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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. “Until those on ramps are built and until I'm getting those calls from the biggest brokers and investment banks is that, of course, there's downside. There's always downside in market, but I don't think there's much sustainable downside until we at least get to that point. So forget about what that price is, because that price, by the way, I said that when we were at $15,000, where now today, I think we hit $50,000 today, right? That would be equally true at $100 or $150,000. It's just the price would be higher. But that feature that I just described of market function would not have changed yet. It takes time. So that's the trader. I mean, the investor in me is, look, this is the future of money. If it's allowed to survive and coexist with digital fiat, which I strongly believe it will be, then”

    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. “Do not yet have high appetite to be transacting and helping their largest clients transact and get size on in this space for whatever reason. So I would tell you that the trader's mind, the day that I have the biggest banks calling saying we want to give you 10,000 lines and 100,000 lines or whatever it is to get your business and we'll get it done right away, that's one of a whole bunch of different trail markers that I would have to be like, okay, we're now at a different place, right? So what does that tell me? It tells me that the on-ramps have been built. They're being utilized. They're being leveraged. And so the world is operational. So forget about the price. I will tell you that given the institutional interest that you read about every day and that we see as a firm.”

    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. “And round the price up on us. And so this goes back to early November with Bitcoin around $15,000. So we called all of our counterparties, which shall remain nameless. One of them we asked to get a line to trade futures. So now let's imagine that we need 10,000. I'm just going to make up the numbers. We need to be able to trade 10,000 contracts. And we need to get our papers and we want to do it quickly and get this on before news leaks out. So let's figure out can we get all the paperwork done in the next few days and can we get the position on really quickly? And we basically learned that it would probably take, I don't know, four to six to eight weeks to be onboarded with this and that we could probably trade 10 contracts. Okay. We need to trade 10,000. So if we wanted to do anything in S&P futures or treasury futures or anything else, the competition for our business is extremely high. So as a trader, what does that tell me? It tells me that the biggest institutions in this space.”

    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. “So I partition my brain as part investor and part trader. Sometimes that can confuse even me. In some ways, you're thinking about different timeframes and different drivers. One of the things really unique about this asset class and this opportunity is that what I see as a trader and what I see as an investor completely aligned and highly convex. The easy answer is to just throw a number out there. We can talk about numbers, but I won't throw one out there initially. I'll just tell you how those different parts of my brain think about it. So when I think about it as a trader, when we decided to get into this marketplace and made, at the time, which was the biggest institutional asset allocation in this space, we wanted to figure out what were the best sources of liquidity to quietly get the exposure, anonymously get the exposure, and get it on quickly before anyone figured out what we were doing.”

    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. “So if we take for granted the operational infrastructure component of it for an institution, How do you start thinking about value? We know this isn't a cash flowing asset or how you think about Bitcoin in particular in the context of a portfolio.”

    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. “In this space, institutions need someone to be able to feel like they can get access to the asset class without taking all of the operational fiduciary risks that they felt exposed to. But these are all issues that they started really being solved post 2017 and they're being solved at an increasingly fast pace 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

  7. “Drug deals being used or arms dealers. We know what all the early adopter bad headlines look like, right? But you needed to have things like custody. You need to have good places to trade these coins. You need to have some regulation come in and kind of start getting a sense for how regulators are going to treat this. You needed to have things like PayPal, their deal to basically to create a retail on-ramp into these assets that integrates it with the existing payment systems. And then you need firms to kind of create the on-ramps for institutions. Because for instance, we speak with institutions all the time. And by and large, some have very small investments in the space, either through a venture deal that they did or maybe with there was someone at the investment team that had great foresight and said, listen, we should start learning about this to make a very small allocation. Those things have happened, not at scale. By and large, most institutions have not gotten comfortable with the”

    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, big one is custody, institutional custody. And you still see the headlines, I don't know, it was headline a month or so ago about some poor guy who lost his password for his computer and his $20 billion or $20 million or whatever. It doesn't matter. They make for great headlines, great stories. But you go back to 2016, 2017, you really didn't have great custodial solutions. And so it was rather nerve-wracking. And so if you're an institution and there are bad headlines about, I don't know.”

