Crypto Insider Reveals The NEXT Zcash (10x Potential) | Steven Mcclurg Canary Capital Transcript, AI Summary & Key Points

00:00 We're probably talking five to 10x over the next three years, right? Once they once once people realize what they're doing. Today I sit down with CEO of Canary Capital, Steve McLur. >> The thing that people most know about us is our our altcoin ETFs. >> He is an industry expert managing over $500 million in assets and responsible for some of the largest altcoin ETFs in crypto.

00:25 >> You know, I'm worried about a recession right now. watch today's whole video. Do you think altcoin season it's obvious not obviously not going to be as volatile as we've seen in the past, but how do you think it plays out? Bitcoin goes first, the altcoins follow. >> No, I >> So, you understand everything. What is your message to crypto holders during midterms, including Steve's bet on the next Zcash?

00:50 >> Look, I think Zcash is is is the current winner right now. It's It's winning the privacy game, but Zcash isn't going to be for everybody, right? >> Click the like button if you appreciate conversations like this. Click the like button. And Steve, let's start with your background. >> Yeah. Uh, so my background is largely both private equity and fixed income, uh, in the traditional sense.

01:13 I, uh, I discovered crypto really about in 2012. Uh, I was doing some research on Bitcoin. and um ultimately decided that the Fed probably wouldn't let it operate in the United States, but just in case I was wrong, I bought a little and um and then around 2016 um I was I was heavy in the fixed income market and saw that bonds were probably at their generational peak and what was next and u I really believed in the promise of tokenization.

01:53 So, um, in 2016, I I jumped in and started working on token tokenizing private equity bonds, you know, some of the things that I was involved in. And, uh, sure enough, 10 years later, it's actually happening. So, uh, here here we are today. Um, I'm still loosely involved in tokenization, but mostly focused on, you know, running a hedge fund and, um, managing crypto ETFs.

02:21 So, as a guy that comes from Tradfi, what do you think all the current uh just traditional guys, they see the headline of tokenization, do they get it? Why do they get it? Why do they like it? >> Yeah, a lot of them really get it. Um I I was actually just uh on a panel with a few folks um this last week and you know you had people from you know Wisdom Tree, New York Life um you know they're very very active and I think they're also very sensible and that it doesn't mean immediate distribution.

02:56 And I think a lot of people over the last 5 years have thought, "Oh, I've got this illquid asset. I'm going to tokenize it and immediately I'm going to get distribution. Uh there's going to be buyers." That's simply not the case. Um you know, their their sober view of this is that um it's cheaper than your traditional transfer agents and eventually there'll be distribution there, but initially they're going to have to provide the distribution.

03:22 So that's really I believe how this is going to work. And you've got so many large um um you know banks and asset managers now involved um you know as you know big banks like Bank of New York then you got asset managers like Black Rockck and several others uh along with some of the ones that already mentioned and they're all pressing forward. Uh they're all building tokenization strategies whether it's a product or whether it's a platform.

03:51 And uh look, I I I believe in the next year or two uh you're you're going to see this really take off. >> Well, what inning would you say we are in for crypto? Cuz like are the big guys already here? Are or is or is it just a little bit here and more's coming? >> Um I think a lot is here and there's more to come, but we're probably closer to like the seventh or eighth inning right now as far as full adoption.

04:22 So I mean so not a lot of upside would you say? >> I I agree with that. Not not the kind of upside that we've seen for the last 15 years. Uh but I I do believe it's going to provide I I do believe there's over the next four years there's going to be more upside than you know broad equity portfolios certain commodities. Um you know crypto is definitely going to outperform you know the Q's the S&P um by a lot probably not.

04:47 I mean, there's some wild price predictions on Bitcoin, for instance. Yeah, it's going to a million. It's going to 500. In the next two years, it's going to 250. You know, my assessment of Bitcoin over the next 3 years, um, you know, the the next three years of the four-year cycle is it probably goes to somewhere between 150 and 180. So, for a lot of people, that sounds pretty boring, but it's a double from where we are right now.

