ROLLUP: Bitcoin Breaks Below $60K | Saylor’s Three Bad Options | ETH Labs | The Quantum Clock

Summary

Bankless Podcast Summary

Episode: ROLLUP: Bitcoin Breaks Below $60K | Saylor’s Three Bad Options | ETH Labs | The Quantum Clock

Date: June 26, 2026
Hosts: Ryan Sean Adams & David Hoffman

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Episode Overview

This week’s Rollup tackles another rough leg in the crypto markets and an industry in flux. The hosts break down Bitcoin’s dramatic slide below $60K, the unfolding MicroStrategy (Michael Saylor) "death spiral", structural and leadership changes at the Ethereum Foundation and launch of ETH Labs, the surprising new Illinois crypto tax, and a new US government push for quantum computing. Spanning existential market questions and protocol governance moves, this episode is a snapshot of urgent pressure points and opportunities across the crypto sector.

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Key Discussion Points & Insights

1. Market Blood in the Streets: Bitcoin’s Slide & Saylor’s Predicament

• Bitcoin Dips Below $60K:

  • Bitcoin broke below its 200-week moving average (historically a key “floor”) and is now roughly 5% under it, trading in the $59K range.
  • (03:46–04:41)

• MicroStrategy "Death Spiral":

  • MicroStrategy’s stock ($MSTR), and its “Stretch” preferred stock, have both plunged (Stretch trading at $74, supposed to be at $100).
  • The company has mounting preferred dividend obligations ($1.7B/year, only ~10 months of coverage left).
  • Saylor faces a “three body problem” (09:41–13:55):
    • Can’t mint more equity without breaking promises to shareholders
    • Can’t sell Bitcoin without breaking the core "never sell" narrative
    • Must pay Stretch dividends
  • Quote [Ryan, 13:55]:
    “There’s just like three different incentives for three different groups. And you can’t, you can’t juggle all of them... under duress, Saylor has to break one.”

• Market Sentiment:

  • Market has lost confidence in Stretch’s solvency.
  • Saylor is still buying Bitcoin, but at a much slower/lower volume.
  • Speculation is that he’ll either try to hang on for higher BTC prices or eventually be forced to sell Bitcoin to cover obligations.
  • No imminent “Luna-style” collapse expected, unless BTC continues to drop; likely “slow melting ice cube” if bear market persists. (15:32)
  • Quote [Ryan, 15:32]:
    “I don’t see the Terra Luna death spiral... but he could burn his bridges with the preferred share holders.”

• Market Odds:

  • Polymarket pricing: 48% chance BTC hits $45K, 50% chance $75K — high volatility and split sentiment. (17:27–17:58)

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2. Ethereum Ecosystem Restructuring: EF Cuts, ETH Labs Rises

• Ethereum Foundation (EF) Downsizing:

  • EF cuts 40% of budget, 20% staff (54 people), restructures into 5 clusters.
  • Moving from being the “lead” to merely one “node” in Ethereum ecosystem governance.
  • Emphasis shifted to security, privacy, censorship-resistance, and quantum resistance.
  • EF will reduce budget burn from 15% to 5% of treasury per year, possibly last Devcon in Mumbai. (31:53–38:02)
  • Quote [Vitalik via Ryan, 32:53]:
    “I personally favor a soft, lean and done approach to Ethereum... Once the straw map is completed... generally stick to security fixes and small high value changes and have a much higher bar for considering new features.”

• ETH Labs Launch:

  • New independent non-profit, spun out of EF, with major ex-EF technical talent (Ansgar, Casper, Barnaby, Josh Rudolph).
  • Intends to “co-develop” Ethereum and ETH, focus on L1 scaling, relevance, and rapid protocol progress.
  • Explicitly aims to help ETH “win” as an asset and drive real-world adoption.
  • Funded by commercial players and grants, not by EF.
  • Quote [David, 40:17]:
    “In contrast to the EF, [ETH Labs] wants to be important... Principles do not change the world until people benefit from them.”

• Ecosystem Implications:

  • Concerns and optimism about long-term execution capacity and legitimacy shifting away from EF.
  • Potential for funding and execution “crisis” if core devs are not adequately supported (Trent’s “Succession After Subtraction” post).
  • Quote [David, 47:02]:
    “Legitimacy tends towards power law pooling... so it’s difficult for new nodes to emerge when the EF sucks up all the oxygen.”
  • Hopeful that ETH Labs instills a “winning” mindset for Ethereum’s future.

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3. AI vs. Crypto: The Battle for Attention and Market Flows

• Why Crypto is Down:

  1. All Eyes on AI: Dramatic capital and mindshare shift to AI/AI stocks (Micron, Nvidia), draining speculative energy from crypto.
     • Quote [Ryan, 21:09]:
       _“Crypto is very much an attention economy... the attention shifting to AI...”
  2. Debasement Trade Paused: Global liquidity/currency debasement is paused due to China halting money printing and a strong US dollar.
  3. Four-Year Deleveraging Cycle: Bitcoin and the crypto market are in the "credit purge" part of the post-bull cycle; all excess leverage must exit before a new uptrend. (24:35–25:43)

• Arthur Hayes’s Thesis:

  • The AI/crypto cycles are counter-cyclical: “Sell the AI top to buy the crypto bottom.” When the AI “bubble” bursts, that’s when to rotate into BTC/ETH. (25:49–27:05)

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4. Real World Assets & NFT Parallels

• Trading Card Altcoin Mania:
  • Pokemon and trading card “altcoins” are surging as real-world assets, reflecting early NFTs dynamics.
  • Cards market is a “real world NFT” category with surprisingly robust economics. (27:05–29:14)
  • Quote [Ryan, 29:07]:
    “Seeing Pokemon cards go on a terror gives me some optimism for NFTs...”

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5. US Quantum Computing Push: Executive Order Analysis

• Major National Tech Priority:

  • President Donald Trump’s executive order accelerates US efforts in quantum technology.
  • Timeline to achieve quantum-resistant cryptography by 2031 (was 2035).
  • Building a national quantum computer for scientific (and cryptographic) purposes, deployment by 2028.
  • Quote [Trump, 52:44]:
    "Quantum technologies represent the next generation of innovation... we want to keep positive momentum going...”

• Crypto Relevance:

  • Serious concern that quantum computing could break Bitcoin/Ethereum cryptography sooner than expected.
  • Quote [David, 57:09]:
    “Bitcoin is not ready... Even Ethereum has so much to do.”

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6. Illinois’ Crypto Transaction Tax: A First in the US

• New “Privilege” Tax:
  • 0.2% tax on all crypto asset movements (“Digital Asset Privilege Tax Act”), effective January 1, 2027.
  • Applies to custody, transfers—possibly even self-custody moves; not a capital gains tax, but a punitive transaction tax.
  • Labeled “the worst crypto tax I've ever seen.”
  • Likely to face legal challenges and potential repeal, but is currently law. (57:25–59:43)
  • Quote [Ryan, 58:17]:
    “If you do anything to move your crypto assets... there’s a 0.2% tax. Not for stocks, not for bonds, not for Bitcoin (unclear)... Just for crypto.”

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7. Personal Portfolios & Market Outlook

• Host Portfolios:

  • David’s allocations: hype, vvv, near, zcash—all in green except zcash. Biggest weight: lit (Lighter), a ZK L2 perp DEX.
  • Discussion on architecture and team strengths, and the challenge of competing with industry giants.
  • Most recent new buy was in crypto; most capital still sits in stocks. (60:02–62:28)

• Macro Market Call:

  • High conviction that a market bottom is approaching (second half 2026), but could go lower before up.
  • ETH seen as discounted (“35% below the 200wk moving average”) and potential value buy.
  • Expectation of a comeback for major store-of-value coins (“majors”) as the cycle turns. (62:31–63:17)

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Notable Quotes & Memorable Moments

• [05:08, David]: “Does Bitcoin not care, and Bitcoin happens to Michael Saylor, but Michael Saylor does not happen to Bitcoin? I don’t know the answer to that.”
• [13:55, David]: “Saylor has to break a social contract...”
• [32:53, Ryan reading Vitalik]: “I personally favor a soft, lean and done approach to Ethereum... have a much higher bar for considering new features.”
• [40:17, David]: “Principles do not change the world until people benefit from them.”
• [52:44, Trump]: “Quantum technologies represent the next generation of innovation... really a big deal we’re doing today...”
• [58:17, Ryan]: “Just touching your crypto, there’s a 0.2% tax. Not for stocks, not for bonds...”
• [63:13, Hosts]: “ETH is 35% below the 200 week moving average...could be a deal.”

