How stablecoins could trigger a $1 trillion shift in global banking

Transcript

more activity should mean high token price and so I think that means ETH outperforms now let's say for the foreseeable actually so we're at roughly 3% now is a is the price so 003 is the ETH BTC cross right I think that goes up this year to to 4% so if I've got 100K for Bitcoin I got 4K for Ethereum by the end of 2026 and then in my long-term forecast stable coins are one of the most boring assets on the market and yet they have also now become one of the most exciting and controversial financial innovations in years. But are they safe? Why are banks causing such a debate about them? And where are they going from here? Hello and welcome to

Milk Road Macro, the podcast that knows that when the national debt is over $39 trillion, all of our coins could use some help becoming stable. I'm your host, John Gillan. Today is Friday, March 20th, and we'll be releasing this episode on Tuesday the 24th. Today we are joined by Jeffrey Kendrick. Jeff is the global head of digital assets research at Standard Chartered Bank, where he launched the bank's crypto coverage back in 2020. He is a widely respected traditional assets known for datadriven forecasts, influencing institutional adoption, and providing thoughtful leadership on policy discussions. Jeff is going to break down the latest on Wall Street's journey to crypto adoption. So, if all that 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 Nexo. Earn interest, borrow, and trade crypto. Without further ado, welcome to Milk Road Macro. Jeff, how are you, sir? >> Very well, John. It's a pleasure to be here. >> It's a pleasure to have you on the show. I'm excited to talk to you today. Uh Jeeoff, I I wanted to start this conversation with something Standard Chartered is quite famous for, which is making some of the most bullish forecasts on Bitcoin. Um however, you published a piece back in February calling for Bitcoin to get down to 50K. And I'm curious how your outlook on Bitcoin stands today. Do you think we are going to see Bitcoin pull back down to 50K or do you think it's going to turn around and continue higher from here? So, at the time of the report that you're talking about, what I was

expecting to happen was uh ETF holders to have a final capitulation. So, we'd had the the big move lower down to 60K uh in BTC, which was obviously a bit ugly. Um, similar to past cycles, but, you know, pretty rapid move down. But actually, ETF holders hadn't sold that many. we'd only come off about 100,000 bitcoins in net ETF holdings from the from the high from before Christmas. So, I was anticipating ETF holders to have that final capitulation and then perhaps that would see us down to 50k. But because of what's happened in the Middle East uh in the last what are we three weeks in now um it feels like maybe we

have seen the low in reality. So, uh digital assets have traded pretty well through the Middle East. uh conflict and I suspect that's because um these types of things drive actual users to the asset class more broadly. Um and the the most recent and best prior example here was when Russia invaded Ukraine uh four years ago roughly. Um at the time you could see um large flows on Binance in uh rubles and also in Ukrainian uh currency. And today I can tell you that in the stable coin space, which I'm going to talk about quite a bit as well on this um podcast, in the stable coin

space, Ukraine flows account for 4% of all stable coins globally, which is a massive number compared to size of economy. So um the point here is that when difficult things happen which in trades been about banks and other but when you have conflicts as well uh sometimes payments rails uh need to use digital assets and so perhaps we're seeing something similar now in in the Middle East difficult to prove so far but the the fact that we've traded a lot better is interesting. So although I'm not yet ready to say we've definitely seen the low, um maybe that 60k low was the was the low that we're going to see um for this for this cycle, which would be fabulous.

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link is in the description. I'm super excited about what we built. >> Gotcha. So, you're saying that there is a possibility we go down to 50K, but the recent price action is starting to make you question maybe we have seen the bottom. Uh, and we'll have to kind of see how things play out from here. I'm curious on your thoughts on get more of your thoughts on Bitcoin's behavior in this recent, you know, crisis because a lot of people have always thought of Bitcoin as a risk asset and risk assets largely are selling off right now, right? We're seeing a pullback in equities. Gold has pulled back a lot and yet Bitcoin has, as you said, performed quite well. Do you think that this is uh evidence that the market is starting to treat Bitcoin differently or is it just you know out of necessity certain people

