Tokenization as the biggest crypto trade of the decade: Bitwise research

Transcript

We have a tsunami of capital coming on chain in the form of stable coins, tokenized stocks, and other assets. And that's going to >> Bitcoin is fighting to hold on to the $78,000 level. The memecoin trenches on Robin Hood are going wild. And somewhere in all of this is the future of finance. Hello and welcome to Milkroad Crypto, the podcast that knows that some digital assets are a generational investment opportunity and some are an IQ test and some are somehow both at the same time. I'm your host, John Gillan. Today is Wednesday, September 9th, and today we are joined by two guests from Bitwise.

Ryan Rasmusen, the head of research at Bitwise, back on the show again, an old friend and fan favorite. Uh, and joining him for the first time is Ish Assad, research analyst at Bitwise, who, and fun fact, this is true. He literally won his job in a contest that Matt Hogan ran. I'm going to get him to tell us all about that because I'm really curious to hear more. Uh, so he's got to have some kind of alpha to share with us. If that sounds good with you, make sure you all like and subscribe. Share this episode with somebody who's going to enjoy it. And as a reminder, our podcast today is free and that would not be possible without our wonderful sponsors at Saber. Money, the stable coin payments platform built for Asia. So keep an ear out for more information on them later in the

episode. But for now, welcome back to the Milk Road Show and welcome for the first time is Ryan. Gentlemen, how are you today? >> Great to be here. >> Thanks for having us. >> Well, I'm excited to get into it. There's a lot going on in crypto these days. Ryan, first welcome back. But just sit still for a second because I want to introduce the audience to Ish. Um Ish, I want to start with the story there. You didn't get your job at Bitwise through a normal interview process. Matt Hogan was running a contest. You won the contest. What was the contest? How did you win? Tell me about this. What happened? >> Yeah, it was pretty awesome. First job that I've ever applied to, let alone got on Twitter or X. I was just, you know, look at the time looking to go deeper

into the industry. Stumbled across the first Bitwise research hiring contest post by Matt on X. It was whoever can make the best Bitcoin Treasury presentation wins the job. Um, I had no idea who the competitors would be like. Uh, I also saw it about like 5 to seven days into the competition window, so I had like three days left. But it's one of those scenarios where I feel like you just if you tell yourself you're going to win it, then you behave like someone who is going to win it and then you win it. So, I went all in, had a couple late nights, and uh I gave it my all and uh it worked out. I guess they liked it.

>> Now, they're stuck with you. Good job, man. That's that's great. So, you I my research says you came over from Hedgei's digital assets desk. So, you've been in crypto for a long time and you've been co-writing a lot of the the research reports, the chain link piece, which Bitwise put out, which was fantastic. Um as well as some of the the quarterly updates. Do you have a specific assigned segment of the market that you cover for Bitwise? Are you kind of like a all-purpose utility player or like tell us about what you focus on in crypto? >> Yeah, on the research team at Bitwise, I'm for the most part a general all-purpose research player here. But if I had to choose a self assigned area of focus and interest, it's definitely tokenization. That's the area that I've been focused on ever since I started in

crypto five, six years ago. Um, so tokenization, getting into the mechanics, the weeds of how it's being done. >> Good. Well, there's nothing going on with tokenization, so I'm sure we'll have nothing to talk about today. >> Ryan, well, it's nice to meet you, Ish. Ryan, I want to ask you about some comments I saw from Matt and get an update from you on just like the whiplash that we've seen in the markets here. Matt said that in Q2 of 2026, he saw the worst sentiment I've seen in 8 years in crypto. Bitcoin was below 60K at the time. Now, we're in the neighborhood of 80K. How how is the market reacting to this? What's the sentiment shift been like? and just how are are your clients or what conversations you having about this whiplash we've seen in the crypto markets?

>> Yeah, it's it's a uh it's a really great question because so much has happened in such a short period of time. Uh and there's so much like bias recency in crypto. I think it's important to to zoom out even a few months and think about where we were and and how it's changed. So, if you think about Q2 in the summer, there was really a few things that were driving investor attention uh and investor sentiment both towards crypto and towards other areas of the market. And the we had the SpaceX IPO, which was the largest IPO in history. And around that time, the experience we had at Bitwise speaking with financial advisors and other traditional investors was that all they were thinking about and all they were spending their time looking at was