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Timestamps for Important Segments

• Bitcoin & Saylor’s “Three Bad Options”: 00:00–18:00
• Market Theories: Why Crypto is Down: 20:59–27:05
• ETH Labs & Ethereum Foundation Changes: 31:53–47:02
• Quantum Tech/Executive Order: 52:01–57:25
• Illinois Crypto Tax: 57:25–59:43
• Host Portfolios & Market Outlook: 60:02–63:17

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Tone, Style, and Language

The episode features the typical Bankless mix: irreverent, technical, occasionally meme-heavy but candid and unfiltered analysis. Both hosts speak with urgency and genuine worry about the market, acknowledge uncertainties, and use analogies (e.g., “three body problem,” “slow melting ice cube”) to explain complex scenarios. Notable for direct attribution and a blend of hopeful and skeptical takes.

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Conclusion

This Bankless Rollup uniquely captures a segment of crypto at an inflection point—rife with macro pressure, evolving governance, and technological disruption. Key takeaways: the MicroStrategy “house of cards” continues to wobble, Ethereum’s core governance is decentralizing and re-prioritizing, attention in the markets is a zero-sum game with AI, and quantum computing is fast becoming an imminent regulatory and cryptographic issue. For crypto investors, the message is clear—be aware, get lean, and prepare for rapid paradigm shifts as the cycle evolves.

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Transcript

[Donald Trump]

Foreign.

[Ryan Sean Adams]

Nation.

[David Hoffman]

It's time for the weekly roll up. It is the last week of June and for what feels like the third time this month, three or three out of the four weeks there is just blood in the streets. We got Ryan back this week. Back from vacation. You picked a bad time to come back from vacation. You should actually just go back on vacation.

[Ryan Sean Adams]

By the way, I came to find out if Michael Saylor is death spiraling, because that's what I heard.

[David Hoffman]

The whole microstrategy ecosystem, we are currently death spiraling. But like, you don't really know how far it goes. Maybe it's a baby death spiral. Anyways, Bitcoin is trading below $60,000. Master MicroStrategy is trading below $100 for the first time since March of 2024. And Stretch is trading at $74, billions of dollars off of where it ought to be, trading at $100. So strategies, they've got $1.7 billion in preferred dividends, obligations and like, like nine, 10 months of coverage left. So we're going to ask the question, is it all over for Michael Saylor,

[Ryan Sean Adams]

I think that means just nine months and then we'll be in a bull market. I think he planned this perfectly, dude.

[David Hoffman]

I think if Bitcoin, we'll talk about this. But the easiest solution is that bitcoin just goes up and then Michael Saylor's just free and clear, not going to

[Ryan Sean Adams]

be a problem at all. Also, I saw this. ETH Labs has just been announced. People are asking if this is the new Ethereum Foundation. It is not quite a fork, but is started by some former EF members. We'll talk about that. Also, the Ethereum foundation itself, reducing headcount quite significantly, like something like 20 to 40%. So is this a restructuring? Is this a crisis? What does Vitalik think about this? And there was an executive order as well coming to the White House this week. It caught my attention because they were talking about quantum. Apparently the US wants to build a quantum computer. And get this, they think, they think quantum relevant crypto relevant computers. Cryptography. Yeah, cryptography. According to Donald Trump.

[David Hoffman]

We got to watch cryptography.

[Ryan Sean Adams]

Cryptography. The cryptography relevant quantum computers could come as early as 2031 and they want all systems to be ready for that. So we'll talk about what that means for the us, what that means for our crypto protocols as well. David, before we get in, you got a shout out to make to our friends over at OkX.

[David Hoffman]

Yeah, OkX. So the ice, the Intercontinental Exchange, parent company of different ice.

[Ryan Sean Adams]

Different ice.

[David Hoffman]

The, the. The markets oriented ice. Yes. Which is the parent company of the New York Stock Exchange. They backed OKEx at a $25 billion valuation because they want to launch tokenized New York Stock Exchange stocks and, and derivatives later this year on OkX. Specifically this is TRADFI on one side coming to DEFI on the other. All in the same app. This is the new money App from, from OkX. Trusted by over 120 million users globally. OkX is bringing products to the United States. This is now a US company that Wall street has been talking about for years. And so if you are not on OkX, they are offering you a 6% deposit match using the link in the show notes. So click that and get onboarded to OKX and get your 6% unless you are in New York or Texas is not available to you.

[Ryan Sean Adams]

Sad. Sorry, sorry. New York. It's weird that it's Texas as well.

[David Hoffman]

Usually you don't, usually New York's common. Texas is not so common.

[Ryan Sean Adams]

Yeah, usually you don't hear that over there. It is good to have another exchange available in the US like more options are better. Specifically coming from the people behind the New York Stock Exchange. But David, let's get into the blood in the streets that you were teasing about. So show us some blood. This is bitcoin. And on the US price chart I think you have a moving average line here.

[David Hoffman]

Yeah. So these are four hour candles. This blue line going across my screen is the 200 week moving average which historically bitcoin just does not stay below the moving average, 200 week moving average very often. We are currently 5% below the 200 week moving average.

[Ryan Sean Adams]

I will say it did for a while. For a good bit. Several months. Many months in 2022, 2023. Bear.

[David Hoffman]

Yeah. Okay, let's zoom all the way out. I will say I think we, I think we talked about that last time. Like it has spent 5% of its time below the 200 week moving average and it's dominantly in the 300 days in right after FTX. The 300 days after FTX is when it spent basically all of its time below the 200 week moving average.

[Ryan Sean Adams]

So how many days will we spend below the moving average? What number is that? 62 right now.

[David Hoffman]

$62,400. And Bitcoin is trading at $59,500 right now.

[Ryan Sean Adams]

Yeah, we're in the 50s. We're officially in the 50s. Is some of that on? Due to some of the concern around the Michael Saylor universe?

[David Hoffman]

This is A question I have is, how big of a deal is Michael Saylor as it relates to the bitcoin price? Or does bitcoin not care and bitcoin happens to Michael Saylor, but Michael Saylor does not happen to bitcoin? I don't know the answer to that.

[Ryan Sean Adams]

They're two gravitational objects, right? Bitcoin is clearly the bigger one. But Michael Saylor is maybe a planet orbiting that star. Maybe he's a really big planet. Maybe it's also. Maybe this is a binary star system, too.

[David Hoffman]

If it's a binary star system, Ryan, that means that bitcoin is dependent on Michael Saylor, which in my mind means that bitcoin project has failed.

[Ryan Sean Adams]

That's sacrilege. Okay.

[David Hoffman]

Yeah, yeah. I mean, they have. Strategy has 800,000 and 850,000 Bitcoin.

[Ryan Sean Adams]

Yeah.

[David Hoffman]

Quite material.

[Ryan Sean Adams]

Yeah.

[David Hoffman]

Still, in the broad streams of things. It's. It's.

[Ryan Sean Adams]

What.

[David Hoffman]

What percentage is that of total bitcoin supply?

[Ryan Sean Adams]

Three. Something like that.

[David Hoffman]

God, that's a lot.

[Ryan Sean Adams]

Okay, but like, he. But, like. Yeah, yeah, I mean, fair point. But he is kind of the marginal buyer, and he is the. The bull of all bulls. Right. He sits on the throne of being, you know, chief bull officer of the bitcoin ecosystem. But what's happening over in microstrategy? Because you teased in the intro that. Yeah, let's just look at strategy was actually down. What is it down?

[David Hoffman]

What chart does this remind you of, Ryan?

[Ryan Sean Adams]

Down. Let me see. Down 7.

[David Hoffman]

25%. 25% off of. It doesn't have a peg.

[Ryan Sean Adams]

Okay.

[David Hoffman]

But I call it par. It's supposed to trade.

[Ryan Sean Adams]

Oh, this is stretch you're showing. This is not stretch. This is not mstr. Right.

[David Hoffman]

Yeah. Well, I'll show MSCR in a second.

[Ryan Sean Adams]

Okay. Can you remind people what stretch actually is and why this is significant that it's down so much?