in the world are are treating it differently but the overall market hasn't changed it thesis? Give me your thoughts on this here. >> I have thoughts in both directions. So the the less positive crypto story would be if you know we already had the big sell-off uh before the Middle East conflict started a few weeks ago and therefore there was really no positioning to unwind, right? So um even I mean stocks have traded pretty well anyway, but stocks have come a bit lower. the price action like we've seen in gold in the last week or so tells me that where there's the most positioning like gold has had you know obviously massive run higher in the last 12 months or so. So where there's max positioning you do get unwinds and so uh perhaps the

fact that there was very very little uh at least short data positioning in Bitcoin meant that there was there there were no sellers or no for sellers if you like. So that's the less constructive um side of the story. the the more constructive side of the story would be to say well actually users on the ground are now more attracted to the asset class because it's a way to get money moving be it in Bitcoin or stable coins so just within blockchain space more broadly um and I suspect that's more likely actually so since the crisis has um begun there's been announcements out of other countries in let's call them western Asia um so Kazakhstan and others have made announcements of getting more

involved in digital assets either from their sovereign wealth funds or just becoming more more cry more crypto proactive and so maybe that's on the back of you know things like what's happening now in Iran remind others that actually there is another solution for payments rails that are outside of the traditional space and so actually we are starting to get I suspect at the margin more users um and so that would be quite constructive if that continues to play out over the next little Gotcha. Okay. So, there's there's multiple things, multiple thesis playing out in the markets right now. And like you said, we'll have to kind of see how that evolves from here. Uh I'm curious how this conflict in Iran and the subsequent oil shock that we've seen sort of shifts your overall outlook for for Bitcoin in

2026 because I think a lot of people had you know like you know one playbook in mind and you know like you said you've kind of already revised your thoughts from February. Um, but going forward here, if we do see persistent higher prices in oil, does that change your thoughts on how Bitcoin behaves in the market in 2026? >> It's probably not a massive driver. Um, so I'm sticking with 100K forecasts for Bitcoin by the end of this year. So, not a new alltime high, but getting back to better levels from where we are today, right? So, that'll be sort of 50% up almost from from where we are. Um, the all price story is interesting. it. So far, central banks globally are viewing the higher oil price as being inflationary. So, I pushing up petrol

prices at the pump and therefore markets are pricing out rate cuts or pricing in rate hikes uh in a number of places. We had a rate hike in Australia the other day. It's it's quite probable we'll have one in um from the ECB in the next couple of meetings as well. So, central banks are moving in that direction. Um, which is interesting because central banks can view higher oil prices in one of two ways. Like if this were more extreme, they'd be afraid of the negative growth implications. Um, of which there obviously will be some depending on how long this goes on for.

So at some stage, you might see those rate uh hikes taken out again. Um, if this becomes more extreme. So, we're sort of stuck in this world now where higher oil prices equals rate hikes today, which traditionally would be slightly negative for risk assets. Um, and so obviously stocks have come off a little bit on the back of that narrative, but uh cryptos traded pretty well. I suspect digital assets are sort of looking through this because you could argue medium-term actually, you know what, if you hike now on the back of higher short-term inflation, you'll be cutting later. um and and so markets in digital assets are kind of looking through it which I think is reasonable at the moment. So for me other drivers are probably more important like ETF

buyers have come back in the last few weeks which has been great. Um and perhaps this thesis about more medium-term users on the back of the conflict probably more important than just the higher all price and implications that that has for the Fed and others. >> Gotcha. So, the it goes into the calculus, but you're saying that there are other factors that are more important and you're paying more attention to those. Um, yeah, I think we're going to have to see how it plays out because I think there's a lot of uncertainty on, you know, the lingering impacts and how bad this oil shock gets. Um, but yeah, going to keep paying attention there. I wanted to ask you, um, you know, you said stable coins is something we're going to talk more about. It is something I've wanted to talk to you about for a while. Uh, the

