Ryan (2:10)

Well, I do think trad markets are really the story here. This chart was really the chart of the week for me. This came from the Defi report, Michael Nado and and he points out that 2026 is the most correlated bitcoin has ever been to the Nasdaq. This is correlation by year. You're seeing a chart here. So we are more correlated right now with the Nasdaq on bitcoin price than we ever have been.

David (2:36)

I have a question for how this chart works. If the Nasdaq goes up 1% and Bitcoin only goes up by like a quarter of a percent, but that relationship is consistent, is that still strong correlation or is it less correlation? If bitcoin is going up any number that's different than how much the NASDAQ went up by, does that make sense?

Ryan (2:57)

No, I'm not sure I understand your question. But correlation means that obviously bitcoin price goes up or down related in a correlated way. In this case the correlation.

David (3:09)

I guess my question is like if the magnitudes are different because the NASDAQ is going up more aggressively than bitcoin measures, but they are still both going up.

Ryan (3:18)

Yeah, this chart doesn't measure that, doesn't measure the magnitude, but it does say when stocks go up, when NASDAQ goes up, bitcoin follows.

David (3:26)

That is confidently happening.

Ryan (3:28)

Yes. And by the way, 2024, the correlation coefficient was 0.1 and now it's 0.48.

David (3:34)

Yeah.

Ryan (3:35)

So this basically means that our destiny is in the stock market's hands right now.

David (3:42)

Does this kind of mean that we're kind of like cucked by AI?

Ryan (3:44)

A little bit. It feels like buying bitcoin right now feels like at least in 2026, a worst play on the NASDAQ at this moment in time. It's not going to stay like that. But that's what the regime. That's the regime.

David (3:56)

You're getting price exposure to the Nasdaq but you're not getting as much as the as returns of the Nasdaq.

Ryan (4:00)

That's right. That's a worse nasdaq. I don't like saying that. I don't think that'll always remain true. There were some crypto assets that performed

David (4:06)

bitcoin framing went from digital gold to a worse nasdaq. That's a terrible.

Ryan (4:10)

Take that, Michael Saylor. Take that and run with it. Um, zcash a better NASDAQ though, on the week.

David (4:16)

Dude, what are we looking at? Zcash has confidently returned not breaking all time highs, but it is up to previous all time highs. $570 for a Zcash for some reason, privacy is just catching a bid, catching a narrative. There are some other like down market privacy coins like Railgun that also caught a bid this week. Also in the, in the crypto world, vvv which is Eric Voorhees Venice project, which is private AI. So it's both AI and privacy is right in the Venn diagram of where you want to market loves that right now. Yeah. Hitting highs that it hasn't seen since token launch, which I don't even really count as like real price action. So $12.75 for a VVV token. What's the market cap on BVV right now? It's pretty impressive, right?

Ryan (4:57)

Yeah, the market cap, this is not fully diluted, but almost 600 million.

David (5:00)

Market Cap a billion dollars fully diluted. Wow.

Ryan (5:04)

Yeah. And the market cap, Zcash right now, 9.4 billion. By the way, did you see Multicoin came out and said we've been buying, we've been buying zcash for the last couple months, ever since Kyle left. Huh. They're into the store value trade. Okay, let's talk about stocks for a second because that's the big story. Let's look at it on your screen, David, because you're, you know, I'm the chart guy.

David (5:27)

I'm the chart guy. So this chart's going all the way back to like December Q4, 2025. But you can see, see at the bottom of the Iran war. And God, we are just since the very bottom, the spy is up 17% and that's across 39 days, which is just nuts. Last week we were talking about how strong the SPY was and it hit a record high, a monthly high of 7200. And today we are at 7360. Or not, not today, but yesterday at the all time highs, Nasdaq's even bigger. Nasdaq gained 24% over that same same time. And so you know, these are indices.

Ryan (6:03)

That's crazy. Can you just pause over like what, almost 40 days? Not, not even 40 days. Nasdaq is up 25%.

