What Grinds My Gears: Bitcoin Price Predictions

Bitcoin: is it a safe haven or a risk asset? Hosts Meltem Demirors and Jill Carlson (for once) talk pricing. They try to make sense of the recent run ups and retracements and explore how the valuation of Bitcoin and other cryptocurrencies fit into the larger economic landscape.

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Meltem Demirors
From Meltem Demirors and Jill Carlson, welcome to What Grinds My Gears, a podcast about the bizarre and buzzworthy happenings in the world of cryptocurrency. Each week, we delve into one key theme and examine it through a broader financial, political, and cultural lens to learn from the past, understand the present, and explore the future.

Announcer
All opinions expressed by Meltem, Jill, and podcast guests are solely their own opinions. This podcast is for information purposes only and should not be relied upon as a basis for investment decisions. Meltem, Jill, and guests may maintain positions in the currencies, assets, and companies discussed in this podcast.

Jill Carlson
This podcast is presented by BlockWorks Group, the only media production company I trust. For exclusive content and events on crypto, visit them at BlockWorksGroup.io.

Jill Carlson
All right, welcome to San Francisco, Meltem.

Meltem Demirors
Oh, it's so great to be here.

Jill Carlson
Is it? Is it though?

Meltem Demirors
You're here.

Jill Carlson
Wouldn't you rather be in Brooklyn on your patio?

Meltem Demirors
My patio's amazing. I call it the tree house.

Jill Carlson
Oh. Well, I'm very happy to have you here because it's a very special day as well.

Meltem Demirors
Why?

Jill Carlson
Today is July 1st.

Meltem Demirors
It is. Start of H2, second half of the year. Where my asset managers at? That's bad.

Jill Carlson
Nerd. Okay. July 1st though, this year, marks the date at which we have reached the longest expansionary period in US history.

Meltem Demirors
Oh my gosh, Jill! I'm so excited!

Jill Carlson
You should be.

Meltem Demirors
What does that mean?

Jill Carlson
That means that this has been the longest bull market period in US history.

Meltem Demirors
Woo!

Jill Carlson
Party on, baby.

Meltem Demirors
Bulls on parade. I feel like we need to play Rage Against the Machine and break some stuff.

Jill Carlson
It's funny to me because I feel like it was yesterday that I was basically graduating into the great recession, the great financial crisis. That feels like yesterday to me, but in fact, we old. That was 10 years ago.

Meltem Demirors
It was actually 11 years ago.

Jill Carlson
That was 11 years ago.

Meltem Demirors
11 years ago!

Jill Carlson
So this expansionary cycle now has reached the point where it's gone on for over 10 years. The second greatest, longest expansionary cycle in US history was from 1991 to 2001, when then the great tech bubble happened. We have now surpassed that.

Meltem Demirors
Right.

Jill Carlson
And this time is different, right? This time is different. We're going to keep partying on. Keep the Central Bank rates low.

Meltem Demirors
"This time is different" are actually the four most dangerous words as an investor. There are a lot of things that go into forming a view on the market. One of the really important things to think about and remember is all investors anchor to the past, right? If you are looking at a particular asset, after all, one of the first things you're going to look at, you're going to go on Google finance or Yahoo finance, and you're going to look up the chart. You're going to see the history of that asset, it's 52-week high, it's 52-week low.

Meltem Demirors
So it's interesting to me. We've had 10 years and one month of rising prices. Everything's going up and to the right, and the question is, is it different this time?

Jill Carlson
I hope so. I sure hope so. I don't want to go through another recession. But this is what everyone is clinging to right now is this hope that this time is different, and you have everyone from people like Howard Marks, professional, seasoned investors talking about this, saying maybe it is different this time. Central banks are doing things that they've never done in the past. The whole cycle looks very different. Inflation hasn't ticked up yet.

Jill Carlson
There are all of these markers that investors and economists tend to look at to say, okay, are we coming up on the end of this cycle? Some of those have emerged, but many of them actually have not yet.

Meltem Demirors
I think this is an important thing to think about. The way that Howard Marks, who is one of my favorite investors to read, he writes these great memos, and one he wrote was about this phrase, "This time it's different." The way he describes it, which I think's a great analogy, is a rocket launching.

Meltem Demirors
If you think of a rocket launching, it needs a lot of momentum to get out of earth's gravity, and break through the atmosphere, and go off into space where it can enter into a very different set of conditions. The limitation is the gravity around earth, these set of rules that we know.

Meltem Demirors
Similarly, for investors, investors get moored and anchored in historical prices because that's all we have to go on when we look at an asset and these-

Jill Carlson
God forbid we look at fundamentals, right?

Meltem Demirors
What fundamentals? Please. Stop it, Jill. You're being crazy. Uber's losing $2 billion a quarter, but don't worry, that's $100 billion company.

Jill Carlson
YOLO!

Meltem Demirors
It's fine. It's fine.

Meltem Demirors
But similarly, I think the limitations that past norms put on asset prices create this field of gravity. You need this force that allows you to blast off into space, or as we like to call it on crypto Twitter, going parabolic.

Jill Carlson
Go to the moon!

Meltem Demirors
Or going to the moon, or “hyper Bitcoinization”, if you will.

Jill Carlson
Oh god.

Meltem Demirors
But is it different? What does that mean?

Jill Carlson
We can talk about this in terms of the overall economy, this bull market scenario that we've been in for the last 10 years, is it different this time? We can talk about this in terms of, again, what central banks are doing, have been doing, keeping the economy effectively on life support. Is that different this time? That's certainly a different set of conditions than we've seen in the past.

Meltem Demirors
Yeah.

Jill Carlson
And then relevant to us, of course, we can also talk about is it different this time with Bitcoin, with alt coins, with the crypto currency markets in general? Because of course, over the last few weeks, we've seen signs of life, I would say, a bit of a run up.

Meltem Demirors
Short-lived.

Jill Carlson
Yeah, short-lived.

Meltem Demirors
Very short-lived. But the bottom line is, for things to be truly different, we have to examine, number one, what we know; number two, what history can teach us and what data about the past can teach us, we have to look back into the past; and then I think really have to ask ourselves, "Well, what is actually different and how might that play out?"

Meltem Demirors
But let's start by talking, let's go macro level before we get into all the weird Bitcoin stuff.

Jill Carlson
Yeah, thank god. Let's talk about something else.

Meltem Demirors
Ugh, terrible. Expansion, contraction. We've talked in episodes in season one about expansionary cycles, contractionary cycles, what that means, but let's just rehash because I think it's important.

Jill Carlson
Let's do a recap.