[David Hoffman]

Stretch is actually. I'll just show you this ad. Do you remember this ad, Ryan? This is a AI ad of some babe in a pool in the Bahamas or like in Asia, drinking a margarita. And she goes, I'm not meant to live a comfortable life. I put all of my savings into stretch. What is stretch? Stretcher is a stock that pays me 11% a year in dividends for holding. Stretch. 11.5% paid monthly. So that's what stretches. It's meant to trade at $100, because when it's trading above $100, strategy just gets to hammer the ATM, and they meant more stretch, and then you pocket the cash, and then they can buy Bitcoin, with the cash they pay out. Also with the cash that they have, they pay out the dividends. And the supply of Stretch has grown so large that they have annual dividend obligations of $1.7 billion a year. And then they also have in reserve $1.4 billion. And so they have. And they also have debt obligations elsewhere as well. And so they have about 10 months. This is on their website. They have 10 months of dividend coverage for Stretch. But there is simply three things are going down all at once. The bitcoin price is going down. Mstr. I'll pull up MSTR now. MSTR is going down bad, very bad. And then also Stretch is going down. And so MSCR from the very tippy top is down 84%.

[Ryan Sean Adams]

Okay. Whereas Bitcoin is down what, like 6, 50, 60, 63, 53, 53. Okay.

[David Hoffman]

Yeah. So all of. All three of these things are down, which is really cornering strategies. Michael Saylor's options.

[Ryan Sean Adams]

Sure.

[David Hoffman]

When all three go down, he just doesn't have a lot of options. He does have time. He has 9.8 months of dividend coverage. So he has time, but he does not have a lot of options right now. And I guess the reason why Stretch is trading at 75, even though it's in theory supposed to be trading at a hundred dollars, is people are worried. It's like a lack of confidence of the solvency of Stretch. Because like, say, say, Ryan, I tell you, hey, Ryan, there's this company, it has amazing dividends. It pays you 11% dividends, but the company is going to go defunct in 10 months. Like, what's that company worth? Not $100 a share.

[Ryan Sean Adams]

Yeah. I think I would ask, like, what is the probability of the company to pay me back? Right. So how much cash do they have? And then like cash in dollars, because I'm getting paid in dol. And then I would say, what else does the company have in terms of their balance sheet to be able to sell, to go pay me back? Right. And of course, if you look at strategy, there's a lot of things they could sell. It's called bitcoin and there's tens of billions of it. And they could just sell some bitcoin and pay me back. But of course, in the three bodies that you described, a market sale of bitcoin at some level, that kind of tanks the bitcoin price, which isn't good for MST.

[David Hoffman]

He did sell 32 bitcoins. Bitcoin, the pre coin price did not respond positively. Yeah, he did sell this week a bunch of MSTR. So he sold MSTR, it was trading earlier this week at like 13 nav. Nav value.

[Ryan Sean Adams]

So, like, there's premium to nav is barely. Barely a premium to NAV.

[David Hoffman]

Barely above 1 30% premium is not bad. Yeah, but you know, it's barely a premium to NAV 1.03, which is where MSTR is today. The fact that it's still positive is actually incredible. But it was 1.05 at the time of. At when I woke up this morning. So it's down to 1.03.

[Ryan Sean Adams]

Wait, but wait. Okay, Strategy is still at a premium to nav.

[David Hoffman]

It's not under 3% premium to nav. Okay, so what does this mean? Is that the value of all of the bitcoin that strategy has, which is $50 billion, is what strategy is worth $50 billion.

[Ryan Sean Adams]

The stock, basically.

[David Hoffman]

The stock.

[Ryan Sean Adams]

So he can't do any more atm. He can't mint very much.

[David Hoffman]

Three.

[Ryan Sean Adams]

Well, no, no. He could go below if he wants.

[David Hoffman]

He can go below. But every time he does that, that's breaking a social contract.

[Ryan Sean Adams]

Well, yeah, I mean, every time he does that. I mean, we've talked about the way DATs are structured, right? Every time he. Like, bitcoin is scarce, but strategy stock is not scarce. So it does have a money printer. And the money printer has a name. His name is Michael Saylor. Because Michael Saylor owns massive amounts of strategy. So he's basically governance for strategy. So he can just continue to dilute MSTR holders and MSTR can get punished. That's why MSTR is down, what, 83% and Bitcoin is only down like 53%. Also, MSTR had a ridiculous MNAV premium previously. Totally, totally. It was like 2, 3x something like that. 4 at one time. It was insane. That couldn't last forever. But anyway, now he's right on the cusp of like, what does he do next type of question, right? It's like he's running out of tricks. He's running out of cards in the sleeve to pull out and just be like, I've got another bailout. And he also this week, make this make sense. He's still buying bitcoin, right?

[David Hoffman]

So it's. It started the week. The M. Nav of. Of strategy started the week at 1.3, is now down to 1.03 because they sold. They sold a bunch of Strategy to finance 300 more million dollars to add to the USD reserve, which is why they're at $1.4 billion. And then they also bought 520 Bitcoin for 35 million. So they still buying bitcoin? Still buying bitcoin.

[Ryan Sean Adams]

Not much.

[David Hoffman]

It's a little bit revealing that they bolstered the USD reserve by 300 million and only bought $35 million of Bitcoin. Like, it feels a little bit like a token buy of bitcoin. Yeah, you said the word. The three bodies. We're invoking this three body problem idea, which I got from Twitter. And this is a tweet from Pentosh. He said, I kind of feel like the market keeps telling Saylor he can't keep all three things. Stretch, MSTR and bitcoin. There's just like three different incentives for three different groups. And you can't, you can't juggle all of them because there's three social contracts here. And in the. Under duress, Saylor has to break one. So what, what are the three social contracts he can't sell? He can't mint new MSTR below an M Nav of one. Because the whole point of owning MSCR is that your bitcoin per share always goes up. And if he mints ms.mscr equity below 1, you're breaking that social contract. Like, why own MSCR when you can just own, own bitcoin at that point? You can't sell bitcoin because that's the social contract. That's the whole deal. You are the bitcoin buy guy. You don't get to sell bitcoin. That's another social contract. You only buy and you have a social contract to pay the dividends of your Stretch Equity preferred offering, which he only has 10 more months of. And so under duress, Saylor has to break a social contract. And I think when Stretch trades at a 25% off of the par off of the $100 peg, I think that is the market saying that they think that they might get the short end of the stick.

[Ryan Sean Adams]

Sure. I mean, Jeff Dorman had a take, which is basically like what probably the 70% probability is. Michael Saylor will continue to do what he's doing, which is continue to ATM mint strategy as long as he can every month and just hope things get better with the bitcoin price. And that's what he's doing. That's the course that he's playing so far. And maybe he'll be able to build enough Runway so that some of these other bodies in the three body problem don't, don't spin off and cause him bigger issues. But there is always the possibility here. And he knows he has this card to rip off the band aid, sell 3 to 4 billion of bitcoin and then just, you know, be like, hey, stretch holders. See we have it. Maybe he could use some of that cash to actually buy some sdrc. Yeah, that could be value accrued. Accretive if he gets that at a discount too. MSTR holders and like that's probably what's going to happen. One of those two options. I don't think he is like, I don't think unless this goes on for a long time, I don't see a death spiral scenario here. Unless bitcoin death spirals down, of course. Or like the more probable scenario if you're kind of like bearish on market conditions is that it's just like a slow melting ice cube. I think Austin Campbell made this remark in a recent post I saw, which is just like over five years, this whole thing could like melt away if bitcoin doesn't get the creative price performance that all investors expect. And that quite frankly, you and I expect. So I don't see the Terra Luna death spiral still.

[David Hoffman]

I definitely don't see that.

[Ryan Sean Adams]

But like if I, you know, there is the possibility that he burns his bridges with the preferred share STRC type of instrument and that those like holders get pissed and you get wiped out, you mean? I don't, I don't think they'll get wiped out. But they can't be happy. They're not happy now. No. I mean, no way is anyone happy with this trading like 24% off of the.

[David Hoffman]

No, not when I saw, not when I saw this babe, this babe drinking this margarita. And she said, asking, answering the question, why is her lifestyle so good? And her answer is, I bought Streff. No, anyone who listened to this ads not happy.

