Kraken's Perfumo on "Most Symbolic Bitcoin Halving"

I have been invited to not one but two Bitcoin halving parties tonight. Whether I go to either of them remains to be seen, but it got me thinking that for many this is something that is interesting to be celebrated. You know it’s coming in the calendar. For others, they they focus on the supply and mechanics of what it does to the market. Where do you focus your attentions? So for me, I think of the takeaways for the Bitcoin having and falling into two different spectrums. Firstly, it underpins why we believe Bitcoin is the soundest form of money. There’s a whole host of reasons why. On the demand side, things like global liquidity, 24/7 365 market access permission permission list, censorship resistant like all these nice qualities for why Bitcoin serves as a good form of money. But on the supply side, you know how reliably can you plan around a currency and Bitcoin because of the having you know that there’s only ever going to be 21 million Bitcoin in existence. And so on The second part of the the take away here is that this Bitcoin having in particular, you know, we we celebrated every roughly 4 years. But this one is the most symbolic in my opinion in Bitcoins history and even looking forward because at a time when you have people who are looking at their conventional currencies, inflation, interest rates and the economic environment that they live in, they see this alternative form of currency Bitcoin. And it’s something that has this really crisp story, this idea that as of tomorrow when the having takes place, 94% of all bitcoins that will ever exist will have been mined and less than 1% we’ll see less than 1% inflation in the circulating supply of Bitcoin going forward. So that’s a really powerful story I think for people and why the having is so important, Thomas, there will be a big section of our audience watching, thinking what has this got to do with me? Is there a chance that they wake up and global financial markets? The world has been changed by this halving. No, The having in of itself isn’t going to be a cataclysmic event. We’re not talking about a rapture here. But what it is doing is it’s reinforcing the narrative of Bitcoin has sound money. And in our opinion, the adoption of Bitcoin and of crypto takes time. This is something that is a very innovative technology. It’s very different from how people use money today. And so this is something that’s going to take place over 5-10 years, 20 years, etcetera. And you’re going to think of it as almost like a, a change in culture and a change in understanding of how people transact with one another. And so when we think about this having in particular, nothing super special, but again like an important milestone, particularly in this time and age. And we’d love to celebrate it. Thomas, I want to get a glimpse of what you’re seeing in this unique position over at Kraken at the moment. Because yes, the reason many have said that this halving is unprecedented is because where crypto has been priced at before, where Bitcoin has been at all time highs, that hasn’t happened before and the other times, but there has been money taken off the table of late. Why has there been new money, Just like trying to resettle when we have this risk occurrence, when we’ve had geopolitical tensions, why do we suddenly see such a fall in price? Yeah. So there’s definitely a lot of volatility when it comes to Bitcoin in general. I wouldn’t say that we’ve reached any kind of peaks. So historically if we look at prior all time highs, you start to see these massive sessions of all time highs. So like 1520 all time highs within a single month on a day-to-day basis and that’s when you see in volatility peak to 100% or so. With Bitcoin we’ve only seen a handful of all time highs in the last month. It is a little bit of ahead of schedule versus the other three having events we’ve seen, but nothing crazy or out of the ordinary yet. What I like to think about when it comes to the price action is it’s a momentous occasion. You know, people come in, they see the price level, they’re like I want to participate and you you get a little bit of that momentum play. But we still have a lot of new entrants coming into space. The Bitcoin ETF for example, $12 billion with new net flow coming into the the cryptocurrency sector. A whole lot of people are coming in, signing up for accounts and buying Bitcoin for the first time. So this is just something you have to kind of space out over the long term and you’re going to have these ups and downs along the way. More broadly, how have you been thinking about that new inflow into Bitcoin coming into other parts of the crypto ecosystem? What’s been interesting is perhaps in the other altcoins we’ve just seen a churn, a movement within it rather than perhaps money coming into Bitcoin and then going, oh, I’m going to play in the world of Solana now, What do you think about that movement coming from Bitcoin ETH into the other or coins? Yeah, these rotations ebb and flow and it depends on the trend at the time. And so when we see in 2020 for example, we had that momentous occasion called Defy Summer. So everyone was going and playing around with Ethereum tokens. And the reason was because you had the maturation of those applications that had been invested in back in 20/17/2018. So they were launching, you started to see the application and the network effects built up from there and then that led into rotation into Bitcoin etcetera. Here we have the having event, the US Bitcoin ETF as the catalyst for people getting interested. And so Bitcoin comes first. As far as other alternative currencies whether they’re tokens or other layer ones like Solana, Ethereum, a lot of that’s driven by whatever application exists that people are starting to really adopt early on. And one of the interesting things in my opinion is that the last cycle back in 21 you had 10s of billions of dollars come into the space to develop new projects and what not. We’re talking at this point about three years of maturation. And so that investment cycle, we kind of have these dark horses. We don’t know exactly what application is going to come out, but we’re really excited about it. And some stuff that’s proliferating right now would be things around like game Fi in the crypto space. So we’ll have to see from Bitcoin what where it goes.