 If they don't want to buy Bitcoin and they never bought it, then I'm sorry for being dumb. What am I supposed to do, shove it down their throats? Dan Held, growth lead at Kraken, thinks Bitcoin could grow to one million dollars or more. At that point, he believes Bitcoin's network effect will be large enough to challenge governments-backed fiat. The governments will attack crypto in what you define as a crypto mass extinction event. Tatochi built the blockchain to build Bitcoin, and he built it to be an incredibly resilient tool against governments. But in a final showdown between crypto and governments, which side would you choose? According to Held, there's only one right answer. If you don't buy Bitcoin now and it keeps going up in price, you'll be punished by that. This is our latest interview with Dan Held, growth lead at Kraken. In a recent interview with Peter McCormack, you claim that Bitcoin is now experiencing a super cycle, which, as you predicted in our latest interview back in the summer, will lead Bitcoin to be worth one million dollars. What happens when the whole world wakes up to Bitcoin's value crop? Being this decentralized store of value that's not seasonable could go to a million. What do you mean by Bitcoin's super cycle? How did you come up with this number? Yeah, so that number was arranged, by the way, but if we were to look at what super cycle represents, it means that this time is different. The previous market cycles for Bitcoin, those speculative run-ups that we saw in 11, 13, and 2017, those all were during a macro bull run, a macro being the rest of the world. But then we had COVID hit. And when COVID hit, we had money printer go-bur, we had people start to lose faith in the existing financial institutions and in our government. So we had this huge moment. I mean, this is a one in a hundred year moment. The last time this happened was Spanish flu back and was it 1918 or something? Literally a hundred years ago. So this is a moment that was a catalyst moment to bring Bitcoin's value crop into focus. Why does Bitcoin matter? Why do we need Bitcoin in COVID? It was a good way to bring that into the global awareness. So we have that. We also have institutions recognizing Bitcoin as Gold 2.0 and all of these pipes plugged in, pipes as in ways people can buy Bitcoin, both in the institutional level and on the retail level. We never before had these sort of pipes plugged in. It was really hard to go buy Bitcoin back in 2017 and 2013 versus now where it's so easy to buy and store for any type of purchaser. So for many of these reasons, Bitcoin shouldn't have a normal cycle. I would say Bitcoin is easily worth between one and $10 million of Bitcoin. If we look at global stores of value and look at Bitcoin as a, if you look at it like the totable addressable market of storing value, Bitcoin is very undervalued at the moment. So for me, the super cycle represents a breaking of the norm, a breaking of the typical cycles to where we might see Bitcoin move up all the way to a million in a cycle, which would be unprecedented. And I don't think any of us are expecting it. I'm just saying it could happen because of all of those events that I named off. Also conversely, what it could mean is that we have a semi normal cycle. So we go up to $200,000, $400,000 of Bitcoin, but then maybe we only have a 20%, 30% dip. Maybe the bear market isn't as intense because this time around, we have institutional buyers who buy and hodl. We have retail buyers who buy and hodl. People aren't just in it for a speculative run anymore. People are buying it because they see Bitcoin's value. So that's where I think we might see a less intense bear market. In a previous interview with us, Bitcoin skeptic Francis Coppola said that the economics of Bitcoin don't make sense to her. She said that the functions of Bitcoin as a means of exchange and as a store of value are incompatible. The incentive structure around a long term store of value that you expect to appreciate over that time does not work for a medium of exchange. To be fair, most people right now abandon that means of exchange narrative and see Bitcoin mostly as a store of value, as you said. So you, on the contrary, think that Bitcoin can still realize both of these two narratives. So can you expand a bit on this theory? Sure. Yeah, I mean, it's pretty common sense. Like, I don't want to go spend Bitcoin unless I hold it, right? So we have to enter the store value era first where people decide to start store and park value in Bitcoin. You know, my thing is that the medium of exchange era where people use Bitcoin for everyday payments, we're just really too early for that sort of thing. You know, we don't, if people don't hold it already, then why would they want to go spend it? You know, you have to hold it first, you have to believe in it first. It has to reach a very high market penetration in terms of the population of owning it. And the volatility has to come down over time and Bitcoin has to exist and continue to exist in people's minds as a real money. Now, this takes, this takes like a decade or two. That's where medium of exchange is just too early of a use case. But I believe long term as Bitcoin becomes universally held by everyone to store value, then eventually they're going to want to go spend it. And if the volatility subsides and there's a huge network effect, let's say like 50 plus percent of the population owns it, then network effects start to kick