Franklin Templeton: the Bitcoin bull case and Wall Street's push into tokenization

Transcript

You know, I I think we're still in a bear now, but again, the the path to breaking, you know, through and, you know, kind of getting back to triple digits is there. So, that that is our base case. Bitcoin has been showing strength recently, but still has not been able to break 80K. Are the bears going to win this battle? Are we finally going to see Bitcoin and crypto break out of this long-standing range? Hello and welcome to the Milk Road Show, the podcast that knows that the Bitcoin conference is going on in Las Vegas right now. So, you might feel a little extra FOMO this week. I'm your host John and today is Tuesday, April 28th and today we are joined by Christopher Jensen. Chris is the portfolio manager and director of digital asset research at Franklin Templeton, where he leads the firm's fundamental research on

listed token strategies and on digital asset initiatives. Chris has over 20 years of experience in technology investing. He's going to give us tons of great alpha and insight today on Wall Street, on digital assets, a lot of other things. If that all sounds good to you, make sure you like and subscribe. Share this episode with somebody who's going to enjoy it. Today's episode is brought to you by Cape, the privacy-first mobile carrier, Faros, the layer one built for real fi, and Consensus Miami, where the next cycle starts. Without further ado, welcome to the Milk Road Show. Chris, how are you, sir? Thanks, John. Pleasure to be here. I'm really happy to talk to you. I want to just start with Bitcoin. I think this has been on everybody's mind right now.

It it keeps rising, well, it's shown some weakness recently, but we haven't been able to break out of 80K. I'm curious your outlook here. Do you think we're going to break out or break down and why? So, we we tend to look at these situations in terms of, you know, kind of a range of potential outcomes and try to think about kind of probability weighting, you know, different scenarios. I would say our base case is is that we do break out here. Um, you know, April has been a pretty constructive month. You know, we have been more or less chopping around, but um, putting in higher highs, you know, lower um, also, you know, higher lows.

So, I think, you know, there there is room to be constructive here. But, it seems that, you know, crypto markets are trying to kind of look past, you know, everything that's going on in the the Middle East, the Strait of Hormuz and everything. So, you know, it feels like Bitcoin wants to go up here. Um, obviously, there's still a little uncertainty and and with that kind of volatility, you know, we're recording, as you as you mentioned, on on Tuesday. Tomorrow's kind of a a big day with FOMC. We have a lot of big, you know, earnings calls on the equity side tomorrow. And so, you know, I think, you know, markets are in a little bit of a wait-and-see. It's choppy, but but crypto prices and Bitcoin in particular seem to want to, you know, be forward-looking, look past that and resume their kind of upward trend. And

as you as you point out, we are kind of butting up against some uh, resistance, but, you know, hopefully, we can kind of break through that and that resistance will turn into support. >> I'm very encouraged to hear some optimism from Wall Street. Uh, Chris, you touched on a couple of things here, but I want to get your thoughts on some of these major macro events that are kind of impacting all markets, but particularly Bitcoin and crypto. You know, you mentioned the Strait of Hormuz. We've got a new Fed chairman potentially coming in soon. There's all these earnings. There's the, you know, all these crypto conferences. And another thing is the Clarity Act is is still potentially working its way through Congress. Is there a specific catalyst out of all of these things or maybe all of them, really, um, that you're looking for for a signal for

Bitcoin's next move here? Yeah, I think on the I mean, it certainly is being treated as kind of a a global macro financial asset, right? And and the nice thing about Bitcoin is you you don't you don't have to worry about supply chain shocks or or earnings calls, you know, so it really is a way to express, you know, kind of that that global macro view. But, I think with respect to, you know, for instance, you know, tensions in in the Middle East, I mean, what we're seeing is it kind of resembles a little bit last year, 2025, everything that was happening with um, tariffs, you know, and kind of the the back and forth there following, you know, liberation day. And you had these echoes of it got worse, it got better, and and the headlines were really kind of whipsawing prices around. But, it

