Building an Investment Thesis for Bitcoin

Welcome to METACO TALKS – Live conversations with the people operating at the frontier of crypto innovation: entrepreneurs, bankers, investors, fund administrators, traders, analysts and other crypto and digital asset market participants. Our objective is to help the broader ecosystem navigate this complex environment and unlock the market opportunity.

This podcast is hosted by METACO – the leading provider of security-critical infrastructure enabling financial institutions to enter the digital asset ecosystem.

Our guest is Mike McGlone – Senior Commodity Strategist at Bloomberg Intelligence, specializing in the broad investible commodity markets. Prior to joining Bloomberg, he was a head of US research at ETF Securities. Prior to ETF Securities, Mike headed the commodity business at S&P Indices. His previous roles included head of futures research at ABN Amro and VP research, analyst, trader, sales at Aubrey G. Lanston / IBJ Futures.

Among other topics, we discuss:

• Why bitcoin is an investible asset class
• Valuating frameworks for Bitcoin
• Key drivers for investing in cryptocurrencies
• How much does narrative drive the investment thesis

Full transcript

Seamus: Welcome to METACO Talks. I’m Seamus Donoghue, the VP of sales and business development at METACO.

METACO Talks, for those that are new, is a biweekly discussion on topical issues and thought leadership related to Crypto currencies and digital assets. It’s livestreamed. It’s meant to be a lot of interactive conversation, so please comment and ask questions and we’ll try to include those in the dialogue. The recordings after the call, after this livestream, can be found on our website, and they’re also available on YouTube, Apple Podcasts, and Spotify. So, please also subscribe so you can join future events, and if you like what you hear, please also leave a review.

Today’s discussion is around building an investment thesis on bitcoin. Quick disclaimer: this is not investment advice. Please do your own research. But onward, I am pleased to welcome Mike McGlone here. He is the senior Bloomberg commodity strategist and author of the monthly Bloomberg’s Crypto Outlook. Welcome, Mike.

Mike: Thanks for having me, Seamus. I appreciate the dialogue and I’m looking forward to meeting you in person sometime.

Seamus: Likewise. It would be great to do some of these events livestreamed and in person. So, you know, we talk to many banks and I think that we hear a lot of pushback sometimes about, you know, is this an asset class, to start with, and then is it an investable asset class. Obviously, there’s been a lot of…the narrative for the last year has been institutionalization, which seems to be accelerating as we’ve gone to 2021.

We’d love to hear how you got into this space. You know, I often think if you’re… Did you draw the short straw at Bloomberg because somebody had to do it? What’s the background that brought you to this space?

Mike: Well, the immediate at Bloomberg is that I came here in 2016, commodity strategist, and I’ve always been somewhat intrigued by bitcoin. The first time I heard about it was from my eldest son, who is now 27, in about 2012. And he was all over it. I don’t think he… He’s bought a little bit but not a lot. He tried to mine some. And I remember it was just silly internet money. Some classic [inaudible – 0:02:01] that’s been converted. You know, just like anybody else. I didn’t really believe it too much until… You know, I remember it peaked around the price of gold in 2013. At the time, I was running the commodity business at S&P. I’m like, ‘Okay, it’s done, it’s silly internet money.’ But once the beginning of 2017, it started to peak above the price of gold, I’m like, ‘Okay, this stuff is serious.’

I started covering here, 2017. Got really bearish. Made a lot of enemies because I was really bearish 2018. And I turned bullish around April, 2019. And one of the key inflection points for me was when the New York Attorney General came down on Tether, the world’s largest stablecoin, and the market didn’t care. I said to me, myself, I said, ‘Okay, it’s a classic sign from a strategist; when the market don’t care, I don’t care.’ And that’s when I started turning really bullish in bitcoin, and then all the fundamentals have kicked in and here we are.

And I want to thank you. Your timing is impeccable because right now as we speak, we’re at all-time high. Now, if I had known when we set this up a few weeks ago, I would have been very impressed. And we’re within a few ticks of the one trillion-dollar market cap.

Seamus: Yeah.

Mike: You planned that, right?

