00:00 Speaker A

So, um, let’s talk about some of the recent action first of all because we’ve had that a lot of volatility. We had the so-called crash in Bitcoin, a mini crash in Bitcoin, but more so in a lot of the other crypto coins a couple of weeks ago. What does that tell us about kind of where we are in the crypto cycle?

00:25 Speaker B

Yes, well, of course, uh, you know, 2025 uh had been and still has been a a fairly positive year to date. Um, but that uh episode uh on the 10th, Friday the 10th last week, um shown a light I think on some of the uh challenging, maybe concerning dynamics in the space and particularly with respect to the amount of uh leverage that’s out there.

00:54 Speaker B

Um, if you look at uh the sort of offshore futures trading market, the open interest in that is less than 2% of the total value of Bitcoin. But it represents 70% or more of the trading volume. And so what you have is this tiny slice of the market that actually trades a uh significant majority of it with much higher frequency and in a much more speculative kind of volatile way.

01:21 Speaker B

And that creates a lot of confusion for investors, um, when you have these whipsaws that don’t seem to make sense from a fundamental perspective.

01:34 Speaker A

Does it fee I mean, a lot of it is in the coins that are not Bitcoin, but does it have a feedback loop to Bitcoin itself also?

01:45 Speaker B

It does.

01:46 Speaker B

I think over time as you see this market mature, you’re going to see a decoupling of the way Bitcoin trades from the way uh most of the rest of crypto trades because Bitcoin really is in a category of its own as this sort of uh prospective digital gold as a global scarce uh non-sovereign emerging monetary alternative. That’s very different from what the rest of crypto is, which is more of a technology bet uh on blockchain innovation and adoption.

02:20 Speaker B

And there’s lots of exciting things going on there, but it’s important for investors to remember that the vast majority of crypto assets by number are totally worthless, right? And so there’s there’s a bunch of exciting projects there. Bitcoin clearly is an important asset. Uh we think Ethereum, there’s there’s a handful of others. But investors have to be really careful trading sort of the long tail of assets, particularly trading them with leverage. and you saw that in the flash crash uh of last Friday. A lot of investors got burned.