    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. “Really, people started paying attention, say, 2017, when Bitcoin price ran up and then later collapsed. What are those key building blocks that have come into play over those last three or four 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

  10. “Happened is the bad money has gotten pushed to the side. It's been ostracized. The bad actors, the bad players. And the regulators have had to take it more seriously. And they have started to get more comfortable with where it goes. And so, you know, a number of years ago that regulators could have destroyed Bitcoin. They can no longer destroy it. They could do various things they can't destroy it.”

    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. “Institutionalized, which means you need to draw that institutional capital in. You need to get the regulators to sign off on what you're doing. And if so, if you're not the kind of person who can do that, you've kind of been left behind in this industry. If you are the kind of person to do that, you're the type of person that builds Coinbase, which is an example, which is most recently the values I've seen the private markets are $70 billion, right? So now if you're someone who's built a company like that, you don't want the dodgy characters in it. So as this market has matured,”

    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. “Maturations happened up to get up to this point. But through that process, what's happened is it was in some sense so unreliable and so threatening to governments and it's then existing form that as more people entered it, they recognized there were needs for certain types of infrastructure. And as they started building those businesses, they realized it takes a lot of money to build those businesses. As you build a business that requires a lot of money to build, you start thinking about, well, I need to make sure there's a valuable business. I mean, you make sure there's a return on this capital. And what you eventually get to is you get to an industry which starts building out the major structural pillars that turn it into a real industry, a real asset class. And each one of those requires huge investment. And so the people who are doing it recognize that in order for their investments to pay off, they actually ultimately need the industry.”

    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. “Is one of them, so initially, I think it is pretty much unambiguously true that most people who are attracted to this tended to, let's just use Bitcoin. Because by the way, a lot of what we talk about, we'll talk about Bitcoin can be extended to other assets, but let's say in the case of Bitcoin. Initially, I think that most of the people who were attracted to it were attracted for a whole host of reasons, many of which included libertarian type reasons where it's like, okay, well, this is an anonymous form of value transfer, new world form of money. Governments can't touch it, et cetera, at attracted a certain type of person. And a part of my brain is that kind of person, by the way. Some of those people acquired very large positions. Some just kind of traded around. But as this asset class has matured, and by the way, it's just beginning the process of institutional.”

    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. “That's one of those fun questions to think through and also something that as I've become more active in the space I've come to see as being one of the reflexive elements in Bitcoin. So there are a number of reflexive elements in this asset class that I think are really unique.”

    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. “Stop money laundering. There's public good to stop money laundering. It's a public good to stop terrorist financing. It's a public good to stop criminals moving money around for all sorts of reasons. So if you really want to control those things, then force everyone into a digital system where every single transaction will be tracked in perpetuity and then force everyone to have a wallet or a bank account that is registered. And then guess what? Once you've moved people off paper money, there's no place to hide. And so that's how the government acquires power through that because once they do that, well, think of all the things that you can do with that, right? One of the things you can do is you can stop money laundering and stop dodging movements. You can confiscate people's money. You can tax people. You can impose negative interest rates on some group of corporations or people. You can give other people subsidies. I mean, the government has enormous power. Once it associates 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

  16. “Think we're observing now what the government is doing with the dollar and the swift payment system. The US has had enormous power because the world uses dollars and uses that payment system. And for all the talk about things like Bitcoin being used for dodgy purposes, the reality is cash dollars or euros or any currency once they're printed and they're distributed, they're very difficult to track. That's reality. Every transaction that's ever happened in Bitcoin's history is available. It's in the public ledger. You can see every single transaction that's ever happened and will ever happen. So why would governments want digital currency? Well, I think that they'd want digital currency because if you can force everyone, and by the way, I'm not trying to present governments as being just universally evil and bad. It's just, I think governments act a certain way, right? If you're the government and you want to.”