Seamus: Absolutely. That’s all part of the METACO Talks. I mean, I think the trillion dollars is near historic because really one of the issues that…I mean, an evident issue is it’s a very small asset class. It’s still relatively small but it’s getting bigger. I mean, we’re still a long way from the ten or 12 trillion that the gold market is.

But I would love to hear… You know, obviously since you’ve been watching this space for as long as you have, how has your analytical framework to look at the market changed? Where is it now and how do you think it’s going to evolve going forward?

Mike: Well, let’s start with one of the key indicators that got me really bullish last year. That was when volatility on bitcoin was going down. Volatility […] every other risk asset in that plant was going up. And bitcoin locked in around ten grand. Yes, it had its correction and then came back. But I look at it from an institutional kind of…I guess you could say more professional standpoint. That was a key indicator. Also, if you looked at volatility on bitcoin…we’ll say 260 days, so annualized, dropped to the lowest ever versus the stock market, versus gold, and versus the world’s most significant commodity, oil. Okay, that means something from a professional standpoint. And of course, the market’s kicked in since.

So that’s a pretty solid foundation. Now, BitBall […] started to pick up as the market breaks up to new highs for good solid reasons, and it should. But I like to start there because, if I look at longer term trends in volatility and bitcoin, it’s gonna match gold in about 2024, which is the next halving. It’s simple regression analysis of 260-day volatility.

And then there’s a key fundamental reason why: bitcoin supply is fixed. It’s a known known. We know until 2024 there will be 900 coins a day, and that’s it. No more. There could be less if there’s a glitch, but no more. And then it drops to 450. So, one side of that binary model of supply and demand is known. The only thing that matters is demand. I look at every other commodity on the planet; they’re both unknowns.

So to me, that’s a good reason. As you mentioned, once the size of the market gets much bigger, it’ll become, I think, a store value asset like gold, but it’s not there yet. Volatility is too high. That’s true. But it’s getting there. And the point is, what’s going to stop it and trip it up? And at this point, we know the trends are clearly positive. And that’s a key thing I think a lot of people miss when they say like ‘Oh, it’s too volatile.’ I’m like, sure, it has been if you look past, but if you look to the future, it’s gonna be very much like gold. In fact, it could be more valuable than gold.

Seamus: That’s an interesting framework because I think, often, we do hear it’s too volatile, but also, the potential investment return is a function of the volatility here as well. I mean, the opportunity is part of that. You mentioned basically it could be more valuable than gold. How do you view the evolution of that? What’s the time? What’s your kind of like forecasted timeline for this type of move?

Mike: Let’s put it simplistically. Let’s put some numbers in. So right now, we’re right around $52,000-$53,000 US dollars. That was my initial target this year to get to one trillion. Last year my initial target was $14,000. That was another story. It was very easy. That was another story. But to me, this is the kind of year we typically get… let’s put it this time last. The last time we had a similar year, the year after a halving, was 2017. The market went 15x. So, going 4x or 5x this year means nothing.

Then I analyze what’s changed. Yes, the market is bigger, but supply is less, demand is picking up, and the macroeconomic situation is almost unheard of. We know what’s happening on a global basis is everybody is going digital, away from cash money. And it’s just that trend in terms of QE, negative interest rates in Europe, you know, and massive fiscal stimulus.

So, to me, there’s no reason I think we shouldn’t just keep similar pace. Get 2x to 3x, maybe 4x or 5x this year, which is around $100,000, and then we look for backup. So, from these levels, I don’t know how much it should back up, but it’s clearly almost a perfect storm for higher prices as everybody jumps in.

And now, is it FOMO? Maybe. I will rope in the fact that the world’s most significant car company in terms of market cap is allocating some of its wealth to bitcoin. To me, it’s something your spouse is supposed to say, yeah, that makes sense. To me, that’s as significant as when NY DA came down on Tether in 2019 and the market said, ‘I don’t care.’

So, to me, it’s a big potential inflection point that’s kicking in. And as far as why, I like to go back to the British Museum. One of my favorite exhibits there is when you go to the Hoxne Hoard. I’m trying to pronounce it right as an American. But it’s that hoard of gold from when the Roman Empire was collapsing and, you know, someone… You know whoever owned that, he couldn’t have the servants do it. He had a box of precious metals. He had to go out and dig it and bury it. If you have a servant do it, you know, the servant can come back and find out where it is. So he probably had to go bury his stash, and never came back for it.