tend to get muted over time, right? And and I think markets were eventually a little tired of the back and forth and trying to look through that. I think we're seeing a similar um, effect here with respect to, you know, the tensions in the Middle East and and the Strait, you know, in the sense that it does seem to kind of, you know, go back and forth, which way things are heading. But, you know, each time it tends the volatility seems to be a little bit less. It does seem like we're getting, you know, close to resolution here. You know, and so, you know, we are seeing kind of volatility compress a little bit as we're nearing the, you know, the potential end of this. And again, I think the the markets are really trying to realize this is short-term, trying to look past it. But, there is an

interesting analogy to everything that's happening now with respect to, you know, kind of a year ago. If you're not seeing this, you're trading blind right now. There are real moves happening behind the scenes that most people don't see until it's way too late. Inside Milk Road Pro, you can track exactly what our analysts are buying, selling, and what's on their watchlists before it moves. You can try it out for just a dollar for 7 days. The link is in the description. >> Got you. I think that's a helpful perspective and it there's this evolution that's happening in this space and in how people think about this. Um, Chris, that leads me into my next question. I spent 6 years at BlackRock.

You obviously at Franklin Templeton. I'm always curious how other people on Wall Street are thinking about this and what the conversation is like around Bitcoin. How are institutions or maybe other clients or just people you've spoken to thinking about this? Do they view it as a tech stock? Do they view it as a commodity? Do they view it as, you know, something completely unique unto itself? And how are they thinking about that in their portfolios right now? Yeah, it's it's a it's a great question. I think I think for Bitcoin in particular, right, there is this a digital gold narrative, you know, that people want to believe in. Some of the performance and correlations, you know, sometimes they break down and suggest, "Hey, we're not there yet." Maybe that's an ideal end state for for Bitcoin. You know, so I think it is a little bit of that digital

gold store of value, but there's this realization there is an adoption curve here. And so, you know, that carries with it a certain amount of reflexivity um, to the upside and to the downside. So, I think when people are thinking about it, you know, including in a portfolio, it's a little bit in that, you know, kind of debasement trade, you know, category, but it also is a little bit of, you know, "Hey, this is also an asset with an adoption curve." And and if you can kind of buy into that secular story, then these, you know, more cyclical uh, downturns are are drawdowns are are opportunities to add exposure. So, you know, I think that's what I think that's how people are thinking the role of the portfolio. I think in terms of funding that position, um, we recommend, you know, thinking about it on um, on kind

of a risk-adjusted, you know, basis. So, really funding it from your your risk budget of your portfolio. Um, if you're just stocks and bonds, it tends to be, you know, your equities bucket. If you've got alternatives or something like that, you know, funding it from those riskier parts of your portfolio. Um, and then sizing, you know, I think we're kind of in that 3 to 6%, you know, from the institutional house view, but that's how I think people are thinking about it on these Yeah, no, that's really helpful context and I think 3 to 6% is a a pretty hefty allocation recommendation. Um, so, I think that's that's really encouraging to hear. And yeah, I think that that gold narrative makes sense, but also still treating it like a risk asset, risk portion of the portfolio. That all tracks for me as well. Uh, Chris, we're

going to hop around a lot in this conversation, so keep up with me here on this. I'm really curious your thoughts about this boom we've seen in on-chain finance and what your take is on the situation that's playing out with Aave right now. Um, and you know, I have a lot of questions about this, but maybe just at a high level, I'd like to hear what you think about this and and the response that there's been to this um, not necessarily well, hacker or whatever you want to call this situation that's played out. Just give me your thoughts on on Aave situation, how that impacts this evolution of on-chain finance. Absolutely. And um, you know, I I think there's there's several interesting issues and topics to really kind of discuss or unpack here. I mean, one is certainly from the institutional perspective, right? We're tokenizing

some of our own funds. Um, we we want to get more on-chain. We want to meet, you know, the customer cohorts that are are that, you know, are interested in Franklin products that are on-chain. We want to be able to meet them where they're at, bring more products there. I think we've announced, you know, tokenizing some of our ETFs. So, it and you're seeing, you know, kind of the rise of the vault space and institutions trying to think about what their strategy is there and how to play a role. But, then you see something like, you know, this recent Kelp DAO, you know, hack incident and the contagion effect from that. And, you know, that was the second incident in April alone.

