Transcript+
Let's be clear, Bitcoin is an international asset. We are spending like drunken sailors. Bitcoin is the only economic entity where the supply is unaffected by the demand. If you want to preserve your wealth, you have to convert that currency into an asset that's scarce, desirable, portable, durable, and maintainable. OK, welcome back to Scarce Assets. Excited for this week's episode. We have Alex porn joining us, founder and wealth strategist at Crossover Capital Advisors, also locally based here as well in the Philadelphia area. So we got plenty of things to talk about today, Alex. Maybe we saved the Eagles talk for a different conversation, but how are you doing outside of that loss over the weekend? Yeah, we'll keep it positive today, right. Thanks for having me on and yeah, excited to talk with you. And look, mid January, it's a fun time of year re engaging with clients on on the year ahead, looking at markets, looking at Bitcoin, where are things going? So we're we're having a lot of engaging conversations. Awesome, Yeah, sounds great. So best place to start typically is just get people familiar with what you're working on these days. I always like to get a sense of the background that you have, and so I know that you spent a good amount of time at Merrill in the wealth management space. And then more recently, you'll correct me if I'm wrong, but 卤3 years ago you started Crossover Capital Advisors, registered investment advisory firm. Could you tell us more about your journey? Journey in the wealth management industry? Yeah. Sure. Look and you know before Merrill I was at EY for a while. So CPA buy background, got a lot of really great experience in my years at Merrill. Got a little frustrated that we weren't allowed to advise around Bitcoin, although I'm sure we'll cover today that that's changed in the last week or so. But yeah, I think wanted to wanted to be able to advise our clients a little bit more independently in a full fiduciary manner, not being pushed towards selling bank product or selling a certain investment product and certainly one of the ability to educate people on Bitcoin and where that makes sense within a broader financial plan. So we start across over capital May of 2023, none of our clients on Bitcoin when they when they made the leap with us. And today about 90% of our clients have some sort of Bitcoin exposure. The other 10% typically like didn't even take us up on education around why they might want to consider it had made the decision that it wasn't for them. And that's fine. So it's been a, it's been a fun journey over the last 2 1/2 years for sure. I love it, Alex. Yeah, you'd, I, I personally have not heard that too much. You know, I speak with a number of people that still sit in some capacity in traditional finance and I don't hear too often that someone actually will make the jump to start their own thing because they're so passionate about a emerging form of money or asset class and that's a motivation enough to start their own business. So I think that's fascinating. I commend you for it. And of course, I think that that's where the future is going in terms of wealth management and incorporating Bitcoin in in traditional portfolios. Yeah, Look, again, I'm sure we'll, we'll get to the recent news around Vanguard, around Bank of America, Morgan Stanley doing some interesting things. So hey, look, it's kind of kind of cool to have been, I guess a pioneer to, to some extent. There's plenty, plenty of advisors that have been, have been working in and around Bitcoin for a number of years. But exciting to see Wall Street coming around, you know, over the last 12 months. Yeah, I'm excited to touch on that for sure. Could you tell me a little bit more about over the span of your career, how you're thinking has kind of changed on markets? Because I imagine, and this can kind of tie into how Bitcoin initially got on your radar, but I'd imagine sitting in the financial planning world for over a decade, you change your opinion on a number of things in terms of having to think about Bitcoin. How does it fit into a financial plan? How do you think about it as part of a portfolio? So we don't need to necessarily unpack all that in in one go, but I'd love to understand like where you are today and how that differed to earlier on in your wealth management journey, how you thought, how you think about markets. Well, I, I, I certainly sleep better at night. I know there's a lot of people out there that view Bitcoin as a relatively risky asset. I'm a little bit on the other side of the coin there. Of course, none of this is is financial advice here, but but yeah, I sleep easy knowing that I've got my family and a number of our clients allocated something I think is going to be really important for a really long period of time moving forward. When I think about Bitcoin in general, look, I think it's pretty likely that the government's going to continue to spend irresponsibly. I think it's very, very likely that Bitcoin supply is going to continue to get more scarce. And I think it's pretty likely that Bitcoin adoption is going to continue to pick up, especially again, as Wall Street continues to get more involved. So, yeah, I, I think I used to stress about so many different moving parts and variables in the market. And it's not that we don't pay attention to those things anymore, but I kind of view the world, I guess maybe somewhat through a simpler lens knowing that we we're applying tools like Bitcoin in the right way across portfolios. All right, it's 2026 and we have a new year ahead of us. It means it's a great time. It is an opportunity to take inventory, think about your Bitcoin custody, your inheritance plan, your broader ownership structure, and your goals. If you're looking for more Peace of Mind this year, get in touch with us here at On Ramp. We're working with individuals all over the world, people who've been in Bitcoin for a decade, people who got in for the first time last year. We're working with individuals who use self custody and have done so for a number of years or even over a decade. And likewise we're working with people who never felt comfortable with self custody and have Bitcoin on an exchange. Either way, get in touch with us here at onramp. We have a private client type approach to our relationships. You have a dedicated account manager, always human support, multi institution custody with inheritance included, an IRA account included as well at no additional cost. Access to Bitcoin back