company, storing your profits in business and and and and taking your time and energy and storing it and something that can't be debased, but you cannot argue the success the company has had the valuation of the company I mean, what they're doing is is fiat arbitrage and it's working and they've a hundred x the value of that company from just a software company and now you look at stake and shake it to me it's still I just look at this and I'm like all the evidence is right in front of you here guys like this this is working for people it's doing better you're you're opening up yourselves to a whole new market segment but it does just it's just the pushback is just crazy yeah well you know uh when when you get into finance they tell you that this time is different

31:42are the foremost expensive words in finance and the funny thing is that people sort of weaponize that against Bitcoin as if we're saying this time is different in fact what you're pointing out is actually all Bitcoin is all you have to do to be bullish on Bitcoin to be bullish on corporate adoption to be bullish on institutional adoption um to be bullish on its role in the in the global stage is say that the same stuff that's been happening for the last 16 years will just continue to happen right it's actually this time is different is on the other side people who are uh you know somehow claiming that all of the trends that you're pointing to uh whether it's strategy accumulating or more companies accumulating or stake and shake growing same store sales um um that those will somehow change and i i don't understand why they would change on the downward trajectory i can see them changing on the upward trajectory is concern about the out increases but i don't i don't you know it basically just has to keep happening um that's it yeah it's it is it's

32:45it's just it's so wild to me that i sit here and see this and it's just so clear i i talked to so many business owners on this podcast that come on and they're i started selling my product for Bitcoin and i found this whole new cohort of customers and now it's that is the norm the norm is you make a good product you advertise that you sell for Bitcoin you gotta advertise that you do have to do the marketing like you can't just be like i accept Bitcoin and now i'm my company's gonna do uh do many more sales it's like now you have to get out there you gotta make yourself known you gotta you know ingratiate yourself to to the community and that sort of thing but every single one of those people that are willing to put in the time and effort and go out there and take payments in Bitcoin their their their business just improves so much and they increase their sales and they have new customers and and i'm not saying well it's it it's a it's a

33:46two trillion dollar market of wealthy mostly younger people who uh operate in the financial ecosystem and typically have money to spend i mean you strip Bitcoin from it everyone should be going after this market because it's extraordinarily attractive just from a size growth it's also growing you know 60% a year on average for the last decade or so um that's an extraordinarily attractive market so it doesn't surprise me that the businesses that identify that go into it well uh they found this cohort of wealthy young best uh accumulating people um that's a pretty good group to go after yeah i mean that's the that's the whole uh marketing strategy forever right is go out and and get to get what's the uh what is it like the eighteen the thirty four down the Africa because right because now you have a customer for life right because once people start buying something they just get used to it's like yeah okay they may not have all the money

34:48but they will in twenty years and that's why we want to market we want to get them in now um just like the you know school system we want to teach these kids we want to scramble their brains when they're when they're young and and then they're then they're loyal and and part of their system and now you have that demographic but who have money like who actually have the ability to purchase things and your your your focus has been on that cohort anyways you might as well just for a narrow it down a little more to go find the specific cohort of people that actually have the money oh dolly yeah couldn't agree more man but it's it is uh it is it's just it's frustrating living through this um but at the same time it's it's humbling and it um it's it's it's teaches you a lot it teaches you that you you whatever expectations you had whatever timeline

35:48you thought no one could predict the future you don't know it's gonna go slower and uh what what's gonna be crazy is at the end of the day it'll you know maybe it'll be fifty years maybe it'll be six years even that that like we basically completely had a new monetary network and standard that took place in 50 years or 40 years or or whatever the number is in the grand scheme of civilization it's like absolutely nothing and yet we still want it to go faster so yeah i think that's right i mean i think it's extraordinary right we're trying to separate money from state uh we're trying to move to a more uh a more sound independent self-sovereign system and we've gone from nothing to having sovereign wealth funds and some countries uh owning it and millions of people owning it in 15 years that's a lot of progress so i hear you on being frustrated that's because you can see where this is going um but the scale of what we're trying to do has never

36:53been achieved before and uh it's really enormous and really important and i think it's you know it's it's going pretty well if you're if you're able to step back from it um it's going pretty well yeah hundred percent i i've made peace with it i'm i'm just you know however long it takes it's gonna take i uh i get it now it's it people not understanding Bitcoin or rejecting Bitcoin used to bug me and now i just go okay well that's another touchpoint for you and maybe to your to your eight touchpoints earlier that's right um maybe i don't know i don't know what the number is for Bitcoin adoption i don't know if it's three or thirteen or whatever but here's here's another touchpoint for you here's another piece of exposure to it and you'll come on your own time and listen we all came on our own time too we weren't uh satoshi we weren't half any we weren't some of these cipher punks that got it right from the beginning or even like a max kaiser or something like that it it took us a decade to come around too and it'll just take the same

