YouSaid · the spoken record

Matthew Sigel

lines on the record: 80
first: 2024-09-10
most recent: 2024-09-10
sittings or episodes: 1
sources: podcast

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“Well, if you talk to Chinese Bitcoin miners or some of the companies that make Bitcoin mining equipment that are Chinese, they will tell you that at some point China will be further isolated from the financial system because of things that may happen in Taiwan or other developments. And China itself will be in a position where it wants to use Bitcoin in order to facilitate external trade so I can imagine that scenario. I think the question is in the case of like China and Saudi Arabia like that might be one scenario that we can imagine where like some percentage of the oil trade between those two countries would be denominated in Bitcoin, not all of it but five or ten percent there aren't examples of that happening and instead what we're seeing is that like Saudi Arabia is making FDI investments in Chinese refinery.”
2024-09-10 · Forward Guidance · Bitcoin's Path To $3 Million Dollars | Matthew Sigel · IDENTIFIED FROM THE TRANSCRIPT
“Counterproductive and can accelerate the adoption of alternative means. So none of us want to do business with Russia right now nor can we. You can't help but note that Russia has just legalized crypto for international payments. They're setting up two state-sanctioned crypto exchanges in order to facilitate international trade denominated in digital assets. We're looking to the other side someday this war is going to end. Russia will be reintegrated into the world financial system in some way. It might be less than it previously was and at that point are they going to abandon all of their digital asset ventures? I'm guessing not. And that's why just introducing this small percentage of global trade, which would be denominated in Bitcoin feels logical to me.”
2024-09-10 · Forward Guidance · Bitcoin's Path To $3 Million Dollars | Matthew Sigel · IDENTIFIED FROM THE TRANSCRIPT
“I'm not sure what the catalyst will be. I mean, in Switzerland there's a petition that gathered enough signatures for the central bank to add Bitcoin as a reserve asset. I doubt that's going to pass, but it might be something like that, which just capitalizes on the existing trends that are already in place, the deterioration of property rights in some G7 nations and the increasing use of sanctions around the world in developing markets. U.S. sanctioned entities have increased 529% since 2009. So we are increasingly using sanctions to advance our geopolitical interests, and there's a lot of evidence over centuries that those sanctions can often be”
2024-09-10 · Forward Guidance · Bitcoin's Path To $3 Million Dollars | Matthew Sigel · IDENTIFIED FROM THE TRANSCRIPT
“And what do you think you need to see or needs to happen for the continued development of foreign nations adopting Bitcoin? And I guess it starts with them mining Bitcoin and selling it to raise dollars, hard currency. The next step would be them actually retaining Bitcoin on their balance sheet, not immediately selling them. And what is a catalyst for this continued adoption? For example, I imagine if the price of Bitcoin were to go up a lot, temporarily that would increase people's in America and investor communities interest in Bitcoin. But maybe it's not the case for central banks. Maybe they actually want the price of Bitcoin to stay stable for other instances because they don't want to keep on buying into a rising market. I don't know.”
2024-09-10 · Forward Guidance · Bitcoin's Path To $3 Million Dollars | Matthew Sigel · IDENTIFIED FROM THE TRANSCRIPT
“Because of the governance structures of these, which are JVs for the most part. So again, that's kind of waiting on that zero-to-one moment where the linkage becomes more clear. And we just don't know how profitable they are.”
2024-09-10 · Forward Guidance · Bitcoin's Path To $3 Million Dollars | Matthew Sigel · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, unfortunately most of these entities do not provide the level of transparency necessary to make those determinations. Governments often have access to energy at discounted prices or energy which is not available to everyone else. So in the case of Ethiopia, there was an enormous capital investment to build this new hydro dam, I think it was like $6 billion of investment. And then the government kind of gets to decide which industrial customers get access to that energy. And they'll often, on the Bitcoin mining side will be either a JV with the state-owned utility or in the case of El Salvador, it's an entity that's connected to the finance ministry. There's not like a pass-through directly to the finances of the government.”
2024-09-10 · Forward Guidance · Bitcoin's Path To $3 Million Dollars | Matthew Sigel · IDENTIFIED FROM THE TRANSCRIPT
“Mine Bitcoin and they sell the Bitcoin to get dollars, which are hard. Thanks for that. And he described what happens to the finances of a country when it mines Bitcoin because mining Bitcoin isn't free and the hash rate goes up. So there's a halving. So over time, you get less and less Bitcoin. But if the price goes up, you can be compensated for that or more than compensated for that. Let's say Ethiopia is mining.”