05:13 That's not terrible. >> And for traditional finance, they'd love that. I mean, anybody should love that. Um, is part of the reason for that because we have a new class of buyers stepping in and they will manage the risk. They'll sell, they'll, you know, we're getting less volatile and they'll sell when they make gains and rebalance. >> Well, that is part of it.

05:34 Um, but another portion of it is, you know, anytime that you've got more sophisticated buyers, they're going to hedge their bets. So they might be buying Bitcoin, but then they're selling calls, you know, 5 10% out, and that actually creates less volatility uh in the asset and of course less upside. >> Does that also mean that it's less volatile, less upside for years and years until they can't suppress it anymore?

06:05 Like if it ever does pop, it's going to pop. Well, look, I think I think Bitcoin has has seen its biggest pops, right? Um, you know, August was was obviously an amazing month, but that was after that was more of a mean reversion after having, you know, 9 months of downside, right? So, I'm not expecting to see, you know, any more 30 40% pops in one month.

06:30 I'm expecting to see maybe 10% pops, right? Um, now some of the altcoins, um, there's still a lot of upside and and I do believe that this cycle is going to be led by protocols involved in tokenization and and the bigger ones, right? I I I think a lot of just, you know, the, you know, the thousands of altcoins that are out there that aren't doing anything, they're they're just going to go to zero.

06:56 But the dozen or so strong protocols that are very active, they have a lot of transactions, people are actually building on um those are going to be the probably the biggest winners. Uh Bitcoin is going to follow. Uh privacy coins will probably take center stage. Um when I say privacy coins, I I'm I'm really referring to Zcash and and and Litecoin. I think those are going to be the two winners out of out of that space.

07:23 Um, so, so look th those two privacy coins probably see, you know, if if Bitcoin doubles, they probably quadruple or more, right? But the but the protocols are probably, you know, we're probably talking about like a 3x 4x over the next 3 years. >> Do you think altcoin season it's obvious not obviously not going to be as volatile as we've seen in the past, but how do you think it plays out?

07:49 Bitcoin goes first, the altcoins follow. No, I Well, I I think the I think the the larger cap bluechip altcoins go first. Bitcoin follows and then the rest of the altcoins just are dead. >> So, they might follow for a little bit, but you know, there's there's no institutional buyers of, you know, random random altcoin that's not in the top 20. >> So, unless there's an ETF, unless there's a DAT, a digital asset treasury, those are those are buyers.

08:19 And this is an institutional cycle or new regime in crypto. So un if they don't have the institutional bid, they're dead. >> Yeah, that's right. >> Very interesting. Um, give me what is your message to crypto holders during midterms? Well, I actually believe and and and and it's starting to solidify, you know, but I've had a belief for six months now that the Democrats would win the House and the Senate.

08:50 Okay? And what that will do is actually just create certainty in the market after midterms are over. And that certainty will actually cause risk assets, including crypto, to go up. Now, it's probably not going to go up as much as it did 2 years ago when you had, you know, pretty much a Republican sweep and a lot of changes that occurred um, you know, at the administration and and at the um um at, you know, at various levels like the SEC, the CFTC.

09:23 Uh but the the Trump administration still will run the executive branch which still runs the SEC, the CFTC, and uh I still expect a lot of positive momentum in crypto. Now, we may not get new laws passed after January, but that's okay. I think all the important laws have passed and I think the important people have been put in place um across the administration.

09:55 So after midterms excluding some short-term volatility, crypto will be higher at the end of Q4 is your thesis. >> That's my thesis. Yep. >> And when we say altcoins than the top 20 that have the institutional bid besides Ethereum, what do you think of? What are like a top five that you see institutions like? >> Yeah. So, so if if I were to name five that I'm really seeing people glam onto and either work with or build on top of, uh the the top one is actually uh XRP ledger.

