Market Outlook: The podcast highlights the current stability in traditional markets like the S&P 500 and gold, contrasting with volatility in the crypto space due to a significant deleveraging event.
Crypto Market Dynamics: Discussion focuses on the recent liquidation of $1.8 billion in leveraged crypto positions, particularly affecting Ethereum and Bitcoin, raising questions about market structure and risk.
Bitcoin vs. Altcoins: Cory Klippsten emphasizes the distinction between Bitcoin and other cryptocurrencies, noting Bitcoin's decentralized nature compared to altcoins, which are likened to tech companies.
Investment Strategy: Swan Bitcoin's model of dollar-cost averaging is presented as a disciplined long-term strategy to protect investors from market volatility, contrasting with the risks of active trading.
Institutional Influence: The podcast discusses the impact of institutional players on crypto markets, noting a slowdown in corporate treasury purchases and the potential for renewed activity in the future.
Regulatory Environment: The conversation touches on the evolving regulatory landscape, including potential crypto-friendly policies and the implications for institutional confidence in the US crypto industry.
Bitcoin's Future: Klippsten remains optimistic about Bitcoin's long-term potential, predicting continued growth and eventual surpassing of gold's market cap, while acknowledging the role of central bank digital currencies.
Gold and Bitcoin Coexistence: The discussion concludes with the potential for Bitcoin and gold to coexist in investment portfolios, offering complementary benefits of stability and growth.
Transcript
Hey everyone, welcome back to Kiko News. I'm Jeremy Saver. Well, it's a fascinating time for investors. We have the S&P 500 hovering near all-time highs and gold holding firm at record levels following last week's Federal Reserve rate cut. But that stability is in stark contrast to what we're starting to see in the digital asset space. Over the past 72 hours, a significant deleveraging event has unfolded, testing an asset class that, to be fair, is still up over 75% in the last year. Now, in the world of crypto derivatives, approximately $1.8 billion in leverage positions have been forcibly liquid, liquidated, rather, but to be clear, these are future contracts. They're not spot assets. And according to data from Coin Glass, the impact was not evenly distributed. Traders betting on Ethereum lost over 500 million, while those betting on Bitcoin lost about 280 million. Now, this sharp divergence raises critical questions about the market structure, risk, and whether crypto is truly decoupling from traditional finance. Now, here to help us dissect this and more is the founder and CEO of Swan Bitcoin, Corey Clifton. Corey, happy birthday. Good to see you. >> Hey, thanks for that note, Jeremy, and uh and to the whole Kit Code team. It's it's good to be back and uh looking forward to this conversation. >> Yeah, me too. appreciate you making the time. Uh that was our our good due diligence. By the way, uh I I got to jump right back in here. Obviously, we're seeing the headlines and and when we see gold and equities stable, but nearly a billion dollars in leverage crypto bets on just Bitcoin and Ethereum get wiped out. Is this a sign of a fragile market structure or was it just kind of a necessary purge of excess speculation? It's usually the same exact thing which is just a bunch of people got bullish and thought when we ran up to you know 116 117 over the weekend that uh you know it was going to keep on running right through 125 and maybe get to new all-time highs and uh obviously the shorts the shorts had uh the numbers in their favor and uh wipe some of that leverage out. It's really not a big deal and it's just kind of a short-term thing. Yeah, I mean we you know the data does show right that 94% of those liquidated were bullish longs and as we noted the pain was kind of disproportionate here. I mean with over half a billion dollars in liquid liquidations from the Ethereum contracts I mean nearly double the hit to Bitcoin. Does this validate the thesis that the real systemic risk lies not with Bitcoin itself but in the broader more speculative crypto ecosystem? >> Uh I just think they're completely separate asset classes even though some people still refer to the whole thing as crypto. you know, you kind of seen the last couple of years, especially since the launch and kind of skyrocketing aum of the of the ETFs and and the continued rise of Micro Strategy and other Bitcoin treasury companies. Uh, you know, you really are seeing pretty much everybody refer to it as Bitcoin and crypto as two kind of different things. Bitcoin being decentralized and then, you know, every other asset of any size having kind of a management team and a road map and kind of building more like tech companies with a corresponding digital asset. So just very different animals. >> Yeah, totally. And of course we we try and differentiate these two all the time, even though there's hundreds of different altcoins. And I know that you have a different term for them. But let's make it kind of practical here. I mean, analysts are now citing 107,000 as the critical line of defense for Bitcoin spot price. I mean, as the CEO of a firm that onboards new investors into the spot market, how do you kind of explain, you know, the stability of an asset when its floor seems to be determined by this these liquidation points of of offshore derivative traders? >> Yeah. So, you make a really really key distinction in our approach at Swan, which is really uh a wealth platform for the leaders of families and businesses. So, it's very focused on on high- netw worth uh individuals and families and businesses that are trying to accumulate for the long term. So, it's kind of an asset for their balance sheet or long-term savings. And we just we're we don't have an order book. It's not an exchange. It's more of a brokerage model. Uh so, think of us kind of as a I guess you would say a digital gold broker for your audience. Uh so, yeah, it's just a very very very different uh and we don't really worry about, you know, if the price goes down to 107, our customers are going to be backing up the truck because they see Bitcoin on sale and they're going to be holding for five or 10 years anyway. >> Yeah. Let's talk about your clients here for a minute because Swan's entire model is obviously built on dollar cost averaging. The idea is making small reoccurring buys over that long period of time. So, I mean, in a week where we've seen leverage traders get completely wiped out. How does that discipline long-term strategy kind of protect the average investor from this kind of chaos? >> Yeah. So, we absolutely encourage people to start savings plans. We also handle large OTC orders and have retirement accounts and trust accounts and inheritance planning, assetbacked loans, uh, 401ks, uh, IRA, all of that. It's pretty much anything you can think of that that you need to do as a Bitcoin investor, that's that's what we do. And we do it with hightouch personal service, like a private client services team. And um you know I just uh I have always found that unless you're a professional trader, you're going to lose generally if you're kind of an active trader. It's it really is kind of a full-time job and you should be planning maybe, you know, at least spending 25 30 hours a week, which is a really big undertaking to actually be a decent day trader, let's say, or even a swing trader. Uh, and most people that get involved in that, we're just humans and we often get attracted to shiny objects, which means price has usually already gone up and we tend to get scared and panic and sell uh when price crashes, which is the exact opposite of what you want to do. And so, you know, it's not as much of a a trading strategy, although dollar cost averaging or just, you know, recurring purchases tends to outperform spot buys in general. Uh, it's also just a a way to counteract our normal human psychology. So it it's like eat a little bit of humble pie, recognize that that we are humans and that uh that we are subject to these biases and and you know instead just save in Bitcoin for the long term and and focus on making more money than you spend and socking away lots in in savings and investments. >> Yeah. You know, I mean the market certainly feels nervous and we've seen this with price action on Bitcoin before. I mean, we now have a massive $23 billion in options expiring this Friday. And, you know, option data shows traders aren't betting on stability. They're kind of buying protection below 95,000, making bullish bets above 140. How do you interpret this barbell of extreme expectations? I mean, what what's the market telling us right now? >> I mean, look, I I think that people are nervous. I think that people can't figure out where the balance of power is going to be between uh opening up the money spigot, cutting interest rates, and trying to basically pump asset prices through the midterms, which I think is obviously uh a big incentive of the party in power right now is to try to somehow not have a pullback every four years since we had pullbacks in 14, 18, and 22. they're trying to to keep the liquidity spigot open and asset pump asset prices pumping. >> Um, and then yet we're at all-time highs in so many different asset classes. Uh, a lot of your audience is, I'm sure, uh, thrilled to see gold above 3,800. Uh, Bitcoin is near all-time highs. Stocks keep hitting all-time highs. Uh but it all seems rather fragile and a lot of what you see as far as you know credit card delinquencies and auto loan mispayments and student loan mispayments. You know a lot of people just don't have any money and so it's kind of how long can you keep on propping up this thing that uh really is also largely based on just uh dollar devaluation. You know it's down I think the Dixie is down over 10% this year. Uh, and you know, so it's it's in some ways it's just window dressing and people are really really worried that the core might be hollow or rotten. >> Uh, and so it's, you know, you don't know which way that's going to go uh over the next, you know, 3 to 6 months. >> Well, I'm going to get your take on gold here in a minute because of course we got to answer to the gold bugs. But there is, you know, one argument though that that isn't just jitters. And a Bloomberg report this morning notes that a key source of demand, the corporate treasury firms, has slowed their buying as stocks prices have obviously fallen. I mean, I guess the question is, is is the market's nervousness a reflection of a real kind of fundamental weakening in demand from the very institutional players that drove this rally this year? So, I haven't uh I'm obviously I think ETF flows rip when when the price is going up and we've kind of seen that and so there's a little bit of a slowdown there uh just as we've kind of chopped sideways and sideways down for the past few months over the summer. But, uh I expect that to pick up in the fall. I mean, I I really don't think that we're done with this Bitcoin bull market. And I kind of expect there to be, you know, as usual on these on these uh you know, 13 2017 2021. I think that we'll have some kind of run here toward the end of uh of 2025 as well. >> Uh and those flows will come back uh with a vengeance. As far as the Bitcoin treasury companies, you know, whether it's companies like Sequins, which we're involved with, or uh Nakamoto, um you know, Strive, uh and obviously Micro Strategy, which dwarfs all the rest. Uh Micro Strategy's purchases have continued a pace. Um so that's that's really not a worry. And I think people were kind of kind of hoping that uh there was going to be a lot more on the bid than the initial funding of let's call it the the five or six larger or largeish Bitcoin treasury companies that started over the summer. But the fact is each of them have to like complete their merger. They have to get new they have to get enough scale to be able to start levering up and issuing preferred. And because what's called MNAV or multiple of net asset value really