Bitcoin To Replace Bonds? Why $250k Is Next | Jason Yanowitz

Bear case target is $150K. My kind of base case of what I think Bitcoin does in, in 2025 is roughly $180K. I think all of those would get blown out if we see a strategic Bitcoin reserve. If we do see a strategic Bitcoin reserve, Bitcoin's at roughly $250K. If I had to, if I had to put a guess on it, I can assure you retail starts to flood back into this market and you start to get some crazy things. You also start to get a lot of new value introduced into the industry, new founders, new funds, new capital providers. Also, I think you'll see new ETFs. You'll start to get things like probably the Solana ETF, the Ripple ETF.

Has Bitcoin peaked at $100,000 for 2025? What's next for Bitcoin and the rest of the cryptocurrency market? And what will drive blockchain adoption this year? Joining us to discuss these themes is Jason Yanowitz, co-founder of Blockworks. Welcome to the show, Jason. Good to see you.

Yeah, good to be here. Too many, too many blockchains. Blockworks. We got to get more creative with the names, you know.

Well, Jason, if it's not broken, don't fix it. But let's start off by talking a little bit about your work. What is Blockworks?

Yeah. So we launched Blockworks almost a little over 7 years ago. This is our 8th year of business. Folks can think of us as a Bloomberg for the digital asset and crypto ecosystem. So today we own several of the largest Big media company, I think, is probably the best way to put it. Big media business kind of looks like a Bloomberg Media or Wall Street Journal just for the crypto industry. We own some of the large conferences in the industry. And then the real kicker is we have a large data and research business. So folks are familiar with maybe CapIQ, FactSet, Bloomberg Terminal. We, you know, we have a similar type of product, but just for digital assets. So our end customer are the traditional financial institutions, the family offices, the hedge funds, the venture firms. Who are now starting to allocate to, to the industry.

I want to start by talking about the biggest crypto, Bitcoin, and get your perspective on why the price is behaving the way it is and what could we expect in the coming months. So now the Bitcoin price has once again roughly mirrored the Nasdaq. I'll pull up the Nasdaq Composite next to the Bitcoin price chart. And we've had a bit of a pullback in equities ever since the Beginning of the month, the end of December, some volatility has kicked in and it's brought Bitcoin down to about $96,000, down from its high of about $107,000. So a slight pullback of nearly 10% from its highs. Now, I'm wondering and a lot of people are wondering, Jason, whether or not the good news has already been priced in for the year. We had the Bitcoin ETFs launching earlier last year. We had Trump. Winning the election, which was very good for the pro-crypto crowd. And, you know, there isn't a major event on the horizon, or am I wrong?

I think you're wrong here. So if we're looking at just Bitcoin as an asset class, right. So I've been in the industry almost full time for 8 years. Every couple of months it feels like there's another thing on the horizon, but maybe it's already priced in. And I would very much— I'm a very strong believer that this is not priced in. So the big event that's obviously coming up is the inauguration of President Trump. In a couple of days, right? So we're recording this on January 14th. There are a couple of reasons why Bitcoin just fell from $107K down to $90K. And I think today we're trading up to around $96K or $97K. First reason, and not to dumb it down too much, is, you know, this is an asset that just went up 100% in 60 days. I think we're due for a little bit of a pullback. But the probably more intelligent takes are, I think the entire— all risk assets just pulled back a little bit. Bitcoin tends to be the most sensitive to changes in global liquidity. And so I think that that was one of the main reasons we saw a pullback. But the other thing that maybe folks aren't as familiar with, if you don't work in the industry, is there was a sense that investors in the industry, whether that was family offices, venture firms, hedge funds, everybody kind of expected this post-inauguration pullback, right? Because starting from January of 2024, we saw such a violent move to the upside. Bitcoin's gone from $40K to about $107K in about a year. Right. So everyone was kind of expecting this buy the rumor, sell the news type of event. The news being, right, Trump actually moving into office. So I think everyone was expecting a pullback upon the inauguration. What we have now, though, was this kind of washout earlier than the inauguration. Right. Bitcoin pulled back from $107K back to $90K. This is very healthy, I would say. And for me, I've done a 180 in what I think will happen in a week, which is I think Trump's inauguration has flipped from this kind of bearish event sell the news, you know, sell the inauguration into a very bullish catalyst.

