Bitcoin’s Current Adoption and Unstoppable Future - Zachary Friedman (GDA Capital )

hello everyone hope everyone's having a great day uh so far and enjoying the conference in london uh so today i'm here to talk to you guys about bitcoin's current adoption and unstoppable future before i jump in there i just want to give some background on secure digital markets and myself so secured digital markets was a company i founded back in 2017. the original thesis was pretty simple at this point i'd already been in the digital asset space for about two to three years um and and had dove down the proverbial rabbit hole um i my main mission was really the mainstream adoption of digital assets and to me the kind of thesis was simple if i could help institutional capital flow into the space capital would lead to talent coming in talent would lead to development and innovation and innovation would lead to adoption there's a lot of inefficiency in the space and i kind of had the foresight to realize that you know if we could improve the sophistication of these on-ramps um you know and i started with an otc desk that that rapidly evolved uh then again those capital could flow and that's really what i'm here to talk to you about today because we're on a precipice where i think this institutional adoption is happening uh very very quickly and and we're really at the edge of something exciting so um outside of secure digital markets i'm also the founder of the gda group of companies our group ecosystem kind of touches on a wide variety of segments within the digital asset sector secured digital markets being the trading and sales arm we also have a ventures arm focused on early stage projects investments there are fund management arm we recently announced uh the metaverse investment fund which is the first metaverse fund uh in the world in partnership with tokens.com a public company uh rare which is an nft marketplace as well as our wealth arms which focuses on education for various financial incumbents in the space family offices etc uh kind of broad spectrum under the umbrella and you know partially why i'm talking to you guys about this segment today is we serve a wide variety of market incumbents um everyone from institutions to hedge funds to btm operators to processors come to us for liquidity investment etc and really pivotal in the kind of adoption that we're talking about here so you know a lot of you considering you're in the room today probably know that bitcoin uh was invented and started in you know 2008 with the um release of the white paper but the kind of premise behind the radical technology of bitcoin comes before that in 1970 the first rsa public key crypto systems as well as digicash and e-gold were concepts that kind of led to the inevitable creation um and listing of bitcoin when it was first launched if you look at the traditional financial industry you know we do see and we are faced with an oligopoly i think it would be hard-pressed to see and consider where all of the you know where financial innovation has occurred aside from credit cards and atms this has been you know slow moving bitcoin has kind of changed that by allowing systems to change people still pay three percent for interchange merchants are you know receiving 97 cents on the dollar transaction speeds etc i'm sure you're all familiar i i won't go too deep but um you know this is what started with bitcoin which is evolving into a completely shifted financial ecosystem so you know quickly to look at kind of the macro tailwinds that we're facing today since the post-world war ii era we're seeing the highest rate of inflation kind of different to what we saw back then you know the job market especially post covid is in a totally different place you know which would have countered that inflation bitcoin today is truly one of the only things with an inelastic supply um in a world poised with quantitative easing and money printing um you know bitcoin can be seen as the antidote so how bitcoin gets to infinity um you know there's various bull cases for bitcoin that we can look at as store of value all the way up to global reserve currency uh we've seen adoption the first of 197 countries in the world to adopt bitcoin through el salvador you know but what is truly gonna take us from where we are today and bring us to those next levels so first let's look at the existing market dynamics official whale walk into the bar if you look at both wallet holders that have a thousand plus bitcoin or 10 plus bitcoin both of these core um groups in the space right now are accumulating bitcoin at faster rates than ever before and this has been steadily growing since 2008 so the believers continue to believe continue to double down and continue to remain and store and lock their value within the ecosystem this is you know an obvious first predicator to the supply and dimen demand dynamic that bitcoin is you know fundamentally based off by the data if we look at the institutional cohort a little bit further seven on ten institutions are preparing to invest into digital assets in the near future um eighty-two percent of institutions are looking to increase their exposure in the next two years 84 percent of european and u.s investors have indicated interest um we also see that eight to ten investors feel that digital assets have a place in the modern day portfolio if you look at you know all of these categories the majority of them do feel and see and believe um that bitcoin and you know the monetary revolution we're experiencing is here to stay there you know it if you look at it you know the boom of today everyone needs to adopt and forget adopt immediately but consider um a blockchain and bitcoin strategy as part of their ecosystem just like in 2009 uh an internet and technology strategy 2016 people had adapted a digital strategy in 2018 19 that was a social strategy um you know this is kind of a core um you know whether you're a corporate treasury evaluating your balance sheet the case studies are there um you know microstrategy and you know how well they've done and tesla and their accumulation of bitcoin on the balance sheet if you're a corporate treasurer it may not be part of your initial mandate but