Um, and so, it is concerning, right? You know, as we're trying to all march ahead to do more actual on-chain activity. Um, and then figure out, you know, how we our tokenized products can then get plugged into DeFi to enhance utility and and this idea of composable money Legos, right? That's one of the things that's so fascinating about um, blockchains and digital assets. Uh, and so, we want to partake in that, but when these events happen, it, you know, it does really reinforce the need to make sure that, you know, your risk management practices are are are sound. You know, I come from a a credit background. Um, so, I'm always kind of focused on where could something go wrong um, and making sure that whatever risk that you are taking, that you're getting compensated for those risks. So, you

know, I think there's a lot of interesting conversations happening right now in terms of, you know, what should adequate compensation for the risks for, you know, engaging in kind of these on-chain activities be, you know, and and who is really responsible for for managing that risk. You know, obviously, with something like this, you know, it it was it was Kelp DAO, but, you know, there was basically a a bridge hack with Layer Zero. So, like that's involved. And, you know, and and then Aave had a bunch of TVL kind of drawdown. Um, and that impacted other projects that, you know, people maybe were doing looping strategy in Aave. So, you really see this kind of downstream effect. So, even if even if your protocol was completely buttoned up and sound, you know, there is kind of that contagion or headline risk associated with an

incident, you know, elsewhere in DeFi because it is all connected. And so, I think as we think about, you know, we're really excited about, you know, new tokenized products and strategies and bringing more on chain and really leveraging the composable nature of it. I think being buttoned up in your in your risk management practices is just, you know, increasingly important. Yeah, because as the DeFi ecosystem grows, so does the potential attack vectors or number of attack vectors and the surface area you have to protect. So, that'll make sense there. Um I'm curious your thoughts about this DeFi United movement to sort of plug this hole because I think that this is something that happened, you know, from my perspective, alarmingly quickly. Um and they've already, I think, you know, to my understanding, crowd-sourced enough funding to more than cover the hole. Do

you think there's a a world where, you know, investors look at this and actually become more bullish because they're like, "Okay, this community, this ecosystem is going to protect me and my capital if there is a breach like this or just like, you know, what are your thoughts around this DeFi United movement we've seen? So, I was surprised at how quickly um they were able to kind of move and and raise, you know, to your point, kind of crowd-source, you know, the funds. You know, we have seen some of these, you know, types of uh of kind of, yeah, collaborative, I mean, basically like a bailout before, you know, with respect to, you know, whether it was the Wormhole, you know, kind of a bridge hack, you know, several years back. But, you know, I don't think I don't think like a bailout is obviously

the uh you know, the end solution or or you you don't want to rely on that or be able to underwrite that. Certainly a nice to have in this issue, but I I think we do need to get to the the kind of the root root cause of this and and and obviously, you know, the these attackers are are quite sophisticated. And I think, you know, an interesting conversation is is, you know, as AI plays a bigger kind of role, you know, here with with coding, you know, is that going to benefit the attacker? I tend to think it benefits, you know, your your defense a little bit better than the offense here, but, you know, I I think we're in we're chartering a turning into you know, kind of interesting waters here with respect to you hear about Claude Mythos and I mean, all these things all

these topics are are related, right? I mean, quantum kind of plays a role here, too. And so, you know, I think it's I think it's important that, you know, really the security of these these protocols are are you know, really kind of shored up to the best of their abilities. Yeah, interesting waters is definitely where we're heading. Um I want to ask you about where Franklin Templeton is heading with this because a lot of people may not know this, but you guys have been at the forefront of tokenization for for many years. I think your Benji product, which is a tokenized security money market fund on chain, was one of the first projects to come to market from a major institution like yours. And I think you guys are over 2 billion AUM now on that product, so congratulations there. But like after this this situation with Aave and, you

know, like you said, this need to reappraise risks, are you guys changing any of your plans for for tokenized products or just things you're doing in the digital asset space or you just like, you know, re-underwriting your security protocols as you go forward here? Yeah, I don't think it's really changed our plans, but it just stresses the need to um you know, obviously there's there's one desire to kind of, you know, get to market quickly, uh but you you know, each one of these work streams is a process and you got to onboard, you know, with the right, you know, counterparties and you know, there's a process there for a reason. You got to, you know, kind of make sure it's all buttoned up and go through it and those do take time, but, you know, they're very important, right? And so, I think it hasn't, you know, derailed any of our

