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Eric Peters

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2024-12-16
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2024-12-16
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  1. “Things in my life. But the reason it's probably greatest mistake is it just took decades to figure that out. And so it's like I'll never get those decades back. But that's okay”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “God, I've made so many Ted. I won't go into details because it's personal and family, but it's an instructive lesson. So there was a time in my life, I think I did a very poor job of for most of my life was really being very transparent. And I felt like I had to keep things that I was thinking about and keep who I was kind of guarded. And my wife, Mara, just she persuaded me that that was exactly the opposite of what I needed to do. And so the great irony is I feel like I've become one of the more transparent people in the industry through my writing, but it's been liberating to kind of be transparent. And one of the things that you discover, I mean, number one, she was, of course, like almost everything in my life, she was completely right and I was wrong. And I didn't even realize how non-transparent I was. But once you start becoming transparent with people in relationships that you have and are just open yourself up to looking foolish or whatever it might be, you end up having much more meaningful relationships. And that's been one of the greatest.”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “Wrote about it recently in an anecdote, so I'll throw out their Moby Dick. I love the classics. And speaking of Mara, my wife, she always makes fun of me because I have so little time to read that when I read novels, I like to read things that have just really stood the test of time. And I enjoy, and it's a big part of what I love about markets and this industry is I love studying human behavior. And I think the classics, they're filled with nuggets. They're just great insights about human behavior.”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “Making a cup of coffee for my wife, definitely. Definitely. If I don't do that, it's not that I'm in trouble. I wake up. That's just what I do.”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “Is get beta exposure to. I think Bitcoin and Ethereum, which is not to say that there aren't other interesting assets. It's not to say that there aren't going to be assets that for periods of time outperform those two. But it's probably the case that a lot of those assets over time won't even come close to the performance that I see out of these two assets. And so if we get our clients invested into this space, we are now deeply knowledgeable about these assets and are building the firm around that capability as well, we will effectively, I think, learn and kind of evolve as this asset class evolves and be able to be, I hope, a step ahead of where the industry goes. And then as different opportunities unfold, our clients can participate in those with us. Some will be big and scalable being in the beta is big and scale. There'll be other niche year ones that will have more limited AUM products, but that will happen over the coming years.”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “Industry needs this. And so I'm going to build this out. And both Alan and Aaron, Landy, who's the CEO of Brevin, who's just terrific. We all chatted about it and it made a lot of sense. And I didn't need to ask permission. I was going to do it anyway. But Alan just threw his full weight and Brevan threw their full weight behind what we're doing because they agree. And Alan's deeply knowledgeable in this space. He has all kinds of investments throughout the ecosystem and is probably the earliest hedge fund person in this space. So we agreed on that. And so where that leads from a progression standpoint is I think the most important allocation that can be made right now given this valuation level. And I said this at $15,000 and I say the same thing at 50,000. The upside versus downside is so skewed to the upside that the most important thing I can do as a fiduciary for my clients, which are big institutional investors. They're not small mom and pop hunters or Robin Hood investors. They're just institutions. So the most important thing they could do.”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “You need to have strong players in each of those, you need to have strong venture players. And of course, you're going to, you need to have strong investment banks and you're going to their great trading counterparties. You need great custodians and those things have been built. agency trading desks or OTC trading desks, but then you need a Vanguard to kind of bring the best in class parts of the ecosystem together into a well-structured product where your client goes, okay, I'm dealing with one river, they're a great fiduciary, they're QPAM, they've built Arisa compliant funds, all that stuff. They have diversified custodial relationships. They've got diversified sources of liquidity. So I know I'm going to get best execution. My assets are going to be safe, all those things. So my discussion with Alan was.”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “So after we did this first purchase of these assets afterwards, only after, I called Alan and just said Reven owns a stake in our firm. And I just said, it's important for all of our clients to have an allocation to this space. It just is. What I've learned through this process is that there just aren't good vehicles for them to invest in, which is not to say there are no vehicles, right? Because you could go directly to Coinbase. You could go to any number of firms. Or you could go to some of these firms that have built their businesses for the last five years in digital assets. And there are a number of them. And they're great firms. Some of them, I'd say look more or less like venture capital firms. Some of them look more or less like investment banks. But there's no firm that really looks like one river, which I would say if I were to create a parallel, it would kind of be the vanguard of digital assets. And so I think that there's in any new ecosystem, you need to have.”