10:28 Um they just signed a big partnership with Bank of New York, which is extremely important. Uh so I think that ledger is going to power a lot. Next, um you know, HAR, a lot of people don't think about HAR. It's not a true blockchain, but a lot of enterprise companies are focused on H bar. They love it. So, that's more of an enterprise data play. Uh, but then going back to, you know, kind of true financial tokenization, um, you know, I think some of the some of the ones the smaller ones after the two that I mentioned,

11:01 uh, that have a lot of interest and and positivity are going to be Injective, SU, and Solano. When I think of XRP and fitting the tokenization and maybe RWA narrative, I look on like RWA.xyz sort of thirdparty site and I see Ethereum, um, Binance, Solana, then I think Avalanche, and I don't even see XRP in the top six or seven. Like, what narrative is are they hitting?

11:31 >> Yeah. Well, what they're doing is they're they're working slow and strategically and they're partnering with large banks. And as these large banks slowly start rolling out their products on their ledger like like Bank of New York, um then you're going to see a lot more traction. But for the most part, what you're seeing like you know Salana is a good example.

11:54 You know, um Salana does a great job of marketing. there's a lot of um independence building on it. Uh there's a few institutions that are building on it, but for the most part, it's more open-source, more looks like Ethereum, and a lot of the larger institutions actually want more centralization than decentralization, right? They they want the ability, you know, we just had the the Binance hack, right?

12:20 And how many of those tokens were able to freeze funds? Well, Tether, USDC, that's great. That's that's exactly what financial service companies want. Now all the you know the the diehard crypto decentralized group you know are hating on that. But you know that's not what Bank of New York wants. They want to know that hey if something goes wrong you can freeze these tokens.

12:47 You can claw them back. You can whitelist them. You can you can KYC them right? If if a bad actor buys something you can get rid of them. Right? and and that goes against a lot of the you know the original ethos of of of of centralized blockchains but at the end of the day the ones that can do that are the ones that are going to win. >> You now I'm hugely bullish on Solana on Injective on some of the other coins you mentioned but you mentioned Litecoin and how it's fitting with privacy.

13:15 I assume that's Mimblewimble but uh Litecoin seems sort of dead. Am I wrong? No, I mean it it it may it may feel that way, but if you look at the transactions, it's actually it actually has more transactions than Bitcoin right now. >> Well, that's Bitcoin's a store of value. Its use case is you're holding it. Litecoin is less of a store of value, so you so obviously you need to transact.

13:41 >> Yeah. And and that's exactly where it's going to win. You know, it does have great transactions. Um look, I think Zcash is is is the current winner right now. It's it's winning the privacy game, but Zcash isn't going to be for everybody, right? So, where you're seeing a lot of the Litecoin transactions is a lot of emerging market countries and they're using it for true transactions.

14:05 You don't see it as much in the US or Europe, but um as that privacy feature via Mimblewimble becomes um uh more utilized, I do believe that uh it's it's probably going to pop >> and it'll probably be if Bitcoin doubles in the next few years, Litecoin would be the three to four three to 5x. >> That's exactly right. Yeah, I think it's got a lot of room room to run to catch up with Zcash.

14:36 Stephen, Altcoin Daily speaks to an audience of over 4.2 million subscribers across all socials. One of our biggest questions from the audience is this altcoin season, I want to take profits. I don't want to bag hold all the way down again. So, what signals will you look for in a few years to tell you, okay, market's toppy? >> Yeah, I I Well, the first one is the easy one, right?

14:59 You know, the the four-year cycle is still in place. Um, I remember last cycle everybody was yelling, "Yeah, the four-year cycle's dead. Things are just going to go straight up no matter what." And I said, "No, the four-year cycle is still here. It's still there's still a lot of uh activity that's controlled by miners, you know, when it comes to selling."

15:20 And one of the things that people point to was, well, in the last year, there wasn't a blowoff top. Uh, it was Bitcoin was actually slightly down on the year. It was basically flat. And the real reason that happened was because AI data centers were coming online. Energy got expensive for Bitcoin miners and they began to both switch over to AI and just sell their Bitcoin early to pay higher energy fees.