Genius Act has passed, uh, and it's made stable coins legal in the United States. uh yet banks are still fighting this and trying to get rid of yield unstable coins. Uh you're head of crypto research for a very large bank. Uh how are you thinking about this controversy between you know the crypto industry on stable coin yields and banks. What resolution would you like to see here? >> Sure. So it's it's very obvious that stable coins are a threat to banks, right? And so um in a number of ways actually uh in emer in emerging markets it's clear that money will leave local bank deposits to go into stable coins that are dollar back because stable coins at a dollar backed easy to get into now via VPNs or other and they're super safe right so if you're in an

emerging market that has either high inflation or political issues going on today it's very clear that it would be wise to put some of your cash into a dollar-based u stable coin Right. So money will leave banks in emerging markets. Now in the US and developed markets more broadly it's marginally more complicated because banks are you know outside of 2008 banks are very very trustworthy. Um and so your money is pretty safe in almost all of those scenarios. But at the margin I suspect we also see some money leave uh local banks even in the US and go into stable coins. And that's where the the fear of yield either direct yield which Genius

Act outlaws or indirect yield which users can get now either via Coinbase for example or um putting coins into DeFi right so there's this indirect yield debate which is because banks even in the US are afraid that there'll be some outflows from local bank accounts local uh deposits um accounts and they will go into stable coins and coincidentally the The Federal Reserve uh wrote a research paper on this exact topic in 2022 and they advised against the choice of backing that was decided upon in the Genius Act uh in the middle of last year because they argued that actually stable coins would be safer than bank accounts. And this is exactly

the debate that's coming up uh today with the discussion between the Bank of America CEO and Coinbase CEO six weeks or so ago now. So um it's interesting that you know even the the the Fed worked out that this could be controversial. Um for me if you had yield or no yield you will get outflows. It'll just be quicker if you had uh direct yield. And even in the in the indirect yield space I suspect we go there. And then if you fast forward a couple of years from now and you think that the Fed has cut rates a few times, which is in my mind most likely um then actually the yield that you're giving up, so the opportunity cost is also decreasing. So the fact is there's no yield directly will will become slightly

less relevant. >> Gotcha. Okay. So what what do you think happens in terms of a resolution here? And I'm Well, let me ask you this question a different way. Senator Cynthia Lumis of Wyoming, who's been a longtime champion of digital assets, said this week, I think a couple days ago, um that a compromise is emerging here and that stable coins and and banks have sort of reached an agreement of some kind. Um and the the idea is to try to get a resolution on this so they can pass the Clarity Act. What compromise are you expecting to come out of these conversations? And how important is this compromise to passing the Clarity Act and and getting this crypto legislation through Congress? Yeah, the fir um first thing I'd say there is it would be fantastic if we get clarity act passed.

Um I know we all tend to look at poly market and calc these days for probabilities on things and that's been sort of 50/50 for clarity act to pass in the whole of 2026. So look, if if those odds move higher, I'll be happy because I think getting clarity act for the asset class would be would be fantastic. But unfortunately, this point of yield on stable coins has been wrapped up. Um so it's like an update to Genius Act if you like that got wrapped up in Clarity Act getting passed which is a shame but nevertheless um I suspect we will continue in the space of no direct yield um in stable coins which is I think is actually fine um but probably the

indirect yield will be allowed to continue. I think that's the most likely. So let's say what happens today is most likely to continue. um and perhaps banks will also um be allowed to participate more directly in the asset class which would be wonderful. Mostly those regulations are outside the US. So that's for sort of like BIS style. But if US regulators or other could convince um global regulators that regulate banks like the BIS to allow banks to participate more broadly that'll be a great outcome. Um and so hopefully we can head in that direction. Um but short short dated maybe it's like no change um in what's allowed on yield at the moment in the stables.

>> Okay. So you're kind of expecting the status quo to continue. I'm curious to hear um what this compromise they've reached is. Um and yeah, I think that you know whatever whatever they come up with now. I do think that this will probably continue to evolve over time. So we'll have to kind of continue paying attention there. Um you know you you mentioned the Clarity Act would be very beneficial. I kind of want to hear your thoughts on that. But I'll ask that tying to another thing uh which is that the c uh the SEC released a statement this week clarifying the application of federal securities laws to crypto assets was the title of the the statement. Um and in it they define a digital security commodity collectibles tools and stable coins. Uh talk to me about the Clarity Act and this statement from the SEC. How