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “We've talked a lot about what you did in Bitcoin. And without going too much into it, because we'll do that over the next couple conversations, how do you think about extending that to other either cryptocurrencies or blockchain assets?”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “Questions about what's going to be the impact of these assets in the future of finance, in the future of our company, in the future of the insurance industry. How do we think about this in a portfolio context? Can we really go into some of the currency debasement risks and what happens with inflation? So part of the discussion is on This appears to be a new asset class, is I think what most people are recognizing. And they want to make sure that they. At least have a baseline perspective on what it might mean so they can kind of go and do further research. And I think some portion of them will allocate and some will wait and then eventually we'll allocate in some way. There really is enormous interest.”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “There's enormous interest and intrigue. Really, I mean, rightly so. And that's driven by a lot more than just the price of this stuff going up. And I know that just because, I don't know, let's go back to the dot com bubble, which we lived through. We have calls with investment firms, it's often the case that we have 10 to 15 people that they're all the senior investment people at every area of a huge firm. And the questions that are asked are a lot less about what do you think is the fair value of this or anything. They tend to be more”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “In the last couple of months, Michael Saylor's out at MicroStrategy talking about it. We've seen Elon Musk do a huge purchase for Tesla. What are you hearing and seeing from institutions of their interest going forward?”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “An account where they can tax a capital gain ironically becomes this new source of revenue for the government. This isn't Bitcoin gone wild and take over the world. I think in some nations that are very weak structurally, that could be the case. It puts a lot of pressure on them. Place like the US, not the case. Places like the EU, not the case.”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “And wherever. But I think that by and large with these big, credible nations like the US, what will happen is the regulation will make sure the government knows where money is. And then if we had an event which pushed the price of Bitcoin to make up a number, a million or three million or $5 million or some crazy number, well, guess what? These guys can tax us. And you know what? They can also, if they're unhappy with how that's developing, they can say we're going to take the long-term capital gains on cryptocurrencies from whatever 20% to 30 to 50 to 80. They can do whatever they want to do. So they actually have not lost control, but there is this check and balance. There'll be a pressure. Like their costs of changing tax codes like that. People go, why are you doing that? And there'll be a lot of people that say that's not fair. But the reality is in a world where these guys are proactively trying to debase the currency, the dollar, have”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “And here's why I think that they won't. And so it's important for me to add that because I don't want to. I think I do the industry a harm by trying to suggest that these assets are such a check and balance on governments that governments lose control. I don't think that that's the case. I think there'll be powerful checks to a degree, but they will not overwhelm a big sovereign country. And here's why. The force of regulation right now is moving toward making these wallets and these systems transparent to government. Initially, when we started the conversation talking about all these markets were anonymous and you could move money anonymously, all those things are still true technically in practice before I moved my coin into our fund. I had a PA, I had Coinbase account. And I'm sure I did something wrong that they would turn me in. So there will probably be some people who continue to have anonymous accounts and they'll live in places like Venezuela and Argentina and Turkey.”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “If you were in Switzerland and you weren't happy with what the Swiss National Bank was doing with policy and you felt like, well, literally in 30 seconds I could move all my money from Swiss francs to euros or vice versa. That could be kind of interesting, right? And I think some of that stuff will happen. What probably will happen is those countries that have the most reckless policies will find that there is a greater check on them. And so historically, those have been countries like Argentina or Venezuela. But maybe what will happen is that that group of countries that have more check and balance because of these private systems of moving money around, they may find that their policies are scrutinized more. And that's probably a good thing, by the way. I'm a big check and balance kind of person. So I think what's important is that these currencies don't ultimately threaten sovereigns.”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “Always think about risks and opportunities. I think in its fullest form out a decade. Hard for me to see that the ability for people to move money like that, it'll provide a lot of information to governments about, in a sense, how people vote with their feet around government policies. That'll be something really interesting because”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “A high degree of confidence that almost everyone on the planet will have a digital wallet on their phone and they'll view it as being as secure as Citibank or anything. And they'll be able to move money between currencies, both government fiat currencies globally. They can already do that or in cryptocurrencies. But at that point, the little like the Twitter chatter, I don't think that will matter because I don't think that stuff ever matters. In big events, maybe it does matter. Maybe there's a run on a currency in Japan or, you know, I don't know what happens, but I think it's interesting. Things will be able to happen in a decade that today is impossible for them to happen. So it doesn't mean that wild things will happen, but new things will be enabled.”