That concept of storing value over time in someplace that’s safe and transmittable and transportable has eluded man since the beginning of time. And to me, like the internet, bitcoin is revolutionary. And the big thing about the history of mankind is, when invading armies, from Alexander the Great, the conquistadors, to the Nazis, come in, they take the gold, right? But you can’t seize bitcoin. And yeah, you know, there’s no better way right now to store that valuable [i…].

So they key thing I want to end on, then we move on, is, bitcoin is not a currency. And I have to point out, that is Satoshi Nakamoto’s mistake. In a good way. It’s a global digital reserve asset in a world that’s going that way.

Seamus: Based on that global sort of characteristic, is the gain in bitcoin the loss of gold? Or are we in a situation globally where you have this excess liquidity that’s sitting in cash that still needs to find a home? And you have fixed income rates. You know, what’s the number now? Somewhere between $15 trillion of fixed income and negative or pretty much zero rates.

Mike: Yeah.

Seamus: Is this broader asset class of stored wealth gonna grow as well? Or is it just a zero-sum gold versus bitcoin?

Mike: Right now, the gain, the way you started, is completely clear and factual, based on the evidence that the gain in bitcoin is the loss in gold. Right now, it kicked in really around Q4 last year. And you can clearly see downflow or outflows in gold ETFs and inflows in anything to do with bitcoin. And it makes sense. I hear it…as I’ve been in the gold space for probably 12, 15 years, and I hear it from all these people I used to speak to in the past. Here’s a good little story: my mother-in-law is a war bride from Germany. She was a child when her father, who was in the Germany army, died in Russia. And so, always liked gold, and I remember during Y2K, her and my father-in-law bought a lot of gold. And when I saw her over Christmas, her quote was, ‘Mike, how do I buy a bitcoin?’

Seamus: [Laughs.]

Mike: So to me, it’s just clearly what’s happening. She’s like yea high, she could kick my butt still, old German woman, buy wonderful. And to me, that’s what’s happening. Anybody who’s allocated to gold through the centuries know now that there is a major competitor here. Unless you expect the world to go backwards. I mean, it’s going rapidly. We’re in that acceleration stage of gradually then suddenly, clearly, in terms of technology. Going digital.

So, my thought is, anybody who’s prudent and has been allocating the gold through the centuries, and more recently…I’ve always liked gold…knows they have to have bitcoin in part of that bucket, if anything, to be a prudent allocator. Now, that’s happening. We’ve seen it in US-based equities. Now, let’s think about the rest of the world. They don’t have the global reserve currency. And a classic iteration from that are central banks.

Central banks are some of the most prudent people on the planet. At least, I respect economists. I work with a lot of them here and…

Seamus: [Laughs.]

Mike: Exactly. And I think that’s particularly because…you know, that’s gonna be controversial to say that, but the biggest buyers of gold in the last few years, most notably 2019, maybe not so much 2020, have been central banks, and of course, China, Russia, and maybe not the US.

But having that stored gold… I remember seeing it downtown in New York. The biggest stash of gold in the world. I remember holding some of those bars. If that gold is diminishing in value because this other asset is increasing in value, it’s prudent to allocate a small percentage to that asset. To me, that’s what’s kicking in this year.

Bitcoin has become prudent last year. That was one of our headlines. I republished on it this year. And it’s just prudent now to have a partial allocation.

So let’s say you have 100 units of investment. You put one unit into bitcoin; it makes sense. Bitcoin goes up 10x, then you’re already overweighed. But what if it goes down to zero? It doesn’t matter. The point is, it’s far past that now to potentially go into zero. It’s been adopted on a global basis. And that’s a unique thing about cryptos. There’s 8,500 of them. I call them bitcoin wannabes. There’s Ethereum that matters. But they don’t go to zero. They hold their value, unlike a stock that goes bankrupt or something.

So, this is a major revolution at the moment, and my job is to just try to quantify it and qualify where it’s going.

