 Hello everyone. Welcome to Cointelegraph. We're at Bitcoin Miami and I'm sitting next to Mike McGlone, Bloomberg senior commodity strategist. Mike, pleasure to meet you for the first time. Pleasure to meet you. I thought you were just a bot or a hologram, but you're real. I'm real apparently, right? Bloomberg does a lot of really interesting reports on crypto. I was looking at your background. You have a real background in commodities and futures. I'm just trying to understand how you migrated from that into crypto. Well, from a commodity standpoint, crypto, I'd say Bitcoin is just so compelling, because I started in training pits in the 80s. I grew up basically 30 miles south of Chicago Board of Trades. I get out of college and I'm like, yeah, I want to sit in the office. It looks kind of fun down there. You've seen the movie A Fierce Bueller's Day Off? Oh, yeah, of course. Yeah, exactly. So it's like, that's kind of cool. That's why I was one of those guys in there, yelling and shouting. But the thing you get right away, the edumacation down there, it's so rapidly. I've got all these degrees and it's nothing compared to the five years I spent in training pits. But a commodity person, when you see Bitcoin, the first thing you notice is, okay, you check supply and demand. Supply, buy code is going down. Can't mess with it. When people ask you, why don't you check the average cost of production? I'm like, I don't care. All I know is you have 900 coins a day on a global basis. That's it. 2024, it goes to 450. From a commodity, whoa, okay. Supply schedule down. So what's the demand side? Demand and adoption are clearly upward. How do you measure that? Don't have to be exact. So over time, that price has to go higher unless something changes the trajectory. Now, you can't change supply by code. But so I just make the assumption, I fully expect the demand and adoption are going to increase. And particularly because a couple of years ago, we weren't kind of all in this space and there was just more and more people. And what we're seeing from this war is that the use case is just, it's exceptional. When people can move around, transmit, transport, transact, this most widely traded asset in the history of mankind, 24 seven, it's never existed. I used to be a trader and I remember you have limits, you shut down, you want to train in the weekends, Bitcoin's always given you price discovery. And so from a guy who comes from a trading pitch, you look at that, I'm like, this is pretty cool. Yeah, yeah. So the idea of supply really never changing, is that how do you view that from a commodity perspective? It just seems like it's a really unique value proposition, the fact that the supply is calculable. And as you said, it's going to go down to the next halving. If demand stays the same or increases, we expect prices to go up as well, right? Yeah, so that's my assessment. And it's overall how you have to look at it. Like, what's given a juxtaposition, an example of the opposite, crude oil. Crude oil peaked at 145 in 2008. It just jumped up to 130, didn't get above New High. That's 14 years later, you know, that's deflation. Because of one thing, rapidly advancing technology, bringing more supply, reducing demand, being replaced by technology. That's what happens with commodity over time. Just what happens with price. Bitcoin doesn't have that elasticity supply. So what's happening with crude oil right now? Price goes up. That supply is coming back. It's lag, but it's coming back fast and fierce and I really expect the price to go back to 50. It's not profound. Bitcoin doesn't do that. That's why it's so unique. It doesn't have that elasticity supply. So all it has is it goes up. It actually can increase demand because institutions are getting more and more into space. So that's something I said two years ago. In the meantime, I think it has a short-term problem. I can get into a little bit with the whole tide of risk baskets going down, but that's the bottom line. You compare it to something like crude oil. And what's happening in crude oil? Ten years from now, we're not going to need it. I drove an electric car from New York to Miami. I live here now. And it's a Chevy Volt. So it's great. I mean, when I'm on the highway, it goes by generator and gas. When I'm driving regularly, it's electric. That's the technology. But you know, the world is all going replacing this technology, replacing this commodity, but you can't do that with Bitcoin. What's the world doing that's going digital? What happened to Blackbuster? What happened to Kodak? So that's the way I see it in the macro. Exactly, exactly. So I was reading the latest Bloomberg intelligence report and you talk about how ETH and BTC are really outperforming stocks on a risk-adjusted basis, right? And it's like, maybe you could illuminate on that because a lot of people are still concerned about Bitcoin's price action recently. But if you zoom out, I mean, we're still outperforming really basically every asset, right? So the key thing institutions look at is risk-adjusted. So for instance, if you have Bitcoin trading 5x the volatility of the stock market, stock market goes up 10 times, Bitcoin should go up 5x that. That's the way it works. What's happening this year, what's been happening since particularly 2008 is the stock market volatility is increasing, but Bitcoin volatility is declining. It's a maturing asset. It's a teenager now, and it's getting more in the mainstream, more adoption, more future. We have the ETF launch. So it's just part of that thing that institutions love to see like, oh boy, that's what I want to see is, it's a nascent asset. My kid talks about it, but I'm 57. I'm running a lot of money at some kind of hedge fund or pension fund endowment. Now they're saying we got to get into space. So the key thing I like to watch is the trajectory. They can't even speak well. From being the south side of Chicago, we know more Dem-D's than those guys. I love to measure Bitcoin volatility relative to other assets, relative to the stock market, clearly heading down, relative to gold, clearly heading down, relative to crude oil, just clearly heading lower. The thing I'll leave you with is what's happened this year was significant. As you mentioned Ethereum, I'm in institutional space. I've always, when I was in trading fits, my job was get on the phones and help execute in the pits for institutions. We've published, my colleague, Jamie Koods in Singapore, who's just joined our team in Bloomberg Intelligence, he published an article that said Ethereum and discounted cash flow analysis in one sentence, in one headlight. So what discounted cash flow analysis is what your typical geek, and I only mean as a compliment, because, you know, CFA, your typical CFA, I got one of those, I passed the test, doesn't mean I learned anything. I forgot it all, is when they look at equity markets, how do you measure the value of a stock market? You measure the cash flows over time. We put that in a Bloomberg, it was the number one hit story we had, almost the number one hit story from Bloomberg Intelligence this year. So what does that mean for you? Institutions had never seen that before. I hadn't seen it before until I watched a podcast and they've read about it. I'm like, you mean with this upgrade, you're going to have cash flows? Like, whoa, okay, that's game changer for institutions. And this is the fact that, you know, this bastion of institutional investing in Bloomberg that people clicked on, it means they're getting in and it's my job to make sure people learn about it. So to me, that's what I look forward to. That's why I see in all cryptos, most of the main ones, Bitcoin, Ethereum, and the other crypto dollars, the other 18,000 I don't know about so much, you expect to see an institution a bit below. Now, I do think price will go lower in the short term, but they're getting out of equity slightly enough and they all know they have to allocate more to cryptos, particularly when you show the value lower correlations. We know that declining volatility over time, rapidly advancing technology and asset, discounted cash flows and things like Ethereum, that brings in the old school mainstream money. Yeah. I mean, I've been talking about the institutions are coming since 2018, right? Yeah. But it seems like recently it's starting to pick up, what for you, since you have a pulse of this, what are they exactly looking for? Is it regulatory clarity? What's driving that adoption? And where do you think we are in terms of institutional understanding of the crypto space? Your spot on. Kevin O'Leary spoke about it, yes. I just talked to him in the guest room. It's kind of cool to talk to you. Yeah, we talked to him too earlier. Yeah. So it was nice. I just first met him and he made a good, it's regulation. So it's proper regulation. Now, again, that's an easy word. I said that word a little while with a Brit, because I love that word proper because the Brit's like, what's proper? But regulation that lets investors get past the board of directors not have to explain this if it goes wrong. So proper vehicles, custody, regulation, mainstream, it's all, you know, it's just what you said 2018. We both said it. We're just kind of ahead of the game. It's happening, but it's happening slowly. This launch of the ETF was good. It's futures, but I'd rather short that and be along Bitcoin and maybe sell some calls against it and launch some, maybe launch some. There's so many things you can, but it's bringing the institutions in this space. To me, that's it. Regulation. And I think most regulations are going to come with crypto dollars, but just a matter of time. And I fully think what's happened now with this war, in particular with China pushing back on cryptos and free market capitalism and mining of cryptos, I fully expect the U.S. And it's happened. U.S. pendulum swing in the other way. We just have to figure out a way to do it right. And it's all going that way. Yeah. So on the topic of stable coins, I mean, this is a really interesting market. And I think it's one of those markets that is, I think could really make crypto more accessible and more user-friendly. What are your thoughts on regulation of stable coins? Matter of time. But I like to have a view. I call them crypto dollars, 95% track the dollar. So the first question we have to ask ourselves, why is that? Why did this organic global free market choose the dollar for place of track? Because it's no better currency on the planet. And I love that right now when people say, oh, this is de-dollarization. I'm like, give me a better currency. Give me one better currency. And so I'm not worried about that. To me, this is an acceleration of the dollar dominance through cryptos, through what happened in the war. And to me, that's where it's coming. And the U.S. is smart enough not to mess it up. It's Churchill's debt. So to me, that's what's happening. Crypto dollars are just like euro dollars were during the Cold War. What happened with a lot of Soviet Union states and things they need to put their dollars in place? They put them in European banks and got a little better interest rate. In dollars. It's happening in cryptos. A lot of it's happening from Asia. So there's a gentleman named Darius Sit, QCP Capital. I met him. He's pointing out that. I think he's at the conference. Just a person I interviewed a little bit. But a person who's in Singapore says, Mike, this is just all Asians. Everybody wants a dollar. And I asked Michael Saylor that recently. He said, because the dollar's a go-to currency on the planet, give me a better one. So to me, that's what's happening. The regulation's coming. But I fully expect the U.S. is going to say, okay, let's look at these money markets, like primary dealers. I used to work in banks. Let's regulate it properly and let our dominance continue. Because it doesn't make sense to mess up something like. So I like to end with this. When I give presentations, I gave one recently to Miami Dade College, which is where that bull's going. You know, the right outside. That's where the bull's going. So I gave one there and I gave this to these guys. I pull on one of the coin market cap or something. I click on it right away. It pops up Bitcoin at the top. I said, start by volume. I try of viewers to do that. Start by volume. What comes up, number one? Tether. It's controversial, but it's the most widely traded crypto on the planet before reason. Because you get it out. You trade dollars. You don't want to trade roubles or yen. I mean, sorry, there's just no liquidity there. And you hold things like Bitcoin. And so to me, that's a key thing to remember about this space. Most widely traded are dollars, crypto dollars. So I love when you say stable coins. I need the best with you on that one because they're all crypto dollars. Why didn't they go to the euro or the yen? Partly because the rates are negative, not anymore. So that's a key thing. I love to point out, and we're getting more and more data on the Bloomberg terminal. We were a little bit behind, but we're catching up. My main thing I said to people, my colleagues in data, is you got to get all the, all the, you know, they're just focused on most of the coins. You got to get the crypto dollars in there. All stable coins to show the volume. Because institutions need to see where it's going. They know who really figured it out. Mastercard, Visa and Mastercard. Because they can transmit, transact, settle dollars instantly through crypto dollars versus in a bank, you got to wait a weekend and when there's holidays and you got to pay a fee, it's just a better way.