2024-09-10 · Forward Guidance · Bitcoin's Path To $3 Million Dollars | Matthew Sigel · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, when I used hard currency, I guess I was referring to dollars, which is that, you know, a lot of these emerging market countries, once they're having major debt problems, there's often capital controls. It's legitimately just hard to get your hands on dollars. So if you have some of the stranded energy like Ethiopia just built this enormous hydro dam, there's like 15 different Chinese Bitcoin miners there, and the country itself was like, you know what, we better hook up to this too. They can sell that Bitcoin every day and get dollars. And dollars are pretty scarce in Ethiopia.”
2024-09-10 · Forward Guidance · Bitcoin's Path To $3 Million Dollars | Matthew Sigel · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so you said they need to generate hard currency. I think the term hard currency, hard money, started with gold when there was a gold standard and gold was fixed. And now that we have the dollar standard, I learned this speaking with Eric Fine and Natalia Gurushina from the Vanic Emerging Markets team about how if Argentina makes a loan in Argentine pesos, that's a local currency loan. But if they make it in dollars, that's called a hard currency loan. And I think that's going back to with the gold standard when there was a hard currency loan. It's interesting to think of a Bitcoin as a hard currency in the sense that there is a limited number of them only going to be 21 million. It is harder than gold and much harder than the US dollar, but it does go up and down. So they are making a speculation on the price. I think that is different than the gold standard.”
2024-09-10 · Forward Guidance · Bitcoin's Path To $3 Million Dollars | Matthew Sigel · IDENTIFIED FROM THE TRANSCRIPT
“Party can actually lose control because of that. They can use Bitcoin as a negotiating leverage. Maybe they say to the IMF, we're going to make Bitcoin legal tender, oh, well, don't do that. Okay, we won't do that if you extend this loan, right? Like with Pakistan, Pakistan agreed to increase its collection of taxes on crypto in return for their recent IMF loan, even though crypto is illegal in Pakistan. So that just highlights that everyone's kind of interested in this issue. And I think one of these countries that has success on the mining front will just take it one step further and add it to their central bank reserves. I don't know which country that will be.”
2024-09-10 · Forward Guidance · Bitcoin's Path To $3 Million Dollars | Matthew Sigel · IDENTIFIED FROM THE TRANSCRIPT
“All announced Bitcoin mining ventures at the government level with surplus energy in order to earn hard currency. And I think it's interesting that all three of those countries have debt negotiations with the IMF are essentially in default. And can use Bitcoin number one to earn hard currency? And number two, as a negotiating tool with the IMF. So when you fail to repay an IMF loan, they come in, they're like, your default, and we can extend and pretend this loan, but in order to do that, you need to do A, B, and C. And the A, B, and C usually create some internal domestic issues, because who's ever the party that's in control? The other party accuses them of giving away sovereignty in return for some foreign loan. And it becomes this like domestic issue. And, you know, one.”
2024-09-10 · Forward Guidance · Bitcoin's Path To $3 Million Dollars | Matthew Sigel · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, that's a good observation that we are predicting in this piece a zero to one moment, which hasn't happened. And that was like Jan VanX pushed back to the piece, essentially, which is, you know, you have no evidence to make this call go ahead, but I'll believe it when I see it. But the underlying trends are in place. The US dollars share of global foreign exchange reserves is at a 25-year low. The US share of world trade is at a 50-year low. And we now observe seven different nations that are mining Bitcoin with support from the central government. So El Salvador was the most famous and they took it even one step further, making Bitcoin legal tender. But this year, Argentina, Kenya, Ethiopia,”
2024-09-10 · Forward Guidance · Bitcoin's Path To $3 Million Dollars | Matthew Sigel · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I mean, that really shows the magic of compound interest $3 million, 2.9 million dollars sounds like a wild price target, but if it's in 26 years, it's only 16% per year. And it's the magic of compound interest. Yeah, we can put up the chart on screen of your predictions of the currency reserves of all countries showing it from 1999 to 2024 and then your projections going out to 2050. And the de-dollarization that you project or assume. Of course, it's a model from 2024 to 2050 is actually much more mild than the dellarization that occurred from 1999 to 2010. Really, Bitcoin is just gets that you could barely see it, that orange slice. And it still is a much smaller percentage of assets than the dollar, the RMB, and gold. But I think it's a big step to go from”
2024-09-10 · Forward Guidance · Bitcoin's Path To $3 Million Dollars | Matthew Sigel · IDENTIFIED FROM THE TRANSCRIPT
“Compound annual growth rate over the next two decades. Our $300,000 target for Bitcoin for 2030, that's a 32% Kagger. So it's rather modest, right? You can see that the growth decelerates dramatically. And that was basically the gist of the work.”