Seamus: That’s great context. So, you’ve touched on, obviously, the maturity evolution of volatility, and now we talk about, you know, relative to gold. How do you look, let’s say, outside of that? Are there on-chain…or let’s say on-chain analytics? Or sort of on-chain analytics… On-chain factors you look at or crypto market pointers that you look at that really drive your thesis as well? Or drive your analysis?

Mike: They have in the past. One of the best, I think, most robust, high-correlation metrics I’ve watched in the past is addresses used. I get there’s some coin metrics. And I use a bit of… It’s a 30-day average, I use. And it was one of the key things that kept me bearish in 2018 and the key things that kept me bullish since 2019. Now, I’ve somewhat ignored them a little bit lately because the market is in such an overwhelming phase where, as a strategist, you have to say, okay, when Tesla allocates… and Michael Saylor and micro-strategy are buying in and open up accounts like PayPal and the market’s waiting for an ETF, you know there’s an overwhelming demand at the moment.

So, I kind of pulled back a little bit on watching things like addresses used, but it’s one of the key metrics I like to watch, as the market is a good indicator last year. And I can share my screen on some of these, if we’d like.

Seamus: Please, do. Yeah.

Mike: As we speak. Sometimes I think it’s better if some of our viewers don’t look at my bald head. I can see my bald head and see a few charts. So I’m just showing you here one of the key metrics I used last year, in white. That’s just a 30-day average of addresses used. It was a major plunge in 2019 and once it broke above this level, 2019, it’s been bullish. But it depends on how you scale it. I scale it in many different ways. But that, to me, is a key thing to watch.

I’ll watch things like hash rate. I think hash rate is a big significant thing. But one thing I also want to show you is, when you look at the entire market, you have to be careful about the broad market, and that is, there is just so many of them that I like to scroll down to just bitcoin. And this is why I show you in this chart here, in white, that’s the change in… There’s basically 8,400 cryptocurrencies, tradable cryptocurrencies. And we know the simple rules of economics, as ex-traders. Moving from lower left to upper right, prices cannot sustain that. But an index… Like, we have the Bloomberg Galaxy Index. It tracks 10 to 12 of them. An index will have a survivor bias.

Seamus: Of course.

Mike: Initially kicked out XRB. And to me, that’s an important way to track. I see people say, ‘What if there’s a bitcoin rival?’ Well, a proper index will measure that rival. But to me, this is part of the reason I can’t be bullish of the whole space; way too much supply. And it’s one of the arguments people often times use – there’s just too many of them. Like, I agree. But there’s only been one adopted globally and only one that’s really considered digital reserve asset, and that’s bitcoin.

So that’s one of the things I watch. And there’s plenty of things on-chain that I use, but those are some of the key ones.

Seamus: That’s interesting, because there’s definitely… You hear some of the criticism is that there’s unlimited supply of these things, but it’s basically conflating all crypto–you know, bitcoin as being the same as the rest of the cryptos, which it’s clearly not; as you mentioned, the 21 million is a limit.

You know, the wallet metrics you look at… You know, there’s some others in the market. Raoul Pal, who you probably know of his real vision; has this theory around Metcalfe’s Law. You know, that the network value is proportional to the square of the number of nodes of users in the network. So basically, as the network grows, it obviously accelerates. I think Willie Wu, one of the on-chain analysts, looks at similar sort of metrics, and a lot of his forecasts are based on adoption.

You know, how do you look to extrapolate some of that? What you’ve described as a [inaudible – 0:16:00] indicator in the wallet addresses?

Mike: One thing I got from Raoul recently, listening to one of his podcasts he did, was equating Ethereum now to bitcoin at the beginning of 2017.

Seamus: Yeah. That’s an interesting one.

Mike: That made a lot of sense. Yeah, I liked that. I love the stock-to-flow, that makes sense. I just don’t need to be that big picture outlook. I mean, there are some great things.