    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. “Money will become digital precisely because it gives governments more power. And we can talk about that in a minute. But so then the question is, well, can Bitcoin or digital assets, will they be allowed to exist next to digital fiat? That was the important transition for me to start recognizing that the answer to that is yes.”

    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. “Experiments with things. So I'll look at, say, something like, I don't know, oil. And you say, are we really going to all be using fossil fuel in 100 years? The answer is kind of pretty clearly not. And then you kind of start winding back. And then it forces you to kind of think about, well, how quickly will transitions happen? Same thing for money. In 100 years, are we really going to be using paper dollars and copper pennies and things like that? It's like obviously not, right? So then you start winding it back and you go, okay, well, how quickly will that transition take and what will it look like? And one of the interesting things that I concluded when I thought through things that way is 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

  19. “It was very clearly a robust system in the sense that it was decentralized and it worked. And when I say it worked, it's interesting. A lot of people will look at the volatility that Bitcoin has had over its life. And to date, it's had six discrete boom bust cycles. And they would say that's a weakness. And I would just point out that I think that that's an enormous sign of strength, actually. Weakness is pets.com, you know, the sock puppet stock that went to the moon and then collapsed and then basically flatlines at zero, right? To have something accelerate the way Bitcoin has over its life and then have deep corrections and then stabilize and then make new highs. That's something that's very interesting, right? And so the more people who I got to know who had either become invested or become just passionate about it, the more intrigued I became. And so then you do the like, I always 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

  20. “Was initially something that governments would watch carefully. They would determine which thing in the private sector ultimately proved to be most robust. And then they would effectively take it over and kill the private market for it and then just turn that into their form of money. But over the last few years, my think on that has changed. And that's when it became much more interesting from an actual investment perspective.”

    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. “Something that I've thought about for a very long time. I've been fascinated by Bitcoin in particular, less so the extended ecosystem. It's mainly because I've just been interested in money, not money for the sake of money, but just the study of money and interest rates and fiat currency. And I've spent my whole career on it, right? So something new comes along and you're naturally going to be pretty intrigued by it. There have been other, I think, attempts at digital money, but Bitcoin was the first thing that seemed like it was very real and initially look, I thought it was so real and it was so important that it would never be allowed to survive. And the reason that it wouldn't be allowed to survive in my mind was regulatory was governments would look at it and just say, well, you know what? Senior age is a great power. Why would we ever give that up? There's no reason to give it up. And governments, generally speaking, a mass power, they don't shed themselves of different powers. So I thought that it”

    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. “And this is kind of unbelievable that about a year ago it came on the show and it was one of the first virtual ones I did and now I'm super excited to actually be sitting across a big table from here.”

    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. “And the likely coexistence of Bitcoin with government digital currencies in the future. We then turn to the development of institutional infrastructure for digital assets. Eric's perspective on Bitcoin as an investor and as a trader, the reflexive nature of Bitcoin's supply, and the risks in the asset. Lastly, we discuss the story of Eric's big trade, the future of Bitcoin, and institutional interest in the space. As you'll hear in these conversations, the infrastructure for institutions to participate in this space is firmly established and led by service providers whose names may be new to institutions. We're pleased that some of the leaders across research, trading, administration, and fund management have joined Coinbase in sponsoring this miniseries.”

    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. “My guest on today's show is Eric Peters, the founder and chief investment officer of One River Asset Management, where he searches for high conviction strategies coming out of his team's expertise, trading and investing in thematic macro, volatility, systematic and inflation strategies, each, as it turns out, turns his focus on studying Bitcoin and cryptocurrencies. Eric made news in November when he executed a $600 million purchase of Bitcoin, then the largest public transaction to date. He has called Bitcoin the most interesting macro trade he's seen in the thirty years in the business, and we kick off this miniseries with his macro case for the digital asset. Our conversation discusses the intrigue of Bitcoin as a form of money, how digital currencies will somewhat ironically increase the power of governments,”

    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