collapsed across the whole industry including for Micro Strategy, it really took away some of the financing options especially for the US companies. And so the only ones that are really raising new capital right now >> are Micro Strategy mostly through those preferred and also through their ATM. And then some of the niche uh international companies like in Japan and the UK where it's just uh there aren't good options for getting Bitcoin exposure and and these companies are providing the best options. So they're kind of in the same stage that Micro Strategy was in from 2020 through 2023 before the ETFs launched and there's a few markets where those Bitcoin treasury companies and those markets are kind of filling the you know filling the need that Micro Strategy filled in the US for a few years preetf. >> Yeah. Interesting. I mean, it's a model that you've championed, right? I mean, today it seems to be kind of facing this identity crisis. We got Sailor, we got we kind of know a little bit about that, but there was some analysis this morning from K33 research data showing that the stock premium for treasury companies is now kind of collapsing with a quarter of these firms now trading far less than the value of the Bitcoin that they hold. And I'm I'm curious, you know, is this the financial arbitrage that f fueled this movement over or is it just kind of beginning? >> I think it's just beginning. I think in in any time there's a there's something discovered and it was sitting there in plain sight which is that if you have a well-run public company that can access capital markets with a weighted average cost of capital of let's say you know 10% 12% even 15%. And if you believe that Bitcoin's keer going forward is higher than that, there's an arbitrage because you can raise capital and lever up and and it will compound and you benefit from from the price appreciation of the Bitcoin that you're buying with the money that you raised. So that's not going anywhere. Uh I do have a long-term thesis by the way that I think you know 10 years from now most of the companies that stack a lot of Bitcoin will be companies that otherwise would be private equity targets because the same factors are present which is you have good cash flow and you have a low multiple on your earnings because the the market doesn't trust you to reinvest the profits into the business. And there was no option for those companies other than basically do a go private transaction. Uh because otherwise you're just kind of dead in the water. So interestingly that's this position that Micro Strategy was in when they first started their accumulation play back in 2020 is they were kind of low multiple but good cash flow. I actually think that's going to be the majority of companies that that become Bitcoin treasury companies or what I call leverage Bitcoin equities for Wall Street friends uh in the future. I think we're just in gold rush stage and as usual that just brings a lot of hot money both on the investor side and on the uh the entrepreneur side to try to get things out of the gate but you know I think these stories haven't been written and I think there's some consolidation happening uh you saw yesterday on Monday the announcement of the merger between uh Strive and Similar which was uh one of the larger uh US companies behind Micro Strategy. So, I think you'll see more of that. And the the logic behind that is you really need to get to around 7,000 coins at these prices. You want to be, you know, at least north of 750 million net asset value for the Bitcoin because that's when you can actually start to issue preferred and start to lever up. Uh without that leverage, there's really not much logic in US markets to having your money in one of these stocks. Uh again there is there is a bit of an arbitrage with the way there's tax treatments in Japan and just kind of a nent market with few options in like the UK or Sweden or something like that. So that that's a different thesis. But in the US if you don't have scale and leverage you don't really have a reason to exist. So it's kind of a race to get to that point where you actually matter and can can survive long term. >> Stay on stay on that theme for a second Cory if you will. I mean on one hand we had the the first kind of major M&A in the space. You brought it up with Strive inquiring Smler Scientific at a staggering 210% premium in a deal that was backed by Peter Teal. And then of course on the other hand we have Japanese firm MetPlanet making you know its largest Bitcoin purchase ever. Is is the market by bifurcating between well capitalized players on a buying spree and and kind of weaker firms becoming acquisition targets then? Yeah, it depends on it depends on how on board their investor base is for the ride and whether they actually believe that they can uh can make something happen. So there's no kind of immediate urgency where you have to do something like this week just because you're trading for a few percentage points below net asset value or something like that if your government governance structure and kind of long-term huddlers of your stock uh believe in the management team and that they can do enough things to to get to scale and and start to lever up. Uh I think what you saw with Similar and why they became a target so quickly was because their shareholders rejected uh the notion of issuing preferred stock. So they they put a measure out and said, "Hey, we want to create a uh a class of preferred shares and the shareholders rejected it, which basically meant they were >> dead in the water." And that pile of Bitcoin was there to be scooped up by somebody that uh that made a bid for it. you were talking a little bit about volatility and it seems like you know Bitcoin coverage always kind of comes back to volatility but it is uh like any other asset. I mean we've seen volatility in the market unlike anything else this year. And on that point I mean there's that strong argument in the Bitcoin community that it's actually a feature not a bug right the the unavoidable result of a perfectly scarce asset kind of undergoing unfettered price discovery. Do you subscribe to that view and why is that a desirable trait? So, look, it's it's desirable for some people, usually people that have uh that are long options in some way because obviously uh volatility is kind of the the biggest driver of value in an options contract according to Black Scholes. >> Uh it's not a desirable feature for people in their 70s that have Bitcoin at savings. So, it's just actually inevitable. It's inevitable that if you know if you believe like I and many others do that Bitcoin will at some point be you know 10 or 20% of global store of value which would be a 100red trillion or 200 trillion asset class >> and that that's not all that far away. I think that's probably you know 10 15 years away. >> Uh you're not going to go there in a straight line. people are going to get. It's just like you mentioned a second ago, you know, it's a it's a vertical supply curve and uh price goes up as demand shifts out. And so this is just a story of adoption against only 21 million coins. >> Bound to be volatile. >> Yeah. Yeah. Bound to be right. Um uh let's talk a little bit about the macro landscape. I mean we have Fed Chair Powell speaking right as we speak here today, Cory. And I was just looking at the headlines. He seems to be staying clear of any new signals about rate cuts, of course, but we also have comments from his colleagues at the St. Louis and Atlanta Feds that have been surprisingly hawkish. Uh, what's the market more afraid of right now? A Fed that is too hawkish in its fight against inflation or a Fed that's forced to be too dovish because it sees fundamental weakness in the economy. Yeah, look, I think there's just tremendous pressure on continuing to lower rates. And I think that's probably what's going to happen despite a hot inflation number that may come out one month or the next month. You know, it's just uh I I just think there's so much pressure to do that and to to free up some cash. And it's something that's popular with it's popular with both the kind of hollowedout middle class that's trying to be able to buy things on credit and they want to see rates come down and they want to be able to buy a house. And it's obviously extremely popular with asset owners and asset purchasers that want to see continuing all-time highs. >> So it is going to be really really hard to resist that. And I think that's what that's what we've kind of seen. >> Yeah. Let's pull the back the lens back a little bit and talk about the grand scheme of things. I mean, there's a there's a long-h held theory about Bitcoin's predictable four-year cycles. You just talked about it, and I kind of want to break this open a bit because this cycle seems fundamentally different. I mean, we have spot, Bitcoin ETFs, public treasury companies, and a wave of new crypto IPOs. Have these new institutional structures rendered the old kind of cyclical models obsolete? >> So, it ain't different until we see proof that it is. So until until I see a year where you know we don't see a new all-time high in uh in you know late 131 17 215 >> uh you know it's it's hard to it's hard to believe that we're done with those. There is something about the dynamics of the having that that is kind of procyclical and causes these things even though it seems like it should be priced in. It's just uh there's something there. Uh I've done tons of research on this and published on it and uh I can send it over to you guys if you want to post a link to it after the show, but uh looked at the diminishing effects of the h havingings. Um and they they are getting dramatically less over time. Uh I'm I'm fond of uh laying out the numbers and I'll try to do it as clearly as I possibly can, but basically from uh from trough to peak leading up to the $1,100ish peak in late 2023, that was from 2 to 1100. So that was a 550x uh jump in the price back then. We should have been buying Jeremy. I don't know what we were doing. It was it was two bucks, man. Uh and then you know trough of 14 up to the peak in 17 was a rise from about 180 bucks to 19,700. Interestingly exactly 110x which was uh 80% less than the previous peak. And check this out. This is nuts. So, the trough in December of 2018 was 3150, 3,150 bucks, and it went up to about 69,400 if you recall in uh November of 21. That's 22x, which is another 80% reduction. You went 550, 110, 22. Uh so the good thing is we've already broken that geometric reduction because that would have been from uh about 155 at the depths of the FTX collapse uh would have taken us at a 4.4x to around 70k and so at least we've blown through that and uh and broken that trend. Uh so little small victories. I think what will what will tell me that we are maturing as an asset class is if there's some kind of blowoff top if the reduction is you know from from peak to trough after the next bull market peak is you know less than 70% less than 60%. That just means we're continuing to dampen these cycles because, you know, if you kind of look at the the the declines, you know, there was like a 94% decline and then an 85% decline and then a 77% decline the last time. >> Um, you know, and so I'd like to see something like a 65 or a 60 at at worst would be nice. >> Yeah. Yeah. No kidding. Uh, we should have been buying at two bucks. I should have been too. I I got to ask you about the regulations, Cory. I mean, on the topic of US structures, we heard from SEC Chairman Paul Atkins this morning that he wants an innovative exception for crypto by year end, part of a major crypto friendly pivot as we've seen from the White House. How significant is a development like this for institutional confidence in the growth of the US crypto industry? Yeah, I mean, look, it's been an extremely successful regulatory push by the uh the non- Bitcoin crypto guys over the last couple of years, and they've they've paid the right people and bought all the lobby firms and kind of successfully avoided the uh the demise of that side of the industry that looked pretty inevitable back in say 2023 or something