Meltem Demirors
Yeah, recap time.

Jill Carlson
Absolutely. An expansionary cycle, as we mentioned, that is a bull market. Everything is going up and to the right, let the good times roll, party on. A contractionary cycle is the inverse, of course.

Meltem Demirors
Well, and I think the important thing here, expansion means more money in the system, more assets sloshing around, and a contractionary cycle's less money in the system. As a result, I think during expansionary periods, typically interest rates are low; central banks and governments want to lower the cost of borrowing to encourage people to borrow to extend the money supply effectively. In period of contraction, they'll lower the interest rate, make it more expansive to borrow, to take money out of the economy.

Meltem Demirors
It's kind of operating these different levers to try to create a desired macro economic impact.

Jill Carlson
That's right. The one thing I would add to that or maybe amend slightly is that central banks are pulling these levers to try to keep the economy in balance. It's a little bit like if you're familiar with bipolar disorder, it's a terrible mental illness that involves having these very high highs, these periods of extreme almost mania, and then having these very low lows, these sort of depressive episodes where maybe you can't get out of bed, whatever it is. For folks who have bipolar, they need to manage this, and they never want to let the highs get too high or the lows get too low.

Meltem Demirors
You get a stabilizer.

Jill Carlson
You've got to stabilize.

Meltem Demirors
Stabilize, yep.

Jill Carlson
Exactly. You can think a little bit of the economy as this bipolar-

Meltem Demirors
A mental patient.

Jill Carlson
If you will.

Meltem Demirors
Jill is saying the economy is a mental patient, okay.

Jill Carlson
It's important to go over this though because the central banks' job is to not let the lows get too low, but also to not let the highs get too high. That's what I'm trying to drive at here because it is actually possible for an expansionary period to go on too long, for us all to party a little too hard, and then the hangover's going to be that much worse the next day. I'm mixing metaphors now.

Meltem Demirors
Right, but I think the key question is, and the one thing we do know that is not different in my belief, and I don't think will be different this time, is markets operate in cycles. It's almost like a wave function. Markets go up and they expand, then they contract and prices fall. The thing we've seen in particular in assets like Bitcoin is typically, each successive low is higher than the prior low. Even though you're operating this oscillating wave pattern, each subsequent low is higher than the prior low, and the pattern, if you smooth the wave, is up and to the right.

Jill Carlson
That's right. This is cyclical versus secular, right?

Meltem Demirors
Mm-hmm.

Jill Carlson
And the secular is the long-term pattern-

Meltem Demirors
Exactly.

Jill Carlson
Over the course of maybe 100 years, and then the cyclical is usually every five to 10 years. Again, 10 being the very long end of the range here.

Meltem Demirors
We just hit the limit maybe.

Jill Carlson
Exactly. The limit does not exist.

Meltem Demirors
Maybe it isn't. Well, we have a new limit, right? So we're breaking free of that mooring. I think the key questions we ask ourselves is does there need to be a recession? Is that a truth? Can quantitative easing continue unabated and maybe we could just print money forever? I think the modern monetary theory of money is that you can just put money-

Jill Carlson
MMT.

Meltem Demirors
You can put money forever-

Jill Carlson
Shout out to our fintwit followers @MMT.

Meltem Demirors
MMT's babies. Horrible idea.

Jill Carlson
Let's cover though, for a second, just how monetary policy plays into this.

Meltem Demirors
Sure.

Jill Carlson
Because we haven't touched on that really yet. Again, the central banks have these levers, as we were talking about. Those levers, as you mentioned Meltem, are basically the ability to print money or to buy assets from the open market. These are called open market activities. And then also, the ability to set interest rates. Setting interest rates low, again, that's kind of a let the good times roll thing.

Meltem Demirors
Yep, it makes money cheaper.

Jill Carlson
It's very easy to take out a loan. Exactly. Setting interests rate higher, that's tightening things. It's literally called tightening, and that makes money, again, more expensive.

Jill Carlson
Actually, very often what you'll see is in an expansionary period, you'll see the central banks start to tighten things, start to hike interest rates, start to reverse maybe some of their open market procedures that they've been engaging in; and then during a contractionary cycle, that's when they slash interest rates, and then for the first time ever, in this past contractionary cycle, again 2008, 2009, we saw this thing called quantitative easing, which was-

Meltem Demirors
Which is a modern phenomenon.

Jill Carlson
Yeah. Basically what happened there was the Fed, more or less, started printing money to buy off assets.

Meltem Demirors
Well, it's helicopter money, right?

Jill Carlson
Yeah.

Meltem Demirors
Quantitative easing is not a phenomenon that's unique to the United States, and what's interesting in speaking to economists who were part of the Obama Administration who implemented QE, when Ben Bernanke and his merry band of economists were sitting around looking at the US economy saying, "What should we do?", quantitative easing was probably number six or number seven on the list. It wasn't intuitively the first thing to do, but quantitative easing has become a popular tool for central banks. It's been used extensively in a number of European economies by the CBE.

Meltem Demirors
The question is, is it different this time? The yield curve has inverted. What that means when the yield curve inverts is typically, short-term borrowing should be cheaper than long-term borrowing because in the short-term, there's less volatility around interest rates. When the yield curve inverts, what it means is long-term interest rates actually are lower than short-term interest rates.

Jill Carlson
Remember, the yield curve, its pricing risk inherently. If I were to ask you, Meltem, would you rather loan me money for the next month or for the next 20 years?

Meltem Demirors
I would say for the next month because I have more confidence in your income in the next month, I know you today; I don't know what's going to happen to you in 20 years.

Jill Carlson
Exactly.

Meltem Demirors
But what the market's saying right now is that 20-year debt is actually less risky than the one-month debt.

Jill Carlson
It's not quite 20-years and one-month, but you get the idea, right? It's inverted.

Meltem Demirors
But it is 10-year and three-month treasuries have inverted.

Jill Carlson
Yeah.

Meltem Demirors
What investors are saying to the market is, "We believe that a market crash is imminent, so we're pricing long-term risk as lower because we believe, in the short-term, there may be some sort of cyclical market event."

Meltem Demirors
The other thing that's interesting, and the reason why this becomes relevant, is environments where the yield curve inverts and where we see all of these traditional signs, investors are looking for when's the next recession coming? What starts to happen is companies and stocks are thriving, even though they don't have profits. We made a tongue-in-cheek joke about Uber, but it's real. Tesla's losing money quarter-over-quarter, Uber's losing money quarter-over-quarter. Companies that basically get paid to lose money, their stock prices are going up. This is kind of irrational behavior.

Jill Carlson
We don't know anything about irrational markets, right Meltem?