David (6:12)

Yeah, 26%. From peak to trough, trough to peak. What? That's just gnarly. That's gnarly. Like you really have to zoom out pretty far to put it in like perspective. But the, the Iran war, it is up double that. Then the Iran war took it down, if that makes sense. Okay, so in terms of size, are

Ryan (6:30)

there sectors that are winning? I remember we were talking about the SAS apocalypse. That's still getting blown away. I, I saw in the mag 7 like Google just crushed it in terms of they were like Google briefly took

David (6:40)

over Nvidia as the world's most valuable company. That is no longer true. At the moment of recording, Nvidia is back on top. But Google had a big day yesterday. So like the sector that is really leading the market is semiconductors. So semiconductors are up 12 and a half percent over the last two weeks.

Ryan (6:56)

Yeah.

David (6:57)

Which is nuts. And so that. Who is that? That's Nvidia, that's intel. Intel's up 60% over the last two months. AMD is up big. So anything that's chip related SanDisk is putting in a record like it was the best performing stock over the last 12 months and it's all AI related. The second best performing sector Ryan is infrastructure industrials and that is a combo of conflict defense companies but also AI capex build out companies. So also the correct Venn diagram to be in in this particular moment. And those two sectors are just leading the market. And so really what's happening is AI is dragging the whole entire market up in a very big way. Industrials is also contributing. Financials is a wash, like a lot of other stuff is a wash. And then things like utilities and energy which is down on the week, which we'll talk about when we get to the Iran war section that's dragging the rest of the market down. But it's just like not in any, in any way that over overshines AI.

Ryan (7:53)

Well thanks AI for bringing Bitcoin above 80k. Corporate earnings were part of the story here, right? I mean what's that like overperformance? Was it 84% of all corporate earnings this quarter beat analyst estimates.

David (8:10)

So we are in earnings seasons at the moment. 63% of S&P 500 companies have reported earnings so far this quarter. Like you said, 85% of them have beaten earnings. And this isn't like they eked out a earnings beat crush. They like broadly they crushed companies are reporting 20% earnings above estimates on average. And also this marks a sixth consecutive quarter of double digit earnings growth for the S&P 500. So corporate returns, corporate earnings strong, strong.

Ryan (8:45)

You know why it's all in the back of AI, right? Anthropic is a huge company in this, you know Anthropic locked a deal with SpaceX to get more compute. So compute was a limiter. I mean part of this story is I, I can tell you that my demand for AI tokens is insane.

David (9:00)

I'm consuming more tokens than I ever have.

Ryan (9:02)

Oh my God.

David (9:03)

I ran out yesterday for like this fourth or fifth time.

Ryan (9:06)

Fourth or fifth time. I had to buy more period of

David (9:08)

time, uh, this year, like the last month.

Ryan (9:12)

Okay. I am now running out. So I'm I$50 increments.

David (9:16)

Yeah.

Ryan (9:16)

Okay. I'm running out two to three times a day.

David (9:19)

My AI, you're just pulling out the credit card. It's like swiping it again.

Ryan (9:23)

Well, I did my first $250 purchase today.

David (9:26)

Because on anthropic you get a bigger discount the larger you pay.

Ryan (9:29)

Yeah. So I was like, oh, I know I'm going to use it. But it's. I don't know if it's becoming a problem. It's just so damn useful. I think I'm channeling it into something that's productive. I absolutely do. But my demand is insatiable. And I got to think like if the rest of the market is doing this as well, it's kind of dawning on everyone that this can make them more productive, that this can save them time, that this can drive revenue and efficiency. Everyone's demand is insatiable. It's. That's what's causing all of the over performance in the AI boom here.

David (9:59)

So there's been a ton of conversation of just like the AI bubble. The AI bubble, it's all a bubble. Like it's going to come crashing down. Anthropic earnings are growth. Revenue growth is up 80x in Q1.

Ryan (10:12)

That's never happened. That was not the dotcom Boom, dude.

David (10:15)

80x earnings and year over year growth in revenue and usage in Q1 2026.

Ryan (10:21)

Can you say the words? This time is like. I don't want to say those words but like this is a different story. I've never seen this before in markets.

David (10:29)

I mean this goes back to the debate of like we did this debate on Bakelist. Like is AI like normal technology or is it a fundamental paradigm shift? The thing is ADX earnings year over year.