loans, insurances included trading capabilities as well. And for a limited time, if you use the code TLT, you'll get 50% off your first month with on ramp. Now I will say it may be worth having a conversation. So when you speak with me or speak with someone and book that consultation on our homepage, you can just mention you heard of us through the last trade mentioned TLT and we'll still take care of that if you sign up. So hope you enjoy the rest of the episode. Thanks for being here. Yeah. So, well, that makes sense in in in the context of Bitcoin. Then you mentioned the irresponsible government spending, which I think is something we commonly will point to in this industry. And I agree with you, it doesn't seem like the incentives are in favor of that ever changing. And so I'd be curious, was that like an inclination you already had and then when you found Bitcoin and you heard of 21 million and that the monetary properties cannot be changed, that it really just kind of like fitted fit into your world view and how you thought about allocating capital Or did that kind of force you to think differently? I guess I'm trying to understand, were you already concerned about the debt, the money printing or did this all kind of happen at one time for you? Yeah, I I think for any non bitcoins that might be listening to your to your podcast for me, and I think this is true of anything, any type of investment. I think when you when you allocate in a small way to something, any asset class or security and you have skin in the game that article that you might not have read before now you're going to read it. All right, I've got some money in Bitcoin. Let me learn a little bit more about this. And as you start to learn some of these things, it really opens up your eyes and, and I think for most people, most Bitcoin investors reinforces the decision that they made. And so that's definitely what happened for me. You know, working at a Merrill Lynch, you know, you have to get approval if you want to invest in a rental property. So unfortunately for me, I was at a pretty good spot in my career. I neglected Bitcoin in hindsight way too long when I found out because, you know, Bitcoin was, you know, deemed A commodity by the SECI found out through compliance that I was able to have a Bitcoin wallet and it wasn't that big of a deal. They didn't really have to know about it because we couldn't invest in for clients anyway. I was in 2020. For me, you dip your toe in the water and then all of a sudden you know, you're, you're reading all sorts of books on, on Bitcoin and Austrian economics and and whatnot. That's that's kind of how it played out for me. Yeah, no, it makes sense, right? Because to your point, you have to have skin in the game. I mean, so many things about life are about having skin in the game and investing is no different. And I think it's so easy to dismiss Bitcoin if you haven't even spent an hour to set up an account somewhere or now you don't even need to do that, right? You can just buy the ETFs on most platforms today. So if you haven't even spent the 5 minutes to execute a trade into IBIT or FBTC or name your Bitcoin ETF, then I think it's a little unfair to have an opinion on something. And So what I found a lot of times is even if you make a small initial investment, well, now you're incentivized to study this further. To your point, and I just would encourage anyone who's listening on the show today, if you haven't spent even a few hours looking into Bitcoin yet, now is an interesting time to do so. And we're going to talk about why because adoption really seems to be ramping up. But we need to give the listeners a little something to look forward to. So we're not going to get quite into some of the more timely things that I think are exciting. But I do want to pull on a couple more threads that you mentioned there, Alex, because now that you started Crossover back in 2023, would love to hear more about what those conversations look like with clients. If I heard you right in earlier on the episode, you mentioned that 90% or so of your clients have some sort of exposure to Bitcoin. So I'd love to hear about what really resonated with the 90%. And then maybe for the 10% that haven't allocated, is there any common theme that you that you hear as to why they wouldn't want to participate or maybe it's just it's maybe not the right allocation for their portfolio? Well, I think at this point, Jackson, I've probably given 4 or 500 presentations to either groups or individuals on Bitcoin supply and demand characteristics. And when I get to the point where I explained limited supply, I would say that maybe 70% of people that I've presented to didn't know about the 21 million, right? But I would say it's probably 95% weren't really aware of the decreasing supply issuance. And so I think you can almost see this light bulb go on. I think people can relate to the government spending stuff, but I think the light bulb kind of really started to go on there. I also have just a simple one page Excel document and I'm such a visual learner and teacher. Let me see if I can articulate this in a in a way that will resonate. But if you think about $1,000,000 investor, right, you know, we can debate the sort of 4% drawdown rate in retirement. I don't necessarily subscribe to that, but I think it can be a helpful framework to conceptualize. Got $1,000,000. I can kind of kick off, you know, sustainably through retirement roughly $40,000 per year. So if you think about allocating one percent, 5%, whatever it's going to be to Bitcoin, I would say a reasonable target allocation that that we've kind of landed on is in the 5% range. Again, not financial advice, work with your financial advisor on that. And So what I would kind of showcase is like what you invest $50,000 would be 5% of $1,000,000. If Bitcoin goes to 0, you've lost $2000 a year of, of retirement income, right? With that derail your financial plan. And I think that kind of opened people up to, yeah, I guess that probably would derail my financial plan. That doesn't sound so bad. And then when you start to get into these other reasons as to why you should and that bitcoins compounded at 5060% per year, might we allocate a small amount? I think 90% of people that we've interacted with, our clients of ours have said, yeah, I guess that's that seems reasonable. And I think that the day that we the day that we resigned from, from Merrill Stark crossover, Bitcoin was trading at 27,000. So you know, even if Bitcoin has pulled