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “Just wildly underpriced for that. And so that's why we're seeing kind of a repricing move. But I think for the longer term, one of the things that could surprise everyone is what a world looks like when you have billions of people who can move money on their phone. And are susceptible to information, are susceptible to misinformation. You know, I think if you asked Mubarak whether he was surprised that there were flash protests and riots and that some of these new forms of social media combined with cell phones could ultimately topple his regime, I think he would have said that was impossible, right? Which is probably why it happened. So I don't know what's impossible and what is possible. If you think about where the world will be in, let's say 10 years. In 10 years,”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “Times that we've had something to say, not because it's one river, but because it reflects what we've done the first large institutional transaction, I think are seen as being knowledgeable in that space. Those have had real impact. So my view is don't say a whole lot. I think a lot of the Twitter stuff that people say so many things that it's part of the landscape, but does it really mean anything? I think Elon's thing was important. I think Michael Saylor some of the things that he said have been important and he's bought a lot, right? So those are all important things. I think longer term to me is more interesting because everything I just described is kind of market noise, whether markets moved because Elon did something or someone else said something, maybe they move faster than they would have moved. But it's not like that sustainably moving markets and keeping them in a place. Markets move because there's some underlying factor that's being priced in. And I think that underlying factor is the realization that this is part of the future.”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “Good question. I would say that there's a near term and a long term answer for that. The near term answer is that it's just a feature of the market. And there are a lot of people saying all kinds of things in the marketplace. We've chosen to be very selective. This is the fourth formal thing that we've done in this interview with our activity in the space by design because we're kind of treading very cautiously into what to say and when to say and how to say it. And it's been interesting because I think we're viewed as having important insights into what institutions are doing. So each time, well, the first three times, you know, that we've said anything, Bitcoin is moved by 15 to 25 percent within a couple days, which is kind of wild. But I think that that's, if I were to think about like what's really moving the market and I look at the various things that have happened, obviously Elon's announcement was really important. I think those.”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “It sounds like when you talk about Bitcoin and having to be sensitive to Twitter, it's hard not to raise the alarm bells of what's happened with all the crowdsourcing convexity of these assets, Robin Hood and whatnot. How have you thought about what that means for cryptocurrencies?”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “To think that someone stupid was in the market putting big orders in and make it look like we were really dumb money and then drill it through. Because oftentimes people do that, right? They'll drill it through those big orders, hoping that they hit stops below. And then we would let those stops get hit below. They weren't our stops. And then we put even bigger orders down to try to scoop up all the stop loss selling. So there are all kinds of games that we played, which was fascinating to see. It was really helpful to understand the liquidities markets. But yeah, it took five days. And by the way, we barely moved the price.”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “Tried all different types of things. So there are all these great algorithms that are available through their Tagomi system. And so I use those, but I also kind of brought in. I want to say old school 90s FX trading, but kind of really. So, you know, it's like what you discover is if the market goes up to certain levels, there's so many algorithms in these markets. The market hits a certain round number, let's say 15,100, for instance. And if it starts backing off, there are all these algorithms that come in and just drill the price down. And so we'd observe that and we'd let things like that happen. Or one of the things that was kind of fun is as I was speaking with the team there, I was like, well, why don't we put some really big chunky bids in on the market? Like, well, you can't do that. I was like, well, why can't you do that? Well, if you do that, then it'll be all over Twitter in two seconds. It's like, well, why is that bad? It's like, well, that's bad because then people will race the market up. But our view is that the price was pretty high at that point. And what we were trying to do is get the position on when everyone was worried that the contested election was going to tank stocks and bring Bitcoin down with it. And so what I really wanted to do is get some big holders.”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  25. “They don't have a proprietary trading desk. They don't take principal risk, which just meant I knew that unless someone there leaked information and I only dribbled information to them. So they never even knew exactly what we were doing in its full size. But unless someone leaked information about what we were doing, there was no one over there to try to front run our orders, which is always the terrifying thing when you're trying to do a big transaction. And incredibly to their great credit, they put a very tight team together. We had a code name for the project. And I spoke with Brett Tejpal, who runs their institutional sales. And he's fantastic. We've done business in the past. So I knew him professionally and he's just outstanding. So he kind of delivered the firm to One River. We had this very tight group of people and I spent five days working with their institutional trading desk. And so what you discover with this asset class is their pockets of liquidity, their pockets of illiquidity. It's 24-7, 365. So I spent five days working with these guys.”