like that. Um, so kudos to them for succeeding and uh and going legit. And uh, you know, I think you'll see a lot of a lot of initiatives that happening that are happening in fintech and in in the banks that are really just kind of incremental improvements to financial IT uh, are getting called blockchain or crypto just because you're you're able to get more budget for it and you're kind of able to advance your career and, you know, get them to pay for your Wharton certificate or whatever. uh as the VP of blockchain innovation or something like that. But really these are just kind of sequencers, private keys, consorcia. Uh there's nothing really kind of new here. Um it's just uh yeah, I mean look, I think we can always use faster settlement times. I think we can use more liquidity. I think we can use more sort of democratic access to financial assets. So I'm a big favor of pushes in those directions. And if the way that that's going to happen is because of uh you know using digital assets or crypto in some way as a vector to achieve some of those things that are long overdue then great. You know I'm I'm a big fan of of having more public companies. I think that's something that that we ought to have. If you kind of look at the growth rate you know prearbox in the '9s like we should be up to 30,000 or 40,000 public companies on the NASDAQ and the NY and we fell way off the trend. I think we're down under 7,000 across the two uh major US exchanges at this point. And it's just like extremely ownorous to be able to provide, you know, let al US access, let alone global access to your equity if you're a company, you know, and have transparency and things like that. So, uh I welcome more more opportunities to get out there and tell your story and have people participate in your company. And I think that's uh if that ends up being the uh the silver lining of all the crypto scamming from the last six or seven years, then uh then I think at least we can put that in the pro column. >> Yeah. Yeah. And you've been outspoken about that. Obviously, you've wanted this industry to mature and it has been. And and is it possible that this, you know, friendly embrace from Washington isn't maybe about fostering innovation, but about domesticating it? Are are regulators building a safe harbor for the industry or are they building a a gilded cage kind of to bring it firmly inside the traditional system and strip away its disruptive anti-establishment potential? >> Well, there's not much disruptive or anti-establishment about non- Bitcoin crypto again because it's centralized and because the government can tell them to do whatever they want and they have offices and they have companies and management teams and road maps and all of that. So, they're all basically just centralized. Um, that goes for Ethereum and Salana and Ripple and all of these. So the endgame for them has always been uh a desire to be co-opted by Wall Street in the government and to become part of the system. That's their goal. And you know that that goes for the crypto exchanges like like Coinbase and Kraken. Like they want to become banks and and Wall Street financial firms. That's that's their goal is to be added to the existing system. So there's nothing really surprising about what's gone on the past few years. it was always the only way out for them because again you can you can only fool a retail audience into believing that you're decentralized for so long when you're not. And so once the market kind of figures out oh wait never mind these are just kind of tech companies of some sort and you know maybe there's a reason for the asset to exist maybe there's not but they're going to end up becoming financial firms. >> Yeah we got to talk to you about CBDC's that scary scary word. I mean, at the same time, we're seeing the ECB board members confirm that they're targeting that 2029 launch for a digital euro explicitly, obviously, to compete with this US stable coin. Uh there's multiple angles we can go here. I mean, do you do you view the rise of sovereign central bank digital currencies as kind of a threat to Bitcoin or or a validation that the world is moving towards digital money? And I guess on the other side, obviously, you know, this is a tool for potential surveillance and state control over money. The polar opposite of Bitcoin's ethos. >> So, look, it's it's neither a threat nor validation. It's completely orthogonal. It's scary. It's dystopian. And it's uh you know I I'm I'm comfortered I'm comforted that in the US uh they're taking the approach of allowing lots of issuers of digital dollars. >> Uh which is you know we've had we've had digital money for for ages especially in the western world. I mean I I was just in in uh Turkey for the summer and I I mean I almost never use cash for anything. You're just paying with cards. it's digital dollars and the medium of exchange just doesn't matter because you're spending whatever you spend and the translation happens in the background. It's just uh you know um abstracted away by fintech and then the merchant receives whatever currency they want to hold their value in. So you know I think a a sovereign CBDC by the by the Euro zone is really just more shooting themselves in the foot. They seem to be getting really really good at that. But uh I think it it ends up just putting their citizens more and more into a financial goolag of sorts where they're just kind of monitored and censored. And I mean it's just it's kind of horrifying. >> Uh maybe it'll be maybe it'll be the final stroke that finally gets Europe on board with Bitcoin, you know, at at similar percentage adoption rates that you see in the United States because they've been lagging behind since inception. And you know when you see the kind of the censorship that you're seeing in the UK and you know arresting people for social media posts and you're seeing all the strife in multiple countries over immigration and you know you're seeing the the financial controls kind of clamp down and you're seeing a really kind of unsustainable economic model with a few countries kind of subsidizing the rest. It just doesn't seem like the euro is long for this world and I would guess that uh digital euro CBDC launch will probably just accelerate that collapse. >> Yeah. Yeah. I mean you're different than most when you come on these programs, right? You you talk about Bitcoin, you understand debasement and to be honest, you're gold friendly, too. But before we bring in that conversation, Cory, I let's talk Ethereum just briefly because we just saw that half a billion dollars in leveraged ETH positions get liquidated almost doubled and Bitcoin as we mentioned off the top which seems to support your view on where the expulation is, right? I mean, we're also seeing this serious trend though of corporate ETH treasuries, that company chaired by strategist Tom Lee, 2 million ETH on the balance sheet. How does Bitcoin only thesis hold up when when you see this serious institutional capital led by these Wall Street veterans? Is it is it kind of a separate bet on a treasury asset or like you said before is it just trendy? So, I think it was just a trend and I think it was probably just Joe Luben uh who kind of controls Ethereum mostly uh seeing the rise of Bitcoin treasury companies as a theme and realizing that it would just kind of leave Ethereum in the dust if he didn't scramble some friends and start some of these things. And because there wasn't net new capital going into them, it's basically just a bunch of Ethereum whales that printed the money for themselves back in 2014 and have massive ETH piles just kind of placing it in the companies. So, it didn't really cost them. they didn't risk anything for the most part. Uh, and so I think it was basically just marketing and, you know, so they got some pump and dump action and kind of ripped the faces off some retail and, you know, kind of did their thing. But I don't think they're long for this world. I think it's very similar to what you've seen with the ETFs where the Bitcoin ETFs have been the most successful launches in ETF history, the fastest growing ETFs in history, and the Ethereum ETFs just kind of like were a dud. Uh, so I think that was a summer theme. Um I I would I think you know we were calling them you know leverage Bitcoin equities or Bitcoin treasury companies and uh the crypto people came in and started calling them DATs as they often do and try to try to wrap themselves up and say oh those are Bitcoin DATs. Uh I would say they are probably more like um you know escoin asset treasuries. So I'll let you figure out what I think the uh the appropriate acronym is for those. But yeah, I don't think they're long for this world. Look, man, the underlying assets are just doomed versus Bitcoin. And you know, I've done extensive research on this. And you know, you just can't build on a weak foundation like an altcoin and expect to compete with Bitcoin. And that goes for treasury companies as well. >> There have only been two altcoins in the history of altcoins that have had a second all-time high uh after their first pump. So, Ripple was higher in 2017 than it got in Bitcoin terms in 2013. And I don't know if you remember uh when Elon was tweeting about Dogecoin all the time back in 2021. So, it had a higher all-time high in Bitcoin terms uh in 21 than it did in 2017. That's it. And, you know, out of 30,000 attempted layer 1's and 30 million, you know, altcoins of, you know, meme coins and things like that, there's literally only two that have ever had a new all-time high. and they're both down 80 to 90% since then in Bitcoin terms. So, it's just not a good bet and it's not what you're going to build the future of finance and the future of money and the future of saving and store of value on. It's not going to be all coins. It's going to be Bitcoin. >> Yeah, I didn't uh I didn't line up for those sales of Dogecoins either. But uh you know, obviously the other side will argue that this is less about technological debate and more about the fundamental difference in asset strategy. Some of them say Bitcoin is that pure strategy reserve asset kind of like digital gold as you've kind of talked about whereas Ethereum with staking is a productive yieldbearing asset. I'm sure you've heard about this a lot Corey more like that digital bond. Aren't institutions simply making a rational portfolio decision to have exposure in both that non-productive store value and productive cash flowing generating? Well, if the asset that you're gaining interest in is devaluing against your benchmark, which should be Bitcoin, then you just look stupid. So, yeah, if you started staking when Ethereum proof of stake launched in a centralized decision by the Ethereum management, >> uh back in 2022, you'd have 21.4% more Ethereum, but it's dropped by more than half in Bitcoin terms. So, you know, good job getting some extra, you know, some extra asset that is devaluing versus Bitcoin. It's just stupid. >> Yeah. >> It's like, you know, it's the same thing. It's the same thing as like keeping your money in Argentine pesos because the bank has 50% interest, but it's devaluing 90% a year or something like that. Like, it's it's stupid. And if you want if if you want the liquidity right away, I mean, I knew somebody over the weekend that was trying to liquidate a small position on ETH and it and because they were staked, it's three to four weeks to sell it. >> Again, whenever you have an inferior monetary system, you usually try to trap people in it, which is the same thing you see with companies and countries, and that's what you'll see with altcoins as well, trying to get into staking. >> Maybe we'll get Tom Lee on the show. Maybe he's watching this. Uh, okay. I got to ask you a little I don't I will say like Tom is an old friend of mine and he's he's a big swan investor from when he was a Bitcoin only guy which he was for many years and I haven't spoken with him since he uh took the Luben money but uh I congratulate him on his yachts and uh I don't believe that he believes the things that he says about Ethereum at all. Uh but uh nonetheless I do wish him