There's still a lot of changes that need to be implemented. We've talked about changes over the campaign trail. The SEC obviously will be changing chairs, but regulations actually need to be penciled in. Right. So what are the major changes that you are expecting or looking forward to first in the first 3 months or so?

Yeah. OK, so we can talk about the first 100 days, but I think it's important not to overthink this one too much, right? So the single biggest takeaway, and if people turn off their ears for the rest of this podcast, is the US is now favorable towards crypto for the first time in history, right? And I don't think I can stress that enough. A lot of people, I think, are overthinking this. We have a pro-Bitcoin president for the first time in US history. So that is what I would— that's just the highlight at the top of the ticker. It's also not just about Trump, right? We have the most pro-crypto Congress in history. We elected, I think it was 278 pro-crypto candidates to the House. We elected 20 pro-crypto candidates to the Senate. So historically, you know, my entire time building Blockworks, D.C. has been a headwind and we have very quickly flipped to D.C. being a tailwind. And yeah, like you mentioned, you know, we have a new SEC, we have a Treasury Secretary who is, you know, just revealed that he owns about $500,000 of Bitcoin. So, so, so right out of the gate, it's very exciting. If you look at Trump's first 100 days, I think there is two ways to bucket it. So what is already— I think it's important to just look at what has already happened, right? So what has already happened is we've already established a crypto advisory council to work with Congress, industry leaders, and regulators. We have a new SEC chair. We have new leadership at the Treasury. And I think there's a lot of conversation and some documents getting unveiled already about kind of Operation Chokepoint 2.0. So I think the easy things right out of the gate, new SEC chair, new leadership at Treasury and a crypto advisory council, and then just the end of debanking of crypto companies. But if you ask me what I would really wish for, definitely market infrastructure bill, either the market infrastructure bill or the stablecoin bill getting passed. I think both of those would be great. Even just one of those we would take. I would say clear regulation for tokens. What has happened that I'm not sure if your audience is familiar with is most of the crypto companies have been pushed offshore. A lot of the really good founders I know have been forced to move to places like Dubai, the UAE, Singapore. Right. They've been pushed to Asia and the Middle East to build their companies. And so what we're starting to see now is kind of a new onshoring of crypto companies, which is very exciting.

Which is, which is a challenge for Trump because he said that he wants to make America the number one place for not just Bitcoin mining, but crypto transactions and development overall. I'm laying out my plan to ensure that the United States will be the crypto capital of the planet and the Bitcoin superpower of the world, and we'll get it done. I wonder though, and some people wonder, skeptics of Trump's plan would, would ask, look, Jason, maybe he's going to flip-flop because he, he hasn't always been pro-Bitcoin. Take a look at some of the statements he's made in the past. For example, right, this is a 2019 tweet that he made: I'm not a fan of Bitcoin and other crypto— cryptocurrencies which are not money and whose value is highly volatile and based on thin air. Unregulated crypto assets can facilitate unlawful behavior, including drug trade and other illegal activity. I mean, this sounds awfully familiar. We've heard this before. I wonder what's changed and if he's actually had a change of heart, or, uh, You know, I'll let you address this. Yeah.

I mean, it reminds me of someone else, right? Larry Fink, right? Larry Fink, CEO of BlackRock, said Bitcoin is only used for money laundering. And now, you know, he has changed his tune. And I think the Bitcoin ETF was probably the most successful ETF in the history of ETF launches. I think it pulled over $40 billion in its first year, right across all— across all the ETFs. I'm not sure exactly about IBIT. So I think— I think Trump has changed his tune. Even if Trump didn't change his tune, by the way, David, so we've got I mentioned the Treasury Secretary. We also have a new SEC chair, right? Paul Atkins. Paul Atkins was, was, was actually the previous SEC commissioner from 2002 to 2008. And just having Gensler out and Atkins in, that alone is a massive change for the industry, right? Atkins will probably shift away from this, like, regulation by enforcement strategy that Gensler did. He'll introduce crypto-friendly policies, right, that will kind of boost the industry, make it more competitive in the global market. I would say ETF approvals will happen, right? Right now we only have Bitcoin and ETH. I would say it's very likely we'll get things like maybe a Ripple ETF and/or a Solana ETF. I think deregulation is possible. And then I think enforcement, right? We do need real rules and real regulations in the industry. Unfortunately, Gensler focused on actually some of the good actors, right, going after companies like Coinbase and Kraken and did not go after the bad actors, folks like FTX. So Well, could Trump change his tune? He could. I don't think he will. But even if he did change his tune, there are so many things that have been put in place— a crypto advisory council, new Treasury secretary who loves Bitcoin, new, new SEC chair who loves Bitcoin. It's going to be pretty tough to fight this industry.