SpaceX IPO or equities related to the AI sector. And what that meant was that capital and focus had rotated completely out of crypto for the most part uh for many of this these cohorts of investors. And that was one element of why sentiment was bad towards crypto or completely uh just just neutral towards crypto. Right? It wasn't that a lot of these investors thought crypto was going to zero, thought Bitcoin was useless, was going to zero. It was just that they saw other areas of the market that they were being asked about by clients that they were focusing on and that they were uh paying more attention to and saw more opportunity. The thing is with that time is that the question we continually got was not is crypto going to zero. is has

it bottomed out, right? And we continued to trade around 60K for several months. In that period, you also had strategies, you know, first Bitcoin sales, you had a bunch of of our clients and and all over Twitter asking about is strategy going to blow up? What does that mean for Bitcoin? That created a lot of uh panic and and despair across the crypto community. Quantum was a big threat that we were being asked about a lot. That was a negative thing. There was all this uncertainty around the clarity act which continued to get delayed and pushed and delayed and pushed and there was a lot of handwaving by politicians around that. So you had all of these things happening in the crypto space that just made investors feel at a minimum like I shouldn't touch that right now or this

thing is is a mess and there's bright spots I should pay attention to. But then something interesting happened in August and we had this massive run up near 30% in Bitcoin. a larger runup in altcoins and at the same time you saw equities kind of trail off and a lot of euphoria around uh AI start to settle out and I think that led to this huge shift in sentiment towards crypto. Clearly sentiment in the crypto uh native community picked up. You saw the fear and greed index spike to to highs we hadn't seen in a while. You saw prices run, but you also saw things like ETF flows really accelerate in August and continue to accelerate a bit into

September. And what that tells us is that you have institutional investors and non-cryptonative investors for the most part really starting to get excited about crypto again. And and what we're seeing now is a lot more optimism in the conversations that we're having with advisors. I was just at a large conference last uh last week with one of the largest banks in the world and the advisers there were really excited about what's happening in crypto. I mean Ish mentioned tokenization that's something that people are paying a lot of attention to. Stable coins of course something we're getting asked a lot about but we're also getting asked about things like hyperlquid and perpetuals and uh and preipo stocks right things that are are are new to this audience but they're engaged with and they're

excited about. The other thing that that reared its head was a 40 trillion uh dollar debt issue that the US is uh is dealing with. Concerns about debasement. Gold rallied and I think that additionally drove investor attention to to things like Bitcoin. So this huge shift absolutely did happen. We're seeing it with the level of engagement from investors that we work with with new inquiries from new clients who want exposure to Bitcoin and other crypto assets as we turn into the end of the year. Hi everyone, this is John. Listen, our Milk Road Pro analysts nailed this AI bull market. They we had dozens of calls pay off in a big way for our community. If you want to see how our entire team of analysts are positioning

for the crypto bull market that's going to come after this bare market finally ends, you can join us now at Milkroad Pro. It's just a dollar. Link is in the description. and you'll get access to all of our analyst trades, their watch list, and see how they're navigating this in their portfolios and get access to ask us questions in Discord anytime, day or night. It's just a dollar links in the description. Milk Road Pro. Join now. I'll see you there. It's really helpful context, Ryan. Thank you. I want to hear from both of you on this question because the the question everyone in crypto is asking right now is, are we in a new Bitcoin and crypto bull market or are we going to fail this and, you know, retrace here? The latest research I've seen from Bitwise says that we've reclaimed nearly every level

that mattered. the short-term holder cost basis, the 200 day, but there's still this 83k level, this failed breakout from like May of this year that we is still over our heads. We haven't gotten through it yet. What's the view on this? Do you think that we have confirmed a new bull market? Do you think that there's still risk that we retrace to the downside? I want to hear what both of you guys are on this. Ish, let's start with you. >> Sure. I don't think we're going lower. I will say that. I think uh this is the largest confirmation of the beginning of recovery we've seen since the highs of last year. Could we chop sideways for a few months to come? Sure. Maybe I know some of the months we're entering historically have been some of the uh lower performers, but I think uh you

know one of the themes we've been highlighting on the research team for the past few months is how prices have lagged fundamentals. All these things we're talking about onchain finance, tokenized assets, vaults, they're all up and to the right in terms of growth. Meanwhile, prices have been floundering and at some point that was going to rerate and we've seen it happen very aggressively so far and that's going to lead to more and more chasing and could lead us into the next bull market. >> Ryan, same question to you and maybe some more in that September seasonality. September of a midterm election year is historically one of the worst months to hold Bitcoin. Does that concern you?