15:46 So that's still a very cyclical approach. Just energy got expensive faster, right? So in this coming cycle, you're really going to see the same thing. It it's going to get muted more muted and muted each time. We're not going to see these big blowoff tops at the end of the cycle. We're not going to see these massive draw downs uh at the beginning. I mean, we've we've seen a draw down, but it wasn't that big this this last year, right?

16:11 Uh so so really prices are going to start leveling out. The four-year cycles are going to be more muted, but this coming cycle will probably be the last four-year cycle that looks like a cycle. And I believe that after that it's just it's it's it's going to start running its natural course. And a lot of that has to do with the having and the amount of rewards that that the Bitcoin miners are are are getting in and their influence on the actual price of Bitcoin going forward.

16:41 >> Are you worried about a recession in the traditional AI economy like in the next two years or three years? I mean that could kill the party for anything including crypto or does that not worry you? You know, I'm worried about a recession right now. And you know, look, the the technical definition of a recession is negative GDP growth for two quarters in a row.

17:01 Well, that's the technical definition, but how do people's pocketbooks feel right now? Right. Um, certainly inflation has been rampant over the last four years, and it's coming back. Uh, inflation's getting higher and higher. the cost of food, the cost of gas, the cost of gasoline is not going down anytime soon either. You know, even though uh there's all these memes out there that well, you know, uh you know, oil is still quite low compared to other presidents, but the cost of gas isn't.

17:36 And people aren't, you know, pumping oil into their car to drive, you know, to to drive them. They're putting gasoline in. And trucks need diesel to ship things like fertilizer and food. So that actually causes higher costs for farmers and higher costs for in consumers. And with interest rates continuing to go up, and they are going to continue to go up, uh it's going to be harder and harder to put things on your credit card and pay your debt.

18:04 It's going to be harder to get a mortgage. It's going to be harder to buy a car. So from a from the standpoint of, you know, how does the average person feel? It feels like recession already, even though GDP might still be growing. So, I'm worried about that right now. And then even with AI, uh the thing that I'm worried about is yeah, AI is in a bubble.

18:24 I don't think it's going to pop like the tech bubble popped, but I think the the air is going to be slowly let out. And the government, the US government and other governments around the world will support AI so that they can, you know, so that they can control it. And so so they'll keep pumping money into it, which means that they're printing money, which means that crypto goes up.

18:50 >> So you're saying that a recession could h is happening sort of right now in a light sense, but it's going to be a step up sort of gradual thing, not a big pop. And that if there is a big pop in AI, it's pretty likely the US will step in and support. >> Yeah, that's right. Stephen, in our final five minutes, I want to go to just some like bonus round type questions, but what what what do we need to know about Canary Capital?

19:14 I know you launched the first Litecoin ETF. You have an H bar ETF. Basically, you're bullish on the coins they have ETFs in. But I get it because those ones are seeing institutional adoption. Um, what do we need to know? Yeah, I mean, look, our our, you know, the the thing that people most know about us is our our altcoin ETFs and and again, we've focused on the ones that we're bullish on, the ones that are either have a privacy feature like Litecoin or um is uh utilized for tokenization, which is pretty much the rest

19:44 of them. Uh we also run a hedge fund uh that's a traditional hedge fund. It's multi-asset. We can invest in equities, bonds, commodities, crypto. Um, and that's something that a lot of people don't know know us for, but we've got a team that has a long history of running hedge funds for the last 20 years. >> What do you think is sort of the out of all the coins that Canary offers, it's it's flying under the radar.

20:10 It hasn't really been noticed by instarted, but institutions haven't got swept in yet. You know, I think the most interesting one and and we don't have an ETF for, but we have a filing for it is Injective. And um I think that's it's a fantastic team first of all. They're building real things. They're they're heads down. Um they're they don't they don't have this massive treasury that they're constantly selling off.

