Garrick Hileman on the state of Bitcoin in 2020

0:19you're very welcome let's dive right into it if you could just start with a little bit of your background in the space your recent focuses and your lead up to heading the research team for blockchain.com then we can dive in deep great so i first got interested in cryptocurrency during my phd at the london school of economics i was stuttering studying under professors albert

0:41ritchell and neil ferguson and i was looking at alternative currency markets and alternative currencies and this thing called bitcoin came across my screen and it led me to kind of moonlight during my phd at coindesk i joined coindesk in 2013 to build up the research program there after the phd at the llc i went to cambridge the university of cambridge and

1:05started the blockchain and cryptocurrency research program at the judge business school and in may it will be three years at blockchain.com as the head of research so i've been following this phase as a researcher for a number of years now teaching lecturing on it and working with regulators to try to help you know all of us come to grips with

1:25this new transformative technology definitely garrick and since 2013 the bitcoin and the whole blockchain space has expanded exponentially and i'm sure it's been an exciting ride for you and for me it has and even with blockchain.com you know they've been one of those companies that's been around since around that time and even before then as well they've expanded so much as

1:47well and it used to be you know blockchain.info and it just had these basic services but now they seem to have expanded out so if you get touch on for the viewers you know what is the a quick overview of blockchain.com and what they're primarily focused on right now great yeah so people have been in the space for a while know us for our block explorer the

2:07dot info days also our non-custodial wallet those were two flagship products for a long time and also a great data hub of charts and data to be downloaded by researchers like myself so that's probably how we're best known to the to the ogs or people who've been in the space for quite a while recently we've really expanded our product offering we've

2:28created an exchange this is custodial product we recognize that not all newcomers especially to crypto wanna take full responsibility of their private keys there's some extra challenges and responsibility involved there we're offering interest rate products we can pay 12 on us dollar stable coin deposits which is i think one of the best rates

2:49per custodial platform and you know we're just continuing to expand into new areas as crypto continues to evolve as well we've done a number of innovative things like air drops you know in the past couple years since i've joined and we're just you know looking to continue to grow with this space as more institutional money comes in we've seen

3:11a lot more institutional business our lending desk is one of the biggest windy desks in the in the whole space and it's just an exciting time to be being crypto right now definitely it's been an exciting year and i'm not sure who could have predicted what would happen to bitcoin at the start of 2020 and i know that you since working in 2013 when you worked at coindesk and

3:32you're working on your phd you also were running the state of bitcoin report which was an annual report and i'm sure there'd be a lot of people interested in those reports nowadays so do you think you could give a little synopsis of you know the state of bitcoin in 2020 do you think it did better than expected and you know overall just a net positive for the whole

3:52community yes i think this has been the best year for crypto assets and for bitcoin since i've been following the space now some people would argue that you know getting the first million people to adopt and use cryptocurrency that's the hardest step to take and i think there's some merit to that without question but in terms of kind of the

4:16acceptance and legitimization and the ownership at really the highest kind of most powerful levels of wall street this year and i mean it's pretty incredible i think for those of us who've been in the space to see that and it's hard not to say wow this was just an amazing year maybe the best year ever depending upon your perspective could that been predicted at the

4:38beginning of the year i don't think so i don't think anyone in january was you know kind of expecting the year we've had and the validation that bitcoin has received this year so it's been an amazing year but as we talked about in our monthly webinar last at the beginning of this month you know with all this renewed public attention

5:02you're going to see more policymaker attention you're going to see regulators more actively involved than they've been and we're seeing some signs of that already with the non-custodial wallet regulations that were announced last week and some other things so it's gonna be a another really important year next year you can't really kick back and rest on your laurels in

5:23this space totally and you mentioned also you know the institutional adoption there you also mentioned that blockchain.com is has that you know institutional desk and they're starting to get involved in that more through your research and since the beginning of 2020 to now the end of 2020 there's it seems like there's just been a lot more institutional interest at

5:44least publicly advertised you know a lot of institutions will go and secretly buy when the price is down but now it seems like we're getting news of all these different institutions that are just jumping on board you know do you see a flip that has been switched or was there a trigger for that and why now this is all coming to light about all the institutional adoption

6:03yes so i think there's been some huge changes since 2017 which was a really retail driven you know kind of adoption cycle this cycle what's different why have we seen the herd finally arriving i mean for years people been talking about wall street's coming and it never happened this year it seems to have finally happened what changed well a lot of

6:24infrastructure has been added since 2017 you've got companies like fidelity and others that you know institutional money managers are very comfortable with have accounts with already now playing in the space you've seen regulatory clarity you know the futures markets that were launched by the chicago's futures markets and end of 2017 they've

