Tether co-founder William Quigley on the Q4 2024 crypto outlook

Transcript

GM good morning welcome to the milroad show The Daily crypto show that's as enlightening as finally understanding the offside rule in soccer I'm not sure I even understand it I'm your host Jay Hamilton and today we're joined by William Quigley co-founder of tether largest stable coin in the world and wax and involved in many other projects this guy is an OG in the space and his brain is incredible in today's episode we're going to discuss how William views the current state of the market he's going to break down his expectations for Q4 and q1 2025 and you guys aren't going to believe his predictions on where he thinks Bitcoin and ethereum are going in the next two quarters you're really

going to watch out for that also at the end of the episode William breaks down the most important dates that he has circled in his calendar and what his expectations are for really December what he needs to see by December in how he allocates his portfolio so that he knows that we're on track or off track this episode is unbelievable you're really going to want to tune into it also are you guys headed to permission list next week the milroad team is and if you're there we want to meet you so comment and let us know if you're there if you're not going to be there but you want to go there we got a 30% off discount code for you guys milk 30 check the link in the show notes to sign up today also are you subscribed to our YouTube channel if you're not help us

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account safe this exchanges setting the standard for compliance and Innovation so you can trade with confidence head over to gemini.com slm milroad and start trading today to earn your $15 in Bitcoin sign up now and get ready to join the trading fund William welcome back to the milk Road Show ah good I'm glad to be back it's great to have you we talked about a month or two ago about the founding story of tether and we focused on stable coins and why stable coins are such a massive Innovation for the world and for the financial system uh today we're going to talk more about your thoughts on the markets which is really exciting to get your thoughts because not only did you found tether

but you're also a very active investor you also have a fund that you manage so you have a well-rounded perspective and a lot to bring what do you think about the current state of the market and when you say that you're referring to crypto to yes I mean you could go broader if you want I'm I'm I'm down to go broader they're interrelated but I would say just at a brief high level um you know we've just entered Q4 this is um you know October November is roughly five six months post the havening the Bitcoin havening this is when the show starts this is it this is what we've been waiting for for four years

uh roughly six months post having uh is when traditionally like the last having has when the market in crypto has started to move up and so um October November we're in we're in October now is when we should start seeing more sustained rallies in Bitcoin and Bitcoin will lead right so Bitcoin always leads these rallies and then the altcoin come a few months after so if the Bitcoin rally actually begins this quarter then the altcoin rally will start sometime in q1 maybe the end of q1 2025 and um this is it's a little Nuance

what I'm saying so I want to make it clear I don't know what's going to happen but what I am saying is if past patterns persist then that's what we're going to see Bitcoin start to Rally all tokens nearly all with the exception of stable tokens are um correlated to bitcoin and so uh Bitcoin goes first then the rest uh no rally is exactly like the last one but uh we've always seen a rally roughly six months or so after the uh Bitcoin happing uh the one caveat I would put in there uh that could affect timing is

that we may be entering a recession in Q4 of 2024 we've never had that happen as a Bitcoin rally was about to take off if that were to happen and it let's say it wasn't a terribly deep recession it's more like a 90 you know 91 recession then you're looking at maybe a six-month delay in which case it would be more like mid 2025 where that uh Bitcoin haviing uh bull market would start to emerge but I don't know I don't know if that's going to if there will be a recession if there

is um will it affect Bitcoin but uh it does look like from a greater Market perspective that in the last three years or so the what happens in the traditional globally traded financial markets has been a bigger Factor on where Bitcoin goes and we see this when there's a selloff in in the stock markets because of fears of something you know inflation or slow down in the economy Bitcoin takes a big hit and and all the other you know the other altcoins as well which is

in some ways puzzling because uh crypto is supposed to be uncorrelated to the traditional markets it's not supposed to be affected by things like interest rates but the reality is if people on Wall Street are selling off their you know quote risky part of their portfolio and Bitcoin is in there then it's going to be affected like any other uh kind of risk off asset and um I like in Bitcoin in the financial markets maybe to the way they think about IPO or recently ipoed companies those things are not attractive when markets get cold uh you

