 Volatility will trend down, as do all assets, as they grow. Do I think we'll see 500,000 or 600,000? Sure. Bitcoin won't be the same ever again. The floodgates for institutional capital are now open after last week a spot Bitcoin ETF was approved in the United States. But what is the long-term impact of the ETF approval? How will it shape the future of Bitcoin as an asset class? And does it pave the way for the approval of a spot Ethereum ETF? I address these and more questions in my conversation with hedge fund manager Mark Yusko. Before we get started, as always, consider leaving a like and subscribing to our channel. I'm Giovanni, your host, and this is a Cointelegraph interview. You welcome this event saying that the boomers are finally coming to Bitcoin, meaning that now, of course, a lot of traditional investors are going to have access to Bitcoin. And in case some boomer is watching our show right now, can you maybe say why should they include Bitcoin in their retirement accounts? You know, I've been talking about my hashtag Get Off Zero for a long time, right? I coined that phrase, I think, back in 2015 or 16, and been talking about it ever since. Zero exposure to Bitcoin is the wrong number. Now, I'm not saying you should put 100% of your assets there, but zero is the wrong number. Well, why do I say that? But Bitcoin is the greatest diversifying asset we've ever seen. And I've lived through all of them, right? This means I'm old. So I've seen, you know, back when times when people only bought bonds in their portfolio. They didn't own stocks because they were too risky. And then they found out that if you add stocks to a bond portfolio, the risk actually goes down because they're uncorrelated. And then you add things like real estate, hedge bonds, and venture capital and private equity. Every time you add a risky asset to a portfolio that's uncorrelated with the other assets, your portfolio gets more efficient. You get more return per unit of risk. Dr. Markowitz won the Nobel Prize for that. Pretty big deal. Well, Bitcoin over its 15-year life is 0.0 correlated to bonds and 0.15 correlated to stocks. It's the least correlated asset of any asset. Stocks and bonds are 0.3 correlated for reference. So when you add it to a portfolio, your return goes up, your risk goes down. It happens to be the best-performing asset in 12 of the last 15 years, of the 15 years it's been around. In fact, BlackRock actually put out a chart today showing that it's been the best-performing asset in 12 of its 15 years of existence. So it's got a good return. Therefore, you should own a little bit of it. Now, I would like to address the problematic aspect of the approval of the SpotBitcoin ETF because I was reading an op-ed not long ago that was saying that crypto needed Wall Street in order to reach mass adoption. It couldn't reach that without the help of Wall Street, the help of the institutions, the help of a traditional financial instrument like an ETF. What do you say about it? There's multiple layers here. Couple things. One, owning little bit Bitcoin, the token. That's important, right? Why is it important? Well, it's important to people who believe in self-sovereignty and self-custody. Okay, but the average person in the boomer class who isn't technologically savvy, who hasn't done the work, who doesn't understand why this asset is so important, doesn't understand why triple-entry accounting is an important innovation, just isn't gonna go there. They're not gonna memorize a 24-word seed phrase. They're not gonna buy a little ledger and hold their own keys. So, CFI, this intermediate step, is necessary. It's why companies like Coinbase and Kraken are so valuable. So, if we think about that as this is an interim step for longer-term full adoption, it's kind of a cop-out to say, well, you needed Wall Street in order to get mass adoption. It's one piece of adoption. There's still three billion people in the world that don't have electricity, so let's work on getting them adoption because of the approval of the SpotBitcoin ETF. We're gonna see some long-term effects on Bitcoin. Some people say that Bitcoin won't be the same ever again. What they mean is that the SpotBitcoin ETF is going to make the price action of Bitcoin a little less exciting in the sense that it's gonna kill the volatility of crypto. You often say that you need to embrace volatility because that's one of the best part of Bitcoin. Some people say that- Yeah, Giovanni, look, look what I'm wearing today. Embrace volatility. I'm actually wearing the shirt. That's why I wanted to ask you, so are you not concerned that the SpotBitcoin ETF will kill Bitcoin's volatility? Well, it certainly will reduce volatility, but that's the nature of growing up, right? It's the law of large numbers. When Bitcoin was very small and basically a science project, I mean, 15 years ago, when Hal Finney, 15 years ago yesterday, when Hal Finney did the basic tweet running Bitcoin, the price was 0.00013 or something like that. I mean, the price was zero. And any movement was incredible volatility, just the law of small numbers. And then volatility was really high and that was great. When it went from a dollar to $10, that was a miracle. That was the miracle. The