Does that factor into your your calculus on whether or not we've bottomed here? >> Yeah, it's a it's a good question. I think what what Ish is saying also is is I just add on to that uh because it's really important is that if you think about historically the signals that have have shown us that we're exiting a bare market, entering a bull market, it's that exact thing that Ish mentioned, right? you see fundamental developments and catalysts that aren't priced in and prices lagging. And we saw a little bit of that kind of correction to that gap happen in August. But I think there's a lot more to go if you just think about all of the fundamental growth and uh positive momentum we have across all these different mega trends in crypto.

stable coins, tokenization, debasement, social trading, onchain finance, agent, all of these things are individual tailwinds for the industry, and they're coming at a time all at once when prices are still down 40% or more from all-time highs. So, I think that's a signal to us that the market has shifted from despair and winter into at least early spring with a lot of runway ahead. The thing about September is that not only is it historically a bad month for for Bitcoin, but it's also a bad month for equities historically. I was at an investment committee meeting last week with a a large RAIA and they were heavily focused on the fact that

September historically is a rough month for equities. And the thing there is that you add the midterms, you add the uncertainty around interest rates, you add the intervention from the Treasury, the conflict in Iran. All of those things just add uncertainty and create more choppy waters ahead for the month of September. But what's also true is that Q4 historically is the best quarter for Bitcoin. And so what I think we continue to see as investors take a step back, particularly financial advisors and wealth managers, they think about the meetings they're going to have with clients towards the end of the year.

They think about how they want to position for 2027. And I think crypto looks very very attractive against that backdrop. And once we've pushed through this uncertainty, next week we're going to have a few things that that clear some of that uncertainty out of the way regardless of which way they go. And that's of course the next FOMC decision almost the last one right before the midterms and we'll have this clarity vote in the Senate. And those two things kind of being pushed through will allow investors to settle and say okay where are we at? How do we want to position for the future? So I think the setup is really really strong. September is likely going to be a choppy month but I think that clears a lot of the runway

and a lot of the obstacles for Q4. >> Okay. It's a really helpful outlook on that. I want to ask about the ETF flows because a lot of the the direction of travel that we saw uh earlier in 2026 was outflows from the ETFs and depending on how you measure it somewhere between like four and five billion of outflows. Has that started to turn around? Is it starting to accelerate or is money coming back in? What are you seeing on the ETF flow side? >> Either one of you. I think uh coinciding with the recent massive jump in prices 20 30% Bitcoin Ethereum and beyond we saw ETF flows inflect higher and I think it actually offset all the outflows or almost all the outflows from this year all within a

week for Bitcoin and Ether ETFs but interestingly 2026 year to date some other crypto asset ETFs uh maintain positive inflows throughout all of it um even as prices flounder namely Salana and Hyperliquid, but I'll let Ryan add on to that. >> Yeah. No, I think that's right. It's also another thing that we typically have seen historically when exiting uh crypto winters into bull markets is that you see individual assets and ecosystems start to perform better than the market or particularly well. And I and I agree with Ish. We've seen that happen with Salana recently. We've seen that happen with Hyperlid. you're seeing other areas of the market where there's a lot of

momentum whether it's Robin Hood chain or ponds and social trading like these are areas that are distinct from one another and showing strong performance and momentum and so ETF flows is a great way to gauge investor sentiment because it really has a direct impact on price right the assets come into the ETFs then we go out and buy the spot asset and put it in the custody and the inverse is true when when dollars flow out. And I think the fact that we've seen capital come into the space to largely offset the outflows that we experienced in Q4 last year following the October 10th flash crash and in the first half of this year is that signal that capital actually is really returning to the

ecosystem. And the thing to remember about ETF flows is that we saw 35 billion of inflows into Bitcoin ETFs in the first year that they launched. So if we're talking about three billion or 4 billion in a month of August, we are still just at the tip of the iceberg in terms of the type of capital that can come into the space. Now we have other ETFs Hyperliquid Salana XRP uh Ethereum, etc., which also can allow capital to come into the ecosystem, create buying pressure and upward momentum. And a lot of ETF buyers are long-term holders by nature. or they add them to model portfolios, they rebalance on a systematic schedule, they they kind of set and forget. And I think that's a positive signal as well is that we're

rotating out of maybe investors who are just trying to exit their positions because they've been holding it at a loss and they're happy to get a little bit of a of a reclaim of those losses and we're transitioning to investors who are repositioning for the next 2, three, four years and that's sticky capital and clearly has an impact on price. >> Excellent. uh really helpful like just view of the ETF space there and it's nice to hear that the the capital that left has come back and then some. Um it's it's great to hear all of that context. Ish, I want to ask you about something Ryan touched on a little bit, but the the frenzy on the Robin Hood chain. Uh I'd like to get your reaction because obviously there's some innovation that's happening around tokenization and like Ryan said, it's brought a lot of attention, enthusiasm

back to to crypto. It is still right now though just mostly a memecoin frenzy and some people are kind of dismissive as a result. What's your reaction? What are your thoughts on this? >> Yeah, I think crazy things happening on Robin Hood chain. One of the most successful launches of a chain, especially a layer 2 in history. I think breaking down what's going on on Robin Hood chain. I think what's noise is the meme coins themselves. Obviously, they're not meant to retain value. They're just quick trades sentiment. But I think the signal there is there's real businesses forming on Robin Hood chain.

even if they are uh just launching you know memecoin launchpads there's real businesses that are generating real fee revenue as real users are coming and transacting on the chain and that's been a huge resurgence in crypto activity um over the past year you know as the market really quieted down Robin Hood chain has has led the market into some more active times and I think there are some interesting innovations there beyond just memecoin launchpads there's been huge inflows of tokenized stocks and even some interesting protocols that are pairing tokenized stocks with memecoins like they'll reinvest fees from memecoin trading into tokenized stocks and then pay dividends to users.