it's on your mind you're seeing the headlines and you're starting to really contemplate and consider this on a wide spectrum so if you actually look at the top reasons why these hedge funds and vcs want to actually purchase bitcoin and get into digital assets aside from speculation which is still rampant and you know the industry has widely been led by the early adopters and speculators have been early adopters um thus far you know they see the percentage for this to send their opportunity for this to sit in their portfolio and serve as a hedge as well it's uncorrelated to other assets proven through and through and also against an inflation and this is probably one of the categories that has grown the most as a hedge against inflation which is you know really something that is uh prevalent and on the minds of all these groups um when you talk about the percentage allocation you can look at various market research data and reports um you know from from leaders like fidelity you've spoken about a one to three percent um allocation of your portfolio into the digital asset class but actually you'd be surprised that there is almost 35 of these um incumbents today in some new studies that are showing they're actually looking at greater than a three to five percent allocation upwards of five to ten percent and you know the average obviously sitting somewhere in the middle of the the four to six percent range based on various you know data sets um that is a significant factor and if we kind of account for some of the supply and demand metrics that you know i've previously afoor mentioned this portfolio allocation could drastically increase given the bulk case of bitcoin um and digital assets as a whole so what are actually the leading barriers to adoption if people are considering it they're interested they want to actually invest some of their cash one of the leading barriers is the volatility the price volatility i'll bet it's a little bit it's definitely come down but there are 20 20 intraday swings that have been apparent um but you know that is drastically decreasing i think bitcoin uh by the volatility metrics is today only about the 52nd or 53rd most via volatile currency in the world um this significantly reduced since you know 2018 2019. lack of fundamentals with respect to its valuation however there are a lot of models that are proving consistent over time the more data we have the more time that's gone by the more that people can an analyst can actually look at this data interpret understand it um you know and account for how this looks uh going forward and as well market manipulation like any industry in its infancy um you know even industries in their maturity art market gold market there are there is manipulation and there's a lot of reasons why you could point to that um but as these institutional investors come in bitcoin continues to be a global decentralized phenomenon uh that manipulation will continue to go down just by nature so um let's look at the vc cohort because i think it's really interesting to see where the money's going smart money is always kind of a predicator for long-term growth in any sector or industry and we've actually seen a continuous minus in in 2017 where we obviously saw the uh had a crypto bear market for quite some time especially with the icos and tokens 2021 has seen almost a 2.

5 2.7 x increase in vc investment into the space this is smart money these are some of the smartest minds globally and across the world that are putting their money into the sector doubling down on early stage projects on investors on talent um and uh yeah really putting their money where their mouth is so to speak further i think that um you know uh the rise of the social on-ramp uh is a really key consideration here so something that not a lot of people talk about is obviously the mainstream adoption of what's gonna really push that to the next level aside from price speculation uh which has led a lot of you know people right now to come into the market uh we're starting to see social networks adopt various forms of integrations twitter being one of the first to lead with bitcoin integrations and tipping um and the ability to transfer it but these social networks captivate and capture audiences of you know hundreds of millions to billions of people what if a phone network a massive social media any of the top 10 really come in use an existing currency aside from one of their own that brings adoption into the space you know everything from cbdc's i i don't look at it as competitive to me all the innovation anything that relies on a blockchain anything focused on you know growth and adoption of what would be considered the blockchain ecosystem um inevitably does provide benefit it opens up everyone into the ecosystem uh familiarizes them with the use of this technology how to store it custody it trade it understand it and as we continue to see innovation this process will become you know much easier i right now can go on my phone in a minute on you know five to ten different apps that i have access to and purchase bitcoin you know fairly quickly however the process is still for someone who's not you know uh too native or familiar with technology with the financial landscape with trading it is still not as turnkey as it can be but we are seeing that development apps are starting to gain popularity and notoriety um and they're really making this process quite a bit easier um so further to that i think the user growth relationship you look at metcap's law talking about that adoption um you know as we continue to see the user adoption the numbers are rapidly increasing uh the value of the network is going to go up we have you know hundreds of thousands of merchants worldwide that do accept bitcoin which allows it to have utility um so you know i think that really um i i'm missing a little point here but it's it's uh it's not a problem that if we have the social adoption we see the capital coming in and the innovation um those are all really you know amazing factors leading to where uh bitcoin currently is and and going towards the bold case um yeah so with that i have uh two minutes left here just kind of pass it off to any general broad questions