initiatives, but at the same time, it just stresses the importance of, you know, making sure we're choosing the right partners to work with and making sure, you know, we understand, you know, the risks and that our clients, you know, understand the risks if they're engaging with, you know, some of our products on chain, kind of what that means. Um I think this all goes back to reinforce the idea of, you know, education uh in in the space, but we don't see it, you know, really changing the course. We continue to think all assets are going to move on chain, it's just a matter of when uh and we're starting to see more and more of that and that is you know, kind of the secular backdrop here. Well, I'm really glad to hear that cuz that's kind of been my assessment, too. It's like been a wake-up call, but I haven't heard

anybody like slamming the brakes yet, which is, you know, encouraging. I hope that continues. Uh Chris, I want to get your thoughts on something else that's been, you know, getting a lot of attention of capital and energy in the digital asset space, which is perpetual futures contracts, particularly hyperliquid, has been one of the strongest performing projects in digital assets over the past, you know, 18 months or so. Um do you think we're going to see a lot of competitors come into the perpetuals contract space to compete with them? Do you think liquidity is going to continue to aggregate to hyperliquid as it kind of becomes a frontrunner in this space or just kind of give me your outlook in general on the perpetual futures space as this evolves and is a a major player in the digital assets industry? Yeah, I mean, they've they've done a fantastic

job. Um I would say not just on the the products and the technology, but also on the tokenomic model. You know, I think uh and and in crypto, what we found, right, is um you know, crypto's very good at at copycatting things that that work. And so, that is that is good, right? I think we will see more and more projects, but, you know, I I think there is something to be said about, you know, competitive advantages related to size and scale and the moat that that creates, right? Um in the land of open-source code, your your your really your only differentiator, your moat, is it's really have that scale advantage and have that liquidity. And and what they're showing also is be vertically integrated across, you know, different types of products and use cases. So, I I anticipate we'll see, you know, more

entrants into the market. You know, I'm I'm excited to see, you know, some of the the frontrunners in the Solana ecosystem and and their ability to potentially compete, but, you know, definitely the market leader has a nice uh head start and, you know, it's going to be tough to, you know, kind of overthrow them. But, you know, I think I think we will see, you know, competition heat up and and that's that's for the betterment of the entire, you know, industry and users, right? But, I also think it's interesting with with HIP-3 you know, now now people have to ask, you know, do they want to compete with Hyperliquid or do they want to partner with them, right? And maybe they're they're launch launching their own kind of perp decks for whatever other niche of assets and they're partnering with Hyperliquid and and and that allows them

to get to market quickly and then Hyperliquid benefits cuz cuz of kind of the economics sharing agreement there. And so, I think that's all really exciting. So, you might see more of these pop up, but they're actually, you know, kind of partnering with Hyperliquid on the back end. Your phone carrier knows more about you than your best friend does. Where you go, who you call, when you sleep, and they're selling all of it. AT&T, Verizon, T-Mobile, they've all been caught leaking data or cashing in on [music] it. And your VPN, your encrypted messaging app, they can't fix what's broken at the network level. That's where Cape comes in. Cape is America's privacy-first [music] mobile carrier. Same premium coverage you'd expect, built with privacy from day one. Your phone's network identifier rotates every 24 hours, so you look like a different subscriber every day. Call

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Phaeros is. It's a layer-1 purpose-built for RealFi, a real-world financial [music] infrastructure that lets assets be tokenized, verified, and traded at institutional scale. We're talking parallel execution for serious throughput, [music] compliance baked in from day one, and infrastructure that actually connects on-chain and off-chain systems. They've got a $10 million incubator backing builders who want to make RealFi a reality. [music] Join the Atlantic Ocean Testnet and start building at milkroad.com/phaerosnetwork. Yeah, I think that's going to be, I agree with you, a proliferation in the space and we'll we'll kind of see which one of these things find product market fit. I think people are going to try everything they can. Um but I'm curious, Chris, your view on on how this is either competition or maybe like