20:39 Um they are I mean they're they're they're they're they're well capitalized. They're building, they're smart people, and they're uber focused on um integration with Wall Street. >> I totally agree. I think of them as sort of like, for lack of a better metaphor, the next Solana or the UN they're they're hitting the trading in the institutions and you know, sort of like Salana but much much smaller.

21:09 >> Yeah. Look, I I think that their potential is something like I don't know. I mean, I'm just guessing, right? We're probably talking 5 to 10x over the next three years, right? Once they once once people realize what they're doing and they catch up in market cap to some of the coins that are that are much higher market cap but like doing less than them like a Cardano for instance, right?

21:35 Then I I I think I think the the upside is massive. I'm very bullish. >> Links for all your stuff down below. I encourage the audience to check it out. rapid fire questions, which just means give a sentence or two. Um, I kind of already ordered uh talked about this first one, but if you could only hold one other altcoin besides um Bitcoin and Ethereum, what would it be?

21:58 >> Oh, Injective. >> Um, the next, >> and by the way, I don't hold Ethereum. So, Injective would be my number two. >> Why don't you hold Ethereum? >> You know, you just said tokenization. I held Ethereum very early, but um I I'm I'm not I think the technology has gotten older. Um people are forced to use it because it's it's it's a big network and a lot of people use it for DeFi.

22:23 But the reality is is, you know, even when like JP Morgan was was was building out their their their their system and now, hey, we're looking at Ethereum. Well, all they did was copy Ethereum's code and built their own private chain using Ethereum's code. So nothing actually ended up on Ethereum. And I think that's what's happening with Ethereum in a lot of cases.

22:42 But at the same time, I'm also more bullish on faster, more secure networks like Salana and Objective. >> So you're basically saying, yes, Salana's winning in stable coins and RWA and tokenization now. That's clear, but they're the one that's going to be usurped. There's better technologies. >> Yeah, that's exactly right. Continuing the speed round, um what's what's the one major sector of crypto that may cause the next collapse?

23:11 And for a perspective, you know, Genesis and BlockFi and lending caused the collapse last time. What could be the sector or thing that causes the next one? >> Well, you know, DATs were already a big problem a year ago, which which caused uh a lot of the issues last year. one of the reasons why there wasn't like a big blowoff top or or something even close to that and there's still a lot of bad dats that are out there that are going to get unwound and even a day like today when you know we're talking about 5 10% drops

23:41 across the board you know I don't know how some of these dats are holding up so uh you know they're going to be forced sellers at some point and I you know I I I I believe that they're going to probably be the next um FTX but not as big as what we saw because we already saw the biggest. >> No. Yeah, we've already seen that. That's probably that's probably the worst thing that that that's ever going to happen hopefully.

24:06 But uh but no, the DATs are going to look like that year, you know, when when just everything fell apart, all the leverage. >> Final two questions. Will Dogecoin hit an all-time high again before 2030? >> I don't think so. >> Really? Isn't that the It's a meme. It's a Lindy effect. memecoin. >> You know, I I think Doge as a memecoin has kind of kind kind of died.

24:30 Um and and I look, Elon Musk had a lot to do with that by naming the government department Doge and then Doge was kind of cool for a little bit and then it just sort of all fell apart and they didn't do what they said they were going to do. So, I I think a lot of people equate Doge, the government agency, to Doge, the coin, and are just avoiding it.

24:52 >> And even Doge, the government agency sort of dead. Exactly. >> Um, what is the best financial advice you ever heard? >> Wow. So, my my old boss and mentor always told me, give your first 10% to God, save your second 10% and do whatever you want to with the rest. >> So, basically, spend less than or that basically means always be saving. >> Always be saving.

25:22 >> I love it. Stephen, thank you very much. Final thoughts for the Alone Daily Army. >> Yeah, look, um, get ready for get ready for a new run. It's not going to look like LA last four years, but it's going to be pretty good. Love it.