[Ryan Sean Adams]

Yeah, that's right. And of course there's bears like Peter Schiff. I see all over Twitter warning that this is the bitcoin bubble that, you know, it's going to like basically dancing with glee that this is happening and

[David Hoffman]

voting for in my head is like Peter Schiff is getting really loud right now. I will say that like there like, I think Michael Saylor's backed up against a corner with Stretch because he truly can't. Like the idea with Stretch is like in theory, theory, they have no claim on the bitcoin. We don't have to sell the bitcoin. In theory, they could be wiped out. They have no legal claim. But then you have like this, the AI ad of the, the Babe, drinking the margarita, I'm like, dude, that is a lawsuit waiting to happen. Sure. And so he, legally speaking, he probably doesn't want to go down that route. Even though he might technically check out. Like, it's still going to be messy. And I, I, the thing that he's been doing, which is minting and hammering the ATM MSCR seems to be the, the path of least resistance.

[Ryan Sean Adams]

Yeah, I still think it's going to work out.

[David Hoffman]

I don't, like, I kind of think it's still going to be okay.

[Ryan Sean Adams]

Maybe not. Maybe not. And it depends what, it all depends on what bitcoin price does, really. Right, right. Speaking of that, what's the polymarket saying on the week price predictions? Because it's been a while since we

[David Hoffman]

looked at this bitcoin. Polymarket is giving Bitcoin a 48% chance of hitting $45,000, a 31% chance of hitting $40,000. And it stops there. Yeah, yeah.

[Ryan Sean Adams]

What about the upside?

[David Hoffman]

The upside, let's see. We have a 50% chance that it hits $75,000. And this is all in this year. This year, 2026. So there's equal probability that Bitcoin hits 75,000 as it does 45,000. Yeah.

[Ryan Sean Adams]

The bearish numbers are growing. Should we check in on our little friend eth, David?

[David Hoffman]

Yeah, yeah, let's check out, let's check in this, check that out. ETH is not looking great. It's not looking great.

[Ryan Sean Adams]

Is that Blue line, the 200 week as well?

[David Hoffman]

Yes, yeah, the blue line.

[Ryan Sean Adams]

Well below the blue line.

[David Hoffman]

The, what's notable to me is that the Blue line, the 200 week moving average is not going up.

[Ryan Sean Adams]

Like that's just, it's an ugly 200 week.

[David Hoffman]

Yeah, it's a flat, it's been flat for over a year.

[Ryan Sean Adams]

So It's a cycle.

[David Hoffman]

ETH is now 36% below the 200 week moving average, which it's never been.

[Ryan Sean Adams]

It spent some time below though, in 2025. Right. The whole tariff thing.

[David Hoffman]

Right, right. Oh, yes. And it was here. And then Tom Lee came in and hammered $18 billion into ETH. And ETH hit all time high and we're kind of back to that same price range again.

[Ryan Sean Adams]

Okay, well, more on Tom Lee a bit later in the episode. How are regular markets doing? How the trad markets?

[David Hoffman]

Okay, yeah. Let's look at the indices. There's been a little bit of a toppiness in the indices. Like you can kind of see it like rolling over at the top. This is the S and P But really in the grand scheme of things, it's fine. Like we're down 3% from the top at the. Of the S and P. The NASDAQ's doing the same thing. There's definitely been a lot of market volatility. You might have noticed, Ryan, that your portfolio got absolutely obliterated in overnight trading on Tuesday of this week. Yeah, this happened because South Korea, South Korea regulators made some comments about cautioning retail investors on leveraged ETFs. Apparently. Leveraged ETFs. You're going to get, you're. I wonder, I wonder what ETFs. Semiconductor ETFs. Leverage. Semiconductor ETFs. In South Korea. Regulators were like warning about them. And then as a result of that, the South Korea's benchmark K O S P I index plunged 10%. They triggered a 20 minute halt. People got liquidated. You know, people got carried out. It was a very brutal day. And then it carried over into our market. So on Tuesday, that's why The NASDAQ fell 2.2% and the S&P dropped 1.4%. But then, Ryan, you know what saved the day? You know what the entire, what the new Nvidia is what's Micron MU earnings got posted yesterday and they just obliterated earnings. So they had $41 billion in revenue, which beat an estimate of $36 billion.

[Ryan Sean Adams]

Incredible.

[Donald Trump]

Yeah.

[David Hoffman]

Wild. And then their, their Q3 revenue is up 75% from Q2. Wild. This is the thing that's already trading like well over a billion dollars, this thing. If you bought MU Ryan in January 1st of this year, you would be up 330.

[Ryan Sean Adams]

Don't tell me that I don't want to.

[David Hoffman]

330%.

[Ryan Sean Adams]

That's amazing. 6.

[David Hoffman]

Incredible. So MU earnings came in yesterday and it was very, very good. And it, and like every single day, every single week, the market is like, is the bubble, is the bubble popped? You know, is the memory stonks over? Like, is the AI trade over? And it seemingly every single week we have something like this and it's like, no, no, throw the dice again. We're back in it. We got more.

[Donald Trump]

We got more.

[Ryan Sean Adams]

I have a take on this. I've, I have three reasons why I think crypto. The crypto market is down. When I, when I zoom out, when I've been thinking about this over the past couple of weeks. You ready for it?

[David Hoffman]

Sure.

[Ryan Sean Adams]

All right. The first reason is basically exactly what you said. All the attention, all the auction in the markets, all the capital is in AI. And so crypto is very much an attention economy. I mean, I think a store of value asset of which, like Bitcoin is predominantly most of the crypto economy. And then ether another store of value is still the underpinning of the crypto market cap. Right. And that is very much an attention asset. It's very much a memetic like gold is too. But gold has 5,000 years of history here.

[David Hoffman]

Yeah, you don't need as much attention on gold.

[Ryan Sean Adams]

You don't need because it's always been here. There's always the gold bugs. There always will be at some level. But crypto's really suffering from the attention shifting to AI. That's the first one. It's probably pretty obvious. Yeah, everyone's looking at Micron and Nvidia and they've moved their capital and attention from crypto. But I think it bears repeating. The second is the debasement trade is on pause. And we could see evidence of this in the gold price. So gold is creeping closer to $4,000 per ounce.

[David Hoffman]

Do you remember which is down, right?

[Ryan Sean Adams]

It's down, right. It was 5,300 or so at the high when Peter Schiff was dancing on the other side. It's down significantly since Michael Howell actually had a great post on this and he talks about the reason why it's on pause and it's because over the past few months China has really paused on kind of their money printing printer and so the liquidity has actually reversed. Coming out of the pboc, he's not actually sure why people aren't sure why. He points to maybe the Iran conflict causing China just be like, oh, pause, we don't want more production, we don't consume more oil. But for whatever reason they have paused liquidity, the dollar is strong. The Fed isn't printing much more liquidity. So liquidity cycle has changed. And he thinks this will be temporary. But as long as that is happening, the debasement trade is not gone, but it's just on pause. It will resume because it has to resume because you've seen the charts, you've seen US debt to GDP ratios. China's in a similar situation from real estate, all sorts of things where they need to print their way out too.

[David Hoffman]

All government things for liquidity. Was the Trump administration doing their damnedest attempt to doge the government and then the spending linearly increasing upwards?

[Ryan Sean Adams]

Yeah, but people are like, oh, the debasement trades, it's over, right? Gold is going, Bitcoin's going. It's not over, it's just on pause right now. And that's how it was always going to work. It would pause and then resume. So but this paused right now. The third reason is this. It's just the four year cycle. David and Michael Nadeau four year cycle unfazed. It's unfazed. And Michael Nadeau wrote a post this week that I thought was really good. It was just talking about what we have to do every four years. You talked about the reason why is we have to deleverage. And so this is the realized price here, 1.9 trillion in Bitcoin. This is the valuation we got to in the last bull cycle. 2.5 trillion. That premium from the realized price, the amount everyone bought in at effectively and the valuation, that $1.5 trillion premium, that was all a lot of credit. It was perps, defi loans, stablecoin loans, centralized, all of these loans on top of that. And every single four years we have to purge the credit, the excess credit.

[David Hoffman]

Is that what we're doing right now? We are purging.

[Ryan Sean Adams]

That's what we're doing. We're purging all of that credit.

[David Hoffman]

Michael Saylor's got to cough something up, dude.

