"Bitcoin Will Be MUCH Higher In A Year" - Matthew Sigel

**Scott Melker** (0:00)
Odds are that Bitcoin will be trading materially higher a year from now. Not my words, but those of Matthew Sigel from VanEck. Matthew is one of my favorite people to talk to when I want to break down exactly what's happening in markets. And he has the resume to prove that he's been right. You can look at his own fund node to see how much it has broadly outperformed Bitcoin and the crypto market. We talked about OpenUSD, the new stablecoin consortium. We talked about his fund and how they're positioned. We talked about Bitcoin miners moving over to AI and basically every relevant topic in the crypto market right now. You're not going to want to miss this one. Let's go.
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**Matthew Sigel** (2:15)
Yeah, I think if you look at the portfolio that I'm managing, we've been overweight the infrastructure and underweight applications. And I would say stable coins are an application. And so we have some exposure to Circle, but this news highlights that the barriers to entry are relatively low in the space when it comes to tokenization, when it comes to stable coins. And that could weigh on margins. So that's what the market was pricing in the other day, when Circle fell 17% on that news.
Now, launching a product and achieving network effects and scale are two different things. And so the history of these types of consortiums is that there's nobody who's really incentivized to drive business activity and sales.
And so you can hold those two thoughts in your head at the same time, that the consortium will struggle, but that it's not great for Circle. And that's where we are. So we added a little bit later in the week, after the stock had already kind of cratered. So I think the risk reward at this level for Circle is pretty good. This news doesn't change their earnings for this quarter or for this year. It may impact kind of the terminal value that people put on the business.

**Scott Melker** (3:44)
Let me ask you this question, and as a continuation, then we'll circle back specifically to OpenUSD. I think what does meaningfully impact the bottom line of a stable coin would be interest rates coming down.
I mean, we know that the bulk of the earnings for Circle, and certainly Tether, but they're not publicly traded, so you don't have to be concerned with their stock price, is being attached to how high interest rates are and how much they cost to be right. So the model effectively for stable coins is monetizing the float, right? The USDC is the product, but the business is a float. And OpenUSD is effectively going to split that float among everybody who uses it as opposed to keeping it as the issuer. So I mean, how do you kind of play that when valuing a stock like Circle or any stable coin moving forward if the float model changes?

**Matthew Sigel** (4:33)
Yeah, a couple things. Well, first of all, rates have been, especially the 10-year, but even T-bills have been kind of higher for longer than people expected. So in the near term, the earning season is around the corner. The stock's extremely volatile. Like if they beat earnings, the stock's going up and it's on its rear end right now. So I don't think the rates are kind of the near term issue. And then longer term, there's other businesses, brokers like Schwab, interactive brokers, where Float is a meaningful part of their earnings. And it's easy to get bearish when rates are coming down. But usually when rates are coming down, it means animal spirits are elevated and business activity is strong. And maybe Bitcoin's working and on-chain wealth's being created. Stablecoin, AUM is growing. So I don't fully buy into that, like low rates are bad for Circle. I think there's kind of more going on. It's a reasonably high quality earnings. But my comment on the pricing pressure, and I agree with you that AUM is at least saying that they're going to return essentially all the float to the ecosystem.