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  26. “It's fun to tell trading stories, I guess. This was definitely the most fun trading story that I have because it was incredibly important that this be super secret just because you're dealing with an illiquid market. So I knew that we had to be super secretive. And so pretty much I only knew how much we were going to buy in terms of anything external. And we worked with the Coinbase team. We selected them having done due diligence across the whole industry, everyone in the field. And we felt most comfortable with them as an initial partner for us. And we since are diversifying our holdings elsewhere, which was always the plan. And there are other great firms. It's just if we were to do the one significant transaction and do it with a team that I had high conviction would have great discretion. It was with that team and with that solution where they have an agency desk, meaning I was able to interact with their institutional trading desk.”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  27. “Around the custody of these assets, you know, things being stolen because at the end of the day, they're bear securities, right? They're bear securities, by the way, that can be tracked everywhere. So even if someone steals something, a huge theft, you can see where that money goes. You can see what wallets it travels to. And the FBI and law enforcement and SEC, everyone's going to be all over that. But if there were a large theft of some sort, then I think institutional investors could say, you know what, I'm not going to touch it for three years. And the price would go down. And so incidentally, that's one of the risks that we seek to mitigate with our fund structure to kind of insulate our clients from that because to the extent that we can educate clients about why these risks are overpriced in the market and we can also help mitigate these risks, I think as a fiduciary, we're doing the right thing because I think the market is overpricing all these risks. And that's why the price is low relative to where it will be.”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  28. “This protocol has got to have withstood more attacks than probably anything in the history of mankind by super smart people. And there are also very smart people who are constantly working to fortify it. It's almost like a living technology system that as not viruses, but it's fending off attack. And so that's one of the other reflective features. The more money, the more valuable this becomes, you could say the more it becomes a target. I mean, it's almost a trillion dollars, a big enough target, right? The more value that people have in this, the more incentive there are for the people who hold their assets to make sure that it's as strong and robust as possible. So I think that there are some risks there, but the system is incredibly anti-fragile. And so would bounce back from some type of attack that was moderately successful. There are ways that this can bounce back from some type of awful attack. And then I'd say the other risks are more”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  29. “Financial institutions can innovate and can build. And financial service is a super important part of the US economy. And so if you were to allow the foundation to be filled with cracks and cracks are just bad actors, you know, illicit activity, if you allowed that to happen, you undermine the potential value of everything that you can build on that foundation. Whereas if you come up with sensible regulation, which doesn't mean everyone's going to love it. And that's the thing in this industry. A regulator will come out and say something and most people in the digital asset community will react very negatively. But really, it's just, that's a normal push and pull between private and public sector, right? But at any rate, I'm comfortable that they will not do that, but that's a risk. Another risk is that there's some kind of flaw in the code or major attack of some sort that takes the whole thing down. This has got to be the most hacked, or this piece of”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  30. “So that could happen. I think I've gotten much more comfortable with it as I've gotten to understand the regulatory environment and have interacted with them. I think that what people misunderstand is the intent of regulators is to create a sound foundation for digital assets upon which American entrepreneurs”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  31. “So let's go through the rest. I'd say that one of the big obvious risks is the regulatory risk. And those risks differ around the world, by the way, because theoretically the U.S. could outlaw the holding of Bitcoin. And that would, by the way, they could not make Bitcoin illegal. It's this decentralized network that exists globally. You'd have to have every country in the world deem it to be illegal with harsh consequences. And it probably still wouldn't go away. The price would be a lot lower. So let's just talk from a US perspective. It's possible that the U.S. regulators or this government or future government could come in and say, it's illegal to hold it, just like at a point in history, they said it's illegal to hold gold, that would knock the price down a long way. And then I think what would likely happen is that that decision would harm the U.S. interest to such a degree that that policy would be reversed, just like it was in gold eventually. But that's a risk.”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  32. “Definitely risk like there are in anything. And I think when you consider. The investment proposition and anything you do, there obviously are going to be risks. And you have to, I think, you have to try to understand what they really are and then ask yourself, are they well reflected in today's price? And so”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  33. “What we no longer really have independent central banks. They're working together with Treasury and politicians are looking at that as a solution right now. And inflation hasn't taken off. So I think that we're just in a different mental framework at this point from a policy perspective. And that makes all the difference. It really does.”