How Bitcoin Is Both a Risk Asset and a Hedge Against Debasement
Episode publishedPodcast: UnchainedUnchained
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Hi, everyone. Welcome to our episode of Bits and Bips, the interview. My name is Steve Ehrlich, head of research at SharpLink and also your host. We've got a lot to get to today, but before we begin, let's take a brief moment to hear from some of the sponsors who make the show possible.
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So one quick disclosure before we begin. Nothing that you hear on the show is financial or investment advice. Everything is for informational purposes only. For full disclosures, please check out unchainedcrypto.com backslash Bits and Depths. Now I'm very pleased to bring in my guest for today, Jim Ferrioli, the director of crypto strategy and research at Charles Schwab. So welcome, Jim.
Hey, Steve. Good to be here today.
Yeah. Yeah. Great. Great to have you too. You've got a really extensive background in the crypto space and traditional equities industry. It's going to be a lot of use today. We're going to be discussing everything from how the Iran conflict and fears of heightened inflation are impacting crypto markets, what it means for things like the debasement trade and some implications for, I think some of the formulas and frameworks that you've put forward in recent weeks on how sort of you and other traditional financial entities are valuing crypto assets. So it's time to get into, but before we do, I
Sure. So I've been covering crypto at a large financial institution since 2020. My background is in equities. Formally, I joined Schwab in August to to build out a dedicated crypto research product for them. You know? But I I have a bit of a different perspective, you know, from a traditional finance background in that I was an equity investor. I also worked on an equities trading desk briefly and prior to that I had some experience as a financial advisor. And so I really like to combine what's going on in the macro with what's going on with on chain positioning and then ultimately looking at
Yeah, terrific and and we always like different and interesting and diverse perspectives and you kind of bring all of that. So let's get right into it. A lot of your research is focused on trying to like build out fundamental models, finding this core drivers of value for assets. But as you've pointed out in a number of your reports, crypto is very much still a momentum play and a highly correlated one at that. So I'd like to just kind of begin by asking like what is your take of what you're seeing right now with price of Bitcoin or their assets are ping ponging with whatever's happening to th
Yeah. So I view the entire crypto asset class as a risk asset. There's a very narrow set of circumstances where it's a risk free asset or a safe haven. If you go back to 2023 when you had several large financial institutions experienced bank runs, saw Bitcoin rally. That's the very narrow area where it's worked as a safe haven. But traditionally, it is a risk asset. When you have a risk off day in the market and you have equities selling off, more often than not, you're gonna see the
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