accelerant for some institutional markets because Hyperliquid has brought out perp contracts on things like gold, oil, other things, basically anything they're going to try to offer a contract on now. Um do institutions view this as an opportunity to sort of expand their playbook here and like maybe get involved in some of these things or do they view it as competition or like what's that relationship like and and how do you think that dynamic plays out? Yeah, absolutely. I think it's I think it's really exciting. I think it's a an opportunity. I think the the perpetual future, I mean, that that that model or idea, you know, I think goes back quite a ways. Uh you know, the early '90s if I'm not mistaken, one of my uh my old professors are Robert Shiller, but uh you know, didn't really take off until crypto, right? And um and it's

just a better form factor for for a lot of reasons, right? And and then you you combine that with the ability to express a trading view 24/7. You know, you mentioned some of the examples of of gold and silver. You know, we've seen those year to date, right? I mean, silver I think was back in January. Things happen on the weekend and they happen in the evening and and uh I mean, oil moved, you know, I think 20% um on on one of these weekends. And the only way that you could, you know, actually express a view and and put on a trade and take advantage of that is if you were on Hyperliquid. So, I think, you know, um it's going to get to the point, it already kind of is. If if you're a trader, you know, and you have a fiduciary, you know, duty to your

clients and and you're not taking advantage of kind of 24/7 markets and the ability to put express these views and put on these trades, you're almost at a disservice, right? So, it's a competitive, you know, advantage and if you don't do it, it's a competitive disadvantage not to kind of embrace some of these new new technologies. So, I think we're going to see more assets. I think I think this is a a big trend that's here to stay as as kind of the perpification of of everything, you know, that phrase is out there, but we're going to see we're going to see more of it and it also helps bring in more, you know, kind of real-world assets on chain. So, we're already seeing that with a few of the examples you mentioned. I I think that trend's going to continue. Got you. Yeah, and I

I agree with everything you there. I'm curious if Franklin Templeton has any plans about this that you want to disclose in terms of how you're engaging with this or there products you're exploring or just like what is your how are you fitting this into your overall strategy in digital assets? >> Yeah, definitely. So, I think one thing is when you mentioned you know clarity earlier, obviously regulatory clarity on how you can do this and through what venues and what partners, you know, I think from an institutional perspective, you know, we're still looking for some of that clarity. So, you know, we're already kind of you know paper trading certain strategies that would that would use this. We're obviously on the liquid token investing side, you know, where we're able to invest in some of these projects on the token side or on the venture side. So, you know, I think it's

a a trend we're watching. It's one where you know allocating capital towards in terms of you know product development and whatnot. You know, from from an institutional perspective, I think we're looking for a little bit more you know clarity there but trying to trying to find ways to do it cuz it's it's pretty interesting. Okay, Chris. I think that's a pretty radical position saying we actually need some clarity in the industry. So, but I'm glad to hear that that's that's something is on the horizon for you all and I do hope we get clarity one way or another here. Chris, another thing I wanted to ask you about that we've seen a lot of enthusiasm on Wall Street around is these ETF ETP products. BlackRock, Goldman Sachs, Morgan Stanley, many others have all brought to market new ETPs around spot crypto products just in the last couple of

weeks here. So, they're also finding record demand when they do bring out these products. Why are these products so popular and [laughter] do you think we're going to get to a point of market saturation on these soon or what's your outlook around these ETPs that have come to market here? Yeah, so I mean it kind of fits into our view that you know traditional finance and and decentralized finance you know on chain finance like like these worlds are colliding. So, if we think of it as two circles moving towards each other, you know, they're already overlapping, you know, I think the Venn diagrams that useful mental model here and there's really interesting kind of innovation happening at the intersection of these two circles. So, you know, ETFs are basically putting the traditional wrapper around crypto native you know

products and strategies. It started with here in the US started with Bitcoin spot but we're moving to things like you know an ETF with multiple tokens in it or or a liquid staking token. I thought that was pretty interesting or you know some yield based strategies whether it's you know writing covered calls or or again benefiting from the yield of the token being staked. I think you're starting to see active management ETF. So, you I think there's still a lot to do there. I mean we've already come a long way since just wrapping you know big spot Bitcoin and so I think we're going to continue to kind of see innovation here on the ETF side and really that another way to think of that ETF are reverse tokenization, right? So, in this kind of you know intersection of

