Wall Street Has Crypto FOMO - Here's Who Could Win BIG

Christopher Perkins (0:00)

It's hard for me to imagine that those gas tokens don't become strategic commodities, because so much value is sitting in those ecosystems.

John Gillen (0:08)

Bitcoin is dipping again, but the biggest names on Wall Street aren't running away. They are building a whole new divisions around digital assets. But what do investors need to know about all of this? Hello and welcome to Milk Road Crypto, the show that knows that once markets are trading 24 seven, TradFi is finally going to learn what it's like to be in crypto. I'm your host John Gillen. Today is Wednesday, October 14th, and today we are joined by Chris Perkins, head of Franklin Crypto at Franklin Templeton. Chris was on the show last in March. He had a different job then. A lot has changed since we caught up with Chris. I'm excited for this conversation. He's gonna share a lot of alpha with us today. If that sounds good to you, make sure you like and subscribe, share this episode with somebody who's going to enjoy it. And as a reminder, our podcast today is free, and that would not be possible without our wonderful partners at Nexo, the digital asset platform that lets you earn, borrow, trade all in one place, all in one account. Keep in or out for more information on them later in the episode. But for now, welcome back to Milk Road Crypto, Chris Perkins, Franklin Crypto. How are you, sir?

Christopher Perkins (1:05)

John, how's it going? Good to see you.

John Gillen (1:07)

It's good to have you, man. I think this is a really interesting time in the market. We're in one of the strongest institutional bull runs ever. The bull market is starting to pick up. Let's start with Bitcoin here.

We're dipping again. Bitcoin has tested 81k a couple of times. It's still holding support, but the macro headwinds, people are worried about Fed rate hikes and things. What's your outlook on Bitcoin here? What are your thoughts on the market at the moment?

Christopher Perkins (1:28)

Yeah, I generally feel very, very positive. I think it's a very constructive setup.

Obviously, macro continues to play a role. I think the good news is that we've seen a lot of resiliency with Bitcoin as an asset vis-a-vis other assets. Bitcoin gold has been constructive. And really, that's picked up since the Iran war picked up. Look, risk assets will always be sensitive to things like rates, things like hot CPI prints.

But if I were to tell you the biggest change in this cycle, frankly, is that as regulatory clarity comes and crystallizes, we're seeing this and what that does, it opens up for institutional adoption. So institutions are marching forward. I challenge you to name one major financial institution. It doesn't have a digital asset strategy. So regulatory clarity has opened up institutional adoption. And so what you're seeing now, and remember crypto since its inception, is largely a retail-driven market. Retail would come, retail would go for your cycle, they would trade that, et cetera. But for the first time, what I'm really seeing is that fundamentals and utility are displacing memes and momentum. Like does momentum and tech, these things apply for sure. Memes still like very exciting for certain people, yeah. But institutions are really focusing on those fundamentals. And I think with this cycle, you're gonna see is a dispersion between those fundamentals and those without. Because you can underwrite and they're very comfortable underwriting tokens, which are now allowed. Like remember, back in the day, if your token had fundamentals, if you had value accrual, it was like a death sentence. You're dead man walking because off you would go.

And then you'd be accused of being a security. And that was that because there was no path to being decentralized or tokenized security. It was difficult. Franklin Templeton pulled it off to be honest with you, it was very, very hard if you were a token.

Fast forward to today, you can be a security and you can be just fine. And thankful for all the efforts that are coming out of the SEC and CFTC from Chairman Atkins and Chairman Selig, they're creating the conditions that allow those fundamentals to shine through. So constructive on Bitcoin, it's proved itself as a store of value, their social consensus. There's still some risks. In addition to the macro headwinds, I think there's a lot of focus, newfound focus, rightful focus on things like security. That's something that people are paying attention to. I'll be honest with you, I've been speaking to institutional clients all over the world. I've been speaking to sovereign wealth funds all over the world. And there's a lot of interest in Bitcoin as an asset, a lot of interest. Some of the challenges that they face, we have a pretty brutal security environment right now. We've got AI coming.