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  34. “The massive deficit that we ran last year. This year's deficit is going to be 15 to 20 percent with an economy that's actually bouncing back to life. I think it's pretty clear that the whole world got to this place where Japan had gotten to, which was very low rates in some cases negative like Europe. Monetary policy really wasn't lifting the economy anymore. Nothing was working and every central banker in the world was pounding on the table for the last two years and saying we have to borrow a lot of money. Fiscal policy needs to be involved or monetary policy won't work. And it's barely working anymore. They didn't want to say it doesn't work anymore because then the markets would have freaked out. But they said we need your help. And so now you have this global catalyst, which was COVID. And you've broken through this mental barrier that we over the course of our career, there's been this economic orthodoxy that said you have to have an independent central bank or all hell will break loose. Well, guess what?”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  35. “Are a whole host of differences that we could also go through. You know, Japan is sitting right off the coast of China and China had a big boom. And so Japan was kind of able to spend a couple decades just churning away, really, and dealing with its aging demographics and some of its internal issues, but had this big customer right off its coast that was supplying machines to as they industrialize and things like that. Japan kind of had it easy because they were the first to go through this. The world pretty clearly doesn't have it so easy anymore and the US definitely doesn't. So when you look at the US and you look at”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  36. “Say that's something really important to get right. And anyone in your seat or mine has thought about that probably their whole career. Let's look at a couple differences. Okay. So Japan, while it has a big economy in the world, it's a very small nation and it's aged very rapidly. US isn't. And Japan is a very homogeneous society. US is kind of tearing itself apart right now.”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  37. “Relatively small allocation and it could go up 10x or it could go up more than 10x. And so at a 2% allocation, by the way, that saves you from a lot of portfolio pain elsewhere in that kind of environment. So I think that's how the thing about it. The last thing I'd say on that is they're also looking at this differently from gold in that you kind of have this call option on technology when you buy these assets that you don't have in gold. Gold will be the same in 2000 years as it was 2,000 years ago. These assets are going to be different and improved in a year and 10 years and 100 years. So you have that, you have exposure to that.”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  38. “In that zone Equities are really expensive. My tenure bond yields 80 base points. The math just does not work. So they're looking at that and they're going, okay, so how do I think about a more robust portfolio? And some of them are thinking about the risk to monetary debasement and inflation. And that's very scary risk, right? Because then your bonds turn into losers. And if you look, you can try to convince yourself that equities are going to do okay in a mild inflation. But if inflation is even a little bit more than you'd hope as a fiducier, you can't help but look at the 1970s and go, that could happen too, right? So your equities might lose money and your bonds lose money. Some of our clients think deeply about gold and some have allocations to gold. The ones who are thinking about digital assets are thinking about it in kind of that debasement hedge part of their portfolio. And it's really attractive because it is highly convex. So you could have a”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  39. “Speak with all the same people, I think one of the major struggles that guys are contending with is, okay, let's say everyone in the world has a 60-40 portfolio that they dress up in one way or another. Maybe they leverage it and it's some form of risk parity. Maybe they amplify it with private equity, whatever. But it's a 60-40 portfolio one way or another. The problem is the 40 just doesn't work anymore, right? And the reason that you love the 40 for the last few decades, our entire trading career, you're in mine, has been that interest rates have been declining and they finally got to a point where they just really couldn't decline meaningfully. So investors are looking at their portfolios. And by the way, this is, I think, a slow and painful realization because it lacks great answers or great solutions. But they're slowly realizing. It's like, okay, so I own a lot of equities. I need to make 7%-ish and maybe it's 6% or maybe it's eight or whatever.”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  40. “Negatively, or you might lose money fast in the long end where the bond market really tanks and you get destroyed. So our clients have been really focused on that. And by November, it seemed that we had the right time and some of our clients were really interested in actually making that kind of allocation. We just gotten through the election. And I think as you saw these assets increase in value from the March lows, it became clear that policy was just going to continue to move toward this highly accommodative phase. And so these assets looked really interesting in that macro quadrant where you think about what policy is really doing. These assets are just uniquely positioned to do well. By the way, gold should do well as well, except these are just this really interesting, highly convex version of gold that's, I think, just deeply discounted. So that's what got us in. And thankfully, we were able to when we did.”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  41. “You're a market historian, that's kind of obvious that that happens. The question is when does it happen really? And so I think this latest, you know, the pandemic and the policy response coming out of the pandemic seems very clearly to us to mark the beginning of that cycle. That's incredibly important for every investment strategy out there in every portfolio out there. But one of the things that's extremely difficult is If you have the Fed and the Treasury in many respects co-joined and the treasury is issuing a lot of debt and the Fed is creating money to buy that debt and then it's being spent and kind of pumped into the economy. And the Fed is actively trying to keep interest rates low so that the real interest rate is deeply negative. Then you kind of know your bond portfolio. You guarantee to lose money. You're either going to lose money slowly by owning it. In the front end and just having your real interest rate work.”