know big investors don't want to hold those types of companies they want more defensive companies so uh uh I'd like their that to be different I'd like them to think about Bitcoin different but right now that's the bucket they put Bitcoin in let's stick with Bitcoin just for a minute uh what do you expect to see from Bitcoin when we do have this next bll Market whether it be this quarter or six months from now sure uh looking at past patterns I have a very precise expectation of what I think Bitcoin should do I knew you would I knew you would not as maybe as uh as uh aggressive as the plan b right I'm sure

you you follow what he reports uh the eternal optimist but um so I'm going to give you rough numbers the first happening um Bitcoin went up about 50x from where it began at the beginning uh right at the havening to its peak in that cycle the next havening it went up about 20x from about a th000 to 20,000 that would have been you know the 2017 rally the next happening it went up about 10x it was about 6,500 and it went to like 70,000 right and that was the 2020 rally um so uh you know

50 uh 201 10 if you kind of Follow that you might think five right half again so we uh Bitcoin was roughly 60,000 65 or whatever let's just say 60,000 so at the habing five times that would be 300,000 so it would be reasonable if you just applied prior movement and said that same pattern is going to apply this time it would be reasonable to say Bitcoin in the peak of this rally it should hit roughly 300,000 now maybe it's 250 maybe it's 350 um and then what about every

everything else right so uh Bitcoin leads but Bitcoin also you know trillion 20000 billion market cap it it's it's not going up 20x right so uh that's what we look to other tokens to do um the Curious one for me is ethereum because it's you know number two in market cap it's U I didn't look today but what 300 billion or so something like that market cap um uh ethereum has done uh multiples of whatever Bitcoin has done right so um uh the last rally depending on when you

what you what day you Peg uh but you know it was a couple hundred dolls it went up to almost $5,000 I think it was 4,800 uh you know so you were getting like whatever 25x m um so uh versus the 10x or Bitcoin but let's just say ethereum uh not only uh uh should it sort of it needs to do double whatever Bitcoin does and and when I say that here's what I mean uh ethereum is a riskier asset and uh you know brand isn't as well known even though a lot of

people in crypto think how could you not know ethereum but you know compared to bitcoin it's it's much less well-known and it's much more volatile well if something is a lot more volatile then you need to be paid more to hold it which means you need more upside the only reason people buy I recent IPO shares is because they think that is a lot more upside than you know Microsoft and if it doesn't then you're accepting far greater risk in terms of price volatility for not enough upside so this is why I say ethereum really

needs to outperform so ethereum would need to do uh let's say double so instead of 5x 10x and ethereum was like I I think it was like $2,000 or so 2,200 at the uh at the havening in uh in April so that would be 20,000 M and that seem seems like holy that's that can't be but you know I remember when it was 30 cents I remember when it was 15 cents I remember when it was 20 bucks um and so it could but in in the first uh uh Market you know ethereum went out in mid July

2015 and then it rose up as part of the um uh the 2017 bull Market um you know it went from call it $20 to uh several thousand uh and so uh I actually was like 1,400 I think it peaked but it that's a big run and um uh these things are always hard to imagine before they happen you know lots of people couldn't imagine a a Semiconductor Company with kind of one main product uh Nvidia being worth three trillion so it can happen but uh I would be uh I would be a little worried if let's say you know Midway

through the rally sometime in 2025 ethereum hasn't uh performed uh some uh substantial amount more in terms of multiple rise than Bitcoin because if it doesn't um you have to rethink whether or not you want to hold on to that for the long term and uh ethereum is a very loved token by many uh ogs and uh it's still very important to the ecosystem particularly in defi defi of course is one of the reasons why it it exploded in in 2020 in 2021 um what is the Catalyst this time