37:58same for other people and um consensus of what has worked in the past conservatism especially in the financial spaces is a real thing and it's a real force and it is and listen it's it's served our species well it has preserved things you don't want to just rashly jump into the next thing because you just want to do new stuff it needs to be tested and tried and true and and and look at otherwise your your your civilization will fall apart so there is a part of human nature that is is rightfully conservative with those things anyway so yeah a hundred percent and uh you know Vidcoin is on a spectrum uh when it started you were right to perceive it as risky it was like a few people we didn't know if it would work maybe some people looked at it read the white paper realized how perfect it was and knew it would work forever but i can't even imagine i'm not smart

39:01enough to have done that i'd want to see some real world demonstration right and every year that goes by it builds up more data points again i think the the stat i threw out uh about it having a hundred percent uptime for the last ten years if you go to fifteen years it had it had a few moments where the network pick up for a few hours right yep but for the last ten years a hundred percent uptime a hundred and twenty five trillion dollars processed uh no wrong there's no other financial ecosystem that can match that so as that track record gets built up maybe for some people they want to see fifteen years fine right i don't think it's going down again um i think it's i think it'll be a hundred years if you need to wait that long but that that track record we're building up and it it's going to capture more and more people as it as it does that yeah it's just so decentralized at this point there's so many nodes all across the world i mean you're you're talking about truly apocalyptic scenarios where uh the whole network would go down i mean a hundred percent of

40:03the nodes went down i don't i don't know if humanity's here anymore so i agree i agree we probably have other things to worry about yeah exactly and uh we're good we're going to be back to uh the barters system monies monies going to be worth a lot less than some canned goods or some ammo or something like that's right so yep yeah and frankly uh i'm not even sure i want to lift i don't even know if i want to try to lift through that so well um i might just be uh all right it's uh we had a good run it's time to check out here but um well also also along those lines of it's it's like get it you know did you would you want to be the guy on the first airplane of of course not um right yeah definitely wouldn't be me the first guy on the first ship uh probably not and so yeah there there is and and and that is what's being built here and i was just

41:03talking about this so with someone a few days ago as well as really what what you need to be looking at is the is the bottom of that that log chart is the points on the bottom that's the that's the increasing adoption that's the that's the conviction level that's the people who have said i understand this thing from first principles and i want to hold a better form of money and that's just gonna just gonna continue to grow yeah i couldn't agree more um the other thing i would say about the current moment is you know in bear markets um or in pullback moments all the good news gets ignored uh but it doesn't get lost it just gets stored as potential energy for the future and i think that's what there's actually been a lot of good news in the last uh five months even as the price has retraced from the october highs there's been approval on national account platforms uh there's been rising conviction in the debatement trade there's been a growth

42:04in the store of value market um there's uh there's plenty of positive things to look at and i think all that will uh eventually make itself known it just gets temporarily overlooked but it doesn't get forgotten it just gets stored and um i think that's but that's the moment that we're in right now yeah it's yeah that's that's building the base right that's setting setting the floor if you will and that next that next piece of good news just keeps adding on and keeps strengthening the network and and and that's one of the really cool things about being in the bitcoin space is you get a front row c to all the things that are being built and the stuff that is being built out there the stuff people are working on and i'm not i'm not sure if you saw but i think it was the Helsinki conference or maybe it was Balticunny Badger maybe it was Balticunny Badger where every single merchant was

43:05set up with um uh i think they used the arc network and it was just lightning was like a glue that held these five or six different protocols together and anyone could just however they wanted to interact with a lightning network they could just pay and it's like do you under uh i that is so revolutionary so mind blowing that you're going to be able to build stuff and now how fast these AI agents are increasing their ability to make stuff and use the bitcoin network and use tools like master use these open protocols to basically build what i mean we're we're going to see just such a massive we're already seeing a massive increase in the stopping built on top of this and it's just going to accelerate it's just going to get faster and faster but to your point if all you're doing is looking at the price or watching a smbc and you're just

44:06you just see it as another ticker in your portfolio or something like that um you you don't really get a a view of any of this stuff going on and it's harder to get excited about something when when you don't see all the all the inner working so that's going on yeah that's definitely right because you will see the price you can't not see the price everyone sees the price we can pretend we don't but everyone sees the price and so if that is your primary news flow yeah you're missing out on what's going on beneath the surface that's one of the reasons i like to come and talk you know i i have my own little angle of things i see underneath the surface which is all these meetings with institutional investors and um i can tell you that there there is there is no bare market actually but another angle from the technology angle but on the institutional adoption side the pace of meetings is just the same um the interest is is probably up you know people are seeing the pullback as an opportunity and i do think you need to yeah you need to get underneath the

