Bloomberg Audio Studios, podcasts, radio news. All right, well, let's take a look right now at how crypto prices are doing. I want to bring in a very special guest right now. I do want to welcome our Bloomberg TV and radio audiences who are joining us now. Is our convest CEO and CIO, Kathy. Would Kathy good to have you on the program this afternoon. I want to start right with bitcoin and what you see as the outlook for bitcoins price.
In recent weeks, you've come out and said one point five million dollars per bitcoin by the year twenty thirty. Since then, though we've seen quite a few outflows, we've seen a lot of volatility. Shanali just went through that. Is that still your view one point five million by twenty thirty, Yes.
It is our view. I think right now we're in a risk off period generally, and if you've been watching bitcoin, it's almost been a leader in terms of the risk on risk off. So I think that's what we're seeing. If we look at our on chain analytics, what we see is I'm sorry as to get this off. If you look at our on chain analytics, which you will see, is that we are in the middle of a little
bit more than halfway through a four year cycle. We think we're still in a bull market and we believe that the deregulation that we're seeing here in the United States is going to be very important to institutions moving into this new asset class. As to the allocators have to have a point of view on this new asset class, and we think by putting it in portfolios, risk adjusted returns for the entire portfolio will go up.
One question I have to the point you're making here on where the risk appetite stands around bitcoin versus other asset classes. There has been a serious dip in markets, Kathy. If you had to choose where you would buy the dip the most, would it be in bitcoin, Tesla or Nvidia?
Oh my goodness. Well, we post our trades every day and you'll see that we've been buying Tesla and names that mimic Bitcoin and other crypto assets like Coinbase, like robin Hood, taking advantage of this risk off period.
So what does this mean in terms of where you see things going.
Do you see more of a selloff.
Before things get better in these risk assets bitcoin or otherwise?
How do you know that we're not at the lows.
So one of the things we think is going on right now is and Treasury Secretary Besson today said he does not believe that we're going into a recession. We think we've been in a rolling recession and that we are actually going to see some negative quarters here, and that's because the velocity of money is collapsing as people, the labor force is worried that and we're talking about federal, state, and local quasi government categories like education and healthcare. There's
a lot of fear around job security right now. So we see the saving rate going up, we see the velocity of money coming down, and we do think we'll see one or two negative quarters. What we believe that will do is set this administration up and the fed up with more degrees of freedom for tax cuts and perhaps lower interest rates or at least ending quantitative tightening.
What do you see as the rate path for this year? The Federal Reserve kicking off, it's two day policy meeting today, We're going to hear from j Powell tomorrow. How many rate cuts do you see happening this year?
Kathy, Well, we tend not to be very short term in our focus. But if we're right and inflation is going to surprise on the low side of expectations, we wouldn't be surprised to see two or three cuts. Now, if you look at an indicator called true inflation, it's probably the broadest measure of inflation out there. It is saying inflation is down to one point six y five percent, well below where the FED is pinning it at roughly
the CPI's two point eight percent. And we believe that the combination of actually food prices have started coming down, even egg prices have started to collapse. As a matter of fact, gasoline prices are coming down. We're seeing some rent prices coming down. So we think inflation's going to surprise on the low side of expectations for those reasons, and because innovation is inherently deflationary, and our five innovation platforms are all driving different kinds of deflation. Good deflation,
which you'll call it unit growth, but deflation nonetheless. So we think the FED is going to have many more degrees of freedom in the second half of this year. Then most people think we could see more than the number I just suggested, two to three cuts.
Hey, Kathy and I have spoken quite a bit over the last few months. You were optimistic about the Trump administration, specifically with regard to disruptive technology and your thesis, but also with cryptocurrency. You just spoke about the easy regulatory environment around crypto. I'm curious that what you think about President Trump's relationship with crypto. The Wall Street Journal reported that the Trump family has held deal talks with finance
following that guilty exchange plea. And then also you have the President getting into meme coins, you have World Liberty Financial. Are you at all concerned that the Trump family is too close to crypto?
Well, I think the Trump family is very supportive of crypto, which is great. It's completely different from the environment we had been In our view on mean coins, we are not as focused on them. We would not be putting them into our various private funds because and I think that you know, the combination of AI and blockchain technology is creating millions millions of these mean coins. We think most of them are not going to be worth very much.
We think there are just going to be a few crypto assets that will gain most of the spoils in the entire ecosystem.
Kathy even some of the people who believe most firmly in the crypto story here, they are still worried about those mean coins and a lot of retail investors being stuck holding the bag.
And another thing that's happening at the same time is you.
Have a lot of exchanges looking to loosen their listing standards.
Do you worry that this could go too far.
That too many coins that are going to hurt retail ambassadors ultimately will be listed on too many exchanges.