well because he is a very nice and a very smart guy. >> All right, I like it. No uh no orange ties on every public appearance. Uh I got to ask you a little bit about the central bank adoption because we have this report from Deutsche Bank. Uh I think just this week it came out and it's projecting that central banks may begin to add Bitcoin to their balance sheets by 2030 treating it as a compliment to gold. Um different ways we can take this. I mean first do you see this is credible? Second, if it does happen, does that risk turning Bitcoin from a decentralized open network into a strategic asset controlled and potentially weaponized as we've seen by nation states? >> Uh I'm not sure how Bitcoin has been weaponized in any way thus far, but uh maybe you can elaborate on that in a sec. But um you know, you're already seeing quite a few sovereigns stacking Bitcoin. So, you know, there's this dispute in El Salvador over whether they stopped buying Bitcoin or whether, you know, I think there's whispers that they may actually just be using the uh the state uh electricity company to mine Bitcoin and that's why they keep on adding Bitcoin. I have no idea. Uh you've got Bhutan mining for themselves. There's lots of rumors about uh Middle Eastern nations that are mining for themselves. We know that Russia has been doing it for a long time and you know China is still 20% of the hash rate even after banning Bitcoin mining. It's still 20% of the hash rate. So you know that's going to CCP CCP members that's going to you know government like who knows who that's going to but it it really hasn't stopped. So uh I think the big next step will be when you see purchases announced. So just spot bitcoin purchases for uh sovereign wealth funds and for national treasuries and things like that. So you know the sovereign wealth funds are already large holders of bitcoin treasury equities like micro strategy and some others. Um but uh yeah I think direct purchases of spot bitcoin and figuring out how to actually like custody that for a nation uh will be the next step and I think that's probably a fair I could see that happening by 2030. Uh I'm not as I I was never bullish on the US actually starting to acquire Bitcoin and I always thought that that was basically a uh that was kind of like the the lipstick on a pig to jam through all the uh crypto friendly regulations in this last election cycle and what's followed you know by the by the regulators and politicians that that gained power as a result of their alignment with the non- Bitcoin crypto industry. Um, so seeing them kind of kick aside and not prioritize the SPR was always kind of expected by by myself and most Bitcoiners that have watched this watched this show before. Um, you know, it's uh it's not surprising and I don't expect that the US will start buying Bitcoin anytime soon. >> Okay, that's interesting. And when I was talking about weaponizing, I meant the dollar. We've seen them weaponize the dollar and other holdings in the central bank, including gold with some of these tariff potentials. But uh are you are you watching you know sovereigns secretly buying Bitcoin strategic reserves right now? You're talking about this there's a lot of under reporting and we've seen it in gold in different nations. Uh do you think that this is happening behind closed doors just not getting the headlines? >> Again I don't think so. But they are openly engaging in mining and stacking Bitcoin that way and they're open openly seeking Bitcoin price exposure through Bitcoin equities, Bitcoin linked equities. So, I just uh they're getting Bitcoin price exposure and they're getting real Bitcoin through mining. Uh I just if if there are countries that are actually buying spot Bitcoin and the real thing and it's it's being done in a clandestine way where they're they're not saying that they are. So, I would be looking at probably autocracies >> uh that would be the candidates for doing that. And there's rumors about some of them, but I I personally don't have any knowledge of of who might actually be doing it for real. Yeah, Corey, you never panicked when it comes to this market, which is great. It's kind of that Eevee even steady approach, you know, we know that you're a long-term holder and given everything we've kind of discussed, the leverage, the the macro divergence, the corporate stress test, as we like to call it. I mean, what what do you think is the single signal that you're kind of watching over the next 6 months that'll tell you definitely, you know, that the thesis is still intact? >> Yeah, look, the thesis doesn't go anywhere regardless of what happens. I mean, even if it pulled back here and then went back up next year and never saw a blowoff top. I mean, I I' I'd welcome that. By the way, I would be so thrilled if we saw a high in 2026 higher than any price that we saw in 2025 and this was like a slowm moving bull market. That's what everybody thought was going to happen from 2018 onward because they assumed that the launch of of futures on the CME was going to dampen volatility and kind of get rid of cycles. And then obviously we went from 3k to 69k soon after that. So, you know, it's didn't seem to do a lot of dampening uh the last time around. So, look, I I I still think that we're going to see, you know, upper hundreds, maybe 200, something like that. Uh, you know, will that happen in the next 3 months before the end of the year? I have no idea. I would say I mean I I have to plan my family finances and you know corporate decisions based on you know my expectation of what will happen with price to some degree. Not a lot but a little bit less than I used to. Uh and you know I'd say there's still there's still a majority chance in my mind that we see an all-time high this calendar year that we don't see again you know for another 18 months after that. So, you know, you basically wouldn't wouldn't touch whatever we see this year again in 2026, that there will be some kind of pullback and we'll trundle along in a bare market like we always have. I just I hope that bare market will be uh significantly shallower than uh than previous ones. >> Now, it's an easy question, but we got to bring in the gold audience obviously because many our viewers are dedicated gold investors who prioritize that long-term wealth preservation that you've been speaking about. I mean, do you see a future where Bitcoin and gold coexist in a portfolio as kind of complimentary assets, gold for stability, you know, Bitcoin for growth and and seizure resistance, or do you believe that the over the long term Bitcoin's superior monetary properties will, you know, lead it? >> Look, man, gold isn't going anywhere anytime soon. And I think we've seen that with the price rise from the, you know, mid to upper thousands up to 3,800. Uh, it it's holding up really, really well. I think it's a it's a moving benchmark for Bitcoin because I I do think that Bitcoin will eventually surpass gold in market cap, but but look man, we were we were targeting, you know, 15 trillion a couple of years ago and now it's like 30. So, or whatever the the gold market cap is is pretty pretty hefty. >> Um, and so, you know, I still think that the lines probably cross sometime in the in the second half of the 2030s. something like that is kind of my, you know, or maybe maybe after that, but you know, it's uh I do think it's kind of inevitable, but that doesn't mean that it it shouldn't be in people's portfolios. I think in particular when you look at at folks that are older. Uh it is less volatile than Bitcoin. It is more trusted. There's not as much that you need to know technically about it. uh you know there I think are are lots of trusted custodians of gold and you can obviously hold the physical uh you know depending on your security setup in your home and things like that. So I do think it has a place. We have so many clients at Swan that uh still have gold or that came from gold and then ended up becoming all bitcoin. And you know, we just we we have honest conversations with them and just try to extol the benefits of sound money. And you know, whether you want to call it digital gold or analog bitcoin, you know, they are sound money cousins. And I think that philosophically uh we all kind of recognize the same set of issues and the same problems. And uh I think there are thank goodness there are there are two solutions to sound money. Yeah. >> Uh I do think that that in the long run uh gold fans should be extremely happy that Bitcoin solves some of the problems that caused uh gold centralization and and made it possible for there to be the 6102 act back in 1933. And you know I I don't think that you can rebuild the global monetary system backed by gold. I think we've tried it so many times and I don't think it's possible. I do think it's not only possible with Bitcoin, but extremely likely that that's what happens. And it's because you can move Bitcoin really well across space because it's digital, which is hard with gold, and you can do it across time because it's holds its value like gold does across time. So, that's probably the way to look at it. You know, fiat money is really crappy at moving across uh time. It doesn't hold its value, but it's really good because it's digitized and it's good about moving across space. Uh, gold is good at transmitting value across time. It holds its value and you know, we can both go get a what do they always say? A nice suit on Savile Row for an ounce of gold just like you did 400 years ago. >> Um, but it's really bad at moving value across space because it's physical and it's heavy, etc. And Bitcoin is just fantastic at transmitting value across both time and space. And I just think it's a it's a superior technology to fiat and to gold. Yeah, before I let you go, man, I mean, you talk to these retail investors all the time. With this conversation this year, you know, whether it was the Doge initiative, you know, we're talking about the Fed and and the treasuries that they're holding and people dumping them and then of course this $37 trillion with debt. Despite all this, Bitcoiners and gold bugs are still kind of coming together a little bit more than ever in the history, don't you think? >> I think so. And I I think a big part of it is just the the the gold fans uh getting to celebrate a little bit. You know, it's been it was trundling up for so long and seeing it go on a run. I just think that that fun and that euphoria and just being proven right that dollar debasement couldn't kind of couldn't the asset just couldn't keep a lid on it forever despite paper games and naked shorts and all the different things that you know may or may not have been going on with manipulating gold price. uh either it's just running because it's inevitable or they're letting it run for some for some reason I'm not privy to but it's running and it makes them happy and it makes them sort of begrudge the massive gains of Bitcoin holders from the last 15 years a lot less uh and so they can kind of join in the celebration a little bit. So yeah, it is it is a nice moment and I don't expect it to get any different. I I fully expect that we see uh gold at 10K an ounce in the next decade and I expect to see Bitcoin at a million in the next, you know, five, six years. >> 10K, 1 million Bitcoin, there's the headline. All right, Cory Clips, founder and CEO of Swan Bitcoin joining us today. Uh thanks for this a crucial and clarifying perspective during this crazy time in the markets, my friend. >> Yeah, absolutely. And uh Jeremy, great to make your acquaintance uh on air and uh have a wonderful rest of your day. We'll do this again soon and give me that research. We'll put it for the audience and uh we'll talk to you soon, Cory. Appreciate the balance here. >> Yeah, truly my pleasure. Thank you. >> Thanks so much. All right, we're keeping an eye on Powell speaking right at the moment and of course these announcements to come out of the White House. Also, gold prices still on a tear. To stay ahead of these fastmoving markets, make sure to hit subscribe for all of us here at Kiko News. I'm Jeremy Saffron. Thanks for watching. Heat. Heat.