I'm not as sure like a lot of people talk about meme coins being maybe the equivalent of the defi uh boost yeah we and then we had nfts and all that yeah uh but that's transitioned to some other chains they all move to salana yeah so uh you know ethereum is it's shocking to me but because the reason I launched wax in 2017 was because it was obvious that uh ethereum could not scale and uh or and it wouldn't be able to scale affordably for people who were using it but it wasn't until like

2021 where the uh mainstream crypto people were like oh ethereum has a scale problem um you know there's not a lot of deep thinking in a lot of crypto uh Corners uh about what can and can happen salana has many issues itself that make it difficult to scale and uh it's doing it's doing much better certainly in the affordability side of it right even your rank and file like barely familiar with crypto people during the nft bubble realized that oh it cost a lot when that network is busy on ethereum to transfer an nft there

should be something better cheaper you know faster um and so but that anytime you uh are looking at whether a a company or traded asset's going to go up whether it's a commodity like copper or a company like like Microsoft or Google or Nvidia you have to say Okay what new narrative is going to propel it higher now and and this I have found over many decades of investing it's not intuitive right and I it it's good to kind of be explicit about things because um uh a lot of people in who are Traders think a

certain way and they're correct to think it but the but the regular Market doesn't realize it like the fact that nobody cares how much money or company has made in the past if you are going to make no more money in the future your company is worth zero that's not necessarily intuitive you know you you don't get good credit for being a good performer in the past and so we need new narratives the Bitcoin narrative uh is pretty much the old narrative and that probably still serves it because it's thought of as the crypto that everybody's going to adopt someday and mistakenly many people think it's going to be adopted as a payment mechanism

it's gonna be which is not and it should be you know that'll be stable coins St coins um the the narrative in 2024 for uh Bitcoin which I find amusing is it's Layer Two right uh and look at all the stuff you can do I I I'm always amused by Bitcoin Maxis because they tout things that were developed like five years before or 10 years earlier right like when we had ordinals wow you can do an nft on bitcoin so what like why would you even want to um and uh uh but Bitcoin does get sort of most of

the spotlight and you can see this in um if we want to think of of ETFs as a proxy for popularity well uh Bitcoin ETFs are I haven't looked today but let's say roughly they have 75 billion in tradable assets right roughly and doing like it was a billion but right now it's probably 6 700 million in Daily volume right if you were to say okay how should ethereum do what you would probably start with was well it's one quarter the size yeah so instead of we'll say 80 billion uh instead of being an 80 billion in market cap it's 20 billion

and instead of 600 million in volume it's going to be 25% 150 million in Daily volume that's not the case though no ethereum is at a six bli ion ethereum ETF 6 billion yeah um versus 75 billion in assets and the daily volume's 50 million yeah way which is kind of equivalent to if you throw in future market trading what a typical top 10 traded token would do in a kind of slow market so that says to me that etherum is is um and this would go for all alt

after that being even less welln there's there's not much uh the the general public markets don't know a lot about anything other than crypto or other than Bitcoin so we need um uh the good news is that means that there's they're open to a new uh narrative because maybe they don't know about these other chains but it's the impact of that would be diffused over a lot of other tokens as as well M mhm um yeah so are you concerned about the ethereum ETF and obviously one of the big reasons the ethereum ETF has struggled is because of the grayscale eth E trust and the outflows that have

happened since the ETF launched and looking right now about three billion in outflows as a result of that which has essentially made the EF negative on the net because of all those outflows so the eth ETF is really underperformed from what a lot of us expected but at the same time it launched at a time in the market when nobody was looking to go risk on do you are you concerned um I wouldn't say I'm concerned in in like a ow dump ethereum I would just say the uh the story as to why uh you would want to hold ethereum versus