There’s one thing, though, I want to bring in that is really, I think, not as widely watched but is a significant indicator. It really kicked in for me in 2016, and that’s the market cap and trading value of Tether. The reason I bring that up is because I don’t see a lot of people mention…actually, I see a lot of pushback against it. Clearly to me, I look at it as, this is what the market wants. It wants a digital version of the dollar. If it didn’t, volume on this digital dollar, which there’s many of them, stablecoin, would not be double right now. It’s basically double the value of bitcoin; based on coinmarketcamp.com, which could be dicey, but I use apples to apples. They’re the same measure, I guess.

Seamus: Okay.

Mike: And that’s what I show you here. That is just in white. I just show you the simple market cap of Tether. And what really struck me about Tether was, I was in Hong Kong in 2018, major bear market, and right after the typhoon, right before the riots in 2019. And I remember major sentiment for bitcoin. I could sense it. Everybody poo-pooed the mainland. And I remember pointing out in some presentations that everything was going down except one thing: Tether market cap was increasing. And I heard a lot of pushback, and I’m like, ‘Guys, this…as a strategist, I don’t really so much care much what the problem is – all I see is market cap’s increasing.’

Seamus: Right.

Mike: And yes, it could be somewhat subjective. But that’s what I want to show you here. We have that dip April 2019 in Tether. It was around three to five billion. New York attorney generals came down it. So, since then, they have been under the radar. Yeah, they’ve gone from two to three billion to 33 billion in AUM, and volume is double. And I look at that as, that’s just in the world.

People say that, you know, they want a CBDC digital currency from China and stuff. I’m like, yeah, good luck with that one. The world’s reserve currency, the dollar, which has been the best currency ever for transacting, is gaining dominance through digitalization… And Tether is an indication of it. So, also, a key thing that might help out… Because we all know it’s all going digital. It’s just a matter of time unless people expect to go backwards. Like, which, I was trying to move forward.

And there’s a bit of a privacy issue. I mean, if you’re in China, dictatorship, you know, clearly wants to track its citizens’ every transaction. Well, you can do that with a CBDC, but with Tether, you know, it’s kind of someone else’s deal at the moment. So, it’s like the banks. You know, they manage the money and…

So, I want to just show you one other thing, and let’s move on. And this is the key thing that matters to me. It’s not being noticed, because bitcoin makes the headlines, but in white, that’s the ten-day volume of Tether. It’s almost $150 billion. It’s about double, almost double that of bitcoin. It’s getting close to that.

That’s what I show you in the bottom. Just one divided by the other. So, there’s a key metric that I like to point out. And every time I hear people push back against it, I’m like, that’s perfect. That’s what you need in this space, because when everybody agrees on something, it’s too late. The market is already priced in. So, it’s just pushback that I like to hear. The naysayers.

And I’ll finish with my rant. To me, that’s a key thing that really shifted probably a few months ago, is all the risks tilted against the naysayers. So if you’re a professional and your job is to help your clients to make money, and you don’t get them in bitcoin, you tell them not to get in bitcoin, and you’re wrong, then that’s a major push against you.

Seamus: Well, I think we’re seeing that with things like, you know, micro strategies, market cap up… I can’t remember the last check whether it’s four or five X’s since the start of the year. It’s kind of hard to ignore what that allocation has done to their market cap and their bottom line. And I think they had 1.400 people at their recent seminar that Michael Saylor put on.

So, 1,400, sorry, corporate treasuries attended. So, I think the money is speaking to the space. And, if indeed, Coinbase comes out with a market cap of 70, 80 billion, that’s larger than many banks, and will definitely drive a lot of board discussions of ‘why are we not in this’ as opposed to ‘why should we touch this.’

I agree there’s a lot of…let’s call it, you know, fawd. Or basically, there’s a lot of concern around Tether. You know, extending some of the thought you described there, how important it is, what’s the impact if in fact there is some sort of fraud at Tether and basically some rulings come out against them? What happens to the market cap there? Does it shift into other stablecoins or is there some other impact? Or…?

Mike:                    Yeah, exactly. I think it’s just gonna get… We should expect more regulation, which would be good. And more and more, most notably, obviously people, you know, from the US government… Because there’s an argument that maybe it’s counterfeit. But, you know, the US government I think is smart enough to go in and, ‘Akay, we’ll just regulate this.’ And, the New York DA has been on it, so we’ve already had this. We’ve already had this shot. We’ve already had a direct hit. And it survived. So, that’s the way I look at it. Like, okay, next subject. What’s the next thing?