important is this regulatory clarity? Do you think this could be a catalyst to push Bitcoin back to new all-time highs? >> For sure. So um just to explain I guess big picture here. So, Clarity Act was supposed to so forgetting about the stable coin yield point for a sec, which unfortunately just got mixed up in it, but Clarity Act was supposed to say which uh organization SEC and CFTC uh owned what from a regulatory perspective in digital asset space. And the simple version of the story is that CFTC should own stuff that is more commodity like so. So, actually most of the layer ones fall into that category. In fact, probably all of them do. and those that are more securities like should fall into SEC guidance. Some things slip

through the cracks there like NFTTS and actually stable coins for example. But the the bulk of crypto assets um you should get ownership from CFTC and and SEC. Now the point of the um what SEC has u put out recently and also what the CFTC has been saying publicly is that even if we didn't get clarity act in the near term the SEC and CFTC going to just agree between themselves who owns what right so instead of having uh the passage of law uh in Congress you'll have those two agencies say actually we're adults let's just decide between us the very logical outcome which would be yeah basically identical to what clarity act was going to say in those.

So hence the um SEC defining digital securities and other which came out recently. So I'm um very much emboldened by that like it would be much better uh to get clarity act because that means it's written in law and it's let's say impossible to reverse if and when we get a change in political political outcome in the US which you know after November could be more difficult but perhaps in three years from now who knows right so um it would be better to get legislation but if the SEC and CFTC can be pragmatic maybe we get to the same place anyway which um which would be great and I suspect each of those points are important for tradi and

institutionalization of the asset class and it's that really which is going to push Bitcoin and other assets to the next level. Yeah. So it was the you know two years ago ETFs that pushed us from 40k to 100k uh in 2024. Um and it's really that institutionalization. So there's this huge pile of cash which is still coming relatively slow moving and I spend most of my time uh educating those in trady about the asset class and they're very very interested but knowledge is not yet high right so there's still lots of new users uh to come and therefore a lot more cash to come uh to the asset class in the next few years which will help push those prices higher of the tokens. I want to

ask you more about this big pile of cash and institutionalization of the asset class, but I want to ask one more question on stable coins before we move on. Um, you said recently that you have estimated that nearly a trillion dollars of capital from emerging markets could flow into the US dollar through these stable coin assets. You know, as we've gotten these these pieces of legislation through Congress, as these things have gotten uh more legitimized, and as you said, even the Federal Reserve is like, "Hey, stable coins are even safer than bank accounts." What are the second order effects in the market of this? because it's it's a a net boon for the dollar and for the US Treasury. Um but there's going to be a lot of impact on the rest of the world. Talk to me about how that plays out and and what you see

that that looking like as we go forward here. >> Yeah, for sure. So today there's um about $300 billion of stable coins outstanding and I estimate that roughly 2/3 of those so 200 billion uh from emerging market savings use case and although it's really uh impossible to prove exactly that that's the case because wallets don't have addresses you can square a few facts together so you can see where there's been geopolitical events um globally in the Middle East or Russia, Ukraine or or others, there's been an uptick in total number of stable coins outstanding. Um, and when you dig into the detail of wallets that hold

stable coins, you can also see that about twothirds of stable coins are held in very large wallets. So more than 10 million, more than a million, more than half a million dollars. So for me, that's more likely savings than transaction, right? And also those coins turn over very infrequently. So I estimate about one once every 10 days those coins that are in that 2/3. So they look to me like emerging market savings which in previous cycles would have gone into buying like property in London for example like a as a way to park cash to get it back later on. So the fact there's no yield is mostly irrelevant to that 2/3. It's an important point when you think about the

implications of stable coins as to what the makeup is today. So if twothirds twothirds of EM savings use case then that has lots of knock-on effects. So for emerging market banks if this continues in size and I think you'll get another trillion dollars as you mentioned a moment ago come from this space in the next few years and that'll play out by the super wealthy that have large wallets today of holding sort of stable coins will tell their friends over golf or drinks on the weekend or what how you know how this goes. So it sort of filters through and then there'll be another very large bucket of people who I think about as like Argentinian taxi driver types that are trying to avoid high inflation in their domestic economies and they've been

putting money into dollars for decades. They're just now using stable coins instead because it's easier, right? So there's and there's a lot of them there's probably a billion globally that would like to do that. And so again the technology should filter through individuals and companies in those um in those locations. So for me that adds up to another trillion dollars in the next few years. And for US Treasury and Scott Bessant this is a fabulous story because this is all new money that because of Genius Act needs to be essentially backed by T bill reserves. Right? So this is another trillion dollars worth of tea bills that will be purchased by stable coin issuers in the next few years in my estimation. And so because of that at some point the treasury in