This is a new development here. This came in on my radar not too long ago. According to BlackRock, the adoption of Bitcoin surpasses now internet and mobile phones. A recent Market Insights publication by BlackRock revealed that the adoption of crypto assets, especially Bitcoin, has outpaced the growth of the internet and mobile phones. The adoption of crypto assets has been driven by, uh, their global and decentralized nature, with crypto seen as a global monetary authority, uh, or alternative rather. Um, Jason, uh, what's your reaction to this story?

I'm not surprised by it. It's, um, better products proliferate, and now this is one—

I'm sorry, just to give you a stat to bounce off of, the report showed that it took mobile phones 21 years and the internet 15 years to reach 300 million users. Crypto assets achieved the same target in 12 years. I mean, uh, okay, well, people are buying Bitcoin on the internet and the mobile phones, but sure, I get it.

Yeah, I mean, here's, here's the cool thing about all new, new technologies, and it's not just crypto, by the way. It's— I would guess all good new technologies will increasingly get increasingly adopted because we can leverage, right, the internet and mobile phones for distribution. The internet wasn't able to leverage the internet, uh, for distribution. But here's what I'd say. There are now— so Bitcoin was launched in 2009, Ethereum in 2015. The industry is 15 years old. For the first time in the industry, real businesses are being built on-chain. So for any of your listeners who were around in the early days of the internet in the '80s, right? It took from 1980 to 1995 to really get Netscape and browsers and things like that. We're at the browser moment for crypto. So real businesses are being built on-chain. I think it's fair to say on-chain is the new online. And, you know, I wasn't around in the '90s building companies, but I think you used to say, oh, one of those internet businesses. Now you just say it's a business, right? And I think today, a lot of people look at the industry and say, look, it's one of those crypto businesses, right? And I think tomorrow, it's just a business.

Well, give us an example of how businesses are moving on-chain.

I mean, I think the biggest examples are— there are what I'd call the crypto-native companies who are kind of building the industry from the bottoms up. These are folks like Coinbase. Coinbase is a publicly traded company. Uniswap, Aave, Compound— there are companies building from the bottom up. Then there are top-down companies who are— crypto and Bitcoin are kind of infiltrating their product lines and their businesses. So maybe two big examples here are BlackRock, right? I think you're seeing BlackRock first launch their Bitcoin ETF, did phenomenally well. Second thing that they did was, uh, they launched a kind of money market fund on-chain called Biddle. And it's now one of the largest, um, basically stable forms of yield on Ethereum, right? It's built on a public blockchain. It's not built on a private database. It's not built on some MongoDB or Oracle database. It's built on a public database called Ethereum. Um, and I think you'll start to see folks like these financial institutions push more, uh, do more things on-chain instead of in these private databases. Another one is Sony. Right. This week, I think it was actually today, maybe yesterday, Sony, the massive entertainment company, launched their own Layer 2 built on a chain called Optimism, which is built on Ethereum. So if your listeners find this confusing, right, it's, it's, it's, uh, these, these blockchains are no different than, you know, it's kind of the new version of AWS, Azure, Google Cloud. When those, when the cloud businesses were getting created and going to market, there was an all-out war for companies and founders and developers to come build on them. And that exact same thing is happening today. So I think you're starting to see some of these institutions launch their own chains. And actually, specifically, I think you'll see a big proliferation of stablecoins as well this year. And a lot of these institutions, whether it's fintechs or corporates or tech companies, I think a lot of them will launch actually their own stablecoins this year. And that will get super interesting.

Once upon a time when the Bitcoin dominance was above 75%, most of the payments B2B were made actually through Bitcoin. If you take a look, take a look at a platform like CoinPayments, for example, the majority, 80% of their payments on their platform used to be with Bitcoin, they told me. And then now it's like 20% Bitcoin and 80% stablecoins and 1% something else. But is stablecoin still the preferred measure of— or not measure, but unit for exchange in today, in 2025? Or do you think there are going to be other projects and altcoins and tokens that may take their place?