Meltem Demirors
Absolutely not.

Jill Carlson
Having been in crypto the last five years.

Meltem Demirors
Absolutely not. The other thing that starts to happen is we see the rise of growth investing. The clear sign is actually here in San Francisco, where recently, Salesforce tower became the tallest building in San Francisco, overtaking a building in the Financial District, but growth investing and investing in tech companies has continued to consume tons of money. We see it with SoftBank's Vision Fund, the first $100 billion growth equity fund, completely changed the late-stage venture game. But again, people are looking for yield, and they continue to believe it's going to be in tech.

Meltem Demirors
To me, these are clear signs that money's really cheap, this is in inflation game that people are playing, and yeah, it's interesting. People are trying to figure out is there a crash? And if there is, what's going to be different this time?

Jill Carlson
And a lot of it is this game of trying to read what the Fed is doing. There's a lot of talk every month, people will follow the Fed Minutes, the FOMC Minutes, which is the Federal Open Market Committee, so these open market operations that we're talking about. Everyone is just trying to guess is the Fed going to cut? Are they going to hike? What's going on? What's going to happen next?

Meltem Demirors
But the other thing they're trying to do is, typically when the Fed raises rates or cuts rates, the market reacts.

Meltem Demirors
Okay, in the last few years when the Fed's done that, the market has not reacted. It has not stopped the cycle. The impact's been minimal and localized. So, the question is even if the Fed does what it's historically done, this time, will the reaction from the market be different?

Jill Carlson
Well, the other interesting thing here is that depending on what the Fed indicates at these monthly meetings, often, the markets can react in the opposite direction, right? One of my friends had this great tweet about this that I'll just read.

Jill Carlson
George Perks, and he says, "It's all very simple: sell stocks because the Fed won't cut rates, because stocks are up, because of the trade war détente, because the Fed is going to cut rates, because global data is weak, because the trade war has ramped up, because the Fed hikes too much."

Jill Carlson
What he's getting at there is this cycle where you can get wrapped up of is good news bad news? Because if data is good, then that means that the Fed is going to hike rates, so we should sell stocks. Is bad news good news because if data is bad, then the Fed is going to cut, and then stocks are going to go higher?

Meltem Demirors
But again, what we're trying to do here, and this is the key challenge for investors in all asset classes, whether it's on the macro scale, trying to determine the impact of the broader economy as a whole, on the micro asset class or the microcosm in which you operate, the question is always how do you determine cause and effect?

Jill Carlson
Yeah.

Meltem Demirors
And are the things we've observed in the past true in the future? That's like reading tea leaves. I'm Turkish, so there's fortune tellers in every town who will read tea leaves or coffee grounds.

Jill Carlson
Actually?

Meltem Demirors
Actually, yeah. My mom does this. Shout out Denise, what up?

Jill Carlson
Denise!

Meltem Demirors
She'll read Turkish coffee grounds. You'll take your cup and you'll flip it over, and in the remnants of your coffee grounds, they'll read fortunes.

Jill Carlson
You're reading my tea leaves after this.

Meltem Demirors
Oh baby, I got you. I got you.

Meltem Demirors
What's interesting is this is what investors, and economists, and market analysts are doing: they're looking at all of these data points; they're looking at what they know; they're combining folklore and folk wisdom with economics, and observed fact, and data science; and they're trying to interpret all of these different things to try to figure out what happens to this particular asset when we take all these factors and combine it to-

Jill Carlson
Up or down, buy or sell.

Meltem Demirors
Buy or sell? Buy, buy, buy. Sell, sell, sell.

Jill Carlson
To riff on that just for a second, we talk about these different asset classes. I want to just divide into two rough categories. When I finally figured this out, it made my life of interviewing for Wall Street jobs so much easier because every asset, for the most part-

Meltem Demirors
But did it make it better?

Jill Carlson
It didn't make it better. It did make it easier. The Wall Street interview process, man, I am so glad I went through it when I did because kids now are starting this their freshman year.

Meltem Demirors
Okay, so here's what's funny: I interviewed for a bunch of I-banking jobs.

Jill Carlson
Ugh.

Meltem Demirors
But the market was in the shitter, so I didn't want to go into banking.

Jill Carlson
Again, we old.

Meltem Demirors
So I was trading in college, I worked on a trading desk, and I was like, "I don't want to be a trader," because I saw the people I worked with and they looked grizzled.

Meltem Demirors
So I was going to these interviews, and I went to this interview with Deloitte, and I thought it was for an M&A job. They start laying out this business scenario, they had me read this thing, I'm like, "Oh, is this a case interview? I've heard about these." They're like, "Yes, this is a consulting job." I was like, "Cool." So, I had no prep.

Jill Carlson
Oh my god.

Meltem Demirors
And literally, all of the other kids in the interview had done all the case prep, and had been practicing for two years.

Jill Carlson
Oh my god.

Meltem Demirors
I literally had no idea what I was doing.

Jill Carlson
And you got the job, right?

Meltem Demirors
I think that was more my charm. They were like, "You're interesting."

Jill Carlson
Oh my god. Okay, sorry that was a huge aside on interview processes.

Meltem Demirors
Sequitur, yeah, okay. Anyways, what did you figure out that made it easier?

Jill Carlson
Okay, most assets can be divided into one of two categories.

Meltem Demirors
Okay.

Jill Carlson
They're either risk assets or flight to quality or flight to safety assets.

Meltem Demirors
Right. Safe assets, if you will. Save haven assets.

Jill Carlson
Exactly.

Meltem Demirors
Okay.

Jill Carlson
You can generally think about these market cycles as risk-on, i.e. expansionary, or risk-off, contractionary. When I say risk-on and risk-off, that can happen over the course of a day, an hour; that can happen over the course of a ten-year cycle; that can happen over the course of a century.

Meltem Demirors
But really, what you're getting at here is in an expansionary cycle, investors seek to take on risk, right?

Jill Carlson
Exactly.

Meltem Demirors
They're on the hunt for an alpha. If the market's returning 7%, if I want to beat the market rate of return, I need to take on more risk than the market, right?

Jill Carlson
You've got to take more risk, yeah.

Meltem Demirors
So it's risk-on, baby. In times when the market's contracting, I don't feel so good about taking risks.

Jill Carlson
Risk-off.

Meltem Demirors
And it's that liquidity episode we did, right?

Jill Carlson
Mm-hmm.

Meltem Demirors
If you're a fish out of water, and there's no water in sight, what's the only thing you want at any cost?

Jill Carlson
Water.