back from 126,000 and 90,000, we've done pretty well for for people with that, with that particular allocation. So yeah, that's that. That's I guess what's worked for us in in helping that light bulb go on. Yeah. Wow. So 70% of your clients before having that presentation or educational pep talk or review of their portfolio, we're unaware of the of the 21 million supply cap. And then you said 95% didn't recognize that or understand that the supply or the issue and schedule of Bitcoin is already predetermined and it's increasing in scarcity over time. Yeah, I would say, I mean and those are back of the cocktail number, right, right. They're direction it's but yeah, I would say so look, I'll throw in one more thing that we've been spending a lot of time, effort and energy on my my business partner, Tasha Shadel is a certified divorce financial analyst and does a lot of really good work with, you know, sort of the non financially savvy spouse that's never handled money before helping them get through a divorce situation. Onto the other side. What we actually ended up finding just from interacting with family law attorneys is there's a huge gap there and family law attorneys don't understand the you know, so when I'm when I'm saying I've given 400 presentations, they're not all just to clients or even prospective clients. A lot of times it could be to a family law attorney that you know, is telling their non financially savvy spouse, Oh just yeah, just let him keep Bitcoin when I think that probably hasn't been good advice over time. So helping them understand why it might make sense for that type of asset in a divorce to be kind of split down the middle. If there are other coins involved, maybe maybe we let the the other spouse have those. So we've had a lot of really dynamic interactions in the family law space where there's just this major gap in understanding around Bitcoin and how that should be being negotiated around in, in a divorce or mediation. So that's been, we didn't expect it. We kind of stumbled upon that by accident, but it's an area where we've been able to I think add a lot of value in the in the marketplace and solve, solve some significant pain points. It sounds like a real opportunity. You know, there's just so few people out there, so a few professionals out there, whether it's Cpas or its attorneys or its wealth managers, it's still so early for Bitcoin, right? So to your point, someone may be speaking with their lawyer and the lawyer doesn't know anything about Bitcoin. The spouse is kind of in the dark about how this all works. And it sounds like a great opportunity to help your clients in terms of really working through that process, understanding why they'd want to own this. And especially now, right? I mean, you can make the case 5 or 10 years ago, not necessarily knowing what the outcome would be with Bitcoin, knowing where adoption would, where adoption would go, what the price would look like. Maybe it wasn't as pressing. But now it's to your point, it's trading in the 90s, it peaked out at $126,000 per coin. It's very meaningful, right? So like to think that there's still not a lot of great education out there. It sounds like you're feeling a great filling a great gap. And I wanted to touch on another thing that you just said kind of in passing. But how do you address the point of Bitcoin versus the rest of the crypto space? I would imagine that's come up with clients a number of times. It's still kind of unclear how this all shakes out. When this podcast goes out tomorrow on Wednesday, we'll be seeing some progression potentially with the Clarity Act for market structure for the industry. And so it's still TBD in terms of how this all plays out with Wall Street adoption and just broader regulations. But I'm sure you have an answer when clients come to you and ask about name your coin, is this something that I should be investing as well or how do you think about that? It's a great. Question I, I think to your point it's evolving to some degree. I think the G for me, I was really, you know, for the most part, Bitcoin only prior to the Genius act, which I think when you see your Walmarts and your Amazons talking about creating their own stable coin, so on and so forth. I guess the way and, and it is isn't a perfect explanation of, of, of why somebody might consider owning Etherium. But in trying to explain and educate some of our clients on stablecoins, I've just pulled up a chart of Visa since their IPO in 2008 up 19 X. And is it possible that Etherium takes a decent amount of market share from that as a blockchain that a lot of stable coins are are built upon? It's more speculative to me then then something like Bitcoin and where I think it's probably going over time and more like a technology play or a financials play, you know, in the equity space, I guess. So I just think that they're they're just two different, very different things. Whereas I think maybe your, your individual who's not educated on quote UN quote crypto just kind of lumps it all together and looks as it looks at it as the same, which is not how I look at it and not how I educate around it. So I hope that that makes sense. Yeah, it sounds, it sounds like a different approach than what you see some firms that are involved in the Bitcoin and digital asset space, they will position product that might be equal weighted to Bitcoin and Ethereum and Solana like the you know kind of the blue chip assets. Whereas it sounds what I've gathered from your response there is you view Bitcoin as more of a core portfolio position for most of your clients. And the way you think about that is preservation of wealth, growth of the purchasing power, pointing to the kegger, pointing to the supply demand dynamics. And then Ethereum and potentially others that you know, maybe are on your radar involve more risk. They're less of like that, let's say strategic asset allocation, but they may in some cases you may discern or decide with your clients that it's more like a tactical play. I think that's a that's a a fair characterization. Got it. OK. Yeah. Just wanted to see where you sat there. It makes sense. Well, why don't we talk about some things that are going on in the industry then? Because I think given your background, there's been a lot of exciting news. And I think news that people were expecting to hear a while. And it took about two years or so from the launch of the ETFs back in January of 2022 for us to get to this point. And so a few things that come to mind just as we