'$10k Gold, $1M Bitcoin': Cory Klippsten's Price Targets After Market Turmoil
Summary
Transcript
Hey everyone, welcome back to Kiko News. I'm Jeremy Saver. Well, it's a fascinating time for investors. We have the S&P 500 hovering near all-time highs and gold holding firm at record levels following last week's Federal Reserve rate cut. But that stability is in stark contrast to what we're starting to see in the digital asset space. Over the past 72 hours, a significant deleveraging event has unfolded, testing an asset class that, to be fair, is still up over 75% in the last year. Now, in the world of crypto derivatives, approximately $1.8 billion in leverage positions have been forcibly liquid, liquidated, rather, but to be clear, these are future contracts. They're not spot assets. And according to data from Coin Glass, the impact was not evenly distributed. Traders betting on Ethereum lost over 500 million, while those betting on Bitcoin lost about 280 million. Now, this sharp divergence raises critical questions about the market structure, risk, and whether crypto is truly decoupling from traditional finance. Now, here to help us dissect this and more is the founder and CEO of Swan Bitcoin, Corey Clifton. Corey, happy birthday. Good to see you. >> Hey, thanks for that note, Jeremy, and uh and to the whole Kit Code team. It's it's good to be back and uh looking forward to this conversation. >> Yeah, me too. appreciate you making the time. Uh that was our our good due diligence. By the way, uh I I got to jump right back in here. Obviously, we're seeing the headlines and and when we see gold and equities stable, but nearly a billion dollars in leverage crypto bets on just Bitcoin and Ethereum get wiped out. Is this a sign of a fragile market structure or was it just kind of a necessary purge of excess speculation? It's usually the same exact thing which is just a bunch of people got bullish and thought when we ran up to you know 116 117 over the weekend that uh you know it was going to keep on running right through 125 and maybe get to new all-time highs and uh obviously the shorts the shorts had uh the numbers in their favor and uh wipe some of that leverage out. It's really not a big deal and it's just kind of a short-term thing. Yeah, I mean we you know the data does show right that 94% of those liquidated were bullish longs and as we noted the pain was kind of disproportionate here. I mean with over half a billion dollars in liquid liquidations from the Ethereum contracts I mean nearly double the hit to Bitcoin. Does this validate the thesis that the real systemic risk lies not with Bitcoin itself but in the broader more speculative crypto ecosystem? >> Uh I just think they're completely separate asset classes even though some people still refer to the whole thing as crypto. you know, you kind of seen the last couple of years, especially since the launch and kind of skyrocketing aum of the of the ETFs and and the continued rise of Micro Strategy and other Bitcoin treasury companies. Uh, you know, you really are seeing pretty much everybody refer to it as Bitcoin and crypto as two kind of different things. Bitcoin being decentralized and then, you know, every other asset of any size having kind of a management team and a road map and kind of building more like tech companies with a corresponding digital asset. So just very different animals. >> Yeah, totally. And of course we we try and differentiate these two all the time, even though there's hundreds of different altcoins. And I know that you have a different term for them. But let's make it kind of practical here. I mean, analysts are now citing 107,000 as the critical line of defense for Bitcoin spot price. I mean, as the CEO of a firm that onboards new investors into the spot market, how do you kind of explain, you know, the stability of an asset when its floor seems to be determined by this these liquidation points of of offshore derivative traders? >> Yeah. So, you make a really really key distinction in our approach at Swan, which is really uh a wealth platform for the leaders of families and businesses. So, it's very focused on on high- netw worth uh individuals and families and businesses that are trying to accumulate for the long term. So, it's kind of an asset for their balance sheet or long-term savings. And we just we're we don't have an order book. It's not an exchange. It's more of a brokerage model. Uh so, think of us kind of as a I guess you would say a digital gold broker for your audience. Uh so, yeah, it's just a very very very different uh and we don't really worry about, you know, if the price goes down to 107, our customers are going to be backing up the truck because they see Bitcoin on sale and they're going to be holding for five or 10 years anyway. >> Yeah. Let's talk about your clients here for a minute because Swan's entire model is obviously built on dollar cost averaging. The idea is making small reoccurring buys over that long period of time. So, I mean, in a week where we've seen leverage traders get completely wiped out. How does that discipline long-term strategy kind of protect the average investor from this kind of chaos? >> Yeah. So, we absolutely encourage people to start savings plans. We also handle large OTC orders and have retirement accounts and trust accounts and inheritance planning, assetbacked loans, uh, 401ks, uh, IRA, all of that. It's pretty much anything you can think of that that you need to do as a Bitcoin investor, that's that's what we do. And we do it with hightouch personal service, like a private client services team. And um you know I just uh I have always found that unless you're a professional trader, you're going to lose generally if you're kind of an active trader. It's it really is kind of a full-time job and you should be planning maybe, you know, at least spending 25 30 hours a week, which is a really big undertaking to actually be a decent day trader, let's say, or even a swing trader. Uh, and most people that get involved in that, we're just humans and we often get attracted to shiny objects, which means price has usually already gone up and we tend to get scared and panic and sell uh when price crashes, which is the exact opposite of what you want to do. And so, you know, it's not as much of a a trading strategy, although dollar cost averaging or just, you know, recurring purchases tends to outperform spot buys in general. Uh, it's also just a a way to counteract our normal human psychology. So it it's like eat a little bit of humble pie, recognize that that we are humans and that uh that we are subject to these biases and and you know instead just save in Bitcoin for the long term and and focus on making more money than you spend and socking away lots in in savings and investments. >> Yeah. You know, I mean the market certainly feels nervous and we've seen this with price action on Bitcoin before. I mean, we now have a massive $23 billion in options expiring this Friday. And, you know, option data shows traders aren't betting on stability. They're kind of buying protection below 95,000, making bullish bets above 140. How do you interpret this barbell of extreme expectations? I mean, what what's the market telling us right now? >> I mean, look, I I think that people are nervous. I think that people can't figure out where the balance of power is going to be between uh opening up the money spigot, cutting interest rates, and trying to basically pump asset prices through the midterms, which I think is obviously uh a big incentive of the party in power right now is to try to somehow not have a pullback every four years since we had pullbacks in 14, 18, and 22. they're trying to to keep the liquidity spigot open and asset pump asset prices pumping. >> Um, and then yet we're at all-time highs in so many different asset classes. Uh, a lot of your audience is, I'm sure, uh, thrilled to see gold above 3,800. Uh, Bitcoin is near all-time highs. Stocks keep hitting all-time highs. Uh but it all seems rather fragile and a lot of what you see as far as you know credit card delinquencies and auto loan mispayments and student loan mispayments. You know a lot of people just don't have any money and so it's kind of how long can you keep on propping up this thing that uh really is also largely based on just uh dollar devaluation. You know it's down I think the Dixie is down over 10% this year. Uh, and you know, so it's it's in some ways it's just window dressing and people are really really worried that the core might be hollow or rotten. >> Uh, and so it's, you know, you don't know which way that's going to go uh over the next, you know, 3 to 6 months. >> Well, I'm going to get your take on gold here in a minute because of course we got to answer to the gold bugs. But there is, you know, one argument though that that isn't just jitters. And a Bloomberg report this morning notes that a key source of demand, the corporate treasury firms, has slowed their buying as stocks prices have obviously fallen. I mean, I guess the question is, is is the market's nervousness a reflection of a real kind of fundamental weakening in demand from the very institutional players that drove this rally this year? So, I haven't uh I'm obviously I think ETF flows rip when when the price is going up and we've kind of seen that and so there's a little bit of a slowdown there uh just as we've kind of chopped sideways and sideways down for the past few months over the summer. But, uh I expect that to pick up in the fall. I mean, I I really don't think that we're done with this Bitcoin bull market. And I kind of expect there to be, you know, as usual on these on these uh you know, 13 2017 2021. I think that we'll have some kind of run here toward the end of uh of 2025 as well. >> Uh and those flows will come back uh with a vengeance. As far as the Bitcoin treasury companies, you know, whether it's companies like Sequins, which we're involved with, or uh Nakamoto, um you know, Strive, uh and obviously Micro Strategy, which dwarfs all the rest. Uh Micro Strategy's purchases have continued a pace. Um so that's that's really not a worry. And I think people were kind of kind of hoping that uh there was going to be a lot more on the bid than the initial funding of let's call it the the five or six larger or largeish Bitcoin treasury companies that started over the summer. But the fact is each of them have to like complete their merger. They have to get new they have to get enough scale to be able to start levering up and issuing preferred. And because what's called MNAV or multiple of net asset value really collapsed across the whole industry including for Micro Strategy, it really took away some of the financing options especially for the US companies. And so the only ones that are really raising new capital right now >> are Micro Strategy mostly through those preferred and also through their ATM. And then some of the niche uh international companies like in Japan and the UK where it's just uh there aren't good options for getting Bitcoin exposure and and these companies are providing the best options. So they're kind of in the same stage that Micro Strategy was in from 2020 through 2023 before the ETFs launched and there's a few markets where those Bitcoin treasury companies and those markets are kind of filling the you know filling the need that Micro Strategy filled in the US for a few years preetf. >> Yeah. Interesting. I mean, it's a model that you've championed, right? I mean, today it seems to be kind of facing this identity crisis. We got Sailor, we got we kind of know a little bit about that, but there was some analysis this morning from K33 research data showing that the stock premium for treasury companies is now kind of collapsing with a quarter of