Well, I think that the SEC did a very important thing in declaring these meme coins not securities. What they essentially were saying is we are not going to regulate them, and it's buyer beware. And so if I have one message for those listening who are buying mean coins, buyer beware, and I think the message is loud and clear from
the regulators. What we think will happen is there will be some heresome declines in the prices of some of these meme assets, and you know, there's nothing like losing money for people to learn, and they'll learn that the SEC and regulators are not taking responsibility for these mean coins.
Buyer beware of what specifically, because you did say that you believe that there are only certain crypto assets that will gain the most spoils. What do buyers need to.
Be aware of that the millions of meme coins will probably end up worthless. So, uh, when we're talking about the big three, we're talking about Bitcoin, Ethereum, Solana. The use cases for those are multiplying, and we think they're going to become very important in years ahead. Meme coins not.
So what about Trump's meme coin? Is that one of the ones that you think will become worthless? Kathy?
You know it's interesting. Uh, the meme coins will be collector's items, so digital collector's items, and so of course some will withstand, uh, you know, will withstand the judgment of time, and that may be one of them. That our working assumption is that when you're talking about millions of meme coins, you know that that's just a step too far and that most of them are not going to be worth very much.
Kathy, I want to switch gears here a little bit and talk about something that I know you've been focusing on a lot, tokenization. Now.
One question I have.
About this is do you think the investment community, particularly the venture community, is underestimating how catastrophic this could be.
To their business model.
If you have companies that can raise money through tokens rather than through traditional venture capital and go public this way or list this way rather than through the traditional listing process, is that a sea change coming for the way that this has typically been done.
I actually think it's very complicated. But you know, in terms of our own venture fund, and we did start an Interval fund, which is a forty act fund, I mean we could see tokenizing that, putting it on chain and enabling many, many more people to get involved with the private world. And I think other venture capital firms could do much of the same thing. I do agree there's going to be a lot more competition, a lot more ways to fund new companies, So that is true
as well. So I'd say this new world's going to be complicated. You know, when we hear Larry Fink of Blackrock saying he wants to tokenize everything, you know, it's big because it takes it takes a lot to move the needle at Blackrock. So we're watching the token innovation movement very closely for own purposes as well.
A little earlier, you said that when you look at these dips, you've been trying to take advantage of them, particularly in part through Coinbase and Robinhood.
I have a question about robin Hood in particular. Do you think it looks more and.
More like coinbase in the future and to the extent that you're buying more of it? Is it on the thesis of expanded stock trading among retail investors, for election betting, or expanded crypto trading.
What of those three things is your favorite thesis?
Well, our main thesis for both is we're looking for the winners in the digital wallet space. Most of us are not going to have many wallets. You can think about this in the same way you think about credit cards. Most of us don't have very many credit cards. So we're looking for those winners. And you know, Robinhood and Coinbase are coming at this from different angles, of course, Coinbase from the crypto first angle and robin Hood from more the equity end of the spectrum. Both of them
have to Robinhood has nailed the either interface. I think Coinbase is putting a lot of effort into getting that right as well. So we're looking at them as two of the bigger winners.
Hey, Kathy, revenut trouble. I'm a letter team. I'm going to let our team work on that. In the meantime, I do want to ask you a big picture question about crypto, because I think for a lot of people they look at these tokens as stores of value, as bets that they'll go up in the future and they'll be worth more and their portfolio will grow as a result. When do you see use cases for crypto, maybe specifically bitcoin,
actually affecting us in the real world. You spoke about tokenization just now, but when will we see crypto being used as something else apart from just a store of value.
Well, I think what is happening with a stable coin movement, which again that we're going to see deregulation and legislation this year, we think, which will open the doors to stable coins. So USDC that circles USDT, that's tethers, that's
the on ramp into defied decentralized financial services. So you're already seeing lending and saving and yield harnessing taking place on these ecosystems which are supported by Ethereum and Solana, and of course you're seeing rapped bitcoin on ethereum as well. So Bitcoin's trying to get into the game. But in terms of real utility, if you go to emerging markets, and I know this is not this market, but you go to emerging markets where their currencies destroy purchasing power
and wealth with massive devaluations. So it's really their policy leaders they are using bitcoin in particular, but also stable coins, which is effectively the dollar as backstops to their purchasing power and wealth because they've been through too many of these devaluations. So I think the real utility if you're looking at stable coins and bitcoin today is in the emerging markets really protecting consumers purchasing power and.
Well, Kathy, you have the great challenge of investing in innovative solutions at a time where the market is nervous and discounting the idea of putting more money to work in innovation at the moment, and to the extent that you could choose one single biggest conviction bet that you would make right now, what is it and why?
Well, we've been we have been known for our Tesla call and our Bitcoin call, and those still stand as two of our biggest calls. For sure, I would add in the AI age platform as a service companies like Pallenteer which are really enabling large enterprises to move into this AI age and enjoy the efficiencies, the cost effectiveness and to create products and services. Those I think are going to be very big as well.
Absolutely fascinating ARC and best Kathy, would we thank you so much for joining us today looking ahead of the curve a little bit and some thoughts on how to get into the ability to buy this dip.
Thank you so much for your time.