That's an interesting use case and uh I think that's what's happening on Robin Hood chain. >> Yeah, there's a lot going on with that. Uh Ryan, the last time you were on, you and I were talking about some tokenized products um that Bitwise is collaborating with Coinbase on and and other partners as well, but um it's called automated token portfolios, which I'm still getting my arms around that language. But talk to me a little bit about the updates in in the month since this has gone live and just like what's been the initial reaction to those products and yeah, just catch me up on on what's happened since we last spoke. >> Yeah. Yeah, happy to. I think we we spoke, if I'm not mistaken, on the day that Bitwise launched automated token portfolios alongside Glider and Coinbase. So happy to be back here and

chatting with it about you. Uh today proud of that by the way. I scooped that story on everybody. So yeah, I am proud we got you on this day same day that happened. But yes, please continue. >> That that's right. That was the first uh first media appearance anyway Bitwise had around automated token portfolios. So I well I am well as well am proud of that. Uh, look, the thing with automated token portfolios is that it's a way for onchain investors to get exposure to professionally design strategies and self-custody those holdings in their wallet. That unlocks so much of what tokenization is all about. You can lend and borrow against these in DeFi. You can make adjustments to the strategies yourself. For instance, if you don't

like one of the equities in the strategies, you can sell it. The rest of the strategy still chugs along as it's designed. And Glider's underlying technology handles all of the rebalancing for you and ensures that the portfolio of assets that you're self-custodying follows this professionally designed strategy. And it's a very popular model in the traditional finance world, right? A lot of institutions use model portfolios that follow a standard rebalance schedule or index funds which have rules around what assets are in this specific thematic index or other index they rebalance their market cap weighted etc.

And so we were really excited about t taking this traditional model and bringing it on chain. I think it's an example of where we're headed, which is you're going to see traditional finance rebuilt and improved and made more accessible and less expensive than it is in the traditional world. And I think that's really what, you know, all of us in crypto have been so excited about for so many years. And it's finally happening. Since the launch of the first automated token portfolios, we've seen Coinbase tokenize more stocks. So the universe of assets you can design strategies around has expanded. I think that's great because you can start to see more and more unique strategies built out in the automated token

portfolios and I think we'll continue to see more and more investor interest in these things. So it's it's really exciting that automated token portfolios have seen so much success, but they are literally just getting started. We think they're going to be a several trillion dollar business in the next 5 10 years in the same way that ETFs went from zero to 30 trillion in 30 years. we see the same potential growth for automated token portfolios which are onchain uh strategies. >> I'd love to get your thoughts on this product as well. You know, as Ryan pointed out, ETFs have become a many many trillion dollar industry and it seems like automated token portfolios or tokenized assets could become an alternative, a competitor. Just how do you see this landscape evolving? What's your view on all of this? Yeah, I think

automated token portfolios similar to vaults are a really interesting way that's going to bring more capital on chain. It really opens the doors to manage strategies um especially, you know, vaults, things that are generating yield from various sources like looping strategies um and ATPs as well. There's a lot of different things that might be complicated for an individual user to put together themselves. Um, but packaging them nicely into, you know, click of a button solutions, I think is going to bring a lot more capital on chain.

>> Who do you think this who do you think this product is ideally suited for? Is this meant to be for like the retail investor who doesn't really know a whole lot about finance and just wants a little like one oneclick way to get some some exposure in this way or is this more something you see as being suited for more institutional more professional capital solutions or is it really like everybody is going to come to this in some way or another like talk me through who the user base you see um this to be well suited for either one of you. >> Yeah, I'm happy to to take this then maybe Ish can can add on. Look, today these are available to non US investors and primarily it's targeted at investors who are onchain and don't have access to these types of strategies in their

traditional portfolios, right? So, so it's easy for us in the US to gain exposure to the MAG 7X in our in our individual brokerage accounts or portfolios, right? Which is the first automated token portfolio uh that we that we launched, which is the MAG 7 plus SpaceX. But if you think about a individual in India or in Africa or South America, it's historically difficult or impossible or very expensive to gain exposure to US-based equities. Yet, this is the the most important and largest equity market in the world. So now these investors with a smartphone and a crypto wallet can gain exposure to the biggest companies in the