Uh, when, when we got into the industry, 100% of our money flowing in and out of the business was in wires. Actually, it was just normal wires. And now probably 50% of the money that moves in and out of Blockworks is via these things called stablecoins. So stablecoins are simply, um, putting dollars on-chain and issuing, uh, uh, kind of credit against that dollar on, on-chain, right? So then the money can move seamlessly to anyone with a crypto wallet. And if this doesn't really— to anyone who hasn't maybe used one of these, it is a 10x better experience and a better product than moving money today. So the crazy thing about today's dollars, there's probably two big issues. One is it takes a really long time. Two is it's really expensive. So, David, I don't know where you live, but let's say you lived in London. I've got a couple of friends who live in London. If I want to send them dollars today, it takes 3 days to get there. And then it also gets really expensive if I'm sending money. So if I want to send $100 internationally, $200 internationally, on average, that costs about 6.5%. The world spends about $55 billion a year in remittances. Stablecoins are bringing this to zero. And you start to see this in the market, right? Stripe, one of the largest fintech platforms in the entire world, they just made a $1.1 billion acquisition of a stablecoin company. This is the largest acquisition in crypto, in crypto history. So, so A, the product is better. It's just a better product. But B, the US dollar, I think, can be thought of as the world's most sought-after community— excuse me, commodity. The problem is that most of the world can actually access US dollars, right? So what stablecoins allow you to do is actually export dollars to the entire world. So the crazy thing about this is if you look at the stats, stablecoins have now become one of the 20 largest buyers of US Treasuries in the world. So it's not central banks, it's not corporates, it's stable— stablecoins, right, are now one of the 20 largest buyers of US Treasuries in the world. And that's why things like transaction volumes have gone up 10x in 4 years. Transaction count has gone up 16x in 4 years. The total supply of stablecoins just reached $200 billion. Outstanding. That's 20x in 4 years. And it's just because it's a better product.

How does it compare to money service businesses that are popping up, online banks, if you want to call them that, that, that offer a superior form of money transferring than traditional financial institutions with wire transfers that take 3 days to get to London, for example? Essentially, you're still— a stablecoin is still fiat is what I'm getting at. You're just using it on-chain with obvious benefits, like you've mentioned already, but essentially you're still using a, you know, a form of a dollar. So how's that any different from using, you know, um, you know, an online bank?

Yeah. So using an online bank, A, it requires the bank account, right? So if you are talking to about 52% of the world can't access a bank account today. So I don't know how many people are in the world, 8 billion, let's call it. You're talking about 4 billion people who can't access a bank account. There are also other services, right? TransferWise and things like that. But a large amount of the population can't get access to those. Creating a crypto wallet, whether it's on Ethereum or Bitcoin or Solana or whatever it may be, takes about 6 seconds. I would say once I have a crypto wallet in my, in my pocket on my phone, I can send anybody else in the world with a crypto wallet stablecoins. So it used to be that you would have to send someone Bitcoin or Ethereum. The problem with this and what I thought was always the The problem with, you know, Bitcoin is money. Bitcoin's not money, right? Bitcoin's an asset. Stablecoins are the equivalent of money, but just being on-chain, they're just US dollars. So yes.

Yeah, absolutely. And I'm just reading a stat here. According to Finbold, in 2024, they accounted for roughly a third of all crypto payments with stablecoins, up from 16% in 2022. There's been numerous attempts at making Bitcoin payments friendly with, uh, Layer 2 developments? Uh, do you see those taking off?

Um, I think that you will see a large amount of Layer 2s and, um, kind of DeFi built on Bitcoin. I don't see Bitcoin ever becoming money. Um, I really don't see Bitcoin ever becoming money. I just see it becoming an institutional asset class. I see it kind of replacing bonds in the traditional 60/40 portfolio. Um, you know, I see Bitcoin becoming the 40, I see bonds moving away. I don't see Bitcoin being, you know, replacing dollars in your bank account.

Okay, I'm gonna have to just ask you about that. I'm gonna pull this chart up once more, the Bitcoin versus NASDAQ chart. I mean, if it's a bond, um, it should be a non-correlated asset, right? So are you assuming that at some point this correlation will break down, or, or people are just gonna play?

