Bitcoin's New Bull Cycle: Chris Perkins on What Drove Crypto's Recent Climb

SPEAKER_1 (0:00)

Chris Perkins, head of Franklin Crypto, arm of Franklin Templeton, is joining me now. So when you see Bitcoin here above 85,000, moving to the highest levels since January, what's the risk appetite about here? Why are folks jumping into Bitcoin?

Chris Perkins (0:18)

Nicole, great to see you. It certainly feels like we're entering the beginnings of a bull cycle. We saw ETF demand coming back. We saw about a billion dollars in inflows on Monday. And what we're seeing is that despite a number of stresses that may have hurt Bitcoin in years past, we had a hike in rates, the Clarity Act didn't pass, there's been other geopolitical stresses, but the asset continues to move nicely up. Why is that? I think the market is maturing. We're seeing institutions step in, retail's coming back, they saw a little bit of price action, they like it. But you're seeing it depart perhaps from being a frontier risk asset and wrapping all of crypto in this like wrapper of frontier risk assets, to assets that are being driven by fundamentals, because as institutions come in, they're looking at fundamentals, they're seeing what's going on with the dollar and some of the action that Treasury Secretary Besson is taking.

And it's kind of coming together. So it's really across crypto, you're seeing a return, or perhaps for the first time, a focus on fundamentals over memes and over momentum.

That's what we're seeing. It's exciting.

SPEAKER_1 (1:34)

Yeah, there was also a regulatory move to make it easier to offer tokenized stocks to investors. You talk about sentiment overall, maybe somewhat shifting and really being believers in these crypto related assets, right? And stocks, I guess that go along with them.

Chris Perkins (1:51)

Yeah, you have more risks for not being in the space now. In the past, we had risks for operating in the space, but 24 seven markets are here. It's happening. And I am a fiduciary. If I have the choice to trade a tokenized asset or a regular old asset, if there's enough liquidity, I have to trade the token because when Donald Trump invades Venezuela on a Friday, I have to be able to manage my risk as a fiduciary. I think that lightbulb is finally going on all over the street.

And institutions are starting to realize, I'm going to have a problem if I can't serve my clients and give them that 24-7 risk management.

SPEAKER_1 (2:31)

Well, the trajectory was quite quick too. When you look over the weekend or maybe what happened recently, was there a short squeeze in one area? I mean, what has been going on sort of behind the scenes in the world of crypto?

Chris Perkins (2:46)

Yes, certainly, look, prices go up when there are more buyers and sellers. I think in this case, there was a bit of a short squeeze that helped add a little bit of fuel to the fire.

Look, this remains a volatile asset. But remember, volatility works in both directions. Sometimes it can be volatile down. In this case, we saw it volatile up. I think in time, that will steady a bit. But again, as we're entering into this new regime, where a lot of folks are saying, okay, the AI story has been run out. This is more on the retail side. Wait a second, there actually are some fundamentals here in crypto that I need to pay attention to as these institutions continue to build in our space.

SPEAKER_1 (3:23)

So if this is the beginning of a bull market, you said, right? And that's bull market for crypto or bull market overall? I mean, I'm assuming you're saying bull market for Bitcoin and the like. What does that mean? What does that mean to you when you say that?

Chris Perkins (3:39)

Like I said, I feel as though there is a focus on fundamentals. And what you're going to see here is that more discrimination between the actual tokens themselves. To the extent a token is driving value, driving utility and driving revenue, it's not dissimilar to what we see in equity markets. Over the long term, fundamentals will drive value. And I think that's what you're going to see as we head into this bull market.

SPEAKER_1 (4:03)

Why?

Chris Perkins (4:03)

Because a lot of sophisticated investors, institutional investors are now coming in and they're using that same underwriting discipline to really find value. And that's what makes me excited about this cycle.

SPEAKER_1 (4:15)

Yeah, all right, that sounds good, bull market. And for the folks that have been in this, they're a little impatient at this point. They're saying, where's my $120,000 Bitcoin?

Where is it? Is it coming?