6:43been around for a number of years they haven't been shut down so those are those of i think that's been really positive i think just the longevity should not be underestimated the fact that this has not gone away and keeps bouncing back you know i still hear people say no this is like tulips it's a bubble tulips never bounced back it went up and it went down and it stayed down

7:05this is bounced back at least a half dozen times and that's not like your typical kind of bubble or you know some terms i mean you know for those of us who know this sector you know we would laugh when we'd hear terms like ponzi scheme thrown around you know but yeah again you know bernie made off you know up down these things don't come back you

7:26know of course for us it was clear this wasn't a ponzi but for a lot of people who weren't really well versed in crypto assets and only just knew a very very little amount it was easy to disperse the space you know you know with those kinds of accusations being thrown around but i think a lot of that fudd has gone away and now you're seeing

7:46very serious people the big boys so to speak getting in and getting in a big big way definitely and i've seen a lot of short clips recently of those same notable investors that are now investing either saying bitcoin was going to zero or bitcoin's useless bitcoin's dead and there's even sites that have tracked how many times bitcoin has died i think it's in the hundreds of times of

8:07articles that it was declared dead and you're right it just keeps popping back up it's not one of those one-offs where it's like tulips and just crashes and it doesn't come back and because it is growing so quickly of course there's still the need for retracements and pullbacks in a normal market cycle you know something can't go up forever every day every minute so that seems normal

8:29and so i want to like jump ahead a little bit with bitcoin here looking at 2021 and as you said 2020 seems to be the most explosive year so far and just overall besides the price just the adoption for the from the community and institutions seems really great do you think we will continue on the same trend for 2021 or even accelerate even further or maybe even slow down and maybe go

8:54as far as a potential price prediction of bitcoin by the end of 2021 next year yeah i mean it's very difficult to you know forecast the near-term future there's you know things that can change the landscape i mean the pandemic you know what's in store is there something like that waiting around the corner but certainly with the momentum

9:17of this year in place i think there's there's certainly a lot of upside in 2021 personally i think the digital gold thesis is a it's the kind of thesis around bitcoin that's easy for people to understand and really does lin support the idea that bitcoin should be a trillion dollar market value asset at least with gold at say 10 trillion and all

9:40the different interesting ways you can use bitcoin beyond what you can do with gold so i would you know i'm on public record saying i expect possibly as early as next year for bitcoin to achieve that level it's not a huge you know in terms of how many x increase you need from here to get there you're looking at a price of just about 50 000. You know 2x

10:03roughly from here you know in 2017 we saw bitcoin do 20x 2x seems like pretty modest for bitcoin to make and it wouldn't surprise me frankly i would i would not be surprised if bitcoin hit 100k next year just to put it out there that would not be shocking when you've got investors like guggenheim and others coming out talking about 400 000 i think 100 000 is a very

10:27achievable near-term price target in 2021 but again what's gonna happen with regulation what's gonna happen with hacks you know what's gonna happen globally with the economy with you know central banks and whatnot there's a lot of different things that kind of could play with the timetable but it does feel like we're heading towards bitcoin becoming a trillion

10:50dollar market value asset definitely and i think that your price prediction is conservative right along side with what i was thinking around fifty thousand to a hundred thousand i recently was watching a podcast with dan held you know growth at kraken and he said potentially if it was a super cycle he could see it reaching a million by the end of the year but that seemed a

11:11little out of reach but a hundred thousand definitely seems a lot more reasonable even though compared to regular assets it seems exponentially higher so back to blockchain.com for a minute you know 2020 was such a great year for bitcoin in the space overall do you have anything notable that you and your team were working alongside in terms of

11:33achievements for 2020 and would you say it was an overall successful year for the research team at blockchain.com yeah for the company and for the research team it's been a i think one of the best years no question about it i mean certainly you know rising tide with salt boats right and you have these cycles since 2017 the company has been super hard at work

11:53at trying to build for the next cycle that's the way crypto seems to kind of grow in these kind of bits and starts and having the infrastructure in place to manage a big cycle like this so we're really proud of the progress we made on kind of uptime and beefing up customer support you know expanding our products and making sure they're they're you know

12:15ready for this kind of way had our best week ever i think on the exchange last week you know and so i think the infrastructure is really taking a big step up we still see problems across the industry right we still hear about outages you know we are not immune to that ourselves so there's still a lot of work companies need to do to kind of you

12:34know continue to handle these massive surges you know but overall very happy with how the company's done and i think also how the industry's matured i think there's been a lot of progress across the whole industry since 2017. definitely and yeah it seems you know when there is a day when all of a sudden a rush of new entrants into the market are coming