2024-09-10 · Forward Guidance · Bitcoin's Path To $3 Million Dollars | Matthew Sigel · IDENTIFIED FROM THE TRANSCRIPT
“64% over the next two decades. China will fill some of that gap. India will fill some of that gap. Much of the world can coalesce around Bitcoin as one of those reserve assets. And we make very modest assumptions as to the eventual scale. We assume that central banks will own Bitcoin at roughly a 2.5% weight in their reserves. And then we assume that global trade, international trade, about one-tenth of it, 10%, will be denominated in Bitcoin. So that probably the velocity of Bitcoin will go down because those central banks will be hodlers, not necessarily transactors. And then we did just a simple velocity of money equation to get to a Bitcoin roughly $3 million price target by 2050. And just to put that $3 million in perspective, that implies a 16”
2024-09-10 · Forward Guidance · Bitcoin's Path To $3 Million Dollars | Matthew Sigel · IDENTIFIED FROM THE TRANSCRIPT
“Of reducing inflation. And these problems are, you could argue, even worse in some of the other kind of primary reserve asset nations like Japan, the euro, and the UK. And what we did this data analysis, and what you can see is that these primary reserve currencies have declined in importance because they're issuing nations are becoming less economically relevant i.e. like Japan and Euro GDP per capita is shrinking. All these nations are becoming more fiscally irresponsible. And we think this trend is likely to persist. It's likely to accelerate and we think that the share of cross-border payments conducted in the dollar yen, euro, and the pound will fall right now that combined share of those four currencies is about 86%. We have it declining to”
2024-09-10 · Forward Guidance · Bitcoin's Path To $3 Million Dollars | Matthew Sigel · IDENTIFIED FROM THE TRANSCRIPT
“States that have been funding U.S. fiscal profligacy and monetary profligacy for the last 15 years, and now they are observing that the U.S. budget deficits are 6-7% of GDP, even in an economic boom. We will look back at this moment of huge budget deficits in the middle of unemployment boom as something that never should have happened. And I think our trading partners are also looking at that and they're saying, what are you spending this money that we're lending you on? You're spending it on wars. And some of these wars are very controversial in the rest of the world. You're spending them on domestic policies that probably don't increase productivity, at least some of the equity-oriented policies that the left has been putting forth. Inflation reduction act, which did the opposite of”
2024-09-10 · Forward Guidance · Bitcoin's Path To $3 Million Dollars | Matthew Sigel · IDENTIFIED FROM THE TRANSCRIPT
“I agree with you that assuming regular citizens are going to be making $5 Bitcoin payments for coffee and the like is not in our base case. So the adoption, we think, is going to be led by institutions, but not your typical institutions, aka banks and corporations, but rather governments. So this is a settlement, a bearer asset that is best used for large settlements, right? Because the transaction fees are extremely low when you're doing a very large settlement measured in kind of basis points, but if you're making a $5 transaction, you don't want to spend a dollar of it. That's kind of the starting point is like we do need institutional adoption, but the institutional adoption should probably come from national”
2024-09-10 · Forward Guidance · Bitcoin's Path To $3 Million Dollars | Matthew Sigel · IDENTIFIED FROM THE TRANSCRIPT
“This is on banach.com called Bitcoin 2050 Valuation Scenarios, Global Medium of Exchange, and Reserve Asset. You have a totally different framework for how Bitcoin will be used and you rest mostly on its store of value and also how it's not going to be people in California. And it's going to be coming from countries that have the greatest financial instability. So I don't tell people what to do. So I'm not telling people to read this piece, but if they want to read a piece about the future of Bitcoin that definitely has a bullish slant and how in a scenario where Bitcoin actually is playing a significant or a much more significant role in the international monetary system, the IMS, as you call it, yeah, read this piece and don't read other pieces. That's what I would recommend. So just tell us, what is your thinking behind this piece? And yeah, what motivated you to write it?”