world directly in their crypto wallet with a few clicks of a button. And and I think that's really really important because it's not just the the it's not that it's you know you don't know about finance and now you get exposure to these things but it's actually investors who you know are very savvy. They're savvy enough to use DeFi and be on chain and uh maybe LP or lend and borrowed allocate to vaults etc. This just unlocks a massive the most massive part of the market for them to access. Now they can hold a a yield generating vault strategy. They can hold Bitcoin. It can hold Ethereum, Salana, Hyperliquid, Lighter, XRP, whatever, alongside the Mag 7 uh and SpaceX, right? The largest publicly traded companies in the world

when they just couldn't do it in the traditional structure unless they were an ultra high netw worth individual or geographically situated in a place where it was easy to access those markets. So, the primary audience today is non US investors and individual investors. Eventually, I think we'll see financial advisors, hedge funds, all kinds of traditional investment firms accessing ATPs on chain once you have the convergence of that infrastructure. But for instance, an advisor outside the US since these are not available to us investors can't custody assets in a wallet on behalf of their clients, right? like the infrastructure for them

and the platforms they use, the nutritional systems they use aren't built or upgraded for that today. But you can envision a world in 2, 3, 5 years where the ability to custody assets under their uh billable umbrella within the platforms they use to custody onchain assets is is seamless and as easy as custodying traditional assets. And I think that's where you start to see the adjustable market for these products really expand to include the professional investor community alongside the individual investor community.

>> Yeah. And just to to add to what Ryan is saying, I think eventually we will see tokenized stocks in the US. And at that point, you'll probably see the investor base expand beyond the international investors who are accessing US stocks for the first time to individual investors who might just want to invest in a really interesting strategy like top 10 picks from Ryan Rasmusen or you know something like that. I think that's one of the great things about ATPs is the speed of launch which you can achieve with it um because they're just self-custodying copy trading portfolios that people can follow.

Yeah, I can't wait to see Ryan's memecoin portfolio come on chain. That's going to be a great day. Um, okay, Ish, I want to ask you about this. You do a lot of time doing deep dives on onchain products and projects and and how tokenization um is actually coming on chain. Can you talk to me a little bit about some of the winners and losers here from your perspective? Because I think a lot of people are they hear this buzzword of tokenization, but they don't know exactly what this means, how to get exposure to it, or which projects benefit, which people are going to, you know, get displaced. talk to me a little bit about your your outlook on that and and where you see like the the real the real winners from this being.

>> Sure. The way I think about who's winning in tokenization, I I think I break it down into three layers because there's a whole stack that's happening for tokenization and there's entities who are winning all throughout that stack. At the top you have the issuers like Onondo, Xtocks, Dinari. They're generating revenue from bringing these stocks onchain, creating the SPV rappers and and offering the 247 assets themselves. Then you have the middle layer which is the DeFi platforms where these tokenized stocks are being used. So maybe that's a where people can lend and borrow against tokenized stocks or unis swap where they're trading them you know against stable coins. And then at the base layer where those issuers and

those protocols are all deployed would be the layer ones particularly Ethereum and Salana Ethereum has about half of all stable coins uh half of all tokenized assets are on Ethereum and that's acrewing value to the ETH token whether it's just from actual demand for ETH for paying for transaction fees or just creating ETH as the global settlement layer for this new age of onchain finance that assigns a value to the ETH token. So, I think there's value acrewing to those three layers of the tokenization stack.

>> You know, one thing we've talked about a lot on this show is that crypto is quickly becoming a huge part of the global payments infrastructure. And nowhere is that more obvious than in Asia. But if you're actually running a remittance company or a payment business, you know that the hard part isn't moving the stable coins. It's dealing with local banking partners, compliance, liquidity, and all of the operational headaches that come with sending money into places like India and Southeast Asia. That's why today's partner is Saber. They give payment companies stable coinpowered infrastructure to collect and make payouts across Asia without having to build all of that complexity themselves. They've already processed more than $3 billion in transactions across 40 different countries. So, this isn't just a concept. These guys are actually doing this for real. If you're building payment infrastructure or expanding into Asia, make sure you check out

saber.money. Yeah, it's really helpful framing cuz I think they're Yeah, just like you said, there's a lot of different players at a lot of different parts of this and they're all capturing value in different ways. So, I appreciate the outlook on that. I I want to get some thoughts on this. Uh you know, you spoke a little bit about some DeFi projects. Bitwise a couple of times in in these conversations has called DeFi the sneaky outperformer of this cycle to quote Matt Hogan, but um with there's been this huge recovery in DeFi that we've seen on projects like a had a lot of inflows after some of the scares earlier this year. UniS swap is doing all-time high on volume. Do you think this momentum in DeFi continues through the end of the year? In other words, do you expect that strength in DeFi to