Meltem Demirors
Water, right? That's when people want to be in deeply liquid assets and low-risk assets when money's expensive and the future's uncertain.

Jill Carlson
A couple of examples here. Risk asset, Facebook stock. Flight to quality asset, gold. Risk asset, basically, actually any sort of high-beta tech stock you can come up with. Flight to quality asset-

Meltem Demirors
And high-beta, let's just define what high-beta means.

Jill Carlson
Oh.

Meltem Demirors
Yeah, I can.

Jill Carlson
Throwback to our Greek's episode.

Meltem Demirors
I love the Greek's.

Jill Carlson
We've got alpha, beta ...

Meltem Demirors
Yeah. Beta is really the correlation between the amount the market moves up or down, and that asset's amount of movement related to the market.

Jill Carlson
So if Facebook, for example, I'm just pulling this out of my hair, I don't think this is the real number, Facebook stock has a beta of two. For every 1% move in, say, the S&P 500, Facebook stock should move 2% up or down, whatever the direction is.

Meltem Demirors
Exactly.

Jill Carlson
Again, risk assets, risk-on; flight to quality assets, risk-off. Things like Treasury bills, G10 currencies, gold, again, is the really big one.

Meltem Demirors
And then there are certain industries, utilities, healthcare, pharmaceuticals, things that tend to be cycle-prone, things that are essential goods, things that are vital to the functioning of economies tend to be perceived as less risky because the cash flows are reliable.

Jill Carlson
Exactly. Everyone's going to need healthcare no matter what.

Meltem Demirors
That's another-

Jill Carlson
Yeah.

Meltem Demirors
That's a non-sequitur.

Jill Carlson
Sorry. We're not actually running a politics podcast here.

Meltem Demirors
No, that sounds terrible.

Jill Carlson
So here's a question I have, Meltem.

Meltem Demirors
Okay, what's the question?

Jill Carlson
And I just want to pose it to you.

Meltem Demirors
Yep.

Jill Carlson
Is Bitcoin a risk asset or a flight to quality asset?

Meltem Demirors
Here's the thing-

Jill Carlson
Bitcoin, specifically, not crypto.

Meltem Demirors
Okay, but here's the one thing we have to keep in mind, and I think this is what people forget when we talk about investing: investing is an individual game, and it's about your psychology versus the psychology of the market. For me personally, Bitcoin is a risk-off asset because I view Bitcoin as a safe haven. However, for the macro, broad world-

Jill Carlson
Yeah, what about the market though?

Meltem Demirors
The market, Bitcoin is a risk-on asset. Number one, they don't care about Bitcoin because they have other problems to worry about right now, like the Euro's going to hell in a hand-basket; China's trade war is getting weird; all sorts of stuff going on, like there may be a new war breaking out. There's all sorts of stuff going on. Bitcoin doesn't even-

Jill Carlson
On, this Iran nonsense, is that what you're talking about?

Meltem Demirors
I don't want to talk about it. But Bitcoin doesn't even register on their radar. It's so far out there on the spectrum, beyond all other alternatives, they're not really thinking about it. And if they are, they're not investing in it directly; they're outsourcing it to another manager in small allocation. Typically, it's one of the GPs or the portfolio managers taking their own personal money and buying an exposure with it. They're not buying it with a fund.

Meltem Demirors
In my view, on the macro scale for most investors out there that are managing capital professionally, Bitcoin's not even on the radar. It is a risk-on asset and they'll deal with it later when they need to.

Jill Carlson
I would agree with that.

Meltem Demirors
What do you think?

Jill Carlson
Most institutional fund managers who I've spoken to, if I ask them, "Oh, do you have any exposure to Bitcoin?", they either laugh at me, or they say, "Oh yeah, well, through some of the venture funds that we have money in etc." I think for that reason because most people's exposure to this is through their riskiest assets, which is LP shares in these venture funds, I think that it gets viewed as this risk asset.

Meltem Demirors
The other-

Jill Carlson
Now, I'm going to disagree with you though because I think that investing and trading in markets and whatever, it's not just about what I think. Unless what I think is consensus, I'm going to be wrong in my trades and in my investments. So, it actually really matters to me what everyone else views it as.

Jill Carlson
I, in my heart of hearts, absolutely view Bitcoin as a hedge, as a risk-off trade. Part of the reason why I want to own Bitcoin is in the event that the world goes to hell in a hand-basket, that we all get forced into using Libra coin and PayPal, and I'm at risk of being deplatformed, I want to have Bitcoin. That is a fundamentally risk-off trade, for sure, but that's not how the world sees it.

Meltem Demirors
No, the world doesn't share that belief. Despite the best efforts of the Bitcoin community to laugh at the gold community, let's face reality here: Bitcoin is, as of today, a $200 billion asset class. Apple has more free cash on their balance sheet than the entire Bitcoin market.

Jill Carlson
They could just buy it up.

Meltem Demirors
Okay, gold is a $7 trillion asset class. So I think in terms of relative size, the other issue here is sizing, and we'll get into this when we talk a little bit about how institutions invest, but if I'm managing $30 billion, $40 billion in a portfolio, and I can't even buy $10 million of Bitcoin without moving the market materially, without 5 to 10% slippage, that's not an asset that is risk-off. That is a highly risk-on asset because the liquidity-

Jill Carlson
Liquidity, exactly.

Meltem Demirors
For me to move in these markets and size just isn't there. I think that's the other factor you can't forget is what makes something risky or not, part of it is liquidity, your ability to move into and out of that asset at or near the price that you want to be at or got in at, right?

Jill Carlson
Totally.

Meltem Demirors
So the challenge with Bitcoin is, and we've seen this in the market, one event can totally decimate the market. You see these massive candles where, over the weekend this weekend, the price dropped $2,000 or 15%-

Jill Carlson
Oh god.

Meltem Demirors
In the blink of an eye.

Jill Carlson
That was just embarrassing.

Meltem Demirors
Right, and it was small order.

Jill Carlson
It was because Joe Lubin sold $10,000 worth of Bitcoin or something, right?

Meltem Demirors
I don't know if that's what it was, but I think-

Jill Carlson
I'm exaggerating in all directions.

Meltem Demirors
But I think, again, this is, for Bitcoiners who are already indoctrinated, like you and I are, we've drank the Kool-Aid, which is the red pill, it's risk-off because we have certain views of the world. But I think for the macro sort of environment and for the average person you talk to, they don't care about Bitcoin. They don't view it as an investible asset at all. It's some weird fringe thing that people on the internet do. They're not interested. You know what they're going to do? They're going to buy gold.