miracle that we got to a real number that people could actually be attracted to and buy was the miracle. Whether we go from $1,000 to $10,000 or $10,000 to $100,000 or $100,000 to a million, that's not the miracle, right? Cause those are smaller percentage increases than that original increase from 0.0001 cent to $10. And so yes, volatility will trend down as do all assets as they grow. That's what we want, right? This idea that we some small hoard of people want to have all the volatility to ourselves, that's not what this was invented for. This was invented to solve a problem which was dual entry accounting being corruptible and replace trust with truth to bust the monopoly of the banking cabal that has been existed, I shouldn't say cabal, cartel. This bit around for 838 years. And so I get it that lower volatility, boring, I can't day trade it as much. So be it, it wasn't invented for day trading. It was invented to solve money. That's what it was invented to allow you and I to exchange value without asking permission. We saw that in the days coming up to the approval of the spot Bitcoin ETF, one of the best performing cryptos was ETH. And then even though it's performing pretty well, it seems that a lot of people are already expecting spot Ethereum ETF to be approved soon. Eric Balchunas, the ETF analyst at Bloomberg, said that there is a 70% probability that a spot Ethereum ETF would be approved by May this year. So what do you think? Would you agree with this sort of expectations? Yes, look, I think certainly anything's possible. I think the big challenge is timing. I mean, it took 10 years, 10 years to go from the first application by the Winklevoss twins for an ETF in Bitcoin to approval yesterday. So now Ethereum will stand on the shoulders of giants in the sense that it probably won't take 10 years. But I think the big challenge is gonna be look, the SEC didn't want to approve this. You know, it was clear in the chairman's statement that, you know, we're approving the ETFs, but we're not approving or endorsing Bitcoin. Not that Bitcoin really wants or needs his approval, but they have clearly said in the past, the Bitcoin is not a security. At one point, they said Ethereum was not a security, but then they kind of backed away from that. They pretty much just said anything else is a security. So probably not gonna have ETFs and those anytime soon. I would say it's less than 70% chance. I'd probably say less than 50-50. I think it'll just come down to are the people that run the firms that manage these assets willing to do the hard work to make it happen. So we'll see how that goes. I was looking at our last conversation six months ago when we were actually predicting the approval of the spot Bitcoin ETF coming sometimes in Q3, Q4, 2023. So you were pretty very close. You said that the Bitcoin fair value was around 55,000 and you were saying that Bitcoin would reach its fair value more or less when we're gonna see the halving and then we're gonna have this big upside move. You were saying that it would reach about $150,000 that was your prediction for the top of this cycle. Would you correct this prediction of yours that you made six months ago right now? What would you correct or adjust? No, no, I'll double up on it in the sense that I still think fair value of the network today is somewhere in the low 50s and we're gonna creep toward that number by the halving. Now I think that gets accelerated by the approval of the ETF. Now we're gonna have some nonsense of the future selling and some front running and day trading so there'll be some volatility but I think between now and the halving we definitely get into the 50s and whether we get to the all-time high, I don't know but on the halving what happens is the fair value basically has to adjust upwards or otherwise the miners don't make enough to stay in business and what we've seen in every past halving is the fair value basically double so that would take us from 50 to 100 to use round numbers and then you get into crypto fall which starts in June and that year following the halving you get the FOMO and the momentum and the leverage and the craziness. I think that's gonna be less this time, right? Normally it's about 2.3, 2.5 times fair value so if fair value is 100 that would takes to 230, 250 I don't think we get there, right? I think it's probably a one and a half-ish move this time because there won't be as much liquidity and won't be as much leverage. Now, is that too conservative? Probably, you know, Kathy Wood on this morning saying, oh no, it'd be 600,000 like of course she's gonna say that she's trying to sell her product but I actually think she probably believes at least a little bit that that's possible. Do I think we'll see 500, 600,000? Sure, by the end of this year, by the end of next year, probably not but I'm pretty confident that we'll see, you know, six-digit Bitcoin in 2024 and the rest of the year will be a lot of fun. Okay, so you pretty much stick to your previous view on this and yeah, let's see how it's gonna play out. Let's talk again in six months as usual. It's always a pleasure to have you and I will show Mark. Absolutely, thanks for having me, Giovanni and best to you and all the viewers and we'll talk soon.