continue? Ryan, let's start with you. Look, I I'll uh let Ish, you know, close this out on this topic because he's the uh he's the DeFi DJ on the team. But uh look, I I do think the strength continues through the end of the year. I mean, just look at the amounts of revenue we've seen generated from the recent activity on Robin Hood chain as it integrates with DeFi protocols. I think you can extrapolate that out to a world where we move from tens of billions of tokenized assets to trillions of tokenized assets. And all of those users or investors in those tokenized assets are trading them frequently. They're using other DeFi protocols like a to lend out those

tokenized stocks at the rate the market is willing to pay. All of that activity generates fees and revenue. And what we've seen happen, I think Ish mentioned this earlier, is that there's extreme interest in value and revenue generating crypto assets, which is somewhat of a new phenomenon in this space because you couldn't really translate that revenue into value under the prior regulatory regime. But of course, we're seeing the the US regulatory regime really open up the door for this type of value creation and value transfer into the crypto asset. At the same time, we're seeing revenue really accelerate at an incredible rate. So, I do think it continues, but love to hear Ish's take

on it. >> Yeah, I agree. I think it continues and I think we're entering a DeFi decade, no longer just DeFi summer. I think there's two things that are happening here that's going to accelerate that. We have a tsunami of capital coming on chain in the form of stable coins, tokenized stocks, and other assets. Um, and that's going to propel capital into these D5 protocols like a unis swap uh other vault apps like Morpho. They're going to be generating a lot more fees as a result fee revenue. And the last thing that I think is going to continue the price appreciation for DeFi tokens being the sneaky winner of this cycle is they're all changing their tokconomic models now. Probably because of the

regulatory uh landscape changing and becoming more favorable. They don't have to be afraid of making their tokens look too security-like. Now they're starting token buybacks, allowing those DeFi tokens to have a direct linkage to the growth of the protocol and making them attractive investment opportunities. >> I do. Tsunami of Capital is an absolute banger. So, thank you for that answer, Ish. I I really like that. Uh I hope a tsunami of capital lands on chain this decade. Um okay. I I want to talk a little bit about like the the road ahead for for the rest of this year, but also some things that might derail this.

There's been this like looming um shadow over all of us, this Clarity Act passing or not passing. The the vote, I believe, is still scheduled for September 15th, the next time they vote on this in the Senate. However, there are rumors now this week circulating that Senate Republicans are already kind of admitting that they don't have the votes and they're not going to get them. Do you guys think that if this doesn't pass, the sentiment shift could reverse on us and this might kind of kill some of the the rally or do you think it's already priced in and nobody really cares if they pass it or not at this point? What's is Let's start with you here. >> Sure. I think I think it's priced in already. You look at the odds on Poly Market and Khi of Clarity Act passing in 2026. They're probably down to 15% last

time I looked on Poly Market. So, the market is not expecting Clarity to pass at this point. So that really limits the amount of downside that we're going to see in in crypto prices should it fail. I think eventually it may pass. Like 2026 is one thing. There's still 2027. It could pass then or it never passes and the SEC has said they're they're here to step up and address the same issues that clarity would have. Ryan, I know you have thoughts to add. Yeah, I would I I think that's exactly right and agree that the the the market has assumed this wasn't going to pass since we reached the September recess in August and really started pricing in before that. So, I do think there might be some small reaction to the downside

if it doesn't pass. I think the the the larger uh potential is if it does pass, there's going to be a lot more upside because the going assumption priced in today is that it's going to fail. But I think something else that's really important here is that and Ish mentioned this, the SEC has said that they're ready and willing to step up and provide the clarity uh from a regulatory perspective through rules and and other uh exemptions by the SEC that the Clarity Act was intended to provide. And so we're going to get regulatory clarity and continued regulatory momentum from the clarity we've already received from the SEC and CFTC with or without this specific bill passing. I think what a

lot of the non-crypto market and perhaps even the crypto market misses is that exact fact. Like for instance, we get asked about the Clarity Act all the time at conferences or on calls with clients, but they're th those same people asking those questions aren't aware and are surprised when we say, "Oh, by the way, the SEC commissioner, the most finan important financial regulator in the world, has stepped up and say that we are immediately ready to provide this regulatory clarity if the act fails."