the US will have to issue more T bills and therefore less debt out the curve. The sizing here is if it was a trillion dollar. So if I'm right then that's the same amount of the pre-planned 30-year options over the next three years. So in theory they could do lots of T bills and zero30 your debt. Uh that will help mortgage rates come down in the US is where I'm going with this. Right. So there's a lower mortgage rate a lower backend US yield uh story which can come on the back of this as well as probably dollar positive flows because money will come out of emerging markets into into dollar assets. Um on the EM side it's possible you will see bank runs become

significant. So money comes out of local banks, bank balance sheets shrink, they can then buy less local currency debt, the banks themselves, and you could get currency crisis actually. So you could get economies become dollarized from the ground up in emerging markets on in in the next few years. So dollar positive, US yield probably lower, probably quite negative for some emerging markets that have either high inflation or weak rules of law, etc. So there's those um countries could be a little challenge for the next little while.

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>> Yeah, I appreciate you laying that out because I think a lot of people don't really think about some of these impacts of of stable coins and the demand for US dollars being sort of unlocked globally. Um, so we'll we'll see how that plays out there. But I think that there's uh a lot of benefits for the United States and our markets, but some risks to others. Um, I want to ask about the the subject you brought up, which is the institutionalization of digital assets of crypto, how that's coming to Wall Street, and just, you know, maybe just start us out like what are those conversations like on your end? Where are you seeing attention and and what's that educational process been like?

>> Yeah, for sure. So um on the stable coin side first um it's fair to say that the interest has gone exponential the last 12 months. Um if I can use demand for my personal time um as as a lead as a lead indicator on this. So I spend almost all my time now um traveling globally and quite frankly talking to uh corporate treasurers about stable coins. So um particularly in the US actually so the corporate treasurer type uh in a company that has lots of let's say a diverse global network of money coming in. Yeah.

So they're either like global tech firms that are in lots of places or you know almost every country. They're global distribution networks. They're commodity uh producers etc. that have operations in lots of countries. Yeah. So particularly where those countries are, let's say places it's it's it's more difficult to get money in and out of. So although in developed markets, we're used to being able to send money to each other almost instantaneous using traditional payments rails, if you have a bank account in the US and you want to send money to Beckistan to make up a random place because you have a business there, it probably takes a week and a half for that money to arrive. And like so it's both the amount of time and also the volatility of time. So it could be

one week, could be three weeks um that corporate treasurers care about. So because of that, they've had to have stockpiles of cash in all these locations in order to run local businesses, right? But now with stable coins, they're all turning around and saying, "Hey, Jeff, we see you've done some research on stable coins. That's interesting. We see Genius Act has passed, so this looks like this must be safe." And we now see that a bank like Standard Charter can stand in the middle and help us actually get this done in in in a practical sense as well. So please tell us how to do this. And they're all asking those questions because they'll be able to make their entire organization more capital efficient. So they'll be able to run down those stock piles of cash in asan and equivalent places and then use stable coins

instead. So they're super interested in that. So I'm basically talking to every um corporate treasury style uh in the US for those like large or or midsize um US corporates. So that's where I'm spending most of my time. Interestingly the whole debate around let's say um buying the assets which was really I guess where we were in 2024 after the ETFs uh were launched in the US that's gone away a little bit. it's still in the background and I suspect on that side um once we get greater tokenization of things so obviously stable coins are tokenized cash but other things are going to be tokenized as well I suspect you'll get

uh another flurry on that right so I'm thinking there about tokenization of u entire funds uh equity markets etc and you probably get another pickup uh on the back of that on the institutional side but today it's almost entirely uh stable coin related Are you seeing a lot of enthusiasm around this idea of tokenization? Because real world assets have been exploding in in volume on chain and just like you said, stable coins are really just a tokenized dollar and this big push from tokenization has come from the SEC, the CFTC, um the New York Stock Exchange, leaders like Black Rockck. Uh so like walk me through what you're seeing there. What do you think is going to be the next thing that sort of catches on and brings this big wave of