Jill Carlson
Well, okay, this is one more thing I want to address on the Bitcoin/gold parallel, which for many people I speak to outside of the crypto community, the crypto world, this is where the penny drops for them of, "Oh, I get it," which is the capped supply. That, to me, is a huge differentiator of Bitcoin from every other alt coin. That, to me, is one of the big things that makes Bitcoin this risk-off trade.

Meltem Demirors
Scarcity.

Jill Carlson
Scarcity, exactly. Because the nice thing there is that it hedges you in a lot of different directions, and specifically, it hedges you if inflation starts to tick up, which people have been wondering why inflation has not started to tick up as we, again, approach-

Meltem Demirors
Because this time it's different, Jill.

Jill Carlson
Exactly, exactly. Howard Marks actually had a great sentence or two on this of inflation is just this kind of funny beast, and people wonder where it comes from, people wonder why it hasn't manifested itself yet. Back in the '70s when the United States was experiencing double-digit inflation, there still is not a great understanding of what happened there.

Meltem Demirors
But in my view, one of the things that impacts inflation is real wages. Again, if we think about the ways people look at the economy, in reality, people's wages have not gone up. And actually, over the last 30 years, PPP or purchasing power parity, which is basically the basket of goods I can buy with a set amount of money, purchasing power parity has gone done. Meaning if I earn a median income in the United States, I can, today, afford less than I could afford 30 years ago.

Meltem Demirors
I think part of the challenge here is, and this is a real problem particularly for people in our generation, and this is where Bitcoin, again, because it's deflationary, becomes interesting, is if I'm earning less money, if I can afford less, if I am 30-years-old and I'm living in San Francisco and I have $200,000 of student debt, and the average price of a home here is $2 million there is no way I will own a home in the next five years.

Jill Carlson
I was going to say, in San Francisco, it feels like your purchasing power parity changes on a monthly basis.

Meltem Demirors
Well, it depends on the number of tech IPOs.

Jill Carlson
Yeah, exactly.

Meltem Demirors
But I mean, again, this is the big question. I don't think you can ignore the macro environment when you're looking at Bitcoin. I don't think you can ignore the individual biases and the lens of the person looking at the opportunity is using, but on the macro scale, Bitcoin is definitely, definitely a risk-on asset.

Jill Carlson
I would agree with that, yeah.

Meltem Demirors
What I do think's different this time, let's touch on that.

Jill Carlson
Yep.

Meltem Demirors
Bitcoin is an asset class. Bitcoin has gone from being the butt of every joke and being this thing-

Jill Carlson
It still kind of is.

Meltem Demirors
Eh, now alt coins are, right? Bitcoin's legitimate, now alt coins are the joke. But I think in most circles, when you say the word Bitcoin, people generally know what that is. Very different from five years ago.

Jill Carlson
Well, okay. Circles in New York and San Francisco and Berlin and London.

Meltem Demirors
No, I would say most places I go to, people have at least heard of Bitcoin.

Jill Carlson
They've heard of it, yes. Yes.

Meltem Demirors
And their perception of it, I do think perception has changed. It's been legitimized in some ways. You see it on the news, you see it in the paper, and it's not talked about in the context of Silk Road or money laundering or drugs or illicit crime anymore, it's talked about in the context of finance and technology innovation in the same way that people talk about other technology innovation or other growth asset classes.

Meltem Demirors
So I think from a legitimacy perspective, that's starting to change, but is it an asset class that people think about or want exposure to? Not quite yet. I think there's still a ways to go.

Jill Carlson
That's actually one area where I'll give, for example, Libra some credit is a lot of people are talking about Libra in the context of this latest Bitcoin price pump where we went from $7k to $14k over the course of two weeks. Very healthy market, right?

Meltem Demirors
Totally normal.

Jill Carlson
Totally, yeah, just normal things. A lot of people though are talking about Libra in that context of, "Oh, Libra's going to be this grant on-ramp with all of this money flowing into it." Maybe, maybe. Jury's out. But I will say is that Libra, I think, has helped changed the conversation around Bitcoin and around cryptocurrency by creating this narrative more around banking the unbanked, these more kind of legitimate, in the light use cases.

Meltem Demirors
I'm sorry. I have a twitch in my eye-

Jill Carlson
I know, you're having a physical reaction.

Meltem Demirors
Whenever people say, "Banking the unbanked"-

Jill Carlson
Again, we'll see, but it's changing the narrative, and that is hugely important in terms of Bitcoin becoming an asset class.

Jill Carlson
Let's dive into some more of these questions that we have around is this time different for Bitcoin?

Meltem Demirors
Okay. I want to talk about something I saw, of all places-

Jill Carlson
It sounds like this grinds your gears.

Meltem Demirors
Oh my god. Ugh. "Banking the unbanked" is probably the most gear-grinding phrase for me, but the second most interesting thing I saw, Binance, you know, big alt coin exchange, they had a tweet after Bitcoin did its crazy rally from $7k to $14k, totally healthy, totally normal, they had this tweet where they had a circle of candles and they said, "Summoning alt coin season."

Meltem Demirors
And so this is where it actually was different this time. Historically, what's happened is whenever wealth flows into Bitcoin, people start to feel good, expansion in the crypto market overall, and people start redirecting those gains into alt coins-

Jill Carlson
They're reaching for more and more risk, right?

Meltem Demirors
Exactly. They want more risk, they want more alpha-

Jill Carlson
[crosstalk 00:33:26]

Meltem Demirors
Bitcoin already doubled in price this month, I want another 2x, alt coins are going to follow. But here's what happened this time: alt coins showed basically no life, right?

Jill Carlson
Yeah.

Meltem Demirors
So it's funny-

Jill Carlson
They got out the CPR, they were clear, Zzz!

Meltem Demirors
Exactly.

Jill Carlson
Nothing was happening. No pulse.

Meltem Demirors
What's interesting, what is different this time, and I think what we're starting to see is a decoupling of flows into Bitcoin from flows into other coins, and there's almost a divergence happening where quality assets or perceived quality assets are being separated from crap assets.

Meltem Demirors
You'll still have the penny stocks and they'll continue to trade, and they have their own little crazy patterns, but there is a separation where the majority of capital inflow is going into legitimate, established, well-understood, branded assets like Bitcoin to start, then we did see some flow into Ethereum, we saw a handful of other currencies get a little bit of uptick, but no one's buying the weird number 200 coin. What was it last cycle? Pascal coin or MONA coin or this weird stuff. That's not happening.