And I think that is very very important and not really priced in. Of course, legislation is better than the the regul regulation here by the SEC because it's uh it's more bulletproof for the next administrations can't be reversed by an SEC chair that may come in and be anti- crypto like we had for the prior SEC administration. But we're going to see a lot of innovation and capital and uh a and new product growth between now and any potential future date where we may or may not have an SEC regime that that is anti or cryptoneutral. And I think that's really really important. I would just add that the Clarity Act fails this

vote next week, it doesn't mean that it's off the table forever, right? It falls into this lame duck period. probably hard to pass then before the end of the year, but then it's back on the on the stage next year as well, right? And we don't know what's going to happen with the midterms. It probably gets a little bit harder to pass next year if the way the midterms shake out is what everyone's expecting. But it already has a lot of bipartisan support is something that's important to remember. And it's already passed through the House and so we've cleared a lot of these hurdles already for Clarity Act to eventually be passed in the next 12 months, 18 months or so. So, and I think that's uh also probably not not fully absorbed by a large amount of the investment community.

>> Okay. So, you guys aren't worried about this, but I reserve the right to be disappointed nonetheless, but appreciate the outlook on that. I want to talk about is you mentioned prediction markets. We're coming up towards midterms here. Uh historically speaking around elections, we've seen an enormous amount of capital on uh prediction market activity and it seems like there's like a three-way bout shaping up between KHI, Poly Market, Hyperlquid. Ryan, I've seen you posting about this on Twitter. I'd love to get your guys' thoughts on who you expect the winners and losers to be here, cuz there's so many different prediction markets coming to market now. You know, Coinbase, Robin Hood, etc. Who's winning in those prediction market wars? And what are you expecting to see in terms of volume and capital chasing this around the midterms?

>> Yeah. Yeah. Happy to. Look, I I I was just thinking about it uh over the weekend in terms of, you know, look, the the first NFL uh game is is today. We have the elite Seattle Seahawks defending their title against the inferior New England Patriots. And that kicks off a bunch of other things that also is happening in Q4. You have the NBA season set to start. You have the midterms that we spoke about in September. October, of course, is MLB playoffs. We have college football that just started. We also have a lot of attention on what the Fed's going to do around the FOMC decisions this month and later this year. And there's always a lot of prediction market activity around end ofear crypto prices as we get in to

Q4. I think what that means is that you have this uh you know to use Ish's word tsunami of of volume and attention coming into prediction markets in Q4. We're going to see volume spike above levels ever seen before across these platforms. We're going to see a huge amount of open interest in the space. And what's particularly interesting now is that back in 2024 during the prior election, all of that was concentrated for the most part into Poly Market. But today you have Poly Market, you of course have Koshi, you have Robin Hood prediction markets, you have Coinbase prediction markets, you also have Hyperlquid deploying HIP 4 which enables outcome markets or

prediction markets that are really starting to take off. I think right now what we're going to see is not only aggregate growth across the prediction market space, but we're going to see really interesting market dynamics playing out. Like if you turn on CNBC, all you see is Koshi everywhere. But I I know a lot of crypton natives prefer to use Poly Market and then the even deeper cryptonatives probably prefer to use Hyperlid, but maybe Coinbase's, you know, tens of millions of users are going to stay on Coinbase or Robin Hood. It's its crazy adoption of the Robin Hood chain. maybe that leads to growth in their prediction markets as well. And so I think the market share dynamics are going to be pretty interesting here as we see this explosion of growth. And I'm I'm interested to to watch it play out.

I think Hyperlid's prediction market is actually going to surprise a lot of people to the upside in in ways the market's not expecting. And uh and I'm really excited to see that play out. >> Ish, what about you? Do you have a take on on these prediction market wars we're seeing? >> Yeah, I don't know if I would assign a winner. I like Poly Market over Koshi because they use more crypto rails. So that's that's as far as my opinions go there. Really? >> That's a very diplomatic answer. Uh all right, gentlemen. Uh last question. I always end when I ask when I have Bitwise on, I always end with this question, but I want to know what you guys are researching next. What can we look forward to from from Bitwise in terms of research reports or or just memos coming out or whatever the case

may be? Uh Ryan, let's start with you here. >> Yeah, look, we have a lot in the pipeline. We're really excited for the second half of the year, but it's certainly a lot of work to tackle. Last year around this time, we published the first ever long-term capital market assumptions for Bitcoin, which is a long-term oriented piece that focus on Bitcoin relative to other major asset classes. The world's largest financial institutions produce these every year on other major asset classes, but nobody had ever done that on Bitcoin. So, we published that last year. We're really excited to to update that and refresh that and put a new kind of uh uh new spin on it this year uh in October. So, we're excited to to publish that piece.