Bitcoin or hold crypto and maybe hold some Bitcoin and some ethereum uh uh versus everything in the S&P that story is not a um well understood it's not well expressed I mean remember in the public markets most people rely on two things they rely on the day-to-day news which is why uh you know every average Joe now has bought you know on a Robin Hood has bought Nvidia MH I think a terrible idea but whatever uh because they heard about it and they don't understand this critical thing about public investing

which is once the narrative is out the opportunity has passed what you want to do is get into something where it's been neglected but you see a change in fortunes that's an amazing thing or something that's not been neglected it's just been ATT and assaulted as a loser as a dead asset but you see a heartbeat right and you're like well wait a minute maybe maybe this is coming back those are cases where you do more than 10x right but investing in something because it's popular I only know this from my own experience in life has uh generally doesn't turn out very well yeah well and

that's that's exactly what is is the position for ethereum right now been slammed they have lost the narrative they don't have a clear tagline like Bitcoin has digital gold salana has decentralized NASDAQ ethereum's never really had that tagline to make it easy to understand but the fundamentals haven't changed the fundamentals are stronger than ever so and they are scaling so I think it is it is in a position where you would say hey everything still looks the same nothing has changed about the fund fundamentals but they just haven't had the price action that Bitcoin and salana have had in this cycle so far if we go go further

to other l1s what are your thoughts on salana or on the other narrative that we've actually been talking a bunch about on the show which is the next L1 you know we had ethereum two cycles go we had salana last cycle what's going to be the L1 in this cycle we've talked about suie we've talked about SE we've talked about aptose curious would be curious to get your thoughts on salana and or your thoughts on which will be the next L1 if you're watching that at all yeah I'll answer that a little indirectly but first directly on salana um it you know hit a low of about 10 bucks $10 yeah N I think right how what nine you said I think nine yeah nine yeah and then went up to almost 200 I

don't know what it is right now 160 something like that 150 um I think even 140 yeah in that range yeah so uh if you take the the uh the way I look at things which is if you're holding Bitcoin you know it's going to go up 5x assuming pass patterns and all that whatever then ethereum needs to go up 10 well then a salana would need to go up by more than 10 because it's more risky right um but we've already depending on when you take that snapshot salon's already had a very nice increase right and maybe is 25 30% of the value of um of uh of ethereum so it's you know it's it's already gone up a lot um uh so

I would say maybe you get a is it possible to get a 10x out of salana possibly but if you were looking for those very very typical crypto bull market run type of returns which is more than that 20x 30X 50x then I don't see how that would be possible with salana I mean the they're already they've already gotten the full value for this next big phase of of meme coins so what would be equivalent to that that would Propel it uh again higher right well it would need to be as big or bigger than the meme coin effect which is pretty strong so the way I would sort of indirectly

answer uh what's the next hot uh token without sounding like a fraudulent Reddit poster right um uh so I have no idea is the simple answer however I can tell you that it will it will uh have certain characteristics if you look at what propelled ethereum it was ultimately it was oh this is a this is a chain that we can launch other icos off of right and then you look at salana well this is a chain we can launch things like meme coins off of and that's because people then need to own that token in order to do that work on the the chain so what is

a a new uh capability that people are going to want to do and what chain is really well suited for that particular function right so um uh let's just take a a random real world assets right let's just say that there's some uh uh things people want to do with the tokenization of real world assets that uh isn't easy to do on uh say salana or ethereum and there could be lots of things we could speculate about that but let's just say that but a new token or or an existing chain has anticipated this and that

chain allows you to do that thing right turn it into a future or something whatever it is that the the ability to propel a a token High when when it's a modestly priced uh token and then there's a massive uh movement towards doing something nfts for instance right all the nft focus chains went up 30 40 50 100x during um the last boom um that is uh that's going to be how how you identify the token that's going to really take off and if you had been thinking about memes and

then seeing that people were migrating over to salana because it was easier cheaper faster you would have ridden that token up like 10x in in the last year and a half so um you you unfortunately you do have to do some thinking about it uh I will say this though I don't know and I've talked a lot about this I don't know what the next um big thing is going to be in crypto I I hope it's real world assets the tokenization of real world assets but um I I could go through it and I won't bore you now but since basically 2012 every single year there has been a very large new capability that came into