our Venn diagram, tokenization is taking those real world assets putting them on chain and and ETFs are are putting the traditional wrapper around the on on chain assets. So, I think we're going to see innovation on both sides continue as these two worlds kind of come together. So, we're we're trying to figure out ways to to play on on both sides of that, you know, whether it's with our ETF ETP product lineup and with respect to new products, you know, new to on chain for us, right? You know, Franklin's got a lot of different products across different asset classes and strategies. How can we get these on chain as well? Got you. I think that's a really interesting perspective. A lot of people who are crypto native were kind of taking this view for a long time that we're going to

just destroy Wall Street and a lot of Wall Street was taking the view that they were going to crush crypto and now we're seeing this hybridization like you said this Venn diagram coming together. It's a really interesting environment and watching these things play out. I'm curious you know you spoke about a lot of the innovations and it's kind of clear that the market is not saturated yet on these ETPs. Are there things that you guys are exploring in this space that you know like how are you thinking about entering here or or evolving your your offerings, your products in this space as well? Yeah, I think it's we have a couple of the spot ones and then we went with easy peasy which right is kind of a basket of tokens.

I think the next place to go and and others are already starting to do it is to think about you know how you can offer yield or active management or some kind of overlays to these types of products and strategies. I think that's you know pretty interesting and you know the ETF complex for Bitcoin at least you know just crossed the the 100 billion mark you know in terms of net assets and you know flows have been good in April. So, you know I think it is a convenient way for a lot of people to get some exposure and have that exposure represented alongside their traditional assets, right? So, it definitely has you know I think a value proposition that caters to certain you know kind of customer segments and so then it's just figuring out how you can you know wrap different types of products and strategies in that

wrapper which people seem to like are very familiar and comfortable with so that it can go into their portfolio. Got you. Okay, well I think we'll have to keep following the innovation that's happening here cuz like you said there's a lot of exciting things happening. I want to ask you about this Michael Saylor has gotten a lot of attention with this STRC this stretch product which he's called the light saber of money which I thought was colorful but not necessarily wrong and he's he's been pulling in a lot of capital. It's coming out of institutional institutional capital is starting to notice this. How do you think that the market is going to respond to this product and and how are institutions going to try to compete with you know a product that's offering 11 and a half percent annually paid monthly. Just like what what are your thoughts on that? How

do you think that changes the market dynamics here? I think it's a pretty creative product and and certainly he's done an amazing job at productizing different parts of his balance sheet, right? And kind of matching you know risk return profiles all kind of related to Bitcoin for different you know customer segments, right? So, I've always thought that it's you know extremely innovative as a as a student of corporate finance, you know, there's there's a a lot that's that's really interesting there and what's what I think with with the stretch product not only are kind of traditional investors interested in it and has a nice you know yield and everything but people are now tokenizing that and bringing that into DeFi. So,

you know, there you have an off chain asset that has a nice yield that then you can you know plug in and and whether it's you know looping or bringing it over into Pendle you know a lot of different ways that you can take that yield and do more with it you know on chain and I think that is very much connects to our discussion about you know the state of DeFi and and whatnot and I think I think important with all of these products and strategies is you have to know where the yield is coming from whether it's you know the yield is natively on chain what's generating that yield or if the yield is off chain and and now is coming on chain again you know what is the source of that yield is it defensible but you know here you have the case of

I mean it's not a senior secure tranche right it's it's perpetual preferred but you you know people can look at the amount of Bitcoin on on strategies balance sheet you know that are kind of pseudo collateralizing you know that tranche and then in Aave I mean it might be two times you know covered and and your yield is a lot less. So, I I think you know as these worlds converge you're going to start to people are going to be comparing risk return profiles across assets that are off chain and assets that are on chain and I think it really connects back to the discussion of you know what what should you know investors be compensated for if they are investing in certain kind of yield products or strategies whether that's on chain or off chain.