[Ryan Sean Adams]

Well, he took on some leverage. Like leverage is sin, right? So he took on some leverage. He didn't take on a lot, but like, yeah, I guess he did take on much more than he has in previous markets. So maybe he'll have to cough it up, maybe he won't. But this purple graph right here might have to get close to the blue graph, might have to even get below it. And in previous cycles it's gotten about, you know, 20 to 30% below it. This is realized price below it. If you want to translate this to bitcoin, price below 54k. Okay, so those three things are happening. We have AI attention dominating. Unless AI attention slows, it's hard for crypto to get a run. Secondly, debasement trade on pause. You could see this in the global liquidity. And then third, it's the four year deleveraging cycle that we're seeing. So some of this has to get washed out and deleveraged. No, I don't think crypto is over. No, I don't think it's like the end. This is just the point in the kind of the big meta cycle that we're in.

[David Hoffman]

Do you listen to my episode with Arthur Hayes?

[Ryan Sean Adams]

Not yet, no.

[David Hoffman]

He's got an interesting brand right now in crypto Twitter.

[Ryan Sean Adams]

I think some of his brand is like Grifter Schiller. And dump, like pump and dump type of brand. That's what.

[David Hoffman]

Yeah.

[Ryan Sean Adams]

Is there a little bit of that?

[David Hoffman]

That's not what I talked to him about. I just kind of moved on to just like he has this broader idea of you want to sell the AI top to buy the crypto bottom. And those things will happen at the. Roughly around the same time. Potentially. Potentially. He gave a bunch of reasons as to why it will be a bubble.

[Ryan Sean Adams]

Okay.

[David Hoffman]

And then why it will pop. And then in like classic Arthur fashion, he's like, this credit event is going to be bigger than 2008 and the government is going to start printing and that's when you want to buy Bitcoin. But like, like the details of that I'm sure are going to be incorrect. But directionally I find it very interesting of just like there's going to be AI. The AI trade is going to get wiped out at some point. Like some, some people made way too much money way too quickly and they're going to get wiped out.

[Ryan Sean Adams]

Sure.

[David Hoffman]

And it seems like there could be a timing there of like crypto can't live until AI dies.

[Ryan Sean Adams]

I think that's right.

[David Hoffman]

I think it's a, it's a narrative.

[Ryan Sean Adams]

I don't want AI to die.

[David Hoffman]

I don't want AI to die. But like it's a narrative that I am interested in tracking.

[Ryan Sean Adams]

Yeah. Meanwhile, the only crypto asset that is pumping, you call this chart, into the agenda, is something called cards. Is this a real world asset for Pokemon cards? David?

[David Hoffman]

That might actually be what it is. Pokemon cards. The whole gotcha universe is pumping right now.

[Ryan Sean Adams]

What's the gotcha universe?

[David Hoffman]

That's like, it's like. I don't know why it's called that, but it's the, it's the, it's the trading card ecosystem.

[Ryan Sean Adams]

Okay. Pokemon cards.

[David Hoffman]

Pokemon cards. There's like, there's one piece cards. There's other cards out there that are trading.

[Ryan Sean Adams]

Okay.

[David Hoffman]

But dude, these are just like altcoins for millennials. But they're real Pokemon cards. And like there's a huge trad real world asset like non crypto trading card ecosystem happening. Kind of like how people are like buying and selling Rolexes in Covid.

[Ryan Sean Adams]

Yeah.

[David Hoffman]

Some of it is making it on chain and cards. Is that cards is like a virtual platform for buying and selling Pokemon cards.

[Ryan Sean Adams]

I never thought about this, but it'd be interesting to go deep, deep dive in the Pokemon cards ecosystem and just understand how the, the central fiat issuers of Pokemon cards, how they like manage supply, like how they make sure that they don't print too many Pokemon cards or like what that because it's an economy that they built.

[David Hoffman]

It's a pretty valuable one that's in the buildings. There is a little bit of that. And I asked Andy, Andy 8005.2 he's running Monster and it's literally just like a virtual you can open up Pokemon cards virt and he literally has a treasury of Pokemon cards. And he said that like Pokemon as a brand they did a very good job maintaining the brand and preserving the value of the OG OG cards while still minting new cards that are different. And a brand that failed at that was Yu Gi oh where they just hammered the ATM if you will and they they over inflated their cars and they destroyed the value for all the collectors. So there's a little bit of an art to the issuance of new editions of cards because you to preserve the value of all your old cards.

[Ryan Sean Adams]

I swear seeing Pokemon cards go on a terror makes gives me some optimism for NFTs. Again, the rise of NFTs. These are just NFTs.

[David Hoffman]

These are just NFTS.

[Ryan Sean Adams]

They're real world NFTs. David, we got more to talk about. The EF is cutting back but ETH Labs is stepping in. What does this mean for Ethereum? All that number of other topics we'll see in a minute. But before we do we want to thank the sponsors that made this possible.

[David Hoffman]

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[Ryan Sean Adams]

That's pretty big still.

[David Hoffman]

That's pretty big. There's a restructuring into five clusters. So there's now clusters at the EF and it's the EF is now kind of just intentionally framing itself as just one node among many when it comes to like the stewardship and direction of Ethereum. On the other side of the aisle, ETH Labs was launched as a new independent nonprofit research and development lab with a just a kind of a different emphasis than the ef like ETH as an asset and Ethereum, the network being co developed, placing Ethereum to be the settlement layer of the global economy. Putting points on the board for Ethereum trying to win. And so ETH Labs is entirely compromised of former EF technical talent. Some very big names. Ansgar, Casper, Barnaby, Josh Rudolph, Julian Ma. If you're in the Ethereum world, you recognize these names. So it's kind of a little bit of a tale of two cities going on here.

[Ryan Sean Adams]

Yeah, I guess maybe let's talk about the EF their structure and getting smaller. So Vitalik put together a post. He actually ends this post and said this the past years have been challenging era for Ethereum. I think a lot of ETH investors certainly feel that a lot of people in the Ethereum ecosystem feel that too. Good to see him put that into words. He said I personally favor when talking about this post was revealing because there's a number of Vitalik thoughts which are always very important for the stewardship of Ethereum on ossification of the Ethereum Protocol he says this I personally favor a soft, lean and done approach to Ethereum Once the straw map is completed that's the current Ethereum roadmap generally stick to security fixes and small high value changes and have a much higher bar for considering new features. So I think the idea here is that the current EF structure and funding gets it crops. That's censorship, resistance, it's open source privacy, security, those being kind of the priorities. And then once the straw map is done the role of the EF shrinks even further still. And so this post was I thought good for Vitalik. I'm glad that somebody from the Ethereum foundation publicly addressed this. Glad that Vitalik did because what we were seeing over the past three to six months was kind of a leakage of what we thought were key people in the Ethereum Foundation. I mean starting with Tamash but then Chowei, the other executive director, leaving a number of high profile departures. Now some of those have have joined this new org that we're going to talk about in a second. But you know Vitalik has been pretty much pretty quiet on this until now. So I guess it was all culminating in this.

[David Hoffman]

There's another post from Bastian who is the new current executive director of the ef making a probably a pretty clear post about what the scope of the EF is moving forward. So he he started with what the EF is not going to be for the EF is not for going to be like important. He the EF is not trying to make itself important is the EF is not for corpo.

[Ryan Sean Adams]

That's clear. I mean I feel like that's been super clear for a long time.

[David Hoffman]

But okay, the EF is not for corpo appeal or for ecosystem popularity.

[Ryan Sean Adams]

All right.

[David Hoffman]

We are not here to please short term speculators or prop up TBTF neo SIFIs. I don't know what that is.

[Ryan Sean Adams]

What is that a TBTF neo Sifi. Let me look that up while you're going through it.

[David Hoffman]

And then also there. The EF is not for marketing every app on Ethereum. What is the EF for? Is eliminating Ethereum weaknesses. So they want the EF to help defensively strengthen places where Ethereum is or still can become extractive, totalizing or vulnerable to cartel or state capture. So. So crappy stuff like what? What is the EF doing? It's narrowing this focus onto crappie stuff. Something that he said was the EF exists too hard in every surface of Ethereum crop is the centers of resistant.

[Ryan Sean Adams]

Yeah, yeah, yeah.

[David Hoffman]

Privacy, security, all that kind of stuff.

[Ryan Sean Adams]

I was glad that they put some priorities here too. Privacy being one of them.

[David Hoffman]

Also quantum resistance.