these firms now trading far less than the value of the Bitcoin that they hold. And I'm I'm curious, you know, is this the financial arbitrage that f fueled this movement over or is it just kind of beginning? >> I think it's just beginning. I think in in any time there's a there's something discovered and it was sitting there in plain sight which is that if you have a well-run public company that can access capital markets with a weighted average cost of capital of let's say you know 10% 12% even 15%. And if you believe that Bitcoin's keer going forward is higher than that, there's an arbitrage because you can raise capital and lever up and and it will compound and you benefit from from the price appreciation of the Bitcoin that you're buying with the money that you raised. So that's not going anywhere. Uh I do have a long-term thesis by the way that I think you know 10 years from now most of the companies that stack a lot of Bitcoin will be companies that otherwise would be private equity targets because the same factors are present which is you have good cash flow and you have a low multiple on your earnings because the the market doesn't trust you to reinvest the profits into the business. And there was no option for those companies other than basically do a go private transaction. Uh because otherwise you're just kind of dead in the water. So interestingly that's this position that Micro Strategy was in when they first started their accumulation play back in 2020 is they were kind of low multiple but good cash flow. I actually think that's going to be the majority of companies that that become Bitcoin treasury companies or what I call leverage Bitcoin equities for Wall Street friends uh in the future. I think we're just in gold rush stage and as usual that just brings a lot of hot money both on the investor side and on the uh the entrepreneur side to try to get things out of the gate but you know I think these stories haven't been written and I think there's some consolidation happening uh you saw yesterday on Monday the announcement of the merger between uh Strive and Similar which was uh one of the larger uh US companies behind Micro Strategy. So, I think you'll see more of that. And the the logic behind that is you really need to get to around 7,000 coins at these prices. You want to be, you know, at least north of 750 million net asset value for the Bitcoin because that's when you can actually start to issue preferred and start to lever up. Uh without that leverage, there's really not much logic in US markets to having your money in one of these stocks. Uh again there is there is a bit of an arbitrage with the way there's tax treatments in Japan and just kind of a nent market with few options in like the UK or Sweden or something like that. So that that's a different thesis. But in the US if you don't have scale and leverage you don't really have a reason to exist. So it's kind of a race to get to that point where you actually matter and can can survive long term. >> Stay on stay on that theme for a second Cory if you will. I mean on one hand we had the the first kind of major M&A in the space. You brought it up with Strive inquiring Smler Scientific at a staggering 210% premium in a deal that was backed by Peter Teal. And then of course on the other hand we have Japanese firm MetPlanet making you know its largest Bitcoin purchase ever. Is is the market by bifurcating between well capitalized players on a buying spree and and kind of weaker firms becoming acquisition targets then? Yeah, it depends on it depends on how on board their investor base is for the ride and whether they actually believe that they can uh can make something happen. So there's no kind of immediate urgency where you have to do something like this week just because you're trading for a few percentage points below net asset value or something like that if your government governance structure and kind of long-term huddlers of your stock uh believe in the management team and that they can do enough things to to get to scale and and start to lever up. Uh I think what you saw with Similar and why they became a target so quickly was because their shareholders rejected uh the notion of issuing preferred stock. So they they put a measure out and said, "Hey, we want to create a uh a class of preferred shares and the shareholders rejected it, which basically meant they were >> dead in the water." And that pile of Bitcoin was there to be scooped up by somebody that uh that made a bid for it. you were talking a little bit about volatility and it seems like you know Bitcoin coverage always kind of comes back to volatility but it is uh like any other asset. I mean we've seen volatility in the market unlike anything else this year. And on that point I mean there's that strong argument in the Bitcoin community that it's actually a feature not a bug right the the unavoidable result of a perfectly scarce asset kind of undergoing unfettered price discovery. Do you subscribe to that view and why is that a desirable trait? So, look, it's it's desirable for some people, usually people that have uh that are long options in some way because obviously uh volatility is kind of the the biggest driver of value in an options contract according to Black Scholes. >> Uh it's not a desirable feature for people in their 70s that have Bitcoin at savings. So, it's just actually inevitable. It's inevitable that if you know if you believe like I and many others do that Bitcoin will at some point be you know 10 or 20% of global store of value which would be a 100red trillion or 200 trillion asset class >> and that that's not all that far away. I think that's probably you know 10 15 years away. >> Uh you're not going to go there in a straight line. people are going to get. It's just like you mentioned a second ago, you know, it's a it's a vertical supply curve and uh price goes up as demand shifts out. And so this is just a story of adoption against only 21 million coins. >> Bound to be volatile. >> Yeah. Yeah. Bound to be right. Um uh let's talk a little bit about the macro landscape. I mean we have Fed Chair Powell speaking right as we speak here today, Cory. And I was just looking at the headlines. He seems to be staying clear of any new signals about rate cuts, of course, but we also have comments from his colleagues at the St. Louis and Atlanta Feds that have been surprisingly hawkish. Uh, what's the market more afraid of right now? A Fed that is too hawkish in its fight against inflation or a Fed that's forced to be too dovish because it sees fundamental weakness in the economy. Yeah, look, I think there's just tremendous pressure on continuing to lower rates. And I think that's probably what's going to happen despite a hot inflation number that may come out one month or the next month. You know, it's just uh I I just think there's so much pressure to do that and to to free up some cash. And it's something that's popular with it's popular with both the kind of hollowedout middle class that's trying to be able to buy things on credit and they want to see rates come down and they want to be able to buy a house. And it's obviously extremely popular with asset owners and asset purchasers that want to see continuing all-time highs. >> So it is going to be really really hard to resist that. And I think that's what that's what we've kind of seen. >> Yeah. Let's pull the back the lens back a little bit and talk about the grand scheme of things. I mean, there's a there's a long-h held theory about Bitcoin's predictable four-year cycles. You just talked about it, and I kind of want to break this open a bit because this cycle seems fundamentally different. I mean, we have spot, Bitcoin ETFs, public treasury companies, and a wave of new crypto IPOs. Have these new institutional structures rendered the old kind of cyclical models obsolete? >> So, it ain't different until we see proof that it is. So until until I see a year where you know we don't see a new all-time high in uh in you know late 131 17 215 >> uh you know it's it's hard to it's hard to believe that we're done with those. There is something about the dynamics of the having that that is kind of procyclical and causes these things even though it seems like it should be priced in. It's just uh there's something there. Uh I've done tons of research on this and published on it and uh I can send it over to you guys if you want to post a link to it after the show, but uh looked at the diminishing effects of the h havingings. Um and they they are getting dramatically less over time. Uh I'm I'm fond of uh laying out the numbers and I'll try to do it as clearly as I possibly can, but basically from uh from trough to peak leading up to the $1,100ish peak in late 2023, that was from 2 to 1100. So that was a 550x uh jump in the price back then. We should have been buying Jeremy. I don't know what we were doing. It was it was two bucks, man. Uh and then you know trough of 14 up to the peak in 17 was a rise from about 180 bucks to 19,700. Interestingly exactly 110x which was uh 80% less than the previous peak. And check this out. This is nuts. So, the trough in December of 2018 was 3150, 3,150 bucks, and it went up to about 69,400 if you recall in uh November of 21. That's 22x, which is another 80% reduction. You went 550, 110, 22. Uh so the good thing is we've already broken that geometric reduction because that would have been from uh about 155 at the depths of the FTX collapse uh would have taken us at a 4.4x to around 70k and so at least we've blown through that and uh and broken that trend. Uh so little small victories. I think what will what will tell me that we are maturing as an asset class is if there's some kind of blowoff top if the reduction is you know from from peak to trough after the next bull market peak is you know less than 70% less than 60%. That just means we're continuing to dampen these cycles because, you know, if you kind of look at the the the declines, you know, there was like a 94% decline and then an 85% decline and then a 77% decline the last time. >> Um, you know, and so I'd like to see something like a 65 or a 60 at at worst would be nice. >> Yeah. Yeah. No kidding. Uh, we should have been buying at two bucks. I should have been too. I I got to ask you about the regulations, Cory. I mean, on the topic of US structures, we heard from SEC Chairman Paul Atkins this morning that he wants an innovative exception for crypto by year end, part of a major crypto friendly pivot as we've seen from the White House. How significant is a development like this for institutional confidence in the growth of the US crypto industry? Yeah, I mean, look, it's been an extremely successful regulatory push by the uh the non- Bitcoin crypto guys over the last couple of years, and they've they've paid the right people and bought all the lobby firms and kind of successfully avoided the uh the demise of that side of the industry that looked pretty inevitable back in say 2023 or something like that. Um, so kudos to them for succeeding and uh and going legit. And uh, you know, I think you'll see a lot of a lot of initiatives that happening that are happening in fintech and in in the banks that are really just kind of incremental improvements to financial IT uh, are getting called blockchain or crypto just because you're you're able to get more budget for it and you're kind of able to advance your career and, you know, get them to pay for your Wharton certificate or whatever. uh as the VP of blockchain innovation or something like that. But really these are just kind of sequencers, private keys, consorcia. Uh there's nothing really kind of new here. Um it's just uh yeah, I mean look, I think we can always use faster settlement times. I think we can use