In New York morning trade. Bitcoin is trading above the 73,000 level and has broken out of its recent range, and a massive structural shift is happening beneath the surface. Of course, geopolitics are in the spotlight as the Middle East conflict marks day 14. Now, during the weekends, traditional exchanges may have been shuttered, but risk did not stop trading. Instead. 24/7 crypto platforms like Hyper Liquid stepping in as the primary venue for real time price discovery. Well, joining me to talk about the expansion of on chain infrastructure and what it means for the future of global trading is Sam Gaer, CIO at Monarq Asset Management. Sam, happy Friday. Great to have you here. What a week it's been.
What a week. Thank you for having me. It's great to be here. Well, of course there are a lot of headlines out there. We're continuing to monitor here on Wall Street. But when it comes to the crypto market, we've been seeing a lot of activity on the weekends when traditional markets are closed. So tell us what's happening when it comes to derivatives. Well, it's really interesting. What we're witnessing right now is not just, oh, trading on the weekends. What we're witnessing here is a true paradigm shift in financial markets and what I call the evolution of exchanges. I wrote a piece on this about when the war broke out, actually, the night that the war broke out, because I witnessed firsthand, uh, as the war broke out, everybody was asleep. Exchanges, traditional exchanges and Timex Comex, CME were closed. They were on their weekend batch runs, etc. no margin was flowing. No banking occurred. While all of this was shut down, bellwethers like crude oil, gold and silver got priced not on 100 year old exchange, but on an 18 year old Dex called Hyper Liquid. And I thought it was super interesting because the two functions of an exchange that are core to their existence were performed on a weekend when everything else would close. And that being risk transfer and price discovery. Yeah. And you bring up key points here when you're talking about what happens on the weekend, for example, when we take a look back on this past Sunday, we saw crude oil prices skyrocket. And we saw both WTI as well as Brant prices skyrocket through that 100 level up to 110 and almost through to 120. And this is as Asian markets were opening and before US markets were opening. But because you have so much experience in commodities, you used to work at the Amex and you were part of this transition from open outcry to electronic trading. So how do you like and what we're seeing now in terms of the move to on chain trading? Well, yeah. And first of all, I started my career on a trading floor on the Nynex and Comex trading floors. And so I've seen it firsthand from a trader's perspective as well as an exchange operator perspective. And the same sort of tells are there right now in terms of the evolution. You have your doubters and you have your adopters. And if you kind of read through the tea leaves, everybody is talking about RWA, real world assets and on chain trading, and there are several firms that are out ahead of the curve. Hyper liquid being far out ahead. And they brought RWA trading via their hip three platform to bear. Um, what you're what you're watching right now in real time are firms like New York Stock Exchange, Jeff Sprecher way out in front, usually a visionary. Um, about a year ago, moved the Chicago Stock Exchange to Texas, called the Texas Stock Exchange. And now they're going they're gunning for on chain. 24/7 trading of U.S. equities using canton networks. Super important. But again, this is all a validation of crypto technology and crypto use case. So there's the industry is facing this paradigm shift moment again just like it did in open outcry from open outcry to electronic trading, where more it's always about information democratization. And so from open outcry to electronic trading, what got democratized, all the information that we as traders had in the pit got put on to order books, and they and they were broadcast and anybody could subscribe and see. Well, now markets are closed on the weekend. Traditional markets equities closed at 5 p.m. for the most part 4 p.m. on market. Um futures are open only 2323 five and crypto trades 24 over seven. So this information and access gets democratized. You no longer need a bank. You no longer need a brokerage account to go and trade. Tesla for example. Yeah. So we are keeping an eye on all of this innovation that is taking place. But you understand not just the capital market side, but also the technology side. And given where price action is right now, when we are talking about the broader crypto market, tell us what's actually happening on the ground. I know that previously you have said this is the time to build, but what does that actually look like? And for retail investors who are watching right now, what would you say to them? Sure. So what I would say is I follow a couple of different maxims. And people at the firm jot down things, Sam says. But really it's generally things other people say. So Warren Buffett is famous for saying, I like buying when there's blood in the streets. And there's another saying that says people make money in bull markets, but fortunes are made in bear markets.
So, um, what I'm seeing in crypto right now is an incredible level of pessimism, FUD, fear, uncertainty and doubt. All you need to do is go on to Twitter. Crypto. You know, the transparency of crypto is also a double edged sword because just go on to Twitter and you'll find out just how how pessimistic people are. But let me give you a few facts and figures I mentioned RWA. Real world asset trading. It's up 3,300% in a year. Um, prediction markets are up 1,700% in terms of volume in a year. Perpetual Dex is 400%. Over 100 publicly traded companies are holding bitcoin on their balance sheets, and MicroStrategy keeps on buying and somehow hasn't been forced to sell yet. So yeah, feel free to sell. But in reality, this is, I believe it's still a great time to be buying, to be scaling in dollar cost averaging. Uh, this is Bitcoin I'm talking about is the best performing asset known to mankind in history. And specifically over a five year basis is still still at these levels right there with gold and silver, uh, etc.. Importantly Importantly, it's only 10% of gold's $27 trillion market cap. So imagine if we go from 10% to 20%, what would that do for price? This is a great time to be building. It is a great time to be buying. It's not a great time to be hiding and waiting. And finally, before I let you go, I do want to get your institutional perspective. So first and foremost, we are here at the New York Stock Exchange when we're talking about digital assets as well as the crypto majors. But when we talk about some areas of the market. So you mentioned Ahwaz. We're watching tokenization as well as stablecoins and the regulatory outlook. So when we're talking about growth in these sectors, what is the long term impact on both the institutional side as well as for retail investors? Sure. Well, I think first and foremost, this market does need a catalyst right about now. And historically, there have been catalysts. And what I always say is don't count this administration's ability to pull a rabbit out of a hat Out. And I would also say that the Clarity Act is relatively going to happen relatively soon from everything that we see. And this administration really wants to be a crypto forward administration and prove to the industry that they have the juice and they will do it. Now, that being said, this makes it a great time. This makes it a great time to be a buyer. And institutions are still piling in. Yeah, they're building infrastructure. Stablecoin addresses have doubled in the last year. Payment rails. Everybody has a distributed ledger project on the book. Every single bank has a distributed ledger project on the books. And and and finally, the thing that institutions hate most. Uncertainty. Yeah. Clarity act brings us certainty. Yeah. And we have less than 60s here. But I do want to get your take on quantum. What are the risks? So I get asked this question all the time, especially given my technology background. Yes. And what I would say, I think I read earlier this week, and I would agree that it's kind of a fool's errand to be running with your hair on fire. That quantum is going to take down crypto and specifically Bitcoin. The statistics are there and there is a crypto working group on quantum. What I would be more concerned with, honestly, and having been in the trad fi sector and in the regulatory sector in trad fi, what I would be more concerned with is how are major banks going to handle the quantum threat? How is your password online not going to get hacked if you can hack a Bitcoin password? So I think that the industry is well aware of this moving forward and will be well equipped to deal with it. Well a lot of moving parts here. So thank you so much for joining me today. And thank you so much for your insights as well as perspective. Remy. My pleasure. Thank you. Thank you.