Yeah, I'm just like, I'm just looking at the numbers. Yeah, I'm just looking at the numbers, which is that bonds deliver horrible performance, right? The 10-year Treasury return for the last 10 years is about 1.5%. Inflation is about 2.5%. That means investors had a negative real return on government bonds for the last decade. Right. If you look at— I know we're talking a lot about BlackRock, right? So BlackRock's iShares 20-year Treasury Bond ETF, that story is not great, too, right? The fund is down like 40% over the last 5 years. So if you, if you had put you know, 60% of your portfolio in the S&P 500, 40% in Bitcoin, your return would have been, I think, roughly 400% over the last 5 years. And I think the biggest pushback on Bitcoin in the portfolio is volatility. But I would encourage folks to go look because I'm sure I'll get a lot of flak in the YouTube comments or whatever for this take. But Bitcoin over a 1-year, 2-year, 3-year, 4-year, 5-year, 15-year, 14-year, 13-year, any time horizon, Bitcoin is up, right? Anyone who's bought Bitcoin in the history of, you know, buying Bitcoin other than maybe people who bought in the last 2 weeks are in the money. And I think this trend will continue.

Do you have a target for us for Bitcoin in 2025? A number that makes sense?

Bear case target is $150K. My kind of base case of what I think Bitcoin does in, in 2025 is roughly $180K. I think all of those would get blown out if we see a strategic Bitcoin reserve. Right now, Polymarket is baking a strategic Bitcoin reserve at around 31% odds. If that happens, if we do see a strategic Bitcoin reserve, Bitcoin's at roughly $250K. If I had to, if I had to put a guess on it.

Yeah, I think this is the odds here. Will Trump create a Bitcoin strategic reserve in the first 100 days? 31%. What— there's various methods of actually going about doing this. One of them doesn't actually involve buying any Bitcoin. It could just be a Cynthia Loomis Senator from Wyoming said in the CNBC interview they could just sell some of their existing gold reserves and then use that money to buy Bitcoin. So, um, either way though, uh, the amount of Bitcoins that they were to accumulate into the strategic reserve, would that actually make a difference on the price? And the other method, of course, is not to accumulate any more additional Bitcoin, is just to keep the Bitcoin that they already have, that they've acquired through confiscation right? So in that sense, they wouldn't actually have to buy anymore. But the broader question is, how will the price move on the implementation of a reserve?

Yeah, I mean, I think it would move massively, right? So Lummis's proposal is to purchase 1 million Bitcoin, kind of ease that into the market. Obviously, this would make us the largest nation-state holder of Bitcoin, right? It would give us about 5% ownership of the network, which is roughly on par with our ownership over the global gold supply called the gold network. We have about 200,000 Bitcoin today, right? We're in possession of about 200,000 Bitcoin today. So they could start by just not selling that Bitcoin. That'd probably be the easiest thing to do is not sell that Bitcoin. But, you know, what I think ends up happening here, David, is this is not a conversation about should we buy Bitcoin to better back the US dollar? There's no, there's no No one's concerned about the backing of the US dollar, right? But that's also not why we have a gold supply. That's also not why we have oil reserves and oil supply, obviously. So the reason I think that you kind of create a global, strategic Bitcoin reserve is because what ends up happening is you're going to start to see states doing this. You know, Pennsylvania just introduced an act to allow them to invest 10% of their treasuries as a state into Bitcoin. Michigan and Wisconsin are now holding crypto in their pension funds. Florida is not far behind. I think that just happened today, actually. So the nation— this kind of state-level game theory is starting to play out. You'll start to see nation-state-level game theory start to play out. So even if they don't want to do it, this is a scarce commodity with incredible institutional demand at both the financial institutional level and the sovereign level. And I think you'll start to see this game theory start to play out, right? The Kingdom of Bhutan, I just saw, is mining Bitcoin. They're generating about $5 to $10 million a week from these mining activities. They've— I think El Salvador has amassed about 6,000 Bitcoin as well. So I think you'll just start to see this very interesting thing play out at the highest levels of asset allocation, which is a scarce asset, insane demand. And I think You know, I don't know what it does to the market, but you can start to do the math on what happens next.

Trump has said that he will not create a CBDC. Do you believe him?