And it’s NASA technology. There’s got to be backups, there’s got to be volatility. I’m waiting for the next one that’s gonna make bitcoin maybe drop 25 percent. Who knows? I fully expect if and/or when that happens, there will be more buyers that are creeping in. It’s just that kind of mode right now. The question is, where’s the plateau?

And that’s the key this, is we’re nowhere near that plateau, but that’s the key fact about bitcoin: it’s completely independent versus those 8,000 other ones, including Tether. They’re all someone else’s project and someone else’s liability. The unique thing about bitcoin, [inaudible – 0:21:52] to go. It’s no one else’s project, no one else’s liability. It’s been developed completely organically and the world’s largest decentralized network ever. It’s been through many tests and, yeah, it’s gonna have more tests, but the bigger it gets, the stronger it is. And, you know, basically what doesn’t kill you makes you stronger, and bitcoin has won that race.

Seamus:               Indeed, it has. I mean, you know, you mentioned earlier when you were talking about Raoul Pal’s thesis that you liked his view of how he looked at Ethereum, that potentially just maybe it’s the same thing, although it’s earlier in the cycle. I think you put some similar research out on Ethereum. Do you want to talk about that a little bit as well?

Mike: Yeah, I don’t follow too much. I typically watch…I mean, I put out a little technical indicator on Ethereum. I mean, I think I like his narrative partly because the way I view Ethereum is, it’s more like a speculative stock now. It’s won the race already of the go-to platform for DEXs, decentralized exchanges, and fintech. But it’s not gonna be a global reserve asset like bitcoin.

So, it’s a completely different world as far as US treasuries. From not just US – from every company in the world, it makes sense in central banks to allocate some to bitcoin. But I look at Ethereum as a closer correlation with NASDAQ. It makes sense that, you know, it’s right around…what are we at? 1,800 at the moment? Yeah, 1,900, just about 2,000. So it’s basically where bitcoin was at the beginning. So, May can have a rush. But it does have major competitors, and it just kind of won already.

But that’s what I like to point out. When I pull up things like that…you know, you pull up my simple little analysis, coinmarketcap.com… If I sort by market cap, you know, you get Tether as actually… I’m sorry, Ethereum is number two, right? I get it. But you do volume, which about everybody doe, Tether has never won. So there you go. So, to me, it’s bitcoin and Tether and everything else.

Seamus: Yeah, fascinating. So, where do you think we go from here, broader market? I mean, one of the themes in the market is inflation. And we’re obviously seeing yields rise, the real yields rise. How is that expected to impact, let’s say, the flight to quality or the store of wealth that is bitcoin?

Mike: So I’m pulling up a recent article I did, and it was titled ‘The 21st Century Commodity Super Cycle.’ It’s here. It’s called bitcoin. And I think that’s what people are missing.

So, as far as inflation, let’s remember what stage bitcoin is in its maturation phase. Right now, it doesn’t really matter. Inflation/deflates, whenever. Bitcoin is in the process of reaching its…it’s in the price discovery stage, it’s nowhere near its plateau, I don’t think. It could easily get to the market cap of gold, which means another 10x probably, and it could go much higher. I suspect it’s gonna be more. Now, what’s gonna happen in the meantime? Who knows?

But the key point is, we in this world no longer… I mean, the last time you talked about super cycles, the US used to import 15 percent of the world’s total supply of crude oil. Now we’re a net exporter. [Laughs.] And the total demand for petroleum in this country and liquid fuels is the exact same as it was 15 years ago.

So, I point out, let’s look for a super cycle in the future for inflation and everything. It’s already happening in bitcoin. It’s just going to that space. But real inflation…if we want to talk inflation […]: metals. Gold, silver, platinum, palladium and copper, maybe aluminum. You can store it. You don’t have to worry about contango and things like that. And I think, you know, gold and silver sure plays well in your part of the world. But you can’t be involved in that space without some bitcoin, the way I look at it, unless you’re looking backwards. Looking forward. So, to me, that’s the right thing.