Ryan (10:42)

Wild. All I can say is just, it's not about reading headlines. I think that the closest thing any investor can do is look at how they're actually using it. And my demand, my use, the utility to me has only gone up and to the right. And so until that stops happening, that's not a narrative.

David (10:59)

This is my lived experience.

Ryan (11:01)

You agree, right?

David (11:02)

I'm not crazy. Yes.

Ryan (11:03)

And you see some of the output of like that, some of the ways I'm using it with AI. I'm not in some kind of AI psychosis. It's, it's it's useful. Is it useful?

David (11:11)

Yeah. Yeah.

Ryan (11:12)

All right.

David (11:13)

Yeah. I mean, so, so we can actually take kind of take a look at Anthropic's valuation in the market from various derivatives. This is on, on hyper liquid. Anthropic is coming in just shy of $1.2 trillion in the private market. This is all slide is not actually trading shares. This is a derivative. But it's useful. It's directionally useful. 1.2 trillion as a pre IPO valuation. Bitcoin is 1.6 trillion. Anthropic is almost a bitcoin, dude.

Ryan (11:42)

What does that. Is, is bitcoin cheap or is Anthropic just that damn good?

David (11:48)

Bitcoin is definitely cheap.

Ryan (11:50)

What would you buy at this price? What would you rather own at this price? Would you rather own at the same price? Bitcoin and Anthropic, which seems like, you know, total market cap is about the same. Which would you rather buy right now?

David (12:01)

Oh, that is a really good question. I don't really like. I like buying bitcoin in trillions because of just what it is. Yeah, I don't like buying any equity in trillions unless it's like in a retirement savings context, like Google, for example, whatever that is. Like 4 trillion. But I feel safe with that.

Ryan (12:21)

Well, good news, David. You can't actually buy it, right? You can own a little perk.

David (12:24)

Why are you even bothering me?

Ryan (12:25)

Private disclosure. But it's private. You get none of this until they go public and you know, they IPO on retail, dump on retail. So the question is, is all of this getting a little bit too frothy? There are definitely some people who say yes. So this is a tweet from Jason Goepfert. Is that how you say his name? Goepfert? Sure. Okay. He said, today will be the second consecutive day the S&P 500 closes at a record high with more than 4% of its stocks hitting 52 week lows. Okay, so two data points here. Second day, the S and P closes record high with more than 4% of its stocks hitting 52 week lows. And he says, anyone want to guess the only other time in a hundred years this has happened? And there's A book called 1929 by Andrew Ross Sorkin in the tweet.

David (13:13)

What's it, what's the point he's making? I don't, I think I would be more scared if all to all equities were going up into the right. But if some equities are going up into the Right. And up or going down, to me, that's like, yes, that's how the market ought to work. Somebody's clearly being rational somewhere.

Ryan (13:30)

I feel like this is just maybe two data points that he found on 1929 that are.

David (13:36)

You can do a lot with two data points.

Ryan (13:38)

But. Okay, there are other, better, let's say, bear cases. One is just like, we know what's happening with US Federal debt, don't we? Like, this has gotta. This has gotta hit us. I saw last week, David, that this is the first time since 1946. You remember what happened in 1946? Yeah. Okay. In one of David's previous lives, the U.S. had just fought a war. And so all the war bonds, all the debt, we just passed the federal debt held by the public as a percent of GDP, 100%. And the only time we've ever been higher was 1946.

David (14:14)

So that just means that the government owes the public a lot of money.

Ryan (14:18)

Mm, that's right. Our government debt has never been higher is what that means. We're at wartime level debts, the level of debt that it took to go defeat Hitler and the Nazis. That's the level of debt we're in right now.

David (14:30)

Who.

Ryan (14:31)

And look. Look at this. We did this in 2000, the year 2000, which is in our lifetimes. Yeah. We were at 31%. Okay, so since the year 2000, we went to 100% of federal debt held by the public as a percent of GDP. What did we spend?

David (14:48)

What did we do with all that money? What did we get out of that?

Ryan (14:51)

I mean, there were some wars. It wasn't a World War II, but where else did it go?

David (14:56)

Yeah, I don't know, man. Okay, well, that