I do believe him. I think that— I believe that it is one of the biggest, the strongest things that folks in the crypto industry feel, feel very passionately about is very anti-CBDC for privacy reasons and kind of like an overreach of government reasons. And, you know, if you look at the crypto industry, helped elect 278 folks to the House and about 20 crypto folks to the Senate. This is really the first time that crypto was such a big player in both state-level elections and national election. And I think, I think we had one of the crypto had one of the largest, if not the largest, super PACs this year with, with the Fair Shake PAC. And so I, I don't think that he'll launch a CBDC.

It's a lot of power to not have. It's tempting, isn't it? I'm just thinking from the perspective of the government, some sort of government-backed blockchain system, some sort of Fed coin. Doesn't have to be, you know, technically a CBDC, but some sort of government-issued fiat-backed stablecoin, let's call it that.

Yeah. I mean, I think I would argue that we already have something that resembles this, right? How much, when's the last time that you use cash? I, you know, I probably use cash one less than once a month. Um, all, all of my dollars are now digital. So do we, I think the, the main thing, it just becomes, do you use a dollar that is issued by your bank, right? Whether it's Chase or JPMorgan, Bank of America or Wells or whoever it is, or are you using a digital dollar that's issued by the Fed? Um, and I think actually the, the, the biggest rioters to this would not be the, the, the banks. It would end— or excuse me, would not be the crypto participants. It would end up being the banks, right, who don't want to get, uh, this— there's a massive amount of control you get when you're able to issue dollars and, um, to folks.

So let's just speculate on the future here. Suppose we move into a cashless society. Um, what would your preferred method of payment be for your regular everyday life? Suppose you buy your groceries, go to Starbucks, whatever, you take your phone out, or a card or whatever the case may be, and you're scanning something, what are you using in this ideal situation? What are you using to pay for your groceries, Jason?

I will— my payment flow will be exactly the same as it is today, but it will be via the payment method will be digital. It'll be tapping my phone on a credit card machine, but the thing that will come out, get debited from my account will be stablecoins. And the reason for this is there is a massive wealth transfer about to be underway, and probably you could argue already underway. We are moving the largest amount of capital we've ever moved in the history of the world from older generation to the younger generation. If you sit down, I don't know if you have younger cousins or friends with kids or, you know, if you, if you talk to, you know, a 12-year-old today or a 15-year-old today or even an 18-year-old today, Go ask them, what is the price of the S&P? You know what they're going to say? They're going to say, what's the S&P, David? Go talk to them. Go ask them, what is the price of Bitcoin? They're not only going to say that they love Bitcoin, they're going to tell you the price of Bitcoin down to the dollar. I think kids today don't want bank accounts. They're not going to sign up for these archaic Bank of America and Wells Fargo accounts. They just want a digital bank account in their pocket. And that's what, you know, crypto wallets give you. All right. Coinbase is the bank of the future. You know, wallets on-chain are the banks of the future.

When we have banks from the— or financial institutions from the crypto side that are as big or if not bigger than traditional financial banks, they will become the next JPMorgans and Wells Fargos and Citigroups of the world. What lessons should they learn from traditional financial banks? What mistakes should they avoid in the future?

That's a really good question. I think that the first thing that's just important to understand is that our traditional banks are built on rails from the 1970s, right? They're built on, you know, ACH and, you know, these ACH and, you know, the code is written in COBOL and it's 55 years old at this point. So even if, even if Wells Fargo and Bank of America and JPMorgan wanted to drastically improve their businesses and their product set, They can't. They're completely handicapped. And this is the same reason even some of the fintechs like the Venmos of the world are handicapped as well. So, you know, at the end of the day, like, will Coinbase be bigger than JPMorgan one day? Absolutely. But will, will they make a bunch of mistakes and, you know, probably become the new institutions? Absolutely. But even just the product set will be exponentially better because they're built on rails from, you know, 2025, not from, you know, 1972.

I spoke to a former vice chairman of the FDIC. And I asked him, Tom Hoenig, and I asked him, if you were once again chair of the FDIC, would you insure crypto banks, you know, in whatever form? And he said, absolutely not.

I think cryptocurrency is a, it is an asset that people, just like the stock market, it's an asset that they're engaging in either because they think it's better or they're speculating in it. And I don't think they should have any backstop from the government. It is a private enterprise. I, I, I acknowledge, and I have no problem if they want to get in that business, that's theirs. But know that you can lose your money and no one will bail you out. And if I were the FDIC chairman, I would make that explicitly clear in the public domain.

So What would you do or say to change his mind or anybody else in government with that kind of a view?

