With Ethereum heading for its best quarter in three years,
our next guest predicts the major coins will continue to
benefit from the ETFs and next month's happening.
Morgan Creek Capital Management CEO Mark Usko is here now
to explain.
Mark, great to see you.
It's been a while. You too,
Melissa, always great to be on the show.
Thanks for having me. So you're forecasting Bitcoin to
150,000 in the next year or so.
Can you explain how you get to that math?
Yeah, so it's. It is just math.
So we we look at the the fair value today
from the the
Metcalfe's law model that gives us round numbers around 50,000.
The halving occurs in three weeks.
What halving does, it cuts the block rewards,
the amount of money that's given to the miner to
secure the network.
If those rewards were to get cut in half,
as they do, many of the miners would struggle.
So historically, what has happened?
The price rises, the fair value rises,
so that would push it at 100.
But this time it's a little different in that instead
of just block rewards,
we get transaction fees because of ordinals and inscriptions.
So let's say the fair value only goes to
75 this time. Then post having you get a lot
of interest in the asset,
a lot of people FOMO in and we normally go
to about two times fair value
in the cycle. So in the last cycle fair value
was 30.
We got as high as
6869. This time I think probably 2 times because there's
less leverage that gives us the 1:50.
So what's that path like to 150 because I I
know that last summer you had called for a blow
off top in
2024 and we haven't seen that.
Is that still to come before we get to that
150?
So the big move happens post halving.
So the halving occurs sometime between
April 20th and April 21st most likely.
So once that occurs then you start to get an
increase in demand right from the ETFs and and other
people interested.
But the supply of new coins goes from 900 a
day to 4:50.
Well think about it, if there's more demand than supply,
price has to rise. So the price starts to rise
it be start, it starts to become more
exponential or or parabolic toward the end of the year
and historically about nine months after the halving.
So sometime toward Thanksgiving, Christmas
we see the the peak in price before the next
bear market.
So Mark Bitcoin gets the headlines.
Micro Strategies and Equity. Coinbase,
what are other things out there,
equity or other coin that you're looking at that nobody's
talking about?
You know it is so hard because the regulatory regime
has been pretty restrictive.
I mean there there are the mining companies that that
secure the network,
they've had a really good run.
So the valuations are are a little toppy but but
we do like those businesses.
There are component companies that that make the machines that
secure the network.
AMD and NVIDIA have been a story,
a proxy to play the the crypto markets for about
six or seven years.
But again, they're at valuation levels that are tough to
stomach.
There are a lot of really interesting products
and new tokens in the private markets.
That's where we traffic at Morgan Creek Digital,
80% of what we invest in are private companies and
only about
20% are in the liquid tokens.
But we like things like
Ethereum, we do like Solana,
we do like Avalanche and you can go down a
little bit lower on the capitalization scale.
Bitcoin is the king. It is the dominant token.
It is a better form of gold or or digital
property now as Michael Saylor calls it.
So I do think it will be the best,
but the law of large numbers comes in.
I think it could go up 10X from here easily
over the next decade.
But I think some of the smaller projects will go
up orders of magnitude more,
just the law of small numbers
for that 20% in the more liquid tokens markup.
I'm curious do you just buy and hold
total or are you actually trading around a position And
and we're a venture capital firm Morgan Creek Digital,
so we're not a trading fund.
So we do buy and hold or huddle,
but we we will sell on occasion.
We sold a bunch of our Solana two years ago
when they ran into problems with the network.
We sold about 2/3 of it.
Thankfully we didn't sell all because it's done well.
We sold out 3/4 of our Coinbase stock when it
went public
and now we hold about 1/4 of it and we
think big things are in in line for for Coinbase.
That's one I forgot to mention.
We do like Coinbase a lot,
so we do hold mostly as opposed to trade.
Great question.