When you think about some kind of risk free rate or base rate plus a credit spread you know a liquidity premium or discount you know and kind of building up a required rate of return that way. Yeah, well I appreciate you sharing a lot of thoughts on that. There's more happening every day and I can't keep up with all of it. So, I'm glad someone is. Chris, I buried the headline a little bit here but the big news out of Franklin Templeton recently has been this acquisition of 250 digital and rebranding to Franklin Crypto and I'd love to just hear your take on the vision here. What what you see as being the strategy and just talk to us a little bit about Franklin Crypto and what's ahead there. Yeah, definitely. I mean when you think about Franklin Templeton's digital asset business, I I think a a useful way to think about

it is is two sides of the house. The the building side of the house which is you know taking our own funds and and tokenizing them putting them on chain. So, it's got a tokenization engine. It's got it's got wallet technology the on chain transfer agent, right? And and Benji's part of that and there we're doing a lot of kind of partnerships you know OKX and Binance and whatnot. So, on the investing side of our house it's typically been you know all kind of organic. Again, we have the ETF business for kind of a low cost beta way to access the market and then we have these actively managed strategies. We have early stage venture, liquid token investing and all that's been kind of homegrown. So, I think with the acquisition of 250 digital it's really

kind of you know stressing that you know hey we want to double down on the investing side of our house as well. Again, we think this asset class is here to stay. It's being integrated into a client portfolios more and more and being more accepted institutionally, right? So, I think rounding out that that that product lineup and that you know institutional scale and and kind of rigor that that comes and that that our clients expect of us across all asset classes, right? So, this allows us to bring on a great team you know not just the folks who lead it but you know the full team's coming over and we're really looking to kind of you know build this out. So, I think it's just you know a vote of confidence in in

in this asset class it being here to stay and us wanting to kind of double down both in terms of of talent coming in the door and different products and strategies that we can build and go after some of the larger institutional clients. I would love to hear your thoughts on if you view this move as being driven by trying to meet demand from your existing clientele, existing user base, or do you guys view this as a way to try to expand and capture additional market share and then what that market share is? Just like talk to me about how you view that. >> Yeah, I think as as digital assets becomes bigger and more institutionalized and you know has more lending behind it, I think what we're seeing is is especially on the institutional side. Like a client might,

you know, determine they want allocate a certain amount towards digital assets and and they might look to a a trusted manager to kind of help them with that allocation and that allocation might actually be broken out into, you know, they want they want a a little bit of the low cost beta, but they want they want some venture, they want some long only, maybe they want some market neutral, maybe they want some yield. And so being at the size and scale and also having that that comprehensive menu to be able to, you know, again, to your point, meet these clients where they're at, I think is is critical. I think initially it was just like, you know, how can I get a little bit of Bitcoin exposure to dip the toe in. And now the conversation's evolved to, you know, what what should a really kind of

thoughtful institutional grade strategy look like for this asset class and how should I think about, okay, if I'm doing X% for digital assets, how do we break down that X% and what buckets does it go into and how should I think about that? Um and so it's exciting that the conversations are evolving as the industry kind of evolves here. Wall Street is here. The White House is here. All of crypto is here. We're talking about Consensus, the world's longest running and most influential digital assets conference happening in [music] Miami May 5th through 7th. This is where 20,000 plus decision makers from 100 plus countries gather to shape the future of finance. 72% are director level or above representing over 4 trillion in crypto AUM. Three days, six stages, 500 plus speakers including

Michael Saylor, Brad Garlinghouse, Anatoly Yakovenko, and Eric Trump tackling the three forces driving trillions on chain, crypto at scale, institutional integration, and [music] agentic commerce. Deals get signed here, funds get raised here, the next cycle starts here. Register and save 20% with code Milk Road at consensus.coindesk.com. Yeah, I think that's really interesting, too, because um you know, what you highlighted here is sort of the the institutional grade robustness of the platform and the liquidity there, but then also still being able to give that granularity in in how you think about engaging with the asset class. That's interesting um and sort of like helps me understand how you view like the differentiator of Franklin Templeton.