in where other people want to receive it. Whereas right now you've got a chicken and egg problem where first of all, not that many people hold Bitcoin or own Bitcoin. Two, you've got like great, so a merchant wants to accept it, but no one wants to spend it, which is a, you know, it's a two sided problem. And everyone's like, oh, it's great for the merchants and I'm like, cool, no one wants to spend it, so that doesn't matter. Whereas in the future, you know, I think as the volatility subsides, people don't look at it as it like a, again, Bitcoin in its final iteration in the final part of its growth trajectory becomes very boring, you know, it's like a gold. So right now people don't want to spend it because they believe there's a lot more upside, which is I think a logical conclusion and why I also hodl as well. You claim that the Bitcoin narrative right now is so dominant that it overshadows all other crypto narratives. And you even said that the DeFi narrative is also not working. Why do you think so? Why can't DeFi and Bitcoin thrive together? Yeah, so Bitcoin's narrative is so dominant because it's finding product market fit. This is a terminology used by product folks to talk about how my product is solving a problem. Bitcoin solves a very real, very in our face problem that all these institutions and retail traders across the world are seeing. They're increasingly being persecuted to store value. I mean, in Europe, we have negatively yielding debt. This is fucking ridiculous. I mean, this is insane. It never has occurred in all of our court of human financial history. People are having to pay their bank to hold their money in Europe. So we're seeing the central banks and governments across the world punish savers and push them into riskier and riskier assets, which they do not feel comfortable doing to the tune of tens or hundreds of trillions of dollars of wealth doing this because they're forced to. Bitcoin offers them an escape and escape out of the system. Bitcoin offers them a way to preserve their wealth and to store value in a way that no one can seize from them. Bitcoin's value prop is immensely valuable in this context, especially when we're looking at a hundred year event. So Bitcoin, its store value narrative has never been more clear than now why it's valuable. And the problem it's solving for the market is huge. Most of what we see in the crypto space is a lot of solutions looking for a problem. That's not how you build things. You build things because you build a solution that immediately solves a problem. That's what Bitcoin always did. And so with DeFi products, I think we're all very optimistic and interested to see what happens there. But certainly Bitcoin's narrative of storing value in this moment of COVID is magnitude higher, more important, and I think more visible and understandable with DeFi. Again, we are all interested in seeing what happens there, but it's a bit more complicated of a narrative. How do you explain DeFi in 30 seconds to someone on the street? So now let's look a little bit more far in the future. So in an article called What Happens If Bitcoin Succeeds, academic John Danielson from the London School of Economics envisioned a dystopian future where a small amount of Bitcoin hodlers will be the wealthiest people in the world, a sort of Bitcoin aristocracy. This world, according to this academic, will be a world of huge wealthy inequality. And this description reminded me of some of your latest statements when you said that no coiners will be impacted very negatively in the future. You said that they will end up on the wrong side of history. And you even compared the Bitcoin to an evil AI that will punish everyone who did not embrace it. So is this the future, is this kind of future that the Bitcoin community is looking forward to? Yeah, so it's called Rocco's Basilisk. And it's a thought experiment. So it's not necessarily about an evil AI or not. It's more of a thought experiment that a lot of people like to come up with. The thought experiment is if you don't back the AI now, you'll be punished by the AI later. And Bitcoin does that and Bitcoin isn't built to do that. But I'm just using an analogy that a lot of tech folks like to use because it's an interesting thought experiment. If you don't buy Bitcoin now and it keeps going up in price, you'll be punished by that because, I mean, there's no physical violence here. There's nothing like that. It's just more of a purchasing power. You will have lost out on accumulating more wealth because you have ignored Bitcoin is what I meant by that statement. Even if you don't like Bitcoin, you still should buy it just in case it pans out because if Bitcoin is the new world reserve currency and you didn't buy it, you know, you've missed out on the largest appreciation of wealth in human history. So that's the context there. And I think Bitcoin, when it comes to inequality, Bitcoin is the most fair launch of any other asset that has ever existed. Bitcoin, unlike equity in tech companies, wasn't only exclusively available to accredited investors. You also didn't have to be a certain citizen of a certain country to have access to the financial markets of Bitcoin. Anyone anywhere could trade Bitcoin for local fiat cash. So Bitcoin, I would say, is the one of the most equitable launches in human history. And when we look at how equitable is Bitcoin versus the ownership percentage of stocks, Bitcoin isn't this really asymmetric thing