more liquidity. I think we can use more sort of democratic access to financial assets. So I'm a big favor of pushes in those directions. And if the way that that's going to happen is because of uh you know using digital assets or crypto in some way as a vector to achieve some of those things that are long overdue then great. You know I'm I'm a big fan of of having more public companies. I think that's something that that we ought to have. If you kind of look at the growth rate you know prearbox in the '9s like we should be up to 30,000 or 40,000 public companies on the NASDAQ and the NY and we fell way off the trend. I think we're down under 7,000 across the two uh major US exchanges at this point. And it's just like extremely ownorous to be able to provide, you know, let al US access, let alone global access to your equity if you're a company, you know, and have transparency and things like that. So, uh I welcome more more opportunities to get out there and tell your story and have people participate in your company. And I think that's uh if that ends up being the uh the silver lining of all the crypto scamming from the last six or seven years, then uh then I think at least we can put that in the pro column. >> Yeah. Yeah. And you've been outspoken about that. Obviously, you've wanted this industry to mature and it has been. And and is it possible that this, you know, friendly embrace from Washington isn't maybe about fostering innovation, but about domesticating it? Are are regulators building a safe harbor for the industry or are they building a a gilded cage kind of to bring it firmly inside the traditional system and strip away its disruptive anti-establishment potential? >> Well, there's not much disruptive or anti-establishment about non- Bitcoin crypto again because it's centralized and because the government can tell them to do whatever they want and they have offices and they have companies and management teams and road maps and all of that. So, they're all basically just centralized. Um, that goes for Ethereum and Salana and Ripple and all of these. So the endgame for them has always been uh a desire to be co-opted by Wall Street in the government and to become part of the system. That's their goal. And you know that that goes for the crypto exchanges like like Coinbase and Kraken. Like they want to become banks and and Wall Street financial firms. That's that's their goal is to be added to the existing system. So there's nothing really surprising about what's gone on the past few years. it was always the only way out for them because again you can you can only fool a retail audience into believing that you're decentralized for so long when you're not. And so once the market kind of figures out oh wait never mind these are just kind of tech companies of some sort and you know maybe there's a reason for the asset to exist maybe there's not but they're going to end up becoming financial firms. >> Yeah we got to talk to you about CBDC's that scary scary word. I mean, at the same time, we're seeing the ECB board members confirm that they're targeting that 2029 launch for a digital euro explicitly, obviously, to compete with this US stable coin. Uh there's multiple angles we can go here. I mean, do you do you view the rise of sovereign central bank digital currencies as kind of a threat to Bitcoin or or a validation that the world is moving towards digital money? And I guess on the other side, obviously, you know, this is a tool for potential surveillance and state control over money. The polar opposite of Bitcoin's ethos. >> So, look, it's it's neither a threat nor validation. It's completely orthogonal. It's scary. It's dystopian. And it's uh you know I I'm I'm comfortered I'm comforted that in the US uh they're taking the approach of allowing lots of issuers of digital dollars. >> Uh which is you know we've had we've had digital money for for ages especially in the western world. I mean I I was just in in uh Turkey for the summer and I I mean I almost never use cash for anything. You're just paying with cards. it's digital dollars and the medium of exchange just doesn't matter because you're spending whatever you spend and the translation happens in the background. It's just uh you know um abstracted away by fintech and then the merchant receives whatever currency they want to hold their value in. So you know I think a a sovereign CBDC by the by the Euro zone is really just more shooting themselves in the foot. They seem to be getting really really good at that. But uh I think it it ends up just putting their citizens more and more into a financial goolag of sorts where they're just kind of monitored and censored. And I mean it's just it's kind of horrifying. >> Uh maybe it'll be maybe it'll be the final stroke that finally gets Europe on board with Bitcoin, you know, at at similar percentage adoption rates that you see in the United States because they've been lagging behind since inception. And you know when you see the kind of the censorship that you're seeing in the UK and you know arresting people for social media posts and you're seeing all the strife in multiple countries over immigration and you know you're seeing the the financial controls kind of clamp down and you're seeing a really kind of unsustainable economic model with a few countries kind of subsidizing the rest. It just doesn't seem like the euro is long for this world and I would guess that uh digital euro CBDC launch will probably just accelerate that collapse. >> Yeah. Yeah. I mean you're different than most when you come on these programs, right? You you talk about Bitcoin, you understand debasement and to be honest, you're gold friendly, too. But before we bring in that conversation, Cory, I let's talk Ethereum just briefly because we just saw that half a billion dollars in leveraged ETH positions get liquidated almost doubled and Bitcoin as we mentioned off the top which seems to support your view on where the expulation is, right? I mean, we're also seeing this serious trend though of corporate ETH treasuries, that company chaired by strategist Tom Lee, 2 million ETH on the balance sheet. How does Bitcoin only thesis hold up when when you see this serious institutional capital led by these Wall Street veterans? Is it is it kind of a separate bet on a treasury asset or like you said before is it just trendy? So, I think it was just a trend and I think it was probably just Joe Luben uh who kind of controls Ethereum mostly uh seeing the rise of Bitcoin treasury companies as a theme and realizing that it would just kind of leave Ethereum in the dust if he didn't scramble some friends and start some of these things. And because there wasn't net new capital going into them, it's basically just a bunch of Ethereum whales that printed the money for themselves back in 2014 and have massive ETH piles just kind of placing it in the companies. So, it didn't really cost them. they didn't risk anything for the most part. Uh, and so I think it was basically just marketing and, you know, so they got some pump and dump action and kind of ripped the faces off some retail and, you know, kind of did their thing. But I don't think they're long for this world. I think it's very similar to what you've seen with the ETFs where the Bitcoin ETFs have been the most successful launches in ETF history, the fastest growing ETFs in history, and the Ethereum ETFs just kind of like were a dud. Uh, so I think that was a summer theme. Um I I would I think you know we were calling them you know leverage Bitcoin equities or Bitcoin treasury companies and uh the crypto people came in and started calling them DATs as they often do and try to try to wrap themselves up and say oh those are Bitcoin DATs. Uh I would say they are probably more like um you know escoin asset treasuries. So I'll let you figure out what I think the uh the appropriate acronym is for those. But yeah, I don't think they're long for this world. Look, man, the underlying assets are just doomed versus Bitcoin. And you know, I've done extensive research on this. And you know, you just can't build on a weak foundation like an altcoin and expect to compete with Bitcoin. And that goes for treasury companies as well. >> There have only been two altcoins in the history of altcoins that have had a second all-time high uh after their first pump. So, Ripple was higher in 2017 than it got in Bitcoin terms in 2013. And I don't know if you remember uh when Elon was tweeting about Dogecoin all the time back in 2021. So, it had a higher all-time high in Bitcoin terms uh in 21 than it did in 2017. That's it. And, you know, out of 30,000 attempted layer 1's and 30 million, you know, altcoins of, you know, meme coins and things like that, there's literally only two that have ever had a new all-time high. and they're both down 80 to 90% since then in Bitcoin terms. So, it's just not a good bet and it's not what you're going to build the future of finance and the future of money and the future of saving and store of value on. It's not going to be all coins. It's going to be Bitcoin. >> Yeah, I didn't uh I didn't line up for those sales of Dogecoins either. But uh you know, obviously the other side will argue that this is less about technological debate and more about the fundamental difference in asset strategy. Some of them say Bitcoin is that pure strategy reserve asset kind of like digital gold as you've kind of talked about whereas Ethereum with staking is a productive yieldbearing asset. I'm sure you've heard about this a lot Corey more like that digital bond. Aren't institutions simply making a rational portfolio decision to have exposure in both that non-productive store value and productive cash flowing generating? Well, if the asset that you're gaining interest in is devaluing against your benchmark, which should be Bitcoin, then you just look stupid. So, yeah, if you started staking when Ethereum proof of stake launched in a centralized decision by the Ethereum management, >> uh back in 2022, you'd have 21.4% more Ethereum, but it's dropped by more than half in Bitcoin terms. So, you know, good job getting some extra, you know, some extra asset that is devaluing versus Bitcoin. It's just stupid. >> Yeah. >> It's like, you know, it's the same thing. It's the same thing as like keeping your money in Argentine pesos because the bank has 50% interest, but it's devaluing 90% a year or something like that. Like, it's it's stupid. And if you want if if you want the liquidity right away, I mean, I knew somebody over the weekend that was trying to liquidate a small position on ETH and it and because they were staked, it's three to four weeks to sell it. >> Again, whenever you have an inferior monetary system, you usually try to trap people in it, which is the same thing you see with companies and countries, and that's what you'll see with altcoins as well, trying to get into staking. >> Maybe we'll get Tom Lee on the show. Maybe he's watching this. Uh, okay. I got to ask you a little I don't I will say like Tom is an old friend of mine and he's he's a big swan investor from when he was a Bitcoin only guy which he was for many years and I haven't spoken with him since he uh took the Luben money but uh I congratulate him on his yachts and uh I don't believe that he believes the things that he says about Ethereum at all. Uh but uh nonetheless I do wish him well because he is a very nice and a very smart guy. >> All right, I like it. No uh no orange ties on every public appearance. Uh I got to ask you a little bit about the central bank adoption because we have this report from Deutsche Bank. Uh I think just this week it came out and it's projecting that central banks may begin to add Bitcoin to their balance sheets by 2030 treating it as a