uh the crypto Market that year that caused even during down or kind of flat markets caused sort of a micro bubble in some area of crypto that's what kept it interesting that stopped in 2021 so 2022 23 and now we're mostly through 24 we've not seen that I thought maybe we could argue the tokenization of tokenized um of staked assets like like what igen layer did reaking a Stak asset that uh I mean that plays to what crypto people like something for nothing right uh even though there are risks but most

people discount those uh but I don't think that's as big as let's say defi or icos or uh exchange issued tokens or you know nfts uh uh intelligent layers on on blockchains that's it's it's more a category of defi than it is its own thing MH and um uh if you go back to 2020 by this time Defi and nfts were had gone from emergent to really going rapid in terms of adoption by the latter end

of 2020 which is why 2021 it just exploded uh if if this is going to happen happen it's happening in the next 90 days right so this is why this is super really exciting time um Q4 2024 was always going to be the the time when either the next Bull Run happened or we are moving off of Old patterns and if we're moving off of the old patterns that's a very strange place to be it means we really have no insight into what's coming down the pike right but so far you have no reason to think we are

moving off the old patterns right now everything seems to be going to in everything that's happened has been like right in line there was post the Bitcoin happening Bitcoin kind of just went flat we need have two capitulations in August September because that's traditionally what's happened um and we had arguably two and a half right so uh I like what I'm seeing the only thing that's that's has not existed which I think is Big that exists this time around is the uh

possibility of a mish recession in the United States in uh 20 you know Q4 maybe early Q uh q1 2025 uh so you know that's different whether that causes uh the stock market to pull back it hasn't really yet you know if you look at the the Schiller PE for uh the S&P 500 it's at 35 uh the the the uh the actual PE is like 27 or so but the Schiller PE which you know is is more of an average PE over 10 years set 35 uh to me the market

is pretty healthy you know there's there's a lot of uh value 50 trillion do in the US public markets whatever more actually um uh uh I think that's just the S&P 50 trillion that's a lot of wealth that's in traded assets so it doesn't appear people are running away um but uh for your audience what they really need to appreciate though is uh I believe whichever way the public markets go uh at least in the near- term crypto follows so and it and it generally has a magnified effect yeah so if you know the

markets are off 2% crypto's off 5 per. yeah um you know and that uh while I think it's illogical if you think about what crypto is supposed to do and what it's supposed to protect against uh it is a reality that now we have to incorporate in how we think about uh cryptocurrencies yeah it's great to hear you say that you think we're still on track because I think there's uh we everybody who listens to the show every day we all have been talking about hey it's coming it's coming it's coming and then October came and we were like you know it's oober and unfortunately we had a little bit of conflict in the Middle East and this week and the Market's nuked a little bit and everybody's

scared again and is October still going to happen but everything is still on track before I ask you my final question here William I just want to say to everybody uh two shows that you should go back and listen to on the rwa side go check out our show about Mantra which is a rwa L1 in Asia that is really set up for that really take advantage of that narrative they done they're up 6700 this year already they've just done incredibly well and the other is our episode on bit tensor and the AI narrative and why we think they're well positioned but also how we view investing in AI in crypto very interesting episode go check that out um William I want to ask you before we wrap

here I know you have some dates circled in your calendar for the rest of this year what are the dates that you have circled in your calendar that you are going to be watching closely as tipping points that you want to see things happen by and if they don't happen by that date you might be a little bit concerned well first we've uh uh the markets are move right now based on um interest rate policy so November 7th um the next uh fed meeting uh we had a 50 basis point rate cut obviously September 18th and um right now if you just look at CME you know the

