#CryptoCornerSeason2 | Bitcoin, Regulatory Clarity & The Debasement Trade OranjeBTC’s Sam Callahan To @CNBCTV18News - Demand for Bitcoin & Gold will continue due to geopolitical fragmentation, trade blocs, capital controls - Investors are going to l

CNBC TV 18 presents Crypto Corner powered by Binance. Welcome back. And on Crypto Corner, our guests on the day is Sam Callahan, who's director of strategy at Orange BTC. Sam, hi, thank you so much for joining in. One disappointment this time has been the clarity act in US not going through. What is the impact that you have been reading within cryptocurrencies? The Clarity Act, it's important to understand that it was always more about the broader digital asset space, tokenized equities. Other cryptocurrencies outside of Bitcoin, bitcoins had regulatory clarity for over a decade now. It is a commodity. And this is really about the rules of the road for the broader space. And it's important to understand that both the SEC and the CFTC has come out and said that they will create new frameworks and rules. And so I think we're going to get regulatory clarity either way. If it's not from Congress, it's going to come from the regulators and as the market builds around those rules, it becomes more difficult to reverse if a new. Administration comes into office. And so I think Bitcoin never really needed the Clarity Act. It was always about the broader digital asset space. And I think we're going to get regulatory clarity either way. So there might be a knee jerk reaction by the market, but over the long term, I think we're going to continue to see building, we're going to continue to see infrastructure and institutional adoption for this new asset class. Alright, Sam, how would you also expect the global liquidity conditions and then of course the central bank interest rates to influence Bitcoins price over the next, let's say any year to two perhaps? Well, I think right now what we're seeing is that the so-called debasement trade is coming back into the spotlight. Ever since we've seen more intervention at the bond market level. Really this isn't really a US specific story, it's global that we see long end yields start to rise in response to concerns over fiscal sustainability, the increased risk of currency debasement and people are starting to seek other ways to diversify portfolios. They're seeking monetary alternatives. Like Bitcoin, like gold. And if we continue to see governments and central banks intervene, there's no free lunch in economics. You there's economic pressure there. It's only going to move to the currencies. And that's what we've seen over the last 5-6 years. We've seen pretty obscene levels of currency debasement. Even according to the core PCE, the dollars lost about 20% of its purchasing power in the last five years. And so it's really natural for investors. To seek alternatives to save for the long term when their currencies are being debased and when the bond markets also in the steepest and longest historical drawdown on record. So this is really natural. I think we're going to see continued demand in this macro environment. And then the other side is the geopolitical front. We're seeing more geopolitical fragmentation, trade blocs, capital controls, the increased weaponization of the dollar and the. And the treasuries as an FX reserve asset. And so I think we'll continue to see a demand for apolitical neutral monetary assets like Bitcoin and like gold. Sam, the other thing that a lot of people try and compare is the Bitcoin and digital gold, anticipating that they are different from other asset classes and perhaps safe havens in their own sense. Yeah, so, so Bitcoin is often called digital gold because of its properties. Its monetary properties are similar to gold, but there are some key differences. And the main difference between bacon and gold is that Bitcoin has an absolute fixed supply. You know, gold is scarce, but it's still inflates at roughly 1.7 to 2% a year. Bitcoin has a fixed supply, it doesn't respond. And so that makes it the scarcest asset in the world. And so when you're thinking about currency debasement and. These macro drivers, Bitcoin will likely move quicker and because it's more of a pure monetary asset and, and then so when you look at Bitcoin as a digital asset as well, that's when you have the asymmetric upside. It's, it has very rare unique characteristics because it has safe haven characteristics like gold, but it also has the asymmetric upside profile of say a tech stock because it's so early in its adoption cycle, it's still only a a $1.6 trillion. Asset, which is a drop in the bucket when you compare it to say the bond market or or the fixed income market or the equity market or the currency market, it's very, very small. And so this is Bitcoin's value proposition moving forward as a fixed supply neutral asset in an environment where it's still relatively small and they're continuing to weaken the currencies around the globe. Some also would you think that broader market would continue to trade Bitcoin on a shorter term volatility at is as it seems to be doing right now or do you think it's a longer duration saving asset is how it should perhaps be treated as? Yeah, I think I, you know, you know, Bitcoin is a global asset. There's all types of traders and long term investors all interacting with it at the same time. But I think you are seeing a gradual shift of thinking around Bitcoin from this kind of short term trade, this kind of risk asset to more of a long term savings asset, a long term investment that has unique characteristics as I mentioned. You hold Bitcoin for the long term for the risk that you eliminate. You don't have the basement risk when you hold Bitcoin. You don't have to ration risk. You don't have business risk. You don't have to trust a management team to execute on a business model. You know all those things are attractive reasons to maybe allocate a small portion of your portfolio to Bitcoin. It also moves differently than other asset classes. You know, when you're constructing A diversified portfolio, any manager understands the benefits of having an asset that moves. Differently than say equities and bonds and gold and over a long period of time Bitcoin has done that. So I think more and more people are going to kind of look past the Bitcoin short term volatility and start to appreciate why you'd want to hold it in a diversified portfolio for the long term. And that's kind of what we we recommend you, you want to have Bitcoin for the next five years or even 10 years and have it to benefit from the compounding nature of its appreciation as well as the. Diversification benefits. It brings a portfolio. OK, Sam, you know, thanks so much for joining in this afternoon. Manisha, thank you so much for taking us through that conversation about cryptocurrencies. Thanks so much for that. CNBC TV 18 presents Crypto Corner powered by Binance.