Jill Carlson
I think that correlates with another observation of how this time has been different. When I say, "This time," I really just mean the last couple of months, but it's been very quiet. There's been very little in the way of very pumpy marketing schemes, the Ethereum scams, the fake accounts that usually pop up on Twitter, there's been a lot less of that kind of noise. There's been a lot fewer, it feels like, new entrants into the space. It feels like the price action has been more of just a reallocation, maybe, within the space or within folks who are already insiders or even institutions who are already insiders.

Meltem Demirors
What I like to say is in 2019, everyone became a Bitcoin maximalist.

Jill Carlson
When you say that though, that makes me think, okay, did all of the alt coiners, was there finally a capitulation where they were like, "Oh, hell. Okay, fine. Finally, we're going to sell out of our alt coins and get into Bitcoin"?

Meltem Demirors
I think the-

Jill Carlson
Because we didn't really see that. That would have resulted in a much bigger tank in price of the alt coins.

Meltem Demirors
Okay, but if you think about where people are at with these non-Bitcoin assets, right? In 2017 and 2018, it was a risk-on environment, everyone was feeling good, money was being thrown around, and people bought these assets at crazy prices. Then the prices dropped 95, in some cases 99.9%. There are people who are holding assets that are way underwater, and they show some signs of life, but what you forget is these assets are still 85, 87, 89, 90% off their highs. And what most people I talk to who are prolific shit coiners, or big, alt coin bag holders, what they say to me is, "I'm waiting for the next big pump," right?

Jill Carlson
To sell, yeah.

Meltem Demirors
"To sell my alt coins into Bitcoin, and I really want to be long Bitcoin."

Meltem Demirors
Now, the question is people who are coming into the market, are they people who want these really high-risk, illiquid, super unpredictable coins? I don't think so.

Jill Carlson
So do you think that this pump then, this Bitcoin pump, was driven by new entrants into the market?

Meltem Demirors
No. I mean, there are a lot of people who have analyzed it. A lot of it, I think, was driven by printing of Tethers, right?

Jill Carlson
Mm-hmm.

Meltem Demirors
Tether continues to impact. And Tether, by the way-

Jill Carlson
Meltem, have you engaged in the Tether fund?

Meltem Demirors
No, no, no, but look-

Jill Carlson
I feel that my work here is done.

Meltem Demirors
No, but Tether is a way of expanding the money supply, right?

Jill Carlson
Yeah.

Meltem Demirors
It's basically a way of shadow banking the crypto ecosystem. I do think that a bunch of people who are already in the community or people who had been sitting on the sidelines for a while felt, when prices started to rise from February onward, that it was a good point for entry, and once prices broke the $6,500 level, I think you saw a lot of people piling on.

Meltem Demirors
The thing is, all of the people in this market who are allocating capital, they all talk to one another. We're constantly talking to one another all day. I'm talking to people at brokerages and trading firms. I'm like, "Hey, what do you think?" Everyone's looking at the same charts, everyone's looking at the same data, so it's not unreasonable that a lot of people felt like February and March was the time to stop being short and start going long.

Meltem Demirors
So when everyone in the group is engaging in the same behavior, it's not surprising that the tide flipped.

Jill Carlson
Yeah. I think that the magnitude of the parabolic rise, and then the sharp decline that we saw over the course of last weekend, that goes back to this question of liquidity and sophistication of the market. Right?

Meltem Demirors
Yeah.

Jill Carlson
It is the classic sign of an immature market that is still all one way. It's this herd behavior. It's the lemmings going off of the cliff all together. Well, climbing the cliff and then going off of it. So I think, from that perspective, this time is not different. Nothing has changed.

Meltem Demirors
Okay. But here's what is different: when I ask myself this question as an investor, it's really what am I willing to bet on, and what are the consequences if I'm wrong? And that cuts both ways.

Meltem Demirors
If you look at what happened with Bitcoin over the last week, a lot of people are like, "Oh, I sold the top," which was around $14,000, and then a lot of people were congratulating themselves because they rebought at $11,000 or $12,000. Okay, we're at $9,000 right now, so that wasn't ... Good job. Thank you, thank you for publicizing that.

Meltem Demirors
But I also think what is different here is we're in this weird no man's land where it could go both ways. A lot of people think the rise from $7 to $14 happened way too fast. Fundamentally, very little changed. Okay.

Jill Carlson
Nothing changed from $7 to $14.

Meltem Demirors
A few things did change. There's more positive news, there's more legitimacy, but structurally, nothing changed. The bigger thing is it isn't like all of a sudden, some new channel to access digital currencies has suddenly opened up.

Jill Carlson
No.

Meltem Demirors
It hasn't. The people who move markets in size, the people who can create a lot of inflows of new capital, they're still not touching this, and they won't for a while.

Jill Carlson
No.

Meltem Demirors
And that's just a reality. The institutions are not here. They are coming, but it's going to be a long process, and it's going to be very cautious, it's going to be very skiddish, and events like what we saw over the last week are going to make them anxious and uncomfortable.

Jill Carlson
One thing I want to point out is, in many ways, the macro environment, actually, changed over the last few weeks, not in any kind of dramatic way, but it was this very interesting combination where we saw stocks reach all-time highs, and also gold start to show signs of life for the first time in years. That, to me, is notable just from the perspective that, again, Bitcoin has these kinds of properties, both of gold, but also of risk assets. I was starting to look at the correlations there.

Jill Carlson
Now, that's a very short-term observation, of course, but that, again, is something that, to me, is a bit different. I'm always trying to impose Bitcoin on the macro markets and to try and derive some kind of sense in the fog of war.

Meltem Demirors
But the question ultimately is, as an investor, you get paid to manage risk, right?

Jill Carlson
Mm-hmm.

Meltem Demirors
And your livelihood depends on your ability to appropriately manage risk, but to also use what you know, and to use what the market's telling you, the proverbial tea leaves, to make the best decisions possible.

Meltem Demirors
If you're reading the tea leaves, there's two ways you can look at the world. Number one is what's happening within this microcosm? Prices are rising rapidly, there was a bunch of self-congratulation and exuberance in the Bitcoin community, there was this big conference in San Francisco where everyone got together and they're feeling really good about themselves-

Jill Carlson
Everyone was like, "It's because of us, it's because of me."

Meltem Demirors
"Yeah, I held! I held!" Ugh. It's like, no, bro. Relax. It's okay. Take less, whatever it is, take less. Have a CBD drink.

Jill Carlson
Or give me some. I don't know.

Meltem Demirors
No, I don't want to be like that.

Jill Carlson
Have yourself a CBD drink. It's going to be okay.

Meltem Demirors
But I think there was a sort of irrational exuberance, and I think people started to get a little ahead of themselves. They're like, "Oh, bull season's back."