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  42. “Clients are broadly speaking, they think a lot about how to build robust portfolios to all kinds of market environments, you know, big market ups, big market downs. We've expressed views that it's highly likely that the late stage of this long economic and market and debt cycle will lead to a large monetary debasement. Essentially, which by the way.”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  43. “Yeah, you know what? You got me. At $50,000, I'm going to let a bunch go. Okay. And so there's reflexivity in that because the higher the price goes, the more money you suck in. The more money you suck in, the more institutionalized it gets, the more institutionalized it starts becoming, the more the regulators have to focus on it, the more the regulators focus on it at higher prices, hopefully the more sensible the regulation becomes, which invites more money in. And then you have this reluctant kind of supply responses as prices go higher.”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  44. “3x like it just did, or 30x, there literally won't be more that's mine. There'll be more people will compete more aggressively to mine it, but it won't increase the pace of that supply. Same thing if it goes down, by the way. And so the reflexivity in that just means that there's this new dynamic that people can't wrap their heads around, which leads to a situation where if prices do start going up, the only way you can create more supply is to push the price sufficiently high that these people who have held through perhaps six boom bust cycles that have been utterly gut wrenching and most human beings couldn't possibly hold on to through that, who have thought this is going to go up a long way, you have to actually move the price far enough for these people to go”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  45. “Has a supply reaction to higher price or lower price for that matter. It just does. There's a supply response. And everything we've ever traded and things that we don't really feel like we're trading, like our house housing has that supply. The price of water has that supply. The price of condos in New York. The price of gold, the price of oil, like the equities, you and I were just talking about SPACs. You know, the market's finding a way to create more supply, right? So everything we've ever traded has a supply response. If the price of Bitcoin goes up,”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  46. “Globally. And this is one of the super interesting things. I think it's probably. It might be the most important thing about Bitcoin in particular is that because it has no intrinsic value, but it's a finite supply. Value could be anything. And so That's been a really important thing for me to wrap my head around. And I think it's maybe the least understood. And maybe it's one of these things that I've just taken too many long walks to think about this. But the reality is Ted, everything that you and I have ever traded in our lives, every single thing.”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  47. “For whatever reason we've looked at gold as having intrinsic value and convinced ourselves of various things about it, that we think that it's real and you can touch it, it has substance. This doesn't even have substance. This is just stripped out all, it's like stripped out all the noise and said, okay, let's call money what it really is. It is faith. Okay. Dollar bills you can hold as well and you feel like there's substance to them. It's silly. I mean, the Fed can create an infinite amount of money with electronically in the banking system the same way that you could theoretically create infinite amounts of digital assets. The thing about Bitcoins, it forces you to look at something that just says, look, there are only going to be 21 million ever. Okay. And we could argue around, will that code ever break or something happen? But the highest probabilities there will only ever be 21 million. And so you look at that and you go, okay, well, it has no intrinsic value. So what should its value be if we want to assign this common faith as a store of value?”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  48. “One of the ways is good money chases bad money out. That's really important. And as that happens, this is one of the great ironies, I call them inversions in this space. I believe that the price will become less volatile the higher it goes. And so Kind of interesting, right? Because you look at something that it's difficult to wrap your head around the value of something because it's Has no intrinsic value, it's like the purest play on faith that you have. Now, by the way, you could say the same thing about gold. It's just we have so many thousands of years where”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  49. “You mentioned earlier the importance of reflexivity in this asset. And anytime we talk about money, you end up talking about faith in whatever that money is. How has reflexivity played out over the last couple years?”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source

  50. “We're at the outset of a decade or 100 year journey in terms of what this asset class will become and new money will become. And is it likely that before any of these on-ramps are built and investors are fully allocated Is it reasonable to think that from an investment perspective that you've already discounted the price of all of that innovation that's going to come on top of this platform already? And I think the answer, I mean, to me, the answer is unambiguously no. I haven't given you a number. I mean, we can talk about numbers, but the numbers are much, much higher. And the thing is, there's no negative carry. You're not, you know, so if you size it right for institutions, it's inevitably going to be very modest, and that's fine.”

    2024-12-16 · Capital Allocators · [REPLAY] Crypto for Institutions 1: Eric Peters – The Macro Case for Bitcoin (Capital Allocators, EP.180) · IDENTIFIED FROM THE TRANSCRIPT · source