started the year and about two weeks in is the B of B of A news. So I think Bank of America is finally allowing their advisors, which there's about 15,000 of them to solicit clients and recommending somewhere between A1 to 4% allocation to Bitcoin Vanguard. It might have been last year, it might have been at the end of the year, sometime in December. Vanguard has flipped their position to be we don't touch anything, you know, we don't let our clients invest in Bitcoin to now opening up. It might have been Ibid and, and one other, but allowing some exposure to the Bitcoin ETFs through the Vanguard platforms. And obviously they're, what are they maybe the first or second largest money manager in the country. And then Morgan Stanley notably is launching their own or at least filed for their own Bitcoin ETF. And as I understand it, and you correct me if I'm wrong on any of this, as I understand it, they only have a few ETFs actually under the Morgan Stanley brand most of the time that they're bringing on external ETFs on other platforms. So interesting to see that they're sponsoring their own Bitcoin product. And then to your point and to your background, Merrill is now allowing advisors to recommend spot Bitcoin ETFs, which I think was as of potentially last week or, or very recently. So what do you make of all this? It's it's interesting to see that the tides are shifting pretty rapidly and in a big way just in the past two weeks since we kicked off the year here. Yeah, Jackson, I think for for investors that are maybe frustrated with Bitcoin price action. Look, I was in the in the in the camp that I thought 2025 and even in particular Q4 will be pretty good for Bitcoin based on how things were shaping up. I ended up being totally wrong there. But when you take a step back and look at the news, let's go back to the to the sort of the first principles thesis. Government's going to keep spending more money supply is going to be, you know, continue to get more, more scarce over time and demand is going to keep going up. Demand going up is kind of reflected in in the news and the the news that you that you mentioned in terms of Morgan Stanley, I I think what you were alluding to, Morgan Stanley owns a number of different brands underneath the service like Eaton Vance is a good example. And so yeah, they, they filed the, their Bitcoin ETF under the Morgan Stanley brand and not under like a, an Eaton Vance is my understanding of the situation. Yeah, look, I, I mean, I, I wrote an article I, I meant to look up what the date of that. I wrote the article. I wrote an article on our blog, on our website probably in spring 2023 about Vanguard and how they weren't getting into the Bitcoin ETF game. And we're kind of sort of saying we'll never, we'll never get into that business. Well, you know, I made the point that yeah, they will, yeah, they will eventually, right? When, when they, when they see the numbers these other firms are doing right. It's been been amazing the amount of assets that that BlackRock has raised over the last two years. Sure enough, they came around. So, yeah, I meant to look up the exact date before I hopped on here with you. And then, yeah, I mean, Bank of America, it's great. It's great to see these names coming around. And I think it's great for their clients. I think it's great for the industry. I haven't seen a lot of chatter there were, you know, there were a number of articles back in 2023 comparing Bitcoin ETF adoption to what gold ETF adoption did when gold ETF came about in 2004. Between 2004 and 2011, massive amount of, of asset flows and into gold over that time frame. Gold price did very well was obviously you had a 2008 that that went down in there. So I, I, I think the point that was made at the time of those ETFs going live was. Firm. Approvals for gold ETFs didn't happen all at once. They happened over a series of years as firms wake up to, hey, we should probably be offering this to our clients, these have been really successful and there's been a lot of demand for them. I don't want my clients to go to another firm and get this from somebody else. You're seeing the same thing now happening with Bitcoin and I think that that's going to mean really good things for flows into Bitcoin. As you pointed out earlier, it's pretty easy to push that buy button on I bit relative to having to set up, you know a crypto wallet and jump through all sorts of all sorts of hoops. So I think it's going to mean really, really good things for flows and probably for prices demand that's a manifestation of demand continuing to increase and adoption continuing to increase. So I think it's exciting news for the industry. Right. Yeah, it's kind of game theory to your point, because you you mentioned the article you published back in 2023. It was just a matter of time. Like how long as a business that's for profit that competes with other businesses that are making a lot of profit from Bitcoin products, how long will you stay on the sidelines and watch that happen and not get into that asset class, right. And so at some point they all will have to capitulate because I mean, assuming Bitcoin continues to be adopted and things play out as we expect, which I think they will based on that assumption, all the firms will have to get involved if they want to retain, to your point, client relationships, continue to grow their assets under management, be able to make money and participate in this new asset class. And whatever comes of it, you know, we're only at very early stages of how all this playing out. And so I think it'd be very short sighted to write off the asset class as Vanguard did, merely on the fact that Bitcoin didn't produce cash flows was my understanding, because I don't think that they are necessarily very fond of gold either. And that's fine. But you kind of have to at least have an open mind. And if you don't have an open mind, well then at some point you pay the price because then you let your competitors get a couple years of Elite on you and generate a lot of revenue from their product. Yeah, censoring your clients and, you know, talking down to them, letting, letting them know that you know what's best for them typically isn't good business. It's just my opinion I guess. Yeah, yeah. But I think that's that sound. That's a sound framework. What do you make of in passing touched on it, but I'd love to hear just any thoughts that come to mind on last year because you and I both and most people who invest in this space expected an outcome that