I would say that it's— they have cost the American public a tremendous amount of value and money by keeping the American public on the sidelines of this asset class. There are two technologies that will define our future. It's AI and crypto. AI is headquartered in the United States, right? It is Google, it is Facebook, it is Meta. The US is winning the AI race, right? And it's going to be a crazy race, but the US is winning. We have pushed arguably the most important industry of our lifetime offshore, right, to the Middle East and to Asia. And I think we'll regret it. If you look at, you know, a lot of crypto apps today, I can't access them as a US citizen. I definitely cannot access them in New York City. Right. Because of things like the BitLicense. South Korea, tiny country. There are more— there are more crypto users in South Korea than there are in the United States today. So that's what I'd say to him.

It's— but it's a good point that Mr. Honig brought up, which is that the FDIC currently is not looking to insure crypto assets. On the banking scale. If I were an ordinary citizen and I were to, per your example, start transacting with stablecoins, I would need a reserve or a bank balance of stablecoins and/or other cryptos and on or off ramp into those. And I'm not going to do that if I don't have assurances that my bank, so to speak, isn't going to be the next Celsius. Right.

I completely agree with that. That's a great— that's a great take. That is One of the things that I hope, you know, this administration lets happen is clear regulation of these exchanges and custodians. We have not been able to have— we haven't had any regulations, right? We— the industry wants regulations. It just doesn't want this kind of middle ground of nobody's telling us what to do. They're not— they're not saying— they're not letting us do anything, but they're not saying don't do this, right? They're just— there's regulation by enforcement is how Gary Gensler and his SEC treated this industry. There was no ability to talk to them. And so all people want is the ability to talk to these places like Treasury, you know, Congress, you know, the SEC. And then I think what I'd also say to this FDIC person is let the banks start interacting with crypto, right? Let them. These are all things that you can't do today, right? A bank can't provide services to crypto startups, right? We, we used to use one of the big banks. We got debanked by them, right? Because, I mean, we're a media and data business. We don't even We're not even a crypto company, right? And we— they, you know, they basically kicked us off the bank. Let them interact. Let the banks interact with the industry. Let folks like BNY Mellon custody crypto, right? So they can start making money from that. Let them— you know, you're all— you're worried about folks like Tether. Let the big banks issue stablecoins, right? So it moves into the safe hands of the banks if they feel that they're safe and just kind of start to enshrine things like stablecoin legislation and market structure bills. So that we can— so that this industry can get some protections, if that is their word, you know, around it.

And I'd like to get your take on what institutions are doing. You work with a lot of big institutions and how they're adopting cryptos. What changes are they making to their crypto adoptions? What are they prioritizing and what are they interested in right now in 2025?

Yeah. So we have a product called Blockworks Research and Data. It is probably the most widely used crypto data platform by the institutional investor. Uh, the most, the thing I think that they are thinking about is, right, they're trying to be one step ahead of the curve. They are thinking about what comes from this inevitable wealth effect of Bitcoin. So let's say everything that we're talking about comes true, right? And Bitcoin goes from $100,000, $96,000 today goes up to $150,000 or $180,000 or $250,000 or whatever it may be. People don't just sit in their Bitcoin, right? I think some of the institutions, the biggest question that we get is what happens? What do the crypto natives, aka the people who have, you know, a large amount of their wealth in crypto, when their wealth goes up 2x, what assets are they flowing into? You know, because if this, if this bull market actually looks like what I think it's going to look like, there will be a large spillover from the majors, right? The Bitcoins and Ethereums of the world into kind of the long tail of assets as people push further out on the crypto spectrum. So the biggest question that we're getting is, you know, what, where does that actually capital flow? I mean, that's what our product, you know, Blockworks Research, actually tries to solve. The other thing is, you know, we have this event coming up in March in New York called Digital Asset Summit, and folks like Michael Saylor and Mike Novogratz and Mohamed El-Erian are speaking. And the one of the big trends we've seen is it used to be an industry dominated by the venture capital firms. Right, there was a tremendous amount of VC money that flowed into the industry as we were just kind of building these new startups. There were very little hedge funds, there were very little hedge funds trading around these tokens. Now, the biggest thing that we're seeing on the institutional capital side of things that the LPs want, the LPs are overexposed to crypto venture. They're underexposed to the crypto liquid hedge funds. So those are probably the biggest cohort of new funds that we're seeing.