2024-09-10 · Forward Guidance · Bitcoin's Path To $3 Million Dollars | Matthew Sigel · IDENTIFIED FROM THE TRANSCRIPT
“Matter where I first heard about narratives, theories about Bitcoin replacing the dollar, a lot of what I heard is basically it will replace the dollar in all forms of currency, so not just a reserve asset, a store of value, but also a medium of exchange and unit of account. So the way I, you know, basically someone in California, someone in Los Angeles is going to go to Starbucks and pay with Bitcoin. I had a really hard time wrapping my head around that and still do, to be honest, just because of how volatile Bitcoin is in dollars. Of course, you could say, oh, well, it's a dollar that's volatile in Bitcoin. And also that, you know, to have an economy, you need a flexible exchange rate where if you have a recession, a depression, and you have deflation, where there is some ability to ease the cost of credit and you don't have deflation, which then incentivizing hoarding and not spending, which is further a recessionary. But yeah, your piece and your work.”
2024-09-10 · Forward Guidance · Bitcoin's Path To $3 Million Dollars | Matthew Sigel · IDENTIFIED FROM THE TRANSCRIPT
“People, what do you think about Bitcoin? Are you bullish, bearish, or neither? The most bearish countries in the world are Germany, France, Japan. All right, what do those countries have in common? They're very old, full of old people, essentially, and getting older. The most optimistic countries in the world, Philippines, Nigeria, these are the youngest countries in the world, right? So the demographics are clear, the desire for kind of anti-dollar are clear. I remember in 2021, the president of Indonesia said, like, we have to break the monopoly that visa and mastercard have on payments. We need a neutral alternative. I'm just very attracted to that alternative. And I think Bitcoin has locked up that market. I don't think any other crypto is going to come along and try to successfully take the digital gold brand away. From Bitcoin”
2024-09-10 · Forward Guidance · Bitcoin's Path To $3 Million Dollars | Matthew Sigel · IDENTIFIED FROM THE TRANSCRIPT
“Take away from me that I could smuggle in my behind if necessary if fleeing somewhere. And it wasn't a maxi approach, but it was 5% allocation and let's see where this goes. And my work at CLSA, which is really an emerging markets geared research provider, just reinforced to me that the appetite for these types of assets is way larger outside the US than it is inside the US. And I still think a lot of Americans throw up their hands with this Bitcoin stuff. What can I use it for? They just are unaware of their own financial privilege. And the fact that we all have seven or eight payments apps on our phone, we can, as Americans, we can access them seamlessly, that doesn't exist in the rest of the world. And there's some very interesting data sets. If you pull”
2024-09-10 · Forward Guidance · Bitcoin's Path To $3 Million Dollars | Matthew Sigel · IDENTIFIED FROM THE TRANSCRIPT
“Think there's a strong hunger from citizens in the rest of the world to get permissionless access to hard currency, whether that's gold or the US dollar. And unfortunately, dollars are not available to everyone in the world. The U.S. Department of Justice is essentially oversees the distribution of dollars and will go after anyone who is distributing them unlawfully. When the Fed went on its kind of money printing spree starting in 2009, but then over the next decade, QE2 operation twist, like everything that kind of distorted the cost of capital. I just think the awareness globally grew. And my awareness grew alongside of it. And I wanted to be able to hold an asset that nobody could.”
2024-09-10 · Forward Guidance · Bitcoin's Path To $3 Million Dollars | Matthew Sigel · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, it takes time for the truth to come out. Now we see just came out a couple days ago that Vanguard voted to support exactly zero of the ESG proposals that were put forward by shareholders this year. That number has steadily fallen over the last four years. So by some measures, I think kind of 2021-2022 was the peak for a lot of this leftist narrative around the importance of net zero or whether it's kind of racial dynamics. And maybe some of the froth is off that, but I agree with you. A lot of people believe in it. A lot of people want it and it'll take time to get like fully obliterated, which I think will happen.”