was different than reality in 2025, right? I mean, we at some point saw Bitcoin peak out. It was in October, 126 might have been plus or minus like a 30% gain year to date and then finished the year down 6%, if I recall correctly. And that was particularly disappointing because we have seen of course really bad years for Bitcoin, but that has typically been in a four year cyclical pattern. The last pattern in 2022, you may recall, listeners may recall we saw kind of the opposite macro setup right where in 2021 you saw the rate hikes, you saw a move away from zero interest rate policy and low interest rates into the fastest rate hike cycle going into 2022. Plus you kind of saw that historical pattern of a blow off top after four years. And then in 2022, of course, you had all sorts of blow UPS across the industry, which really just even further depressed the price and sentiment in the industry. Whereas 2025, I mean, we've only scratched a little bit of the surface, but there's largely positive news yet. The Bitcoin price was chopping around most of the year and then finished down 6%. And then it Creative planning publishes some great charts of asset class performance. And it was really sad to look at the 2025 performance because you had every other asset class had some sort of green print, you had gold at like 50% for the year, the S&P about 20% every asset class and then you had Bitcoin in the red. So what do you kind of attribute to the disconnect between the reality of where things ended up shaking out and where our expectations were at the start of 25? I think a number of things happen you reference for your cycle. I mean, there's so many different factors that we look at. I'm not the probably like the biggest like proponent, like market technician, right, not the best analyst, quote UN quote that you're going to have on here. Certainly we pay attention to a number of like quant analysts and, you know, a number of different indicators that have driven Bitcoin price action in the past and stuff like 4 year cycle. You know, I think it's reasonable to believe and and you can see this on chain that there were a lot of whales selling off part of their Bitcoin stacks over the back half of the year, perhaps anticipating that for your cycle thing, right? They had they had participated in Bitcoin in a big way, going from 16,000 or so at the bottom and you know, towards the end of 2022 now up to 126,000. So hey, let let me sell half my stack, right. I've, I've really enjoyed, enjoyed a nice ride here. So I think you, I think you had been though I think Bitcoin is maturing and I do think that institutional adoption changes the game to some degree. I forgive me if this statistic is slightly off, but I think it's like owners of more than 10,000 Bitcoin control 33% of the Bitcoin. It's something like that, right? So those owners can still dictate to some degree what the market does. And then you had, you know, whatever the issues were in early October, I think you had a, a number of market makers blow up, right. So there was some sort of like idiosyncratic stuff below the surface that's that maybe took a couple months to to kind of shake out. So I think it was like it was those two things in my mind that maybe hurt us and that, that, that I think kept a lid on things or, or, or push things down in the back half of the year. I think that's why it's so important that some investors work with a financial advisor that can communicate what's actually happening and that we, you know, to me, Bitcoin is more about where things are going to be 5/10/20 years from now, then looking at things like a publicly traded stock on a quarterly basis. So, yeah, I mean, those are the things that, as I see it, that that kind of kept Bitcoin suppressed a little bit. When it comes to holding Bitcoin security, Peace of Mind starts with architecture. Onramp's multi institution custody distributes control across three independent regulated key holders and a two of three quorum. No single point of failure, no pooled or omnibus exposure. Segregated client titled faults. You retain full legal ownership while Onramp coordinates security, compliance and operational workflows behind the scenes. It's strength of many delivered through the simplicity of 1 multi institution custody is the foundation for everything. We build sound infrastructure that distributes counterparty risk and provides fault tolerant resilience with clear audits and institutional controls. And now on ramp is piloting flat predictable pricing, making best in class Bitcoin custody and financial services more accessible now than ever. On ramp strengthen many simplicity in one. To learn more, check out on rampbitcoin.com. Agreed, Yeah, I think though you really have to nail on the head in terms of some of the some of the dynamics at play that led to that outcome. You did mention thinking ahead like 5-10 years, 20 years, which I think that's just, you know, that's a prudent way to approach any type of investing. And of course a Bitcoin, maybe even more so just because of the price volatility can be so distracting in the short term. So I'm curious and you can kind of take this however you want. It could be Bitcoin related or it could just be maybe you know, the broader asset landscape as you look at things, you know, in traditional assets as well. But how do you kind of see longer term things shaking out like over the next five years? And how do you maybe position yourself personally or think about your client portfolios? What are you trying to protect against? What type of outcomes do you see? I know it's, I know it's a big question, but just like if you can give us a sense of how you think longer term that would be helpful. Well, I think if you we take a step back and maybe let's talk about AI for a second and look at what's happening with copper, silver, gold, right prices through the roof. There's like a ton of demand for all this AI infrastructure build out and it's creating a supply and demand imbalance that's sending price higher. I often tell people that I'm educating about Bitcoin that you should try and get some while you can, because I think there's going to be a point in the future where maybe it's, you know, it's, it's hard to get your hands on enough supply, especially as having continues to make new issuance more scarce. You know, we'll, we'll see, obviously the Bitcoin treasury companies have taken a beating, but we'll see how much demand continues to get sucked up by them moving forward and by Wall Street and the