Meltem Demirors
But then the other thing that happened is the macro climate suddenly changed. The world, over the course of 72 hours, got a lot riskier. Don't forget that the G20 Conference happened this weekend; we're in the midst of a trade war with China, and neither side's really budging; we're initiating a trade war with Mexico; we're initiating an actual war with Iran. So I think there is this reality that all of a sudden, over the last week, the world has gotten different. It's gotten riskier. There are concerns over what's going to happen with Brexit, there are concerns over the dissolution and the breakdown of the Eurozone-

Jill Carlson
But the Fed is going to keep cutting rates, so it's actually all good.

Meltem Demirors
But I think, again, you can't ignore the fact that this time isn't necessarily different because the underlying factors haven't changed. What has changed for the first time since Bitcoin's inception, coincidentally also 10 years and one month ago, which coincides with this market expansion period, is we haven't seen the behavior of Bitcoin in a contractionary economic cycle.

Meltem Demirors
When people start thinking about their overall exposure, people have real world costs. We pay our bills in US dollars. If you have a family, if you pay mortgage, if you have employees, if you have fixed costs that are paid in US dollars, and the world around's you changing very rapidly, and you're sitting on an asset that's really volatile and carries a lot of inherent market risk ...

Jill Carlson
What I think is pretty interesting about that point though is let's say we do enter a recessionary spiral.

Meltem Demirors
Oh no!

Jill Carlson
Oh no! You're talking, again, about-

Meltem Demirors
That's like saying, "Beetlejuice" still. Don't say it!

Jill Carlson
Well, okay. Meltem, you're talking about this Bitcoin conference, 2019, all of these people who are like, "Oh, I held, I held! I hodled!" Whatever. You're like, "Calm yourself."

Meltem Demirors
Mm-hmm.

Jill Carlson
I could imagine a scenario in which in a recession, in a contractionary period, all of those people are still hodling, actually, and making Bitcoin because, again, those of us who are crypto native who've drunk the Kool-Aid, we believe that Bitcoin should be a risk-off asset-

Meltem Demirors
But hold on.

Jill Carlson
And so if you have a core holder set, who aren't selling, then suddenly, Bitcoin is one of the more resilient assets in a contractionary period, and I could imagine more money pouring into it and paying attention to it as a gold alternative.

Meltem Demirors
But let's realistically talk about what happens in this scenario. You're a holder and you've been holding your Bitcoin, whether you have .1 Bitcoin or 100 Bitcoin, you've been holding your Bitcoin. All of a sudden, recession. The first thing that happens is you get less consulting gigs, or you have less paying clients, or god forbid, you lose your job. What do you do?

Meltem Demirors
Okay, maybe you have six months of saving to live off of, and then you start running out of savings. What do you do next?

Jill Carlson
Yeah, you tighten your belt.

Meltem Demirors
But what are you-

Jill Carlson
You downsize.

Meltem Demirors
And then what do you do?

Jill Carlson
Well, if you have assets, if you have investments, you sell them.

Meltem Demirors
Okay.

Jill Carlson
But what I would push back on there though is if you look at this hodler set, I would argue that probably many of those who are holding Bitcoin have net worth in other places.

Meltem Demirors
Okay. The other thing, there's another metric that's been introduced. There is, obviously, we have on-chain data, and one of the other metrics setting an all-time high over the last few weeks was HODL waves. What that is, it's basically a metric that analyzes how frequently Bitcoin moved from wallet to wallet. What we saw over the last few weeks is that ratio hit an all-time high, meaning that on average, people were moving their coins far less frequently, and the average hold period of coins in a wallet was going up, which substantiates this idea that more people are holders than net sellers.

Meltem Demirors
What I think what did happen, bear market flushes out sellers, so every time we saw price action of the last few months, people would sell into that price action, which would push the price back down. People were holding, maybe some new capital flowing, some were selling etc. I think we finally got to a point where we ran out of net sellers. We flipped to buy. Every fund I've talked to has flipped from being short to now being long. Right?

Jill Carlson
Yeah.

Meltem Demirors
But macro environment, we can't ignore it.

Jill Carlson
This is just a thesis, a hypothesis really, not even a thesis, that in a risk-off environment, Bitcoin will hold and we might even see inflows into it, despite it being, as we said, a risk asset.

Meltem Demirors
But with what money, Jill?

Jill Carlson
The same money that's going to be flowing into gold in a risk-off environment.

Meltem Demirors
I don't believe that will happen on a macro scale, but I think that-

Jill Carlson
We'll see.

Meltem Demirors
Okay. But here are the things that we do know are different: the economic environment in which we're operating is different, and we've never seen Bitcoin's behavior in a period of macro economic contraction. That, I think, is something new that I'll be interested in, and we'll see is it risk-on, is it risk-off? It actually may oscillate depending on the time of risk. I think in periods of political risk, it may be a risk-off asset; in periods of economic risk or regulatory risk anxiety-

Jill Carlson
Oh yeah, of course.

Meltem Demirors
The riskiness of the asset can change depending on its status.

Meltem Demirors
What hasn't changed? There's no clearer regulatory scenario-

Jill Carlson
Yeah, speaking of regulation.

Meltem Demirors
It's still a clusterfuck.

Jill Carlson
If anything, it's worse.

Meltem Demirors
It is worse.

Jill Carlson
In the United States.

Meltem Demirors
It is. I mean, the CFTC has issued licenses. Notably, LedgerX, after five years of working on this, got approved by the CFTC, although that news was a little misreported, but go you. ErisX, also notable. They've been working with TD Ameritrade, and then backed physically settled futures are about to go into their test phase in two weeks. I'm pretty excited about that.

Meltem Demirors
We're seeing record volumes in the CME cash-settled futures product. BitMax, which is the leading Bitcoin derivatives exchange, for the first time crossed a trillion dollars in traded volume in a 365-day period, which is a big milestone.

Meltem Demirors
But from a regulatory perspective, things are not really clearer. The SEC's not moving application forward.

Jill Carlson
They called for a halt on developing Libra.

Meltem Demirors
That's right. What's his name?

Jill Carlson
We have this whole kick nonsense going on.

Meltem Demirors
The senator that asked to stop the crypto-

Jill Carlson
Oh, Sherman.

Meltem Demirors
Yeah, Representative Sherman still wants to stop the cryptocurrency.

Jill Carlson
That, I think was very bullish, actually, for Bitcoin.

Meltem Demirors
But either way, it hasn't changed. That's not different. Institutional capitals, we've touched on. It is and isn't different.

Jill Carlson
The institutions are coming!