Okay. And Do you think that altcoin season is upon us in 2025, or do you think Bitcoin dominance will continue to gain?

I think altcoin season is upon us.

The, you know, that, that's an interesting perspective. Altcoins are primarily bought or invested in by the retail crowds. And if you, if you just take a look at Google Trends, for example, the interest level of Bitcoin or crypto is not as high now as it was back in 2021. And one can make the argument that much of the Bitcoin price action that we've seen in the last couple of months was driven by institutions, not the retail crowd. Do you agree with that statement that the retail interest hasn't arrived yet to the same extent that it was in 2021, a couple of years ago?

Yeah, we have a lot of data on this inside of our Blockworks research and data platform. The, the retail crowd very much has not arrived yet. On the institutional side, the VC flows are still much lower than they were in 2020 and 2021. The retail flows are also much, much, much lower than they were in 2020 and 2021. I think you'll start to see as Bitcoin goes up, when Bitcoin breaks all-time, breaks this kind of like fundamental number of $100,000 and, you know, folks like President Trump start speaking about it and tweeting about it, I can assure you retail starts to flood back into this market and you start to get some crazy things. You also start to get a lot of new value. Introduced into the industry, new founders, new funds, new capital providers. And so, yeah, you know, I also— I think you'll see new ETFs, right? Right now we only have the Bitcoin and Ethereum ETFs. You'll start to get things like probably the Solana ETF, the Ripple ETF, right? VanEck, you know, large capital markets players calling for $3,000. I think their price prediction on Solana is $3,200. It's trading at roughly $200 today. So I think that's what, a 16x.

So were you surprised that the ETH ETF didn't have as big of an impact on the ETH price as it did, as the Bitcoin ETF did on Bitcoin?

I was, I was, you know, Ethereum's struggling from a problem right now. That's a very solvable, very fixable problem, which is Bitcoin is this kind of store of value, digital gold. And that, that's the trade. It's a store of value, digital gold. Um, you know, it's passed up every market asset and currency since, uh, I think there's— it's probably 7th largest, uh, asset in the entire world. To hit gold, it's probably a 10x from here. Ethereum is different, right? Ethereum's a smart contracting platform, meaning you can build applications on top of it. In the last cycle, it was kind of the go-to, the dominant smart contracting platform. Today you're seeing a lot of competition from other smart contracting platforms, folks like Aptos, Sui, Optimism, Arbitrum, Coinbase launched their own platform called Base. They're building on, right, Base is building on Ethereum, but a lot of the value is leaking into Base instead of leaking back into Ethereum, Solana. So they're kind of struggling. They're getting a lot of adoption. They're getting a lot of usage, but they're actually really struggling from a value capture perspective where that value and those fees, right, we've come up with a term at Blockworks called REV, real economic value. It's not actually flowing back into the token holders. The value is being captured by the network, the blockchain, but it's not flowing back into the token holders.

Just on ETH, and we'll end it here. We can touch on the ETH and Solana ecosystems in another chat. But the idea of staking ETH was a major selling point post-merge. Do people still care? Are people still—

People do care. Yeah, people do care. I mean, you're— Do people care that stocks have a dividend? You know, there's a group of investors who do and there's a group that doesn't. And I think that there's a large group of ETH holders who loves getting 2, 3, 4, 5% on their, on their ETH, right? It's a native yield kind of baked into the blockchain here. So, yeah.

Okay, Jason, that was a fantastic talk. Thank you very much for the overview. Well, we can drill into some more detail in each of these bits next time you're on the show. Tell us where we can find you. Find your work and learn more from Blockworks?

Yeah, blockworks.com is our, you know, where you can read all the news, listen to the podcast, newsletters. I'm on Twitter @JasonYanowitz. And then if you're an institution looking to sign up for our research and data platform, blockworksresearch.com.

And you mentioned you have some events coming up, right?

New York, March 18th through 20th is our institutional event. You can just Google Blockworks Digital Asset Summit, Blockworks DAS. We've got Michael Saylor, Mike Novogratz, Mohamed El-Erian. We've got several sovereign wealth funds and pensions and endowments. And David, maybe you'll join us too.

Yeah, that'd be fantastic. We'd love to be a part of that. Thank you very much, Jason. Appreciate your talk. Welcome to the show, and I'll speak to you soon. Take care.

Thanks.

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