ETFs, etcetera. I think the supply and demand imbalance that you're seeing with gold, silver and copper may pale in comparison to what you may see with Bitcoin in the future as supply continues to get more and more scarce and demand continues to go up. Perhaps, right. That's what's been happening. We'll see if that that continues in the future. My expectation is that it will. So, yeah, about 10 years from now, I'll go back to first principles. Those three things that I discussed, I, I, I expect them to continue happening and trending in the direction that they've been trending over the long run. And I think that will lead to Bitcoins price moving higher over time. Yeah, that's true. I mean in those metals markets, right, there's those markets do not have, there's an elastic supply, right. So the industries that mine those metals, refine them, get them to market, are able to react to the demand. And so as we know, that doesn't exist with Bitcoin. And so to your point, there may come a time in the future where there's so much demand and there's so little supply that, you know, perhaps, I mean, it sounds hyperbolic, but the, the price predictions kind of go out the window, right? Because there is only 21 million Bitcoin. I at least think that there's a future for everyone to own Bitcoin. My bare case would be, I don't know how you think about it, My bare case for Bitcoin would be Bitcoin remains an investable asset where people allocate some percentage of their portfolio to whether it's 1%, five, ten, name your percent. That's my bare case. And then my bowl case would be, of course, that Bitcoin actually is adopted as a global form of money. And I think that path to getting there probably plays out over a very long period of time, longer than most people expect. And it's very uncertain in terms of getting there in my opinion. But even in that bear case where Bitcoin still broadly allocated to it exists as a standard part of people's portfolios, we're not anywhere near that point, right? I mean, we just talked about how some of the largest firms in the world are just now allowing clients to get allocated. So I think it still remains to be seen. It's a great point, right? Because we, you know, there's been so much attention on gold and silver and you know, gold in particular is a scarce precious metal and silver is to a lesser extent, but it still is. But those supply, demand, demand dynamics are just going to be so out of balance with Bitcoin at some point if this all plays out the way we expect it to. Yeah. And I, I totally agree. I don't want to get too out there, but again, I mean it it the AI thing is just really interesting to me. And you've got Elon Musk talking about robots making robots. What happens when you have robots making robots who can allocate almost, you know, infinite resources towards mining gold, right? So you could get. The price of gold dropping very, very quickly if, if there's a massive flooding of supply because it becomes almost free to extract it. Whereas Bitcoins difficulty adjustment even if energy costs drop significantly because of increased efficiencies in energy extraction or Elon putting solar panels in space or you know, any number of interesting things that I've heard over the last month or two in the world of AI. Think Bitcoin is insulated from some of the deflationary effects that could happen in society. I think ultimately could be really good for societies. I think Bitcoin becomes a very unique store about that store value asset under that type of somewhat out there scenario, but maybe 10 or 20 years off, who knows with how things are progressing so rapidly in the world of AI today. So a lot of interesting angles to Bitcoin. Right. And I, you know, I didn't even think about, I've heard kind of the idea of mining gold in space before. But the other thing that's interesting that you mentioned kind of in passing is that you could have data centers in space and you could extract solar energy in space. And if you did that with Bitcoin miners, and of course, that would just fortify the network, right? Because again, you can't mine more Bitcoin than the network is already programmed to do. So if anything, that makes the network stronger because you have more energy that's being used to secure the network means hash rate goes up, but the supply remains unchanged. So I think it is really kind of unchartered territory in many ways in terms of what will happen with artificial intelligence, exponential technology gains, productivity, deflation. And maybe before we kind of get toward like the end of this show, Speaking of deflation, inflation, we've had a bit of a quarrel between the Federal Reserve and the Trump administration. And I'm curious if you have any comments or thoughts on it because just most recently on Sunday, you had Jerome Powell kind of fire back pretty much saying like, the Federal Reserve's going to remain independent, not going to succumb to political pressure, going to set interest rates based on what the market needs. And of course, I, I mean, I would say that it's kind of silly that an institution would set interest rates for the quote UN quote, free market. But that point aside, like, I'm just curious how you see things shake out in 26 with, you know, the Trump administration clearly wanting rates to go lower. And you have the the Fed kind of speaking up against and and wanting to remain at least the perception of Fed independence. Yeah, it's, it's an interesting situation. Look, here's what I'll say. I would expect interest rates to go lower and prediction markets have have, gosh, I saw a statistic the other day, I think it was like 70 some odd percent likelihood that we get below 3% on the Fed funds rate in 2026. You've got GDP skyrocketing, inflation dropping. It seems like a pretty good set up for for risk assets too. Well, I mean, when everyone thinks that the market will zig, when you think it's going to zag, I suppose. So always got to be wary of that. And then I mean, look, there's a lot of certainly geopolitical uncertainty these days that, you know, could, could go any which way. But yeah, I would expect interest rates to go lower and I would expect GDP to to continue to to be pretty elevated based on how things are trending with with the economy and that's being driven by all this AI stuff. So I think it's, it's setting up for a good year and and then maybe maybe Bitcoin spring is, you know, has been coiled over the last year and, and maybe 2026. Now that we've invalidated the four year cycle, maybe 