Meltem Demirors
Institutions are not yet coming. Look, there is more legitimacy and validation, right?

Jill Carlson
Mm-hmm .

Meltem Demirors
So Libra, JP Morgan coin, Goldman Sach's CEO, Dave Solomon, now talking about potentially Goldman coin. Henry Kravis, the legendary investor and one of the partners at KKR, which is a well-known PE and investment firm, is an LP in a crypto fund that one of his former employees is running, and he was talking about, in that press release, why he feels Bitcoin's a great investment. So, people are coming out of the woodwork and legitimizing the asset class, whether it's institutions, fabled investors, Real Vision TV, which is Raoul Pal's finance news specialist station, did a whole two-weeks series. I got the privilege of being in that.

Jill Carlson
Heck yeah! Tune in. This girl right here.

Meltem Demirors
These things are legitimizing. People are watching this, reading this, etc.

Jill Carlson
But the market is still no more mature.

Meltem Demirors
Exactly. The market is way too small. The other thing that's interesting is who are these inflows coming from? I think it continues to be a retail game. I think it continues to be a high network accredited investor game. I think there's a little bit of family office participation, but there are no asset managers that are buying it, there are no wealth managers that are buying it, and at the end of the day, the market's just way too tiny.

Jill Carlson
All right. To start to wrap up here, we never do this, but I'm going to say we should do this today.

Meltem Demirors
Uh-oh! No!

Jill Carlson
What is the low and what is the high that Bitcoin is going to see before the start of 2020 in the rest of this year? Gun to your head. We do not give financial advice, not to you, anyway.

Meltem Demirors
Yeah. I think price targets are tricky. In the words of, again, Howard Marks-

Jill Carlson
Don't evade the question, just answer the question.

Meltem Demirors
I'm just going to ... Okay. So if I were answering this question at any other time, I'd say I'll give a price, but not a date or I'll give a date but not a price.

Jill Carlson
Yeah, no date, but before the end of the year.

Meltem Demirors
Look, I think I could see Bitcoin retracing back to the $6,000 range which is where it evened out for this first run-up, but I also think we could see Bitcoin pass its prior highs. I think it's fairly unlikely that Bitcoin would go over $20,000, but again, there are all of these exogenous factors that we can't control.

Jill Carlson
So $6k and $20,000?

Meltem Demirors
Yeah, I think that's a range-

Jill Carlson
Damn it!

Meltem Demirors
Over which I have 90% confidence.

Jill Carlson
That's so close to what my range was going to be.

Meltem Demirors
What's your range?

Jill Carlson
I'm going to say $6,500 as the low.

Meltem Demirors
Okay.

Jill Carlson
I think we'll hit that again though. I do.

Meltem Demirors
Yeah, I think so as well.

Jill Carlson
I feel confident that we will see $6,500 again. I was going to say $20k is the high. I guess just to tighten up your market a little bit, I would say maybe $18k. I think-

Meltem Demirors
Damn you, Jill. But what's your confidence on that? Because a range is no good-

Jill Carlson
Would give it 90, I would give it 90% confidence interval.

Meltem Demirors
90? Okay. And look-

Jill Carlson
I make tighter markets than Meltem, let it go down in history.

Meltem Demirors
Whatever, Jill. But look, here's what is different: we don't know what's going to happen because we've never been in a contractionary macro economic period with Bitcoin.

Jill Carlson
And we're still not.

Meltem Demirors
We're not yet, but we may be, right? Here's what we do know is true and is not different: markets are cyclical. Bitcoin is going to continue to be cyclical. It's going to continue to oscillate. We hope that the pattern continues to be up and to the right when you zoom out, but it may not be. There are no guarantees. What I always say is long-term, very long, long-term, way, way, way zoomed out, Bitcoin's either a zero or it's a whole lot more than zero, and there's really not much in between.

Jill Carlson
It feels very binary.

Meltem Demirors
It is binary, right.

Jill Carlson
So keep playing the game.

Meltem Demirors
That's what risky assets are about. But here's what I am watching for, here's what I'm excited about: the best thing that could happen to Bitcoin is everyone obsesses over Libra and [Clayton 00:53:10], which is the Korean equivalent, which by the way, this Libra thing, the Asian tech companies have been doing this for a while. It's not that novel. But let's let regulators obsess over these, what I can not cryptocurrencies, but digital currencies, and these new constructions of, really, financial products of ETFs that are issued on a blockchain. Let the regulators go and worry about that, and leave this Bitcoin thing alone and let it continue to grow and evolve. Let them go do that for a while. That's probably the best thing, honestly.

Jill Carlson
I think that in the course of that, Bitcoin will continue to gain legitimacy.

Meltem Demirors
And no news is good news. It takes a long time for people's beliefs to change, but I think finally, five years into really the mass market messaging of Bitcoin, the message is starting to change. The narrative is starting to change and what our best friend is right now is no news.

Jill Carlson
I'm going to leave it here on this note, which is that I'm going to remain long Bitcoin because of that property that we described where it can be both a risk-on asset and a risk-off asset because I view that as a pretty well-hedged trade. I think that if the party continues on, if the good times keep on rolling, then we'll continue to see money flow into it as a risk trade, and I think that if we contract, well, we got into that already, but.

Meltem Demirors
The only thing I'll end with is none of this is financial advice.

Jill Carlson
No.

Meltem Demirors
You should never invest more money than you're willing to lose. Bitcoin is still a very high-risk asset and you should speak to a financial advisor before making any decisions.

Jill Carlson
And do your own research.

Meltem Demirors
Yes, do your own research. But look, the party is far from over, the bulls are still running in the streets, and at the end of the day, we're still up. The price has close to tripled in the last six months. H1 is over, done and dusted. We've almost tripled, so the question is H2, what do you have in store, baby?

Jill Carlson
Don't forget though, year-on-year, that chart is still not looking so hot, but we'll leave that for the next episode.

Meltem Demirors
All right, Jill. Well, cheers.

Jill Carlson
Cheers.

Meltem Demirors
Oh, you already finished your-

Jill Carlson
I'm out.

Meltem Demirors
Your CBD drink. Cheers to San Francisco. We hope you enjoyed this episode and we will be back soon.

Jill Carlson
Hey this is Jill and Meltem. Thanks for joining us for another week of What Grinds My Gears. We love hearing from you, so please hit us up on Twitter, send us feedback, join the conversation. Follow us on Twitter @WhatGrindsMyGears where we share a summary of each week's episode, reference, reading materials, and of course, memes.

Meltem Demirors
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Meltem Demirors
Thank you so much for listening. We love you and we'll see you next time for What Grinds My Gears.