Futures uh it's 96% uh uh assuming the Market's current pricing is is assuming a 96% likelihood of another 50 basis point cut uh personally I think that's we didn't need a cut but whatever uh markets tend to like Cuts however and this is again one of those counterintuitive things uh historically when rate Cuts have begun uh markets have gone down and and what's really going on there is markets uh uh were going down and the FED started to

cut so it's not like the cut caused the market to go down but it's a sign that the markets are probably getting weak because the overall economy is getting weak uh who knows how long this Port strike in the US East Coast is going to go on but that could have an effect but so I'm looking at the rate if if we don't get a rate cut then the market uh will uh sell off and therefore in early November we would have a selloff in in crypto and I I assume we'll get a rate cut of um of 50 basis points because that's what the Market's you know factoring in but we'll see um then after that for me it is call it early December if by early December number Bitcoin is

not at call it 90 to $100,000 I think that's a bad sign if we finish December and it hasn't passed call it $100,000 then uh that's a that's a that's a red flag so we had the sell-offs in August September which was in keeping with historical patterns so I'm like okay we're on Trend and now we're in Q4 I would like to see Bitcoin go up you know at least 50% from its from its happening uh price so 60 to 90

plus if it doesn't let's say we're bouncing around 60 to 70,000 by the end of December it's not it's a red flag it's not game over but then q1 2025 be comes extremely important if we finish q1 2025 and there has been no uh substantial increase in the price of Bitcoin uh then here's what I would say to everybody it's not the end of the world but here's what it does mean it means uh We've entered a new era and uh what we all relied on were which was these fouryear Cycles which were

very good Guides of how things were going to work have gone away and what new pattern emerges uh we'll have to literally sit through the show to see I I suspect on the positive side of that uh uh what that means is any existing uh any people who are just coming into the market at that point you are not disadvantaged by people who have all this prior accumulated knowledge of of you know what the next page is going to tell you because nobody knows so from that perspective it could be an opportune time to enter the market because a new

pattern's emerging and maybe you'll figure out what that is on the other hand it's disconcerting to the ogs uh to certainly to to Wall Street that really likes understanding patterns and uh you could see some amount of cryp crypto um buyers leave the market and say well now it's more it's more random right what's gonna happen and uh uh no investor likes random right uh it there's often a confusion with crypto people call it gambling and then they say random too but they're very different

things uh the odds in gambling are actually posted you know with certainty what the odds are right uh uh Roll by roll you may not know what's going to happen but over time it's mathematically predictable uh uh an a new era for crypto will be exciting but also a lot more jarring and so the great news is by the within 90 days we're going to have red flag one or green flag right and then 90 days after that we will know what to conclude uh so we're now we're the show's begun and everybody if you have

any interest in in um in this area if you're allocating portion of portfolio to this area this is when you have to be following this stuff every single day right you could have been asleep for the last two and a half years but going forward now this is it because uh virtually all the money that most great investors have made was made in short periods of time there's long dry spells punctuated by incredible opportunities it is not like you know a certain amount every day that's not how the markets work you you catch the market at the right time you make a lot and then an inventure Capital which I did

for many decades when it's dry it's bone dry there's no return uh so when when when the sun is shining when the markets are in U a volatile time that's when you have to be engaged and that's now Now's the Time and that's why you got to listen to the milk Road show every day okay so William we're gonna get you back on I think in December and then we'll get you back on 90 days after that and we'll have a chat either I will be very excited or I will be very concerned yeah there we go yeah and we'll make sure that we either way we'll we'll be able to see have a clear picture of where we're at William thank you so much for your time and for joining us again today if you guys don't follow William on

Twitter make sure you do we'll throw his Twitter in the show notes you guys are going to want to follow him he's got such great insights and he's always keeping us up to date and we'll make sure tune in because we'll have you back on in December and we'll chat about red flags or green flags at that point that sounds good awesome thanks for listening in everybody have a wicked awesome day as always if you liked today's episode please hit subscribe and make sure you follow us so you don't miss out on the next one there's also a link in the description to our free 5 minute daily newsletter where we simplify crypto for you while making you laugh and if you're willing to step up your crypto investing game we're going to also leave a link for milk Road Pro you get access to our

portfolio where you can see exactly what we are buying this is your number one resource to help you invest successfully in crypto one final note this show is for educational purposes only and nothing we say is financial advice investing in crypto or any asset is risky and you should never invest more than you can afford to lose thanks so much for listening in my friends have a wicked awesome day