As far as inflation, good luck with that one at the moment because deflation remains the primary force. The place we’re getting inflation is assets like bitcoin, most notably the stock market. The key thing is, when you get to…I’m gonna show you this right here…the highest right here. You know, the highest market cap ever to GDP, US stock market, global stock market… That’s what I show you in white. Okay, that’s inflation. But just a little […] version there. What’s the problem? Massive deflation. Massive printing of money.

So that’s why I like to narrow this whole question down to one little potential inflection point, and that is the relationship between Tesla and bitcoin. So, I know we started inflation, Seamus…

Seamus: That’s an interesting one.

Mike: I want to go there because we…

Seamus: Please.

Mike: I’ll slow down and I’ll tell you why in a second. But to me, this is the key thing I’m watching for that potential narrative. And it’s… [Inaudible – 0:26:37]. Because what’s been happening as I show you in this chart so far is, since Tesla allocated to bitcoin, Tesla has gone down, bitcoin’s gone up.

And let’s put ourselves forward a year from now. If that trend continues, what are the macroeconomic repercussions of the world’s most significant automaker, one of the biggest members of S&P, going down and bitcoin going up? Let’s just do the dominoes. [Inaudible – 0:27:07] is more, more fiscal stimulus, everybody is worried about deflation… Boom, it just trickles down. So, let’s put it this way: Tesla has got to go up, or we’ve got a problem. And that’s why I think I would love to have some good real inflation.

And then I look over… One simple little thing like in this country… Like, I’ve got a bridge to show you. When I catch an airplane, I come from Connecticut and I go to the airport and I go over the Whitestone Bridge. It goes over the East River and the Long Island Sound. Two years ago, there was a hundred people there who would man that; now it’s all electronic. Poof. Gone. These people are just gone. I used to be in the trading business. So this was when you and I were in […]. Poof. Gone.

Seamus: [Laughs.] Indeed.

Mike: People underestimate technology refreshing inflation forces, and we’re in that acceleration phase.

Seamus: Great points. We haven’t had a chance to go to questions, so I’ll just change the topic a little bit and go to some of those questions. I have one question here about, can bitcoin crumble when quantum computing comes?

Mike: Yeah, sure. It could have a problem. I hear people address… I saw a Bitwise webinar yesterday where they addressed that. Let’s put it this way: if that happens, there’s probably greater risks with things like the Pentagon and the US government…

Seamus: Correct.

Mike: And when that happens, and say that happens in a nefarious country that has reasons to not like the US, who provides security for the planet, then I think we have bigger things to worry about. For now, the bitcoin network is quite strong. And yes, new technology could upset it, but that’s why I love what Michel Saylor says; once you adopt a technology, it holds on. Just like the way we’re speaking right now and how email works and stuff. But to me, that’s a minor thing and I’m more worried about getting hit by a bus.

Seamus: [Laughs.] And one other question. What’s your view, if any, on Cardano?

Mike:  No clue.

Seamus: Fair enough. Okay. Well, I think we’re kind of at the time limit. It’s been great to chat with you, Mike. And I agree, we have to do this again sometime in person, and we’ll grab a Guinness somewhere to celebrate some Irish heritage. So, thanks for joining today. And how can people connect with you?

Mike:  Yeah, I’m on LinkedIn. Just hop into LinkedIn. I’m on Twitter too, I just don’t follow it as much. I don’t have time to respond. But link in with me. Happy to do that. And I’m happy to put on my distribution list. Just link in and I can get you on my list, and, you know, maybe someday you can hook up on a Bloomberg terminal and I can get, you know, brownie points for that. But LinkedIn is great and I’m happy to put you on my list. Mike McGlone at Bloomberg. You’ll find me.

Seamus: I would definitely recommend your research reports. They’ve been great reading. I’ve enjoyed them. So, Mike, it’s been great talking to you. Thanks for joining us.

Mike: Thanks for having me, Seamus.

Seamus: Thanks everybody for being with us today. The next call will be on March 5^th, and we will announce the guest shortly. And thanks for joining today. See you next time. Thanks a lot.