From Bitcoin to Hyperliquid: Crypto’s Next Phase Is Already Here

Eliezer Ndinga (0:00)

Hyperliquid has a chance, if done right, to be able to be the second largest cryptocurrency.

John Gill (0:06)

The Federal Reserve has hiked interest rates and Bitcoin responded with a billion dollar ETF inflow day and a breakout into a technical bull market. Is this a fake out or a breakout that signals that new all time highs are on the way? Hello and welcome to Milk Road Crypto, the show that knows that don't fight the Fed is good advice, but Bitcoin is going to Bitcoin no matter what happens. I'm your host, John Gill, and today is Wednesday, September 23rd, and today we are joined by Eliezer Ndinga. Elie, as he's called, is the head of research at 21Shares. He actually founded the research team there. Last time we had him on was back in June, and he was talking about how Hyperliquid is going to become the second most valuable asset in crypto. So we're going to catch up with him about that, about a lot of other things, about 21Shares' recent earnings report. There's going to be a lot of alpha in this one. So if that sounds good to you, make sure you like and subscribe. Share this episode with somebody who's going to enjoy it. As a reminder, our podcast today is free, and that would not be possible without our wonderful sponsors at Nexo, the digital asset platform that lets you earn, trade, borrow, all in one place, keeping you out for more information on them later in the episode. But for now, welcome back to the Milk Road Show.

Eliezer, how are you?

Eliezer Ndinga (1:08)

John, thanks for having me. It's great to be here back.

John Gill (1:11)

I'm really glad to talk to you today. This is our first conversation, but hopefully the first of many.

I thought a good place to start this conversation would be, get your perspective on what we've seen in the macro landscape. The Federal Reserve raised interest rates. Some people think they might raise them again. At the same time, Bitcoin is breaking out into a new bull market. What's your read of this macro landscape for Bitcoin and why has Bitcoin suddenly gotten so massively bullish?

Eliezer Ndinga (1:36)

This is a phenomenal question. One of them that we have 21Shares as one of the world's largest ETF issuers of crypto assets has actually received all the time about the correlation between the macro and, of course, Bitcoin as well. And what we've seen is really interesting because I think for the first time in Bitcoin history, we've seen a very strong macro trade when it comes to the overall currency debasement concern that we've seen over the last, I would say, especially a couple of months, when essentially the Treasury Department has actually indicated that they will actually buy a lot more of these US Treasuries, which definitely concern over the overall value of the dollar, despite the fact that this is the world's reserve currency. We've seen actually investors quite concerned about that. That's why you've seen, of course, a higher correlation between gold and Bitcoin, which is quite unusual because usually gold and Bitcoin actually perform in a very different way over the last, I would say, eight years or so, and I spent about 11 years in the crypto space. Interestingly, there is a higher correlation between these two.

The reason is because in these frightened, and I would say fragmented environment right now, the macro landscape, especially on the back of the Iran war, investors are actually looking at an allocation diversifier away, of course, from major currencies that would be impacted by the Iranian conflict, but also the fact that they would need to diversify their portfolios. So gold and Bitcoin actually have been part of the conversation and also reflected in the inflows that we've seen in these Bitcoin ETFs. So year-to-date combined for crypto ETFs in Europe, for example, where we started at 21Shares, we've seen well over $1.5 billion in inflows year-to-date and well over $2 billion in inflows in the United States of America, which shows again that there is definitely a pent-up demand and a need for this asset class. But usually the sizing of these investors is quite of a small allocation between 1% to sometimes even 3% of their diversified portfolios among equities and art assets and of course bonds to diversify with crypto as well. So I do think that this is good news because usually people think that when there are higher rates, as we've seen historically, this punishes the performance of Bitcoin. But right now, there is a structural difference compared to the last, I would say, three and a half years thanks to the spot Bitcoin ETFs in the US. And of course, where we started in Europe at 21Shares since 2018, where investors were able to invest directly through their bank and brokerage account into crypto.