2026 where a lot of big pointers would have pegged it to be a not so good year. Midterm years have not been good years for Bitcoin. Maybe that maybe that flips this time around. So I, I, I generally am, am pretty positive in here on, on the Bitcoin outlook over the next, over the next year. But that said, a lot of my conviction really actually comes from the the five to 10 year outlook. So yeah, it's kind of kind of what I'm looking at. Anything that I I left out or that's on your mind with, with your outlook for the next year that you think listeners should be, should be paying attention to. Man, put me on the spot as the host of the podcast. I would say, yeah, I would say what you said about the four year cycle being invalidated, I agree with that. But it seems like there's still a lot of market participants that don't necessarily see it that way, right? Even though we haven't seen a big collapse in the price, we're probably sitting at 25% or so down from all time highs. Some people still think that the the prophecy is that Bitcoin must go lower in 2026 because the cycle pattern has to repeat. I think what I heard from you is what I would agree with that the fact that Bitcoin has been so resilient 3 months from the all time highs is a testament to the cycles being over. And I don't necessarily, I mean, I think that there was credibility to cycles earlier on with the having have more of an impact. But I don't even know like in terms of 2021, we just kind of saw the whole cycle theory align with also the tightening of monetary policy, which is going to put pressure on risk assets. And even though you and I don't really perceive Bitcoin to be a risk asset, the market does. And so I agree, right. I think, I think we've seen the cycle invalidate. I do think that if we are able to reclaim all time highs in 2026, then finally that'll put to rest the entire debate. And I think it's one of the more bullish things that could potentially happen for Bitcoin longer term is we can move past from the four year cycle theory. But I agree with you, I think the macro setup is favorable for Bitcoin and broadly risk assets. You got rates trending lower. You have governments that always will spend right, will always devalue their currencies. Interesting. I didn't know or at least hadn't paid attention to the fact that midterm election years have historically been bad years for Bitcoin. But I would think this year that with just trying to stimulate the economy, try to keep markets hot. Trump administration in particular has been very supportive, or at least posture to be supportive of the Bitcoin and crypto industry. I think that things would go higher as well. But who knows, We could be certainly proven wrong. I was proven wrong in 2025. Look, it's good. It's going to be fun to monitor 2 Two other things that I would point out again, not that like we don't bow down to like anyone indicator, but if you look from a technical standpoint, right, if if the 200 week moving average has been a good support for Bitcoin and bear markets, it's like so I think somewhere in the range of like 5560 thousand. Oh, and then I, you know, I think I believe Bitcoin power law again, not that some of these things can be like, you know, it just battles a Bitcoin power law support. I think it's down in that same ballpark. So to me, if you've, if you've written it down from 1:26 to, I mean, at 1.81 or at last I saw earlier today, we're at 92. To me, that's kind of like, dare I say worst case scenario, right? Or like historically has been a good a good bottoming support level. When I look at like my long term upside, do I really want to like get caught offside trying to protect myself from 90 down to 60 and potentially miss the run up back-to-back to 126 and maybe beyond? To me, the risk reward just says if you're still in it at this point, probably just want to ride it out. That's just my line of thinking, right, wrong, indifferent. And that's how we've we've been thinking about it for clients. Yeah, it's always hard to time markets, right. And and in particular this market could be hard to time, especially in the case that the four year cycles invalidated like people I think had their perception that, oh, it's so easy to time Bitcoin, right. You just buy after it's seen at 7080% drawdown and you sell in the fourth quarter of the fourth year, in the third year. But that's really not how things are going to progress going forward. And I hear you. I mean there could potentially be more downside, but at least from what I see, there's just not a lot of, there's not a lot of motivation to sell. Think in 25 we already covered why a lot of the selling happened. I think one thing I would call out as well that is often overlooked is there the, there's the perception of a lot of selling happened because there was more liquidity there. There was the ETFs, there is the Bitcoin treasury companies and there is some institutional adoption happening here and there. And that gave the long term holders with like massive positions, right, hundreds of 1,000,000 billions of dollar position gave them the buffer to sell into the market and have the liquidity. I think the underappreciated aspect of that as well is it's really the first time that in my opinion, it it was the first time that there was like very little political risk for liquidating a large Bitcoin position. The first Trump administration, the Biden administration, I could imagine liquidating A sizable position cash coming into the account and potentially your account is frozen, right. So I think that was probably a risk that was or that was probably a factor that was under appreciated in the selling in 2025. Finally, there is the ability to do so without having to risk like losing or or forfeiting those, those those dollars in the bank account. So I don't know how much more selling. I'm not a whale. So you know, I'm, I don't know how much more selling pressure there is from those long term holders, but I think there are less, I certainly know there are less long term whales that are able to sell versus the amount of demand on the buy side. Yeah, I think you make a lot of good points. I don't know if you read Jordy Visser's article on Bitcoins IPO moment maybe back in October, November that kind of described some of that whale selling for a lot of the reasons that you that you highlight. I thought it was a great mental framework for kind of what was going on. And I think the, the comparison that I've made in describing that article to my clients is I can, I can