[Ryan Sean Adams]

Quantum resistance, which is huge. We'll talk about that later. Now with the dates, you know, continuing to. I guess you'll fall back for when we'll get a quantum breaking computer. That seems even higher priority. There's even some question whether Ethereum will be ready, let alone Bitcoin. But having that as a centerpiece, if the EF was just able to deliver that, that would be actually incredible. My favorite part of Bastian's post was actually this where he talked about Eth the asset. Glad they said Eth the asset. Making Eth normal digital cash is how he put it. He defined it like this. A private dignity respecting, debasement resistant and surveillance resistant medium of exchange and store of value as well as the native asset of private computation and private coordination for both humans and their agents. So good to see some emphasis on Ether the asset and not just Ethereum the network. Something that I know you love to see and I love to see as well. And so I do have a definition for TBTF NEOsIF. Yes. Too big to fail is TBTF and CIF is a systemically important financial institution. So it's big banks basically. So that was the departure from the ef and then we had Eth downsizing

[David Hoffman]

and restructuring and narrowing of scope over the EF. An important point about the EF is that they were consuming 15% of their treasury per year. That was in their intentional part of their treasury strategy as the run and maintain structure of the EF. And now that is going down to 5% of the EF budget per year. They're also, I think just downsizing some mega projects. So this might be the last devcon, the devcon India Mumbai. So things like this. So they're just really leaning up and kind of hunkering down, which needed to happen.

[Ryan Sean Adams]

Right. Bobby Ong from. From. Coingecko makes the. The organization was 270 people before they laid off 20% of their staff. And Telegram has a total team side purportedly of like 50 people. Yeah. Hyperliquid. I don't know. What are they, like a dozen?

[David Hoffman]

14. Yeah, 14.

[Ryan Sean Adams]

So 270 is a lot of people for developing a crypto protocol. Right. So maybe they just needed to lean down, as all organizations eventually do.

[David Hoffman]

Should probably keep going.

[Ryan Sean Adams]

Dimash was pretty favorable towards this too. I don't know if you saw his post on this. Did you read this?

[David Hoffman]

Tell me.

[Ryan Sean Adams]

He basically said this is generally the direction that I would have wanted the EF to go into. So he's pretty supportive. But he ends it with this. He says my biggest worry is about execution. If you look at the diagram, this diagram of all the different seven areas, he said it's still pretty messy, pretty unclear the structure. Maybe it's too hierarchical rather than flat. And so he said this mostly likely reflects the team's challenges in controlling pressures for people to keep titles, people keeping titles, General Org stuff. Right. Like the EF is not immune to the bureaucratic tendencies of governments. And I think that's sort of some of the malaise that has. That has befallen the structure over the past 10 years.

[David Hoffman]

I mean my confidence in the EF fixing itself and like, like becoming new again and being effective, like I've. I just don't think that's where it's going to happen at the ef. And so yeah, they're leaning up, but it doesn't mean that they're turning into this polished, well run organization. It kind of seems to be that this, the lack of being well run is a little bit intentional by design because they don't want the EF to be like important. Maybe.

[Ryan Sean Adams]

I don't know. This seems like a step in the right direction for sure. But let's talk about what at least I am more bullish on. And I think you probably are too. Tell me about ETH Labs. So this is a net new entity. We got a blank canvas. We can do this thing right with this organization. What is ETH Labs? Who is behind it?

[David Hoffman]

ETH Labs. In my mind, this is my words, not theirs. I'm recording with Onsgar and Casper tomorrow. That episode will come out on Monday.

[Ryan Sean Adams]

Some of our favorites from the ef.

[David Hoffman]

Yes. Yeah, the. The. I don't like to pick favorites, but I really like Casper and Osgar. Yeah, I'll say that like ETH Labs, in contrast to the ef wants to be important. Here's, here's a line out of ETH Labs that I really like. Principles do not change the world until people benefit from them. And the reason why that's important is just speak through the lines is like, sure, a lot of Ethereum's values, the crops, the decentralization, the censorship, resistance is great. It doesn't matter if those things aren't relevant. And I think ETH Labs is trying to make Ethereum as relevant as possible. And so like I said, this is Onsgar, Casper, Barnaby, Julian Ma, again, some heavy hitters with funding from Bit Mine, Sharplink, a handful and like a number of other, just individual contributors. And so this is where they're getting their funding from a bunch of grants

[Ryan Sean Adams]

from organizations, commercial entities.

[David Hoffman]

Commercial entities. And they have a whole, they have a whole website. And so this is, think of this like as a small, lean, refined group of very competent protocol specialists who want to do things that the EF isn't going to do. And this has to do with scaling. I think like layer one scaling is now kind of in the realm of ETH Labs, because I don't think the EF is taking on layer one scaling. And so ETH Labs is now doing layer one scaling. And they are, I think they're kind of still working on exactly what like step one, step two, step three is. But this is really about an organization that wants Ethereum to put points on the board. Yeah, there's like this one central slot in the crypto world where they're single settlement layer for all of Internet finance. Ethereum is the only ecosystem that fits in that slot. And they want to make sure that Ethereum inhabits its spots to the best of that ability. And so this, this is the ETH is winning. Ethereum is winning Org in my mind. Whereas the previous one was like, we're indifferent to Ethereum.

[Ryan Sean Adams]

I mean, the hopeful vision here is this is like a Bronze Age mindset, Lean ef, basically that wants to win. And I really did like their thesis, as you said, part of it. But they also said this. We believe ETH matters, the asset. It's called ETH Labs, guys. It's not called Ethereum Labs. The most valuable programmable store of value is how they define it. A decade of broad distribution, deep liquidity, maximally trustless asset on Ethereum. Yes, that's exactly it. That is something I was never convinced the EF fully believed. I know Justin Drake, I know some members of the EF believed it. It was never convinced that the EF fully believed that. Or for that matter, Vitalik fully believed it. They also said this. We believe defi matters. Thank you. That's the use case. That's one of the four points of the pillars of their thesis. And we believe adoption matters. I believe those three things, too. I wasn't sure that the EF prioritized those three things. So it's good to see an organization spin up and do it funded by people with commercial interest in this too. So this is a nonprofit, but commercial interests are funding it. So Tom Lee has got $300 million in staking revenue that he throws off of EF staking every year. How much does it cost to fund this team, do you think?

[David Hoffman]

Not that much.

[Ryan Sean Adams]

Couple million?

[David Hoffman]

Not that much. Not that much.

[Ryan Sean Adams]

And so what a great RO salary

[David Hoffman]

that they're used to getting from the ef. Their expectations are probably pretty low.

[Ryan Sean Adams]

I'm glad. Now. Now the question for me is, of course, any new or can they execute? Will they be able to. And what parts of the roadmap will they execute on? Will there be conflict? Will the Ethereum foundation be like, no, you can't work on single slot finality or whatever they try to work on, because we've got that. I don't know how this is all going to be worked together, but good to see the blood stay in the Ethereum ecosystem and for us to have a new org to actually propel the platform and vision forward. So I'm bullish. I'm like cautiously bullish because it's a new org. But imagine these developers and protocol engineers leaving the Ethereum ecosystem.

[David Hoffman]

Oh my God.

[Ryan Sean Adams]

Joining in another blockchain company or something,

[David Hoffman]

or going to AI or whatever.

[Ryan Sean Adams]

And they didn't. They stayed here. And so I think the net story here is actually bullish. Ethereum. At least that's my interpretation of it, but we'll see.

[David Hoffman]

Yeah, the timing of the EF announcing their restructuring plus the launch of ETH Labs. Maybe, maybe that's coincidental, but I think it's very illustrative because now the EF is explicitly saying that they just want to be one node in a network. And ETH Labs is like, hello, we are also. Thank you for the invitation into this network. We are also a node on this network. Power Dynamics, I think are TBD to be.

[Ryan Sean Adams]

Well, EF did not fund them. Notice. That's what. That's kind of interesting. I'm sure they had the option to fund them.

[David Hoffman]

Them, probably. But also like they're. The EF is in potentially a funding crisis. We'll Talk about that in, in a hot sec. Like, maybe it's like, oh, like, get, get Tom Lee to do it. He's got plenty of money. But, like, who has the steering wheel there? There's a huge synergy here in my mind where like the ETH Labs is looking at the EF and being like, you guys got crops. And Vitalika is like, yeah. And Bastion is like, yeah, we got crops. Crops. We are taking care of crops. So now ETH Labs doesn't have to worry about crops because the EF's got it and the ETH Labs is gonna worry about like market adoption, scaling, you know, commercial relevance. And those two things are synergistic. But I do imagine there being like, who, who's got how many hands on the steering wheel? And the thing is like, Ansgar, Casper, Barnaby, Julian, Josh, these people are very influential when it comes to the EIP process.