2024-09-10 · Forward Guidance · Bitcoin's Path To $3 Million Dollars | Matthew Sigel · IDENTIFIED FROM THE TRANSCRIPT
“It's when you integrate some biases into your coverage, either by omitting important news or by highlighting news that adheres to kind of one strain of thought. So I've been a Bloomberg terminal customer or employee for the last 25 years, and I've kind of watched the editorial slant of that organization shift gradually to the left. It got highlighted when Mike Bloomberg ran for president and the media organization famously did not investigate his past. But you can also see it on the Bloomberg terminal today that the ESG page is above the economics page, right? So you basically get a lot of what I think is meaningless information and then the true information gets buried. And I think that's become just more of a phenomenon in the last 10 years as everyone.”
2024-09-10 · Forward Guidance · Bitcoin's Path To $3 Million Dollars | Matthew Sigel · IDENTIFIED FROM THE TRANSCRIPT
“Google for antitrust. Let's sue Apple for antitrust. Yesterday, headlines, NVIDIA, you know, DOJ investigating for antitrust. I'm more attracted to the let's disrupt these companies' profit margins by offering an alternative product, which is better, and which doesn't centralize power. So that's kind of how I got attracted to. But it was June 2017. It was a rocky ride.”
2024-09-10 · Forward Guidance · Bitcoin's Path To $3 Million Dollars | Matthew Sigel · IDENTIFIED FROM THE TRANSCRIPT
“This was June, so I was writing research. The most clicked on research piece I ever wrote on the sell side was a piece called Google is Evil. It was in 2017. And by now, all of that is very consensus. in digital platforms, how Google managed to basically kill the local classified ads market in the US and local newspapers and this kind of centralization of truth which I identified as a long-term structural trend and the conclusion was by Google but in the long run this technology Google and the other big tech will be disintermediated the margins are too high it's either going to come from technology innovation or from regulation and it seems right now that kind of most of the mainstream political parties have coalesced around the regulation side right let's sue”
2024-09-10 · Forward Guidance · Bitcoin's Path To $3 Million Dollars | Matthew Sigel · IDENTIFIED FROM THE TRANSCRIPT
“Store it to people who don't have access to the money printing spigot. I actually think this is a positive indicator. So bought my first Bitcoin 2017 and just fell down the rabbit hole of smart contracts. And when COVID came around, I felt like the news industry was even further obliterated, fake news became more of a thing. And in my mind, people would coalesce around the Bitcoin blockchain where every 10 minutes everyone can agree what is the truth. And that felt very scarce, so had gotten to know Jan Van Ack and joined here 2021 to help broaden out the product suite. So we now have 20 different crypto products, about $2 billion in assets on a total asset base of about $100 billion.”
2024-09-10 · Forward Guidance · Bitcoin's Path To $3 Million Dollars | Matthew Sigel · IDENTIFIED FROM THE TRANSCRIPT
“Instead of just the prices on a screen, which in your 20s and 30s was a little stressful and lonely for me. So I pivoted again and spent 10 years on the sell side at a Hong Kong-based broker writing research and selling research to institutional investors. And that firm located headquartered in Hong Kong. I spent a lot of time traveling around Asia, Southeast Asia especially, Japan, China, and realized in 2017 that this thing called Bitcoin was getting pretty widely adopted by retail investors in Asia. And I remember coming back from a business trip and talking to my co-workers on the trading desk, like, hey, my taxi drivers are talking about this Bitcoin thing, and they're like, taxi drivers, that's a contrarian indicator. You sell when that happens. And I'm thinking, well, this is a retail asset. It's meant to take power away from, you know, centralized intermediaries.”
2024-09-10 · Forward Guidance · Bitcoin's Path To $3 Million Dollars | Matthew Sigel · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, it was a winding journey. I started in journalism 25 years ago as a reporter and producer at Bloomberg, CNBC and NHK, the Japanese public broadcaster, always covering finance and economics. Simply put, I got disillusioned with fake news and jealous of interviewing sources who had more zeros next to their personal balance sheet. So I did kind of whatever a good journalist does, which is a lot of networking, started studying for the CFA Chartered Financial Analyst Track, and after passing level one of that, I got connected with Kathy Wood, who was then a portfolio manager at Alliance Bernstein, and she hired me to cover tech. So spent four years doing global equities at Alliance. I found myself missing parts of journalism writing something and getting feedback from people.”
2024-09-10 · Forward Guidance · Bitcoin's Path To $3 Million Dollars | Matthew Sigel · IDENTIFIED FROM THE TRANSCRIPT