Bitcoin’s August Curve is Here - Will This Time Be Different? Matt Hougan

**Scott Melker** (0:01)
Bitcoin's four-year August curse is here. I have no idea who chose that headline, but here we are. More interestingly, the $100 million Bitcoin cold storage hack, Bitcoin didn't move at all. We are here to talk about it with the guys from Bitwise, Matt and Ryan, CEO of ArchPublic, Tillman Holloway. Let's go.
Well, here we are. Welcome in to Tillman, Matt and Ryan, the perfect group for Tuesday's show. Thanks guys for being here. I appreciate it.

**Matt Hougan** (0:54)
I'm excited to be here.

**Ryan** (0:56)
Yeah, let's do it.

**Scott Melker** (0:57)
Yeah, you guys are really at the nexus of what's going on right now.
Talk to me about why in the world we have a $100 million sort of core shaking Bitcoin cold storage hack, and Bitcoin doesn't move at all. It just doesn't do anything. There's no response. I mean, it's extraordinary. I mean, everybody's talking about the hack. Everybody, that's crypto Twitter. And yet price goes nowhere. This happened three years ago, five years ago, seven years ago.

**Matt Hougan** (1:32)
That doesn't happen.

**Scott Melker** (1:33)
We're talking about 10, 15, 20%.
So why? What's going on? Somebody tell me why.

**Matt Hougan** (1:40)
Brian, you want to take a first step?

**Ryan** (1:42)
Yeah, I'm happy to take a step. I think it's a sign that the market has matured significantly away from individual Bitcoin holders to institutional allocators, investors that gain access to Bitcoin via ETFs, or maybe use third-party custodians like Coinbase, or Anchorage, or Kraken, or something like that, and the market's gotten bigger than these instances. And that's not to say this isn't a big deal.
But I do think that today the market looks materially different than it did five or 10 years ago. And just the number of people or percentage of Bitcoin owners affected by this hack is just significantly smaller. Most new entrants to Bitcoin are getting exposure through the ETFs or through a centralized exchange, and they are not going to have any idea what is happening in terms of this hack. So I think that's the reason why it hasn't moved markets, I would say.

**Scott Melker** (2:41)
Well, it's a material change even from three years ago, to be truthful, right? I mean, even three years ago, the space was very, very different.
ETFs had not found themselves in a position to even take a dollar from anybody in the Bitcoin and crypto side. So big shifts there. Matt, you know, you're the man on the ground having all these conversations, right? And so I would imagine that you've had some interesting conversations over the last couple of days. What have those been like in regard to this issue? Or maybe, interestingly enough, have there not been as many conversations as you thought there would be? So I'll give you the floor.

**Matt Hougan** (3:22)
Yeah, certainly from the institutional crowd, there have not been as many conversations. I think towards Ryan's point and towards your point, we're in a different place than we were three years ago. Three years ago, people would be asking, well, how can I safely store Bitcoin?
Now, because of the ETFs, they have an answer. The other thing I would say is that this has actually changed, I would say from three months ago.
We're in a unique part of the market cycle, where it's like the matrix when you can just stop all the bullets and they fall to the ground, where bad news isn't affecting Bitcoin at all. You have this hack, the market doesn't care. Sailor sells Bitcoin, the market doesn't care. Stretch trades 75, the market doesn't care. There's a huge AI reset, the market doesn't care. I think there's an element of us being at the end of a bear market cycle where bad news stops affecting you. So it's still bad news. It's less bad than it was three years ago. But bigger picture, the market is just exhausted. All the sellers have left. Everyone else is sort of ride or die Bitcoin. And you're not shaking it out of their hands. I think there's an element of that.

**Scott Melker** (4:28)
Yeah, no, fantastic. Tillman had a very, he's got a long history as a miner in Bitcoin, you know, a decade more ago.
And so understanding the inner workings that I don't understand, frankly, associated with Bitcoin's code, Bitcoin improvement protocols, you put a couple of posts out in LinkedIn that were lengthy yesterday, kind of walk through some of that as it relates to this particular hack and kind of where we go from here, given that we've got guys here that are probably the solutions to this particular problem, right?