[Ryan Sean Adams]

Like, they are earned legitimacy.

[David Hoffman]

They have earned legitimacy. And so I am hoping that we can take some of the power, the leadership power of the EF and like, orient it towards ETH Labs and that not to be, not to be like, dominant, but, like, let's give ETH Labs some, like, leadership over the direction of Ethereum.

[Ryan Sean Adams]

I think we will. I think that's exactly what's happening. I think this is part of kind of a new era for Ethereum that's just starting to build. But you mentioned a funding problem or a funding crisis. I've heard other people talk about that. Is that Trent's take here? So Trent was formerly EF of the Protocol Guilds. I'm not sure if he's still in the Protocol Guild, but he had a post this week called Succession after Subtraction. What was he saying?

[David Hoffman]

Yes, a handful of points here. His first points, which kind of echoes what I was just talking about, is that legitimacy tends towards power law pooling. And the EF still holds quite a lot of legitimacy. There's the Ethereum brand. Vitalik is at the EF. The EF has the pre mined treasury. They own ethereum.org, they own Ethereum. At Ethereum on Twitter, they have a decade of just Lindy. And there's a ton of just legitimacy pooling that all kind of concentrates there. And so he's illustrating it's difficult for new nodes on the network to emerge when the EF sucks up all of the oxygen, whether it wants to suck up the oxygen or not. However, he is saying also at the same time that there is just like a funding crisis. So $30 million a year of core dev funding. It costs the EF with their limited budget remaining. And so to some degree they are giving up. There is a open window of opportunity for a new organization with new funding to come in because there's that power vacuum being set up. But I think what's Trent's real point is, is that we need legitimacy to be spread away from the ef. That's the succession part, but also the difficulty in doing so. That's kind of the through line of the article.

[Ryan Sean Adams]

I got Trent's post. I kind of disagree with parts of it because he talks about a funding crisis, but I think there's actually an execution crisis in Ethereum. It's like a shipping crisis. Yeah.

[David Hoffman]

What's the point of funding incompetent shipping?

[Ryan Sean Adams]

That's right. If you talk about 30 million a year and let's take that number, let's say that that's 10% of what on eth staking every year. 10% could defund the whole thing. You think he's not. You think the ETH stakeholders are not willing to do something like that? I think they would do it to a competent organization that could execute, that could actually move the dial on Ethereum, the asset. So I think that's where the EF has fallen short in some ways. And I think this legitimacy shift will happen so long as other organizations step up and are able to execute. So this is all good. This part of the process is just like taking way longer than I hoped it would.

[David Hoffman]

Can I give you a bit of a teaser for this? These are Onsgard's words. That's part of the ETH labs and a little bit of a teaser for the episode that I'm about to record with them tomorrow.

[Ryan Sean Adams]

Okay. Yeah.

[David Hoffman]

ETH labs wants to co develop Ethereum and eth,

[Ryan Sean Adams]

I don't know, Co develop Ethereum and eth.

[David Hoffman]

Yeah, yeah. They're an Ether. Ethereum RD lab. Yeah. I thought it was the hottest line ever. Why are you so muted? I was like, we need co develop.

[Ryan Sean Adams]

Co develop.

[David Hoffman]

They're going to develop Ethereum.

[Ryan Sean Adams]

But oh, the two things together to

[David Hoffman]

ETH and Ethereum together they are going to co develop. Yes.

[Ryan Sean Adams]

Okay, that's hitting me different now. Thank you. Say it like that the second time it hit me. David, we got more to discuss, including the Illinois governor signed to the worst crypto tax I've ever seen. I can't believe this is real.

[David Hoffman]

I saved this part of it for when you were back. I didn't want to talk about this with Tom I want to talk about.

[Ryan Sean Adams]

This is going to be so fun to talk about. All right, we'll get to all that and more. But before we do, we want thank the sponsors that made this episode possible.

[David Hoffman]

In 2024, emerging markets generated over $115 billion in annual yield for investors. With yields ranging between 10 to 40%, these are some of the highest, most persistent yields on earth. The problem? Defi can't access them. BRICS changes this. Built on mega Eth, BRICS takes emerging market money markets and sovereign carry and turns them into composable primitives you can access straight from your wallet. While DeFi investors earn 3.3-6% on stablecoins and T bills, institutions have been harvesting 10 to 50% yields backed by sovereign monetary policy. BRICS connects these worlds with institutional grade tokenization, local banking rails compliance across jurisdictions and real time stablecoin settlement. Bricks does the heavy lifting so Defi can finally access real collateral and structured products on top of real world yield. Even the best carry trades can be within reach. Bricks brings DeFi's promise to the emerging world world and brings emerging market yield to your wallet. Let the yield flow with bricks.

[Ryan Sean Adams]

Some exciting news. We are launching a new podcast to help people figure out the crypto cycle, how to navigate it. The best crypto cycle investor I know, his name is Michael Nadeau. He runs the Defi Report. This is the guy that sent me a sell alert before the 10:10 price drop happened. His cycle analysis has been absolutely on point. I've been following him for years and this year we started recording weekly podcast episodes. Each one we get into his portfolio, what he's holding, the market structure, entry targets, fair market value of Bitcoin and ether and where we are in the cycle, there's new episodes that are released every Wednesday. They're 30 minutes, they're short, they're punchy. I think this crypto cycle is harder to navigate than most. So let's do it together. Go subscribe to this podcast, Search the Defi Report Wherever you get your podcasts, YouTube, Apple, Spotify or find a link in the show Notes. There's a new episode waiting for you now.

[David Hoffman]

Ryan, I think think everyone reasonable will say that the Donald Trump presidency is mixed. You know, maybe, maybe there's some good things, but there's definitely some bad things.

[Ryan Sean Adams]

Sure.

[David Hoffman]

One positive thing I will firmly say about the Donald Trump presidency is their approach to technology is serious and correct.

[Ryan Sean Adams]

It's much better.

[David Hoffman]

Yeah, it's much better. They're taking like structurally important technology very seriously and we're hitting the gas pedal. So this week out of the White House, a tweet that said, investing in American quantum leadership like never before. President Donald Trump signs executive orders on quantum supercharging, a national effort and innovation in quantum technologies, ensuring national security and continuing American growth in a critical industry. Yes, correct. Full points. Let's listen to this clip right now.

[Donald Trump]

Quantum technologies represents the next generation of innovation across computing, sensing and networking with enormous significance for our country's economic growth, scientific research and cyber security. It's really a big deal that we're doing today and country is doing really well. As you know, in 2018, I signed the National Quantum Initiative act into law, which led to doubling the federal government investment in quantum research and development. I think you all know about that. That helped unleash billions of dollars of private investment in America's quantum industrial base, promoting significant scientific and technological progress, like progress like we've never seen before. Actually. We want to keep that positive momentum going in America with the orders that I'm signing today. And these will really have a, I think, place it a big step forward. We're already the leader by a lot and we're going to be now the leader by a lot more.

[David Hoffman]

Great job. Love it. Taking it seriously. That was a serious clip. Sorry, Ryan. I have one more clip that I want to play. This is a hilarious clip.

[Donald Trump]

We're going to be investing in American quantum leadership like never before to stay ahead of the pack. We're way ahead right now. We'll keep it that way. The second order I'm signing directs federal agency to transition to what is called quantum cryptography. Do you know what that is?

[David Hoffman]

Does anyone know what that is?

[Donald Trump]

Very soon? So you're going to find it.

[Ryan Sean Adams]

Quantum cryptography. That's amazing.

[David Hoffman]

Does anyone know what that is?

[Ryan Sean Adams]

That's great. Well, we know a little bit of what it is talking about on Bankless for the past couple of years.

[David Hoffman]

There's a little bit. Okay, let me, let me summarize everything in the executive order.

[Ryan Sean Adams]

Yeah. What's in this thing?

[David Hoffman]

Okay. So we are migrating the timeline forward for being Quantum secure by four years from 2035 to 2031. That's great.