We've been working on some really interesting papers uh around onchain finance and specific ecosystems. So, we're excited to launch those. Of course, we've been doing ton of stuff at Bitwise around staking and onchain vaults. We have our quarterly reports coming up, both the crypto market quarterly review, which is your guide to the crypto markets and then we have a staking report that also comes out at the end of each quarter. Our first one came out last quarter. Uh the second version of that will come out this quarter that dives into the largest staking ecosystem. So our goal is to provide insights into every corner of the market and uh is instrumental in doing that and works on all of these things. But I'm really excited about our long-term capital market assumptions, our staking report, some of the other

onchain reports that we're working on, and then of course our annual crypto predictions, which is my favorite thing to sit down uh and discuss with everyone in the research team and write every single year, which will come out towards the end of the year. >> I did a full episode doing a deep dive on Bitwise's first staking report, which I was really excited to see a staking report from you guys. So, thanks for that. Uh Ish, let's let's hear from you. what are you researching and what's what's next for you on the docket? >> Yeah, working on a lot of interesting, you know, single asset papers right now. Um, in terms of areas we're looking at, like I said, tokenization as always. Um, another area that I'm looking at in particular, I think is capital formation in crypto projects like Metadow. I think

we're going to see more of this happen again with the regulatory environment changing, token designs can get better, and we're going to see better launches. Stay tuned from us on Twitter. That's where a good chunk of our content is going to come out as well in the form of some really interesting threads. >> Yeah. Well, I follow all of you guys on Twitter and ish you leak a lot of alpha just through the pictures you post from the Bitwise research room and what's on the whiteboards in there. So, yeah, it's it's a great a great place to go for alpha. Uh, one final question. Is Bitcoin over or under 100K by the end of the year? I'm really interested to hear what Ish says about this, but Ryan, I want to hear your take as well. I get price predictions from Ryan all the time, but uh yeah, let's let's go. Who

who who wants to start with this one. >> Let's go. Let's hear you. >> By the end of the year, over a hundred >> bullish. >> I think and I think that's conservative. So, >> yeah, I I agree with I think there's a few things to remember. Historically, Q4 has been a really strong year for Bitcoin. I think that that's working in our favor from a seasonality perspective. I also believe that we're going to see renewed acceleration of ETF flows. A lot of this negative things that we talked about earlier in the episode from Q2 uh in the summer have just been churned through. No one's worried about strategy anymore. Quantum is being addressed by all of the

different crypto ecosystems at an accelerated pace. We've seen crypto ETF flows accelerate. People are worried about debasement. They turn to hard assets like Bitcoin and gold. So, I think all of those things work in Bitcoin's favor and push it higher. The other thing to remember is we're only about 10% down from where we started the year, right? Bitcoin closed last year in the mid to high8s. And so I think once we reclaim the year-to-date uh losses for Bitcoin, which we're very close to doing, I think we see a massive amount of momentum uh into the asset and we see it snap up and would not be surprised to end the year above 100K uh in Bitcoin.

>> Yeah, I very much agree with Ryan. I think Q4 seasonality is going to be a big push. All the downside risks have largely been priced in. I mean, crypto has gotten hammered over the year. Meanwhile, AI stocks were were pumping endlessly. Multi-t trillion dollar companies. I think uh a rotation is due. >> Well, I really appreciate the bullish encouragement and updated thoughts from both of you. Thank you so much for being on the Milk Road Show. Where can we send people to find more of you and your work online? Ryan, let's start with you. >> Ah, you could find us on bitwiseinvestments.com. would encourage everyone to sign up for our CIO memo which is a weekly memo 3 to 5 minute read also an audio version on what's happening in the market and what we're seeing at Bitwise also can follow us on Twitter as I ish mentioned I'm at

Rasterly Rock and go ahead and and show your Twitter handle >> I'm at Assad Ishmile follow us there's other members of our team as well putting out good content on X >> everybody at Bitwise is a great follow gentlemen I want to just take one moment to just remind you both that I could have asked you both about Hunter Biden's laptop meme, but I didn't and so you owe me. But thank you all for being on the Milkro show. Our audience really appreciates the work you're doing and the insights that you share. So, thank you so much for being here. >> Thanks so much, John. Yep. Thanks, John. Great to be here again. >> And thank you all for joining us. I hope you all learned something today. There's a lot of fun in this one, so I hope you take it slow and unpack it all. But

until next time, stay safe, stay educated, stay bullish, and we will see you all on the next episode of Milk Road Crypto. Thanks for being here, everyone. Bye. >> Thanks for listening to Milk Road. If you enjoyed the show, make sure you like and subscribe. And if you're struggling to find winners in the market, that's exactly what Milkroad Pro is built for. Our analysts have called some of the biggest winners early, and Pro lets you see what they're buying next, every trade they make, and the research behind every position. Check out Milkroad Pro at the link below. Everything you hear on Milkroad is forformational purposes only. These are our personal opinions, not financial advice, and we may own some of the investments we talk about.

Always do your own research and make the decisions that are right for you. See you next time.