capital in terms of tokenization? >> Yeah, for sure. So if stable coins do do this, which I like to draw 45 degree lines, but obviously it never happens in the real world, right? But let's just say it did. Let's say we went from 300 to two trillion in a straight line in the next few years. What that's going to do for tokenization is um corporate treasurers, who again I spend all my time speaking to, imagine if you're a corporate treasurer today and you had like a million dollars offchain. Yeah. So you'd have some of that. Let's say 10% would be in cash because you need to spend some money to run your company and 90% would be in a money market fund offchain either directly or via bank like ours quite frankly. So, because you want to get some return on your excess cash, right? Tomorrow, if you want to

get access to stable coins because of their 247 instantaneous, near-free, etc. benefits, um, you want to take all the million dollars onchain because you don't want to go out of stable coins and back into idiotic fiat, which is ridiculously slow by comparison. Rather, you'd like to have all of your off-chain money market funds onchain as well. And so I think that will drive a massive demand for onchain money market funds like Black Rockck Spittle and the Benji project as well. So there's a few of them so far but it's very very small about $10 billion only in that bucket today. Um, in terms of the size, if you even think that only 10% of all transactions will go into stable coins

in the next few years, which I think is quite a low ball number, then you probably with this logic need to have 10% of all tokenized money market funds on chain as well. And in the US, there's 7.5 trillion dollars of money market funds offchain. So 10% of that is 750 billion. And today it's 10. Yeah. So I think we go from 10 to 750 in tokenized money market funds by the end of 2028 on the back of that and then other things will get dragged on chain as well. So it's been a lot of chat about equities um you know there's and a few other projects which have been successful.

There's NASDAQ obviously teaming up with Kraken recently to do some tokenized equities as well. And I think where we end up going with that is that once you have enough liquidity in tokenized stocks that trade on weekends, then funds will be forced to use those. Right? If you're an asset manager today and you know 5:00 p.m. Friday New York, you say, "Okay, markets are all closed and futures are closed. See you guys on Monday." But if there's tomorrow something super liquid that runs on the weekend and there's small versions of this already, but once you have enough liquidity, those guys will be working weekends, right? It'll be impossible from a risk and compliance perspective to ignore tokenized stuff. And so then everything gets dragged on chain. So if

stable coins do that, tokenized money market funds kind of behind saying equities probably go slow and then go really fast at some point. And so you can get a massive amount there. So I've actually also forecast that tokenized other things get to $2 trillion as well by the end of 2028. And so that's off about $40 billion today which is a current 50x in 3 years. And the only feedback I get on that number is on being too conservative. I it's too low not too high which in this seat is fabulous. So >> Right. Okay. Well, it sounds like you're saying you're very calm, Jeff, and you're very like matter of fact about these things, but you're making some very bullish statements here. Um, so you, you know, you talked about

tokenized dollars exploding on chain and then, uh, money market funds, equities. I'm curious about where this leads in terms of DeFi adoption because we saw Black Rockck announce a partnership with Uniswap. Their Bidden or Biddle fund is now um, available on Uniswap. Um, I think there was also an announcement between Apollo and Morpho. So, but talk to me about Wall Street's appetite for decentralized finance and how long do you think it takes before this migration on chain starts to look like an adoption of DeFi? >> Yeah, for sure. So, it would be very handy if we had clarity act for this stuff. That would just make it easier.

So, let's just assume clarity act gets it done at some stage and you know poly markets 50/50 is wrong and actually we get 100% clarity act this year which would be great. Then I think in that case it becomes easier for tradi to start thinking about uh more interesting things like defi and I suspect where it goes is when you end up having um so today if I go back one step banks and tradfi sort of speak this direction is the way I think about it and defi speaks this way. So for them to match in the middle is is actually quite difficult today to be fair. Um but there there is desire on both sides now. So uh crypto can see that like there's money to be had from uh tradfi and tradfi can see actually if we don't get involved then

our core business is in trouble right so I suspect we do end up meeting in the middle and particularly when you overlay AI uh style solutions in a gentic space you'll end up with a solution in your phone yeah which will be basically an app that'll be built on blockchain rails it'll have tokenized everything in there and then you'll be able to scrape excess cash into a DeFi solution like Ave or Moro or Compound like so you mentioned a couple of those before and you get some returns on those as well like 5% most of those offered today on excess cash um perhaps you scrape those that cash overnight right so there's no point if you're sleeping eight hours to not get