where there's only a few whales that hold it all. A lot of the analysis only looks at on-chain addresses and doesn't identify those addresses as exchanges or hedge funds. They try to pretend that those are individuals, which is, I think, a really disingenuous way to look at Bitcoin ownership percentage. There's been a recent analysis, and I forget who did it, maybe that analogy of dolphins, whales, and a few other kind of more fun analogies for different ownership classes. And they did a good job of parsing out and filtering out some of those on-chain addresses that were exchanges. And so I don't think that we really see this huge income discrepancy. I mean, the idea that the most fair launch in history isn't fair is kind of absurd. Anyone could have mined Bitcoin, anyone could have bought Bitcoin. The worries that there's going to be this aristocracy, I mean, fucking awesome. Yeah, these people saw the future and bet on it in the most fair way possible. They deserve all of the wealth that they should have. And maybe, just maybe these individuals will be smarter than existing bureaucrats or aristocrats who just accumulated their wealth through stealing it from others. Maybe these individuals who actually earned it will decide to allocate it effectively by building companies and tools and products. So I couldn't be more excited to have individuals like Bitcoin hodlers own that wealth versus some other individuals who would seize it from others using illegitimate means. Okay, so you don't think that this kind of Bitcoin aristocracy will kind of coincide with a large amount of no-coiners which will be leaving a miserable financial life? Yeah, I mean, those no-coiners are the ones who profited off of the existing system and chose to ignore Bitcoin their entire lives. So what am I supposed to do, shove it down their throats? They have to be able. I mean, if they don't want to buy Bitcoin and they never bought it, then I'm sorry for being dumb. The article by John Danielson that I mentioned earlier seemed to coincide with some of your theories, some of your other theories because this author said that in this dystopian future, this Bitcoin aristocracy will be attacked by the government because this Bitcoin aristocracy will just become too powerful and it will be a danger for those governments. You also said that sooner or later the governments will attack crypto in what you define as a crypto mass extinction event. You also said that Bitcoin is the only crypto that would be able to survive such a catastrophe. So why would governments want to attack crypto in such a way and why would only Bitcoin survive such an event? Yeah, Bitcoin, the original intent of Bitcoin is to be very antagonistic towards governments. I mean, Bitcoin undermines their entire power and authority by removing money from their ownership. This is of course undermines the entire existence of most governments. As soon as you remove their ability to print money and regulate the economy, then they will slowly lose relevance. You would eliminate 90% of government jobs because they basically run to this giant bureaucracy over hundreds and hundreds of years. So Bitcoin, I mean, that's the whole reason why blockchain was created. Satoshi built the blockchain to build Bitcoin and he built it to be an incredibly resilient tool against governments. I mean, that's why he openly mocks governments both in the only message he includes in the Bitcoin blockchain, his birth date, referencing how trust is required to make it all work and how they've breached our trust. Satoshi is a very libertarian freedom-oriented individual. So ultimately, that's what this technology is useful for, is to be resistant against state-level attacks. What we see with a lot of these other cryptocurrencies or crypto assets is that they destroy the entire reason why they exist, so they'll degrade some of their decentralized properties or they'll degrade some of their state-level censorship resistance in order to have higher throughput on layer one or something. You also have currencies that are like different crypto assets where they have founders that are well-known. I mean, Satoshi was pseudonymous for a reason. He wanted to make sure that he wasn't the central point of failure where they could come attack him and they could undermine confidence in Bitcoin by attacking him as a human. That's why we never knew who he was and that's why he left. He wanted Bitcoin to stand on its own merits and we don't see a lot of these other chains seek to do that. They've never operated in a very antagonistic, intense environment. Satoshi must be a bit older because I think he understood the 1990s, the cypherpunks battling encryption standards in the 1990s with the U.S. government. That's where I think like with these other points, they allow for higher throughput, but eventually all you can do is run these nodes in the Amazon AWS. It increasingly trade-off decentralization for supposed improvements, but when you look at them long term, you're like, well, long term, if there's ever a government attack, there's so many weak points here that you could easily crumble versus Bitcoin, which constantly is paranoid about being state level censorship resistant all the time. All right. Cool. Thanks a lot, Dan, for joining our show today. Yeah, no problem. That was Dan Held, growth lead at Kraken. I'm Giovanni, your host. If you enjoyed the interview, don't forget to smash the like button and subscribe to our channel.