45:10surface of price or listen to people who are underneath the surface of price uh so you can see what the fundamentals of bitcoin are for lack of a better word um and those are those are doing those are doing really well yeah i've i've been shocked even just all the people i talked to the number of people that actually heard about bitcoin that are willing to learn about bitcoin places that are like oh yeah we'll sit down we'll have a lunch with you i four years ago there is no way they would have sat down had a lunch with me even listen to me they would have been like you're you're a crazy person go away now they're like yeah we'll talk to you let's tell me about it and and to what all this stuff we were talking about earlier about in terms of this just building and however long it takes and um it's been up and running for 10 years and my my personal favorite bitcoin meme slogan whatever you want to call it is tiktok next block there's like 19 amazing kind of mind

46:13blowing concepts all like wrapped up in that but at every lock that gets added on it gets harder and harder to deny that this thing is going to go away and that that actually is one of the things one of the refrains i have heard a lot from people is it's obviously not going away now i should probably learn something about it whereas i never heard that even just a few years ago yeah and i think that's really important you know i tell people uh it's harder to convince someone the bitcoin's worth one dollar and not zero and it is to convince them it's worth a million dollars and not one dollar um i do think that initial step of it's not going away and it has intrinsic value in the world and it's going to be valued forever once you make that leap it becomes very easy to to to to make the to stretch to where you can see its significance over time um and i do think as you said every day it goes on every day that it continues to

47:18actually strengthen and get better makes it easier for people to make that initial leap and i think that's actually where most people uh get off the bitcoin train is they can't make that initial leap once they make that initial leap they're in and it's hard to imagine it not being really uh globally important yeah it's it's almost like you just have to submit you just have to say okay um will i'm willing to learn i'm willing to listen and it's like once that's broken down i mean i have i have never had someone spend more than 10 hours studying bitcoin and be like i don't get it i don't understand i it's if i can get you if i can get you to read the bitcoin standard if i can get you to like 10 hours you're at least that person is then at least like okay i should probably learn about this i should i should know a little bit more about it it the the people i can't get to are the ones that are just like i'm never buying it i don't care

48:20my mind's closed um it's not happening and those are the people where i'm just like i never have a chance with you um um never have a chance but yeah it is that it is that willingness to just let your guard down be like okay i got to understand this and then once you do it's i mean are you aware of anyone who's like really put you know a hundred hours in a bitcoin that's been like i i i don't get it i'm i'm scared about something here um i mean no it's definitely a one-way door i definitely agree with that um yeah once you've seen it you can't unsee it you just need to help people uh help people see it right and they'll get there again they want everyone gets there on their own time right Michael sailor was a bitcoin skeptic in 2013 and uh he's not anymore so um you know everyone i think almost everyone as you said the few exceptions goes through this process so um that's been going on for 10 years it'll keep going

49:23on for the next going on for 15 years it'll keep going on for the next 15 as well i i i certainly went through it myself i i was very much a skeptic and we used to we used to do a um a thing my old boss and a few guys we would we would get together at the end of the year and we do predictions for the following year and uh i think i i think i said there's like 2016 or something i was like big coins going to big coins going to i don't know if i said zero but i'm like it's a guy it's going to be drawn down 90 percent it's like never coming i basically declared bitcoin dead and uh two years later i you know bought my first uh made my first purchase so i can i can sympathize with uh the the journey and the path it takes so um it's hard yeah it's hard for people to to accept something as new i think a lot of people assume you're like at the end of history of financial development they can't imagine anything you know fiat currencies they

50:24couldn't imagine anything beyond mutual funds um they couldn't imagine anything beyond physical banks that you go to and talk to a teller they couldn't imagine ATMs i mean the history is is is full of these people thinking this is this is it this is the final version they were skeptical of robinhood no one will trade on phones right all of that was met with the same sort of skepticism in cards exactly they were skeptical of credit cards yeah yeah who would ever trust these they had to like airdrop credit cards to be yeah i mean that right finance it's hard to break habits particularly around money um and uh and people are skeptical that there will ever be anything other than the way they've been doing it right i'll never not write paper checks um i'll never use an online account uh i will never have a digital uh form of self-sovereign money i i just think like it's it's the same story and um just part of the process absolutely well matt uh i know you need to

51:25go here at the top of the hour and i think that's a good note to end this one on so uh i thank you coming on and uh appreciate your insights and what you're seeing out there and if people want to check you out where where should they go yeah sure come on over to bitwise investments i wrote a weekly memo bitwise investments last cio memo or find me on x it's matt underscore hogan hogan spelled funny it's h-o-u g-a-n uh so matt underscore h-o-u g-a-n you could find my commentary there and always this is uh big my business podcast put on by sovereign you can find us on all the socials by just searching sovereign s-o-v-r-e-i-g-n or the website sovereign s-o-v-r-e-i-g-n dot-i-o and uh um we be aint on on master and you can find me on linkedin uh under my real name branding carpoolus so matt thank you so much for your time today hope you have a great one appreciate it thanks brand

52:25and this is fun