compliment to gold. Um different ways we can take this. I mean first do you see this is credible? Second, if it does happen, does that risk turning Bitcoin from a decentralized open network into a strategic asset controlled and potentially weaponized as we've seen by nation states? >> Uh I'm not sure how Bitcoin has been weaponized in any way thus far, but uh maybe you can elaborate on that in a sec. But um you know, you're already seeing quite a few sovereigns stacking Bitcoin. So, you know, there's this dispute in El Salvador over whether they stopped buying Bitcoin or whether, you know, I think there's whispers that they may actually just be using the uh the state uh electricity company to mine Bitcoin and that's why they keep on adding Bitcoin. I have no idea. Uh you've got Bhutan mining for themselves. There's lots of rumors about uh Middle Eastern nations that are mining for themselves. We know that Russia has been doing it for a long time and you know China is still 20% of the hash rate even after banning Bitcoin mining. It's still 20% of the hash rate. So you know that's going to CCP CCP members that's going to you know government like who knows who that's going to but it it really hasn't stopped. So uh I think the big next step will be when you see purchases announced. So just spot bitcoin purchases for uh sovereign wealth funds and for national treasuries and things like that. So you know the sovereign wealth funds are already large holders of bitcoin treasury equities like micro strategy and some others. Um but uh yeah I think direct purchases of spot bitcoin and figuring out how to actually like custody that for a nation uh will be the next step and I think that's probably a fair I could see that happening by 2030. Uh I'm not as I I was never bullish on the US actually starting to acquire Bitcoin and I always thought that that was basically a uh that was kind of like the the lipstick on a pig to jam through all the uh crypto friendly regulations in this last election cycle and what's followed you know by the by the regulators and politicians that that gained power as a result of their alignment with the non- Bitcoin crypto industry. Um, so seeing them kind of kick aside and not prioritize the SPR was always kind of expected by by myself and most Bitcoiners that have watched this watched this show before. Um, you know, it's uh it's not surprising and I don't expect that the US will start buying Bitcoin anytime soon. >> Okay, that's interesting. And when I was talking about weaponizing, I meant the dollar. We've seen them weaponize the dollar and other holdings in the central bank, including gold with some of these tariff potentials. But uh are you are you watching you know sovereigns secretly buying Bitcoin strategic reserves right now? You're talking about this there's a lot of under reporting and we've seen it in gold in different nations. Uh do you think that this is happening behind closed doors just not getting the headlines? >> Again I don't think so. But they are openly engaging in mining and stacking Bitcoin that way and they're open openly seeking Bitcoin price exposure through Bitcoin equities, Bitcoin linked equities. So, I just uh they're getting Bitcoin price exposure and they're getting real Bitcoin through mining. Uh I just if if there are countries that are actually buying spot Bitcoin and the real thing and it's it's being done in a clandestine way where they're they're not saying that they are. So, I would be looking at probably autocracies >> uh that would be the candidates for doing that. And there's rumors about some of them, but I I personally don't have any knowledge of of who might actually be doing it for real. Yeah, Corey, you never panicked when it comes to this market, which is great. It's kind of that Eevee even steady approach, you know, we know that you're a long-term holder and given everything we've kind of discussed, the leverage, the the macro divergence, the corporate stress test, as we like to call it. I mean, what what do you think is the single signal that you're kind of watching over the next 6 months that'll tell you definitely, you know, that the thesis is still intact? >> Yeah, look, the thesis doesn't go anywhere regardless of what happens. I mean, even if it pulled back here and then went back up next year and never saw a blowoff top. I mean, I I' I'd welcome that. By the way, I would be so thrilled if we saw a high in 2026 higher than any price that we saw in 2025 and this was like a slowm moving bull market. That's what everybody thought was going to happen from 2018 onward because they assumed that the launch of of futures on the CME was going to dampen volatility and kind of get rid of cycles. And then obviously we went from 3k to 69k soon after that. So, you know, it's didn't seem to do a lot of dampening uh the last time around. So, look, I I I still think that we're going to see, you know, upper hundreds, maybe 200, something like that. Uh, you know, will that happen in the next 3 months before the end of the year? I have no idea. I would say I mean I I have to plan my family finances and you know corporate decisions based on you know my expectation of what will happen with price to some degree. Not a lot but a little bit less than I used to. Uh and you know I'd say there's still there's still a majority chance in my mind that we see an all-time high this calendar year that we don't see again you know for another 18 months after that. So, you know, you basically wouldn't wouldn't touch whatever we see this year again in 2026, that there will be some kind of pullback and we'll trundle along in a bare market like we always have. I just I hope that bare market will be uh significantly shallower than uh than previous ones. >> Now, it's an easy question, but we got to bring in the gold audience obviously because many our viewers are dedicated gold investors who prioritize that long-term wealth preservation that you've been speaking about. I mean, do you see a future where Bitcoin and gold coexist in a portfolio as kind of complimentary assets, gold for stability, you know, Bitcoin for growth and and seizure resistance, or do you believe that the over the long term Bitcoin's superior monetary properties will, you know, lead it? >> Look, man, gold isn't going anywhere anytime soon. And I think we've seen that with the price rise from the, you know, mid to upper thousands up to 3,800. Uh, it it's holding up really, really well. I think it's a it's a moving benchmark for Bitcoin because I I do think that Bitcoin will eventually surpass gold in market cap, but but look man, we were we were targeting, you know, 15 trillion a couple of years ago and now it's like 30. So, or whatever the the gold market cap is is pretty pretty hefty. >> Um, and so, you know, I still think that the lines probably cross sometime in the in the second half of the 2030s. something like that is kind of my, you know, or maybe maybe after that, but you know, it's uh I do think it's kind of inevitable, but that doesn't mean that it it shouldn't be in people's portfolios. I think in particular when you look at at folks that are older. Uh it is less volatile than Bitcoin. It is more trusted. There's not as much that you need to know technically about it. uh you know there I think are are lots of trusted custodians of gold and you can obviously hold the physical uh you know depending on your security setup in your home and things like that. So I do think it has a place. We have so many clients at Swan that uh still have gold or that came from gold and then ended up becoming all bitcoin. And you know, we just we we have honest conversations with them and just try to extol the benefits of sound money. And you know, whether you want to call it digital gold or analog bitcoin, you know, they are sound money cousins. And I think that philosophically uh we all kind of recognize the same set of issues and the same problems. And uh I think there are thank goodness there are there are two solutions to sound money. Yeah. >> Uh I do think that that in the long run uh gold fans should be extremely happy that Bitcoin solves some of the problems that caused uh gold centralization and and made it possible for there to be the 6102 act back in 1933. And you know I I don't think that you can rebuild the global monetary system backed by gold. I think we've tried it so many times and I don't think it's possible. I do think it's not only possible with Bitcoin, but extremely likely that that's what happens. And it's because you can move Bitcoin really well across space because it's digital, which is hard with gold, and you can do it across time because it's holds its value like gold does across time. So, that's probably the way to look at it. You know, fiat money is really crappy at moving across uh time. It doesn't hold its value, but it's really good because it's digitized and it's good about moving across space. Uh, gold is good at transmitting value across time. It holds its value and you know, we can both go get a what do they always say? A nice suit on Savile Row for an ounce of gold just like you did 400 years ago. >> Um, but it's really bad at moving value across space because it's physical and it's heavy, etc. And Bitcoin is just fantastic at transmitting value across both time and space. And I just think it's a it's a superior technology to fiat and to gold. Yeah, before I let you go, man, I mean, you talk to these retail investors all the time. With this conversation this year, you know, whether it was the Doge initiative, you know, we're talking about the Fed and and the treasuries that they're holding and people dumping them and then of course this $37 trillion with debt. Despite all this, Bitcoiners and gold bugs are still kind of coming together a little bit more than ever in the history, don't you think? >> I think so. And I I think a big part of it is just the the the gold fans uh getting to celebrate a little bit. You know, it's been it was trundling up for so long and seeing it go on a run. I just think that that fun and that euphoria and just being proven right that dollar debasement couldn't kind of couldn't the asset just couldn't keep a lid on it forever despite paper games and naked shorts and all the different things that you know may or may not have been going on with manipulating gold price. uh either it's just running because it's inevitable or they're letting it run for some for some reason I'm not privy to but it's running and it makes them happy and it makes them sort of begrudge the massive gains of Bitcoin holders from the last 15 years a lot less uh and so they can kind of join in the celebration a little bit. So yeah, it is it is a nice moment and I don't expect it to get any different. I I fully expect that we see uh gold at 10K an ounce in the next decade and I expect to see Bitcoin at a million in the next, you know, five, six years. >> 10K, 1 million Bitcoin, there's the headline. All right, Cory Clips, founder and CEO of Swan Bitcoin joining us today. Uh thanks for this a crucial and clarifying perspective during this crazy time in the markets, my friend. >> Yeah, absolutely. And uh Jeremy, great to make your acquaintance uh on air and uh have a wonderful rest of your day. We'll do this again soon and give me that research. We'll put it for the audience and uh we'll talk to you soon, Cory. Appreciate the balance here. >> Yeah, truly my pleasure. Thank you. >> Thanks so much. All right, we're keeping an eye on Powell speaking right at the moment and of course these announcements to come out of the White House. Also, gold prices still on a tear. To stay ahead of these fastmoving markets, make sure to hit subscribe for all of us here at Kiko News. I'm Jeremy Saffron. Thanks for watching. Heat. Heat.