Who do you view as your competitors? Do you feel like it's you know, a host of different players? Is it the Coinbases of the world, the hyper liquids of the world, or is it, you know, just other asset managers on Wall Street? How do you think about that in terms of situating Franklin Templeton in the market and, you know, differentiating it from other players? Yeah, I think you're always going to have people who want to do it yourself, you know, the do-it-yourselfers. Um and then you're going to have people who want a trusted advisor to, you know, help them with the the allocation and the strategy and even though there might be passive components to that allocation in addition to actively managed, I think, you know, having someone that they can trust, I think we're up to a, you know, 80-person, you know, kind of

full-time team just focused on digital assets, uh an institutional grade, you know, research and risk management that comes with that. So for a lot of people, the crypto part of the portfolio is still a a, you know, single-digit percentage, right? So they can't afford to be focused on it with 100% of their time. And and as as you know, if you're not focused on this space 100% of the time, um it you know, it can be quite challenging. And so that's where a trusted manager can really help with that. So in terms of, you know, competitors, you know, I think it's it's less of, say, you know, Coinbase or the exchanges where a lot of people are kind of doing it themselves, it's more, you know, kind of other large global asset managers that have really, you know, kind of emphasized growing their digital

asset practice as well. Okay, that that makes a lot of sense. What are the next steps from here? Obviously, you've made the acquisition, the rebrand is happening, you're clearly doing the podcast circuit to kind of get the word out, but what do you view as the next thing in line for for Franklin Templeton? Are you waiting for the the Clarity Act to to like come through to to make that decision? Just talk to me about what you view as the next steps for for Franklin here. Yeah, I think I think there's a lot to be done on the product innovation side. Um you know, I think as as, you know, we're starting to embrace this technology as it gets more lending. Again, you know, these these hacks they they do kind of set things back a a little bit or make you pause, but I think the general direction is is

again, these worlds are colliding. So how can we come up with interesting, you know, products and strategies that are really kind of meeting the clients' demands? And so I think that there's a lot to do on the innovation side. So you know, I think you'll see, you know, more announcements from us in terms of things we're rolling out, you know, things we're excited about. And and I think what's helpful, too, on, you know, being on the venture side is you get to see the innovation pipeline. And so, you know, we we see things that are coming down at the early stage. We It gives us an informed view of where this is all headed. You know, I know you've had Sandi on the show, as well, and, you know, right? So she sees this world where, you know, no longer do we have account views, right? It's all, you

know, all your assets are in your wallet. So in that world, you know, what is the role of an asset manager and, you know, and what does wealth management look like? And and so I think we're we're starting to really kind of envision that and figure out, you know, different things that we can do to help help support, um you know, the industry moving in this direction. Chris, we started this conversation with Bitcoin and you kind of gave us this optimistic bullish outlook here. If we do break out past 80K and you're welcome to punt on this question if you don't want to do price predictions, but do you guys have a target in mind for 2026? Cuz I've seen wild valuations from lots of asset managers um and I'm curious if you have a price target for 2026 that you're watching for for Bitcoin here.

>> Yeah, you know, and I will say we do a lot of evaluation work on on all these protocols and tokens and and and it's never a point estimate, right? Everything's kind of probability weighted, but if we're talking about our base case, you know, I think I think we think we're we're we're back, you know, above the 100K mark, which is kind of a key threshold, right? So, you know, I'm not one of the the million guys, you know, in 12 month, you know, type of forecast, but I I I see the path for us to kind of, you know, first reclaim the the 200-day, you know, and again, there's there's still going to be volatility and and chop, but but, you know, we are putting in at higher highs, higher lows, we're consolidating, um you know, Bitcoin's moving, you know, between different cohorts, you know,

when you look at the on-chain data, you know, I I think we're still in a bear now, but again, the the path to breaking, you know, through um and, you know, kind of getting back to triple digits um it is there. So that that is our base case. Chris Jensen, Franklin Templeton Digital Assets, thank you so much for coming on the Milk Road show, sharing some insight, wisdom, and some hopium with all of us. Where can we send people to find more of you and your work online? Sure, I think I think best place is on X, you know, FTDA_US. I guess right there. You know, and then we also have, if you just type in or search for Franklin Templeton digital asset research hub, that's for more long-form, you know, kind of papers and and that sort of thing. But but the X account is probably the best place. I

recommend the long-form papers if you haven't. They do great research. So check them out. Keep following Chris. Chris, thanks so much for being on the Milk Road show. Want insights on what's moving crypto markets [music] and how we're trading each event? Subscribe to our channel and join the Milk Road daily and pro newsletters and start investing [music] like the top 1%. This show is for educational purposes only. Nothing we say is financial advice. Investing is risky. Never invest more than you can afford to lose.