[Ryan Sean Adams]

That's. All agencies, all agencies have quantum resistant crypto cryptography cryptography algorithms by 2031 rather than 2035. That's a massive. That's almost like, that's like a 40% increase forward in timelines here.

[David Hoffman]

We're also going to build a quantum computer. And so the executive order establishes the quantum computer for application Development and discovery science. And we are, we, the United States of America are aiming to build a powerful quantum computer for scientific discovery with a planned deployment at the Department of Energy facility and potential access for the broader scientific community. Reporting points to a targeting a meaningful capacity by 2028. By 2028, the United States government is going to have a crypto, cryptography relevant quantum computer for. For scientific discovery.

[Ryan Sean Adams]

Yeah, I think this is a really big deal. This is the US saying this is a national priority. They're going to invest in it. I'm sure they're getting the tip off from the leading frontier labs in quantum in the US and maybe and US allied countries like Google I'm sure is just being like, hey, we're making huge progress on this and this is all a national defense type thing because like imagine all the communications that could be tapped into and hacked if somebody had a quantum computer. I mean the US absolutely has to beat China to this in order to maintain its kind of position in the world and not to be at national security risk. But this is moving faster than I think anyone thought. Remember Justin Drake put out that post in March 2018. Well, in March of this year. And he said that what did he give it? A 10% chance by 2030, is that it? That we would have quantum? I now put the odds of Q day by 2032 at 50%, 10% by 2030. And I would expect his estimates have even increased, have fallen back since then. This is happening very fast. Not sure that Bitcoin will be able to make it in time. It's even unclear that Ethereum will be able to make it. Well, I mean, they'll figure it out. It just could be really bumpy if this happens within the next five to six years.

[David Hoffman]

Yeah, Bitcoin is not ready. They're just so not ready. Even Ethereum has so much to do.

[Ryan Sean Adams]

It's a lot of work.

[David Hoffman]

We have a lot to do between now and then. I mean, at least Ethereum's taking it seriously, but man. Dude.

[Ryan Sean Adams]

Yeah, yeah. Let's finish with this. David, do you see the Illinois governor? You did see this?

[David Hoffman]

I did see this. Let's talk about it. We haven't talked to. I saved it for you.

[Ryan Sean Adams]

Okay. This is a 0.2% crypto transaction tax on everything. This was signed by the governor of Illinois on June 16th. So it's already signed. It's a law that has passed now.

[David Hoffman]

It's still. Wow.

[Ryan Sean Adams]

It's not effective yet. So it's effective January 1, 2027. So within six months. It's going to be effective. And this is in play for anyone in Illinois. It's the first statewide transaction tax of its kind. It is called the Digital Asset Privilege, the Digital Asset Privilege Tax Act. So implying that if you have digital assets, you are a privileged individual. And what it's doing is this is not a capital gains tax.

[David Hoffman]

What an assumption. I don't feel very privileged right now.

[Ryan Sean Adams]

This is not a profits tax. This is a tax on movement. So if you do anything to move your crypto assets from one place to another, there's a tax on it. 0.2% is the tax. There's a tax for keeping it in custody. 0.2%. Just like touching your crypto, there's a 0.2% chance tax. Not for stocks, not for bonds, not for Bitcoin. It's unclear whether moving crypto assets from a self custodial account that you hold to another self custodial account that you hold also incurs this tax. It could. The language is unclear and vague. And all of this happens in Illinois, like places like Chicago. What if you're a bankless listener in Chicago, like, how livid are you right now?

[David Hoffman]

Do you just have to like go drive over the state boundary? What's the state that's next to Illinois?

[Ryan Sean Adams]

No, I'm sure it's a residency type thing. It's a residency, yeah. So you'd have to like move to Florida for six months.

[David Hoffman]

It's got to be illegal.

[Ryan Sean Adams]

It's state tax. It passed. It's law.

[David Hoffman]

It doesn't. Doesn't feel right.

[Ryan Sean Adams]

I mean, I think it will be challenged. So a repeal bill was introduced within days. I think it could be challenged in the court system. But for now, it's the law that's going into effect January 1, 2027. And it's the worst tax that has ever heard of.

[David Hoffman]

Yeah. It's just so confounding. It's just like that just nukes everything.

[Ryan Sean Adams]

Yeah, yeah. Let's end with this. We haven't talked about this in a while, but David, I know you are buying some things in crypto. I don't know if you're bottom ticking anything right now. What's your portfolio looking like?

[David Hoffman]

I have a portfolio of hype, vvv, near and zcash, which is like, kind of like.

[Ryan Sean Adams]

It's very trendy.

[David Hoffman]

It's very trendy. It's very trendy. I will say, like people were harping on me for like hopping on the trend when I tweeted that, like I tweeted this one thing, people, I was like, after I sold all my eth, I bought those four things and then, and then in the tweet I said, and now I'm buying lit. But people are like, oh, David bought zcash. All of those positions, I will say are in the green other than zcash. Yes. Still. Wow.

[Donald Trump]

Still.

[David Hoffman]

Yes, that's correct. Yeah.

[Ryan Sean Adams]

Lit is in the green relative to eth.

[David Hoffman]

No dollars, dude. Okay, yeah, zcash. I bought it like 550 or 80 or something. So that one's kind of down bad, but like near is still up. And oh no, Venice might not be up anymore. Venice might be down. Venice might be down. Anyways, lit is the token that I'm the most concentrated in, just because it seems so damn cheap to me, you know? Lit Lighter, of course.

[Ryan Sean Adams]

Yeah. I think it's a great founding team. It's basically an Ethereum app. You could think of it that way. Perps are huge. The question is, it's like such a power law winning game, Right. With hyper Liquidity, like there could be a world where.

[David Hoffman]

Because how many exchanges have there been that are worth many billions of dollars?

[Ryan Sean Adams]

Yeah, Coinbase, you know, because it's.

[David Hoffman]

It's an exchange business. So it is a Dex. It's a ZK layer 2 on Ethereum. That is a dex. A perp dex. It's got spot, it's got perps, but like it's going to. It's competing, is trying to compete with the biggest exchanges out there. Not just hyper liquid, but also Coinbase and like Binance and okx. And it just wants to have its internal operations be ZK circuits on an Ethereum layer too.

[Ryan Sean Adams]

Yeah, I could see it. I mean, the architecture makes sense. The team is fantastic. It's. Can they, can they run faster than some of the big competitors they're trying to execute against? Right.

[David Hoffman]

And did you know Vlad, the founder, is like on the cftc, like board of advisors or something.

[Ryan Sean Adams]

That's cool. Very cool.

[David Hoffman]

I mean, he's in the right spots. So that's why most concentrated bet.

[Ryan Sean Adams]

Yeah. Well, are you thinking about anything else or you just wait and see?

[David Hoffman]

Right now everything else is in. Is in the stock market. I'll say. Buying lighter has been the first time my money has flown from the stock market to crypto in a long time. Usually it's been going the other way.

[Ryan Sean Adams]

Yay. Sign of the time. Sign of the time, I think.

[David Hoffman]

Am I eyeing anything else? I don't think I'm eyeing anything else.

[Ryan Sean Adams]

Yeah, I think it's an interesting time for the market. I think that I'm probably pretty convinced that we'll bottom sometime in the second half of this year and that'll be a great time to buy all sorts of things. By what I'm still trying to decide, I mean certainly store value assets will have a comeback.

[David Hoffman]

You mean the majors? The majors.

[Ryan Sean Adams]

I still think ETH could have a run. I understand some people don't think that apps in crypto, big deal.

[David Hoffman]

I mean say what you will about eth, it is a discount.

[Ryan Sean Adams]

Yeah, yeah. I think everyone will say that it

[David Hoffman]

is 30% below, 35% below the 200 week moving average. So like it's a deal. Probably.

[Ryan Sean Adams]

It could be. It could be. Could very well be.

[David Hoffman]

Could be a deal. It could be a deal.

[Ryan Sean Adams]

And it could still go down a little bit more before it goes up. But I think we're close to the bottom now. We just spot bottom for a bit more.

[David Hoffman]

Yeah. Bank location. That is it for this week. Ryan will be back next week. He is not going on another vacation. He'll be back back in pocket it. Until then though, crypto is risky. You can lose what you put in. But we are headed west. This frontier, it's not for everyone. We are glad you're with us on the bikeless journey. Thanks a lot.