distinctly remember early in my career, the Facebook IPO, IPO at around 40, like very quickly dropped below 20 because you had all the initial VCs and long term employees that are like, Hey, I've got liquidity for the first time. I'm selling half my Facebook stock. And you know, sometimes that process can play out, you know, over the course of the year. I think I think Facebook stock traded down there for a while before, you know, the rest is history hasn't become like a, you know, a clear mag 7 stock and a huge, huge winner over the last decade and and and change. You know, the I guess the point that he made was, you know, the one that you made. This was a, a liquidity moment with, with all the ETFs and hedge funds and treasury companies so much buying, you know, so much buying power allowed for for those O GS, Bitcoin O GS to unload part of their stack without totally tanking the price. So pretty interesting. I think I saw, I think I read Galaxy digital help one client unwind like $9 billion in Bitcoin. That's crazy. So anyway, look, I, I, I agree with you. I don't, you know, I don't know exactly how long that that's going to go on for, but eventually the next wave of owners, just like with Facebook stock, you know, ownership shifted from a handful of people to the broader market, Facebook stabilize and move higher. That's going to happen eventually for Bitcoin too. So yeah, it's a, it's a really interesting market dynamic and I thought it was a really good piece by Jordy. In case you missed it earlier, we are offering a limited time opportunity to sign up. Use code TLT for 50% off your first month with on ramp. I just want to reiterate stakes are high and this is an important decision to think through. So I would fully expect that you'd want to have a conversation with someone on our team could speak with Cam, myself, Michael, go to our homepage, book a consultation. You can speak with us for 15 minutes, thirty minutes. No obligation beyond that. You can just ask us questions, learn about the solution. And I just want to make sure that as you as a listener, whether it's for you, your friends or family, I just want to make sure you have Peace of Mind and you feel good about this year ahead of us as it relates to Bitcoin ownership, custody and inheritance. So again, limited time offer, 50% off your first month use code TLT. You can just mention that during the consultation. Or if you do end up just going direct to sign up, mention that code on the website and you'll be all set. So thanks for being here and hope you enjoy the rest of the episode. Well, it doesn't sound like you're discouraged. I think we'll have a good 2026 ahead. You know, I think there was some sentiment before. Oh yeah, before we wrap, just like interesting point that sentiment was as bad as sentiment was as bad last quarter than it had been in 2022, like in the midst and after the FDX collapse, which is just crazy to me. I think in part it's maybe the disconnect, right? The perception of expectations and reality. And in 2022, people had already been clobbered. They'd already been down like 7080%, you know, their expectations and was already in the gutter. And they also kind of expected that maybe not the FTX stuff wasn't expected necessarily, but the drawdown was expected. And then that was the cherry on top was just FTX and all these other firms blowing up, whereas everyone was expecting that blow off top in Q4 of this year. And instead we finished the year down 6% with you know a more moderate 30% up in October. Sentiments bad. I I mean I agree, I don't know really what would get us much lower. And if we do go a little bit lower, it's just to buy an opportunity for those that are able to have that 510 year investment horizon or longer. I think you hit the nail on the head with expectations minus minus reality equals happiness. Is that is that the? Is that the? Equation. It sounds right. Yeah, I think you hit the nail on the head there. And I've seen it from talking to people. But yeah, I, I mean, I don't know again, my, my outlook tends to be tend to be lower time preference. If you can imagine that, I don't know, Bitcoin drawn down 3035%. It just doesn't really doesn't affect me mentally. But as an advisor, it's important to be talking to your clients and making sure people understand what's going on and make sure that they're aligned with their time horizon on, on their Bitcoin allocation. And another mental framework for that that's been helpful to me is I'll sometimes ask clients like visualize their, their net worth sort of stacked up in $100 bills on the desk. And you know, if you're, if you're going to be spending off the top, right, you can think about something like Bitcoin is that those very bottom bills, like even if it drops by 40%, you weren't touching it anytime soon anyway. And that's, that's maybe been a helpful visualization to to I guess stay committed through through big draw downs. I like it, yeah. That that conviction and commitment will likely be rewarded in the future. So it's, you know, good service you're doing your clients by helping them to just stay educated and understand what's going on and not let the volatility get to them. So Alex, pleasure catching up with you today. For anyone who wants to reach out to you or find you online, where's the best place to do so? Yeah, we post some content on on LinkedIn, on Twitter, at Crossover under Score Alex, same same handle for for Instagram and you know, website crosscapadvisors.com. We post blog stuff, some Bitcoin research on there. And yeah, we've got some really fun projects coming in the Bitcoin space in 2026. So stay tuned there. Awesome. Well, Alex, thank you. It was it was nice to catch up with you and I'm appreciative of your time. Jackson, thanks so much for having me on. Great to catch up with you and I'm sure we'll be talking soon. Yes, we will. Thank you. Thanks for listening to this week's episode of the show. If you found the information valuable, please share the episode with a friend or leave a rating on your favorite podcast app. All the links we discussed in today's show will be in the show notes inside your podcast app. Before we finish, a quick reminder that On Rat Media is for informational and entertainment purposes only and nothing should be construed as investment or legal advice. Regardless of where you are on your Bitcoin journey, we'd love to hear from you. Visit onrampbitcoin.com/contact to. Schedule a consultation with one of our private client advisors.
Transcript source: fountain