Bitcoin

“Giving advice and being responsible for somebody else's money is different than what you do with your own. So I know people who have made bets on Bitcoin or various other things that lost tons of money, and if they were an advisor, they would be fired, but you…”

“As an allocator, I'd have a really hard time, by the way, investing in blockchain funds, because I can meet a lot of people who talk shit about Bitcoin, and I can't meet a lot of people who are haters on the blockchain. So that's probably already been priced i…”

“Bitcoin's probably the worst technology of the ones in the index. It's probably slower, more expensive, but it's got stain power, and people trust it, and it's hit some level of network effect that would be very, very difficult to overcome.”

“They wouldn't just stop using it, but they might switch to a fee model where basically you're paying miners to maintain the network, but maybe you're paying them in digital fiat or a store value protocol that might be Bitcoin or something else. So I think that…”

“Whether you're buying Bitcoin at 700 dollars or 7000 dollars or 17,000 dollars is frankly less material because you're either going to lose all your money or make a big multiple. There's no way it's going to be worth if whatever it is, 9000 dollars today, four…”

“Low single digit percentage. And we did it all at once.”

“In fact, it is probably more likely to go to zero than a huge multiple, but the multiple is sufficiently high for a small investment to make it make sense.”

“Came to the view that I said, you know what, actually, look, at the time it was, I just don't see how the current values of anything but Bitcoin can be justified, and we got out of everything but Bitcoin, and that enabled us to take our basis plus a return out”

“So I think what you're going to see is a spectrum. So some assets are going to trade 24 seven. I mean, many assets already do. Bitcoin is traded 24 seven. Ethereum is traded 24 seven. For traditional assets, maybe the larger issues will trade 24 seven, but you…”

“And so one of the points I make in the paper is that I think there is a lot of promise in terms of really reducing settlement time, but these are more complicated transactions than just the way cryptocurrency works, right? Like you've got custodians involved, …”

“There is absolutely no way that in a five years time, at least, you're not calling up your broker and saying, you know, dollar yen and cable and Bitcoin and Libra and gold, and they're going to all get traded on the same desk.”

“Bitcoin's kind of done. The project is finished. It's good enough to be decentralized gold. It doesn't have to change.”

“The whole market clap of the cloud is less than a trillion dollars. So it's one-tenth of gold. Amazon's cloud, Google's cloud, Alibaba's cloud, take their cloud earnings, put a market cap. This is rough, rough math, but it's not eight trillion. And so that gro…”

“Bitcoin, I think it's a pretty bad investment. All the smart people I know in Silicon Valley who made loads and loads of money bought early and sold early. And, you know, it was all the sort of dumb retail people who piled in late.”

“I think Bitcoin's important, but I think a little too eccentric for the billions of people kind of scale.”

“We were the first Real regulator to be from a government perspective to touch crypto assets. And there were two reasons. A few years earlier, it had been determined by the agency that Bitcoin is a commodity.”

“The first three times, you know, Though we've said anything, Bitcoin has moved by 15 to 25% within a couple days, which is kind of wild.”

“Until those on-ramps are built, and until I'm getting those calls from the biggest brokers and investment banks, and there's that, of course, there's downside. There's always downside in market, but I don't think there's much sustainable downside until we at l…”

“It's probably the case that a lot of those assets over time won't even come close to the performance that I see out of these two assets.”

“A lot of people will look at the volatility that Bitcoin has had over its life, and to date, it's had six discrete boom-bust cycles, and they would say that's a weakness. And I would just point out that I think that that's an enormous sign of strength, actuall…”

“When I think about it as a trader, when we decided to get into this marketplace and made at the time, which was the biggest institutional asset allocation in the space, we wanted to figure out what were the best sources of liquidity to quietly get the exposure…”

“The upside versus downside is so skewed to the upside that the most important thing I can do as a fiduciary for my clients, which are big institutional investors, they're not small mom and pop punters or Robin Hood investors, they're just Institution. So the m…”

“The ones who are thinking about digital assets are thinking about it in kind of that debasement hedge part of their portfolio. And it's really attractive because it is highly convex. So you could have a relatively small allocation and it could go up 10 X or it…”

“This isn't Bitcoin gone wild and take over the world. I think in some nations that are very weak structurally, that could be the case. It puts a lot of pressure on them. Place like the US, not the case. Place like EU, not the case.”

“The investor in me is, look, this is the future of money. If it's allowed to survive and coexist with digital fiat, which I strongly believe it will be, then we're at the outset of A decade or a hundred year journey in terms of what this asset class will becom…”

“I believe that the price will become less volatile the higher it goes.”

“And so, you know, a number of years ago, the regulators could have destroyed Bitcoin. They can no longer destroy it. They could do various things, but they can't destroy it.”