yield on your money right you may as well scrape all your cash into those and so I'd say we'll end up with solutions basically where trad and DeFi come together well um and kind of solve a number of those things and it will optimize returns for everybody which will be fantastic. So there's a huge financial fairness and financial inclusion stuff that I think we circle back to from DeFi. Um, and actually the average user wouldn't have a clue that the new app in their phone that gives them 5% um in o like overnight yield and it'll automatically scrape 10 10 p.m. to 7 a.m. or whatever you want to set it at, right? But most people won't know where it's coming from, but you'll get that style of stuff, I think, in the

next few years. >> Gotcha. So, you're going to see an advancement of products and of quality, and just like you said, there going to be advantageous outcomes for all stakeholders in the process. Um, yeah, but I think it's it's interesting to see them speaking different languages but still realizing they need to come together and and seeing what that looks like as that starts to take shape is going to be really exciting. Um, Jeeoff, I want to end with a question here on Ethereum. Ethereum obviously has been one of the places where a lot of this innovation has taken place around stable coins, decentralized finance, tokenization, real world assets. A lot of this either started or the bulk of it is still happening on Ethereum. Uh, back in January, you published a report called Ethereum Outperformance Expected.

Since then, obviously, Ethereum has sort of struggled here on price action. Uh, talk to me about Ethereum. What are you expecting from ETH's price in 2026? And what's your outlook for, you know, the the digital asset ecosystem outside of just Bitcoin? >> Yeah, for sure. So, uh, the interesting part here for Ethereum is as trady gets involved, Tradfy is, um, okay to build stuff on Ethereum. So it's fair to say in banks um since 2008 risk and compliance type functions have the power in banks right so individuals if they were to say actually we're going to build something now in blockchain space directly it'll be very safe to say I'm going to build on Ethereum layer one right because it's never gone down so I

think a lot of this stuff in its first instance happens on Ethereum layer one so think about how black rockck rolled out be for example right um all on layer ETH at the start and then you do avalanche and a few others later on a couple of layer twos right so which I think is a very logical playbook for how trady more broadly we'll approach this buildout in the next few years so if you assume that more activity in the ecosystem means higher uh token price which I think is correct um today I find the best measure is uh fees paid on the applications or protocols that are built on the Ethereum network and then you compare those against market cap. That's quite a good measure um for listeners to

have a look at as well after. But more activity should mean high token price. And so I think that means ETH outperforms now. Let's say for the foreseeable actually. So we're at roughly 3% now is a is the price. So 0.03 um is the uh ETH BTC cross, right? I think that goes up this year to uh to 4%. So, if I've got 100K for Bitcoin, I got 4K for Ethereum by the end of 2026. And then in my long-term forecast, just to throw that out there as well, I've got 500,000 Bitcoin by 2030 and 40,000 Ethereum by 2030. So a massive outperformance obviously a massive um

absolute potential upside from here like a what are we now 20x roughly by the end of 2030 but a huge out performance as well so um and it's because of all that use all the use cases that we're talking about on this will almost all happen on Ethereum in the first chunk later on it could go to other chains for sure but the first phase was more likely to be Ethereum based >> jeeoff you know your job very Well, giving those price predictions and the bullish price predictions, especially at the end of the episode, I think is a great place to end. Um, but I just want to thank you so much for being on Milk Road Macro. I really appreciate you coming on, sharing this wisdom and laying out a lot of these things from your perspective because, um, a lot of people are, uh, you know, without this

kind of insider information and getting your views on this is really helpful, I think. Uh, where can we send people to find more of you and your work online? >> Absolutely. So, either jump on the standard charted website or you can find me on LinkedIn. Um, everyone can do that. Please reach out with questions and um you know as as new topics come up obviously throw me some ideas and I'll be um very keen to share some insights. >> Jeff Kendrick outperformance expected. Thanks so much for being on Milk Road Macro. >> Pleasure. >> Thank you all for joining us. I hope you all learned something today. So until next time, stay safe, stay educated, stay bullish, and we will see you all on the next episode of Milk Road Macro.

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