12:54in these exchanges and service level applications seem to be going down because they can't handle the bandwidth of all the new people which is a good problem to have but not a good problem you know in the moment so that's i'm glad that blockchain.com sort of has that covered now moving forward to 2021 again i want to talk about because i know that

13:14you're very involved in economics and following in the political spectrum as well as you said it could be a huge year for 2021 for bitcoin at least do you see the current political state of america and the world economy in determining how quickly or how slowly this blockchain economy is going to progress coming into 2021 you know that's a really interesting

13:42question you know this year and we've seen this before throughout the years you know is you know crypto correlating with you know a decline in the value of the chinese room to be sometimes it looks like it is we saw that spring of last year 2019. boy it was just moving in lockstep as as the one was heading down in response to trade tensions you know we've seen it

14:01you know really closely correlate with equities and gold at parts during parts this year you know how tied crypto is to the us and the economy overall is still for me a big question mark it does sometimes march to its own beat sometimes it moves in lockstep with something but certainly i think it's reasonable to assume that we're going to continue to see

14:22fiscal monetary stimulus that's been made very publicly clear we just have a new stimulus recently passed fed has been very transparent about what they're looking to do with interest rates monetary policy all that's very bullish for bitcoin at the same time we're continuing to see broad technological innovation in d5 with ethereum kind of making

14:41progress with each 2.0 and so it's all looking really really positive the thing that i probably you know wonder about the most is rule regulators continue to strike the right balance and also this is getting moved up beyond the regulatory technocratic level we're getting politicians now more involved with policy we saw some stable claim

15:04legislation proposed out of congress it sounded like mnuchin was very much behind a lot of this non-custodial wall legislation so it's going beyond kind of the vincent technocratic level up to the political level and there i get a little more worried because you sometimes see things happen that are for political points you know scoring points reasons

15:26and are less grounded and how do we keep the american economy competitive how do we keep innovation flourishing how do we strike the right balance between obviously trying to prevent bad guys doing bad things with this technology and also enabling innovation to grow onshore definitely garrick that's a great point about the regulation make sure that

15:44you're not over regulating and stifling innovation and that point about the non-custodial wallets and i know a few large ceos of blockchain companies were outspoken about that saying you know make sure you don't go too far to stifle innovation so it'll be interesting to see when the new presidency comes in how much regulatory bodies

16:08will get involved and whether they'll be encouraging that or they'll try to put their foot down now we're running short on time for the interview but i want to look forward to 2021 for blockchain.com do you have any hints to any of your road maps or major releases or what you're looking forward to as the company grows into 2021 right well i think you know we've

16:30expanded our product suite significantly in recent years and have the exchange have it on custodial wallet have a block explorer have an interest rate product i mean it's i mean i don't know that a lot of crypto companies have as wide a range a product offering is what we have and so i would with this wave that's coming into the crypto space

16:53you know my senses will be really focused on making sure those products are you know leading class and reliable and but you know look i'm not the product guy i'm the research guy so i and i can't obviously rebuild anything that hasn't been publicly announced but i think you know just making sure that our existing suite of products is really

17:15really ready for this cycle is a huge priority for the company and yeah hopefully we can just continue to see you know adoption grow at a steady rate there's a lag you know i mean it's inevitable crypto companies can't hire and staff up with massive support teams for a bear market you know there's going to be you know you got to like you know plan if you're

17:35going to stick around like blockchain.com has since 2011 you've got to be prepared for the downturns as well as the upswings and there's always a lag in kind of stepping back up so please customers be a little patient with us if you're a little frustrated you know we're working as hard and fast as we can to manage the intake definitely

17:54garrick all right well if the viewers are interested in learning more about blockchain.com or for following your work personally as well what's the best way for them to learn more right so you know we have a monthly webinar and we do a regular podcast as well now we're really trying to be more kind of visible and accessible you can follow myself and the company and our

18:15leadership team on twitter of course we're very active on social channels i do want to mention there are a lot of impersonators out there and so please be really cautious and we send out emails of course regularly to our customers you always want to be careful when you get something that looks suspicious or especially online just incredible how many

18:35fraudulent actors are out there trying to trick people into reviewing things like their private keys their secrets never do that please we'll never ask you for your seat phrase keep your funds safe and contact our support channels through blockchain.com if you ever have any questions about anything that looks suspicious definitely i'll leave those links in the

18:54description box below thank you so much for your time carrick it's been a pleasure speaking with you all the best in 2021 and let's follow up in the near future sounds great thanks ashley have a great day you