“Some investors are carving out some of their gold allocation and moving it into digital assets like Bitcoin. We don't find it the least bit coincidental that we saw some of the largest outflows on record from gold funds in Q four of last year when Bitcoin star…”

“Digital currencies like Bitcoin. Are, in fact, the worst, and again, I'll repeat, the worst mechanism for you to use if you would like to do anything the least bit untoward, nefarious, legal, you choose your own word. Every transaction in Bitcoin, the best way…”

“Investors should be thinking about valuing these assets in a way that is distinct from the way that they may look at valuation for more traditional assets, where they're, they might be able to do a discounted cash flow, For Coca-Cola, but for Bitcoin, they act…”

“There's also still this shared appreciation that, 12 years into Bitcoin, we, Thankfully, haven't really broken it. We haven't really messed it up, and so it's kind of the old adage of, if it ain't broke, don't try and fix it, but while that has remained relati…”

“In the developed world, Bitcoin is at a minimum in today use case, It's digital gold. It's speculative in nature, and it may not be anything in our lifetimes other than a digital store of value. It certainly has the potential to be all kinds of other things, b…”

“And then I think Elon, there's really a dynamic around Tesla's purchase, where if you were your typical board a few months ago, you were saying, do we really need to consider Bitcoin? This seems like a fringe dynamic. When Elon buys, it becomes, why aren't we …”

“So I think we could pull forward the next Bitcoin cycle, have this be a super cycle.”

“Crypto has tended to have a Four-year cycle. I believe that's tied to Bitcoin's halving cycle. The new supply issuance of Bitcoin gets cut in half every four years, roughly. We call that the halving. And as a result, you tend to have three good years of perfor…”

“And I think Bitcoin breaking out to a new all-time high and continuing to move higher is really a reflection of that regulatory de-risking to a good extent.”

“And I think we're certainly seeing in the institutional conversations that we're having a very quick progression from either Bitcoin alone or Bitcoin and Ethereum to start to looking at a broader set of crypto assets. And it's not a two year progression. It's …”

“So even large cap, you could think of Bitcoin as being a, maybe a series C, a series D type venture investment.”

“So if we have a, depending on the volatility of the asset, if we have a 20 to 25% relative drawdown versus Bitcoin, let's make sure that our thesis is playing out. Let's make sure we understand the dynamics that are at play. And the re-underwriting decision ca…”

“I remember the first SEC filing that mentioned Bitcoin and kind of feeling a level of validation, a level of Excitement around this coming into the, just the first fold of mainstream. And it was the S one where PayPal spun out of eBay.”

“And we were strongly convicted that that's nonsense, that Bitcoin is a risk asset. And while it might not be correlated one to one on a five percent S&P move, If S and P falls enough, Bitcoin is going to catch up to the downside because that's wealth destructi…”

“BitMEX, which had the largest trading volume for Bitcoin in the world, they had 70% of all volume about a year ago.”

“I put it at maybe 10% over the next five years that there is a successful attack on Bitcoin that effectively renders the network temporarily unusable, but unusable in a way where we don't know when the next attack will be.”

“Almost immediately, probably a third of UChicago endowment employees bought Bitcoin in 2016.”

“The idea that we're copying and pasting this arcane long string of alphanumerics to represent a million or ten million dollar transfer is insane. It's so error prone. It feels awkward. It's terrible. I had hoped four years ago, I thought that by this point we …”

“Basis, you can capture CME futures, often trade at a 20% annualized premium to spot Bitcoin.”

“The wealth created by Bitcoin flows down the risk curve. Bitcoin going from 3000 to 30,000 in a year, that generates wealth. That wealth looks for its next 10 X and flows down the risk curve into riskier, newer assets.”

“Bitcoin, you do have machine learning algos from guys like Two Sigma and Susquehanna pointed at it.”

“There's also existential risk. This is maybe debatable today, but I think it certainly could go to zero, as most assets in the world can.”

“But my guess is that in another year, that's similarly will feel not like a terribly difficult allocation decision operationally.”

“You look at central banks around the world and they're all pledging to do roughly the same thing. That will continue to buoy assets and assets in the form of gold, in the form of Bitcoin, in real estate, and in equities.”

“If governments are not going to embrace it honestly, it should go down to just the technology value of it.”

“We also have for where it's appropriate, which get, it's a definitely a subset of our clients, small, but I would call index, quasi index positions, Bitcoin, Ethereum, Positions that we basically are doing it as if an index, but this is way out on the risk rew…”

“Can't be used for much, but it's certainly as good as gold and arguably slightly better because it's an infinite supply and easily accessible.”

“The Bitcoin blockchain will not be really used for anything that actually has social utility, but it's an asset that you hoard.”

“I view Bitcoin as the gold of the crypto world. I view Ethereum as oil for the crypto world or the energy.”

“Because we knew what we didn't want to do is go and start trying to trade Bitcoin up and down. That's not what we do. That's not our edge. Our edge is in thinking about these assets, thinking about how the technology is going to be applied.”

“In 2016, you really couldn't build anything on Ethereum. It didn't work, and like, you could never really build anything on Bitcoin.”

“If you accept just as a store of value the total gold market at 11 trillion dollars, half of that, five and a half trillion dollars, if you just had generational shift where people said, you know what, I prefer this in the same way they prefer Bonobos to Docke…”

“If you're, I think, a super rich guy, you probably think, I need to have some assets that are off the grid, for lack of a better word. And there's only two of them, really. It's gold and it's bitcoin.”

“This stuff was just religious proselytization as a financial asset. Like if you could own a digital religion, would you want to? Yes, absolutely. The first global digital religion that is basically a Ponzi scheme But you can own it. And that seems like a great…”

“And if you look at what Bitcoin is, it's a good first crack at solving a pretty fundamental technology problem, but it's not actually designed very well for all of the things that even the earliest people on the internet wanted to be able to do.”

“The techno libertarians who felt that this could be a new global reserve currency, that it was an inflation hedge, that you could extricate yourself from holding fiat government currency and things like that. I think a lot of people drank that Kool-Aid, and it…”

“And what usually happens is we'll hedge with some super liquid assets that we can do very cheaply, specifically perpetual futures contracts in Ethereum, Bitcoin, and a couple others.”

“We should have had some Bitcoin next to our Greek government bonds. It would have helped a lot.”

“In the 2016, 17 traditional venture capital vintages, you saw some managers having exposure to blockchain, either blockchain companies or even Bitcoin on some occasions.”

“I put most of my life savings in Bitcoin that summer in 2011. I think it was 500 dollars or 700 dollars or something like that.”

“Bitcoin hashing is an insanely efficient market, and nobody centrally manages it. It's all based on bottoms-up incentives in a global marketplace of competition. And because of that, it's an extremely competitive area. So that competition is net beneficial for…”

“I think one thing that we screwed up a bit at Coinbase is throughout 2014, 2015, we tried to launch all these new products. We were launching like a tip button that you could embed and tip people on Reddit. We were very focused on merchant integrations for peo…”

“I was doing consulting on my free time while at Talker, and there was a fund that reached out to me that had lost the passphrase to a 1.5 million dollar Bitcoin wallet and offered me 20% if I could break into it.”

“Digital assets work in a very different manner. There is no DTCC. There's no central repository. Owning the private key of Bitcoin is ultimately owning the ability to own the asset and settle the asset. And so if you don't own the private key, you can't actual…”

“There appears to be an ability for two different systems to coexist, because there are countries outside the US, there are the deep state, and those who fear the deep, you know, there's a duality in the society, and so crypto appeals to a certain section of so…”

“In order to have a currency, you need a military. Otherwise, everybody's going to counterfeit your currency, and you need to enforce it in a court of law, and you need to have a transparent court of law, and therefore, the U.S. Is sort of the right country wit…”

“We tend to think the world is going to be multi-chain. It's not going to be one chain to rule them all. And there probably is going to be some sort of power law there. So the big winner will be really big. We tend to think Bitcoin and Ethereum will be really b…”

“I think we bought our first Bitcoins in the 16 to 17,000 zone, which ironically is where it is right now.”

“If you look at the value of Bitcoin, it bears no resemblance to any value proposition or utility that Bitcoin has.”

“Came out generally skeptical of Bitcoin and really, really bullish on the longer term potential for the Ethereum network as a technology to help people transfer things of value in coming decades and beyond.”

“At some point, it won't be that highly convex because the overall market cap will be so high and so many people will be in that it'll probably trade a bit more like gold, where gold sometimes trades like a great inflation hedge and sometimes it doesn't.”

“It's an asset unlike any other asset that I am aware of in the history of the world in the sense that no matter what the price is, the supply will not respond. It has a predefined schedule of supply over the next, you know, a hundred years or whatever, a 120 y…”

“You just talk yourself out of buying something that is a highly convex inflation hedge over the medium to long term. Doesn't mean in any given quarter, any given year.”

“And as this greatest wealth transfer in human history plays out, 30 trillion over 20 years from boomers to Gen Z and millennial There's just a natural demographic tailwind for Bitcoin. I think Bitcoin is very well positioned.”

“And 70% of all Bitcoin Has not moved on chain in the past year.”

“We're now discussing a Bitcoin strategic reserve at the federal level in the U.S. And in 31 states.”

“What's interesting about Bitcoin is that it's a finished product. There's no real additional tech that needs to get built. There will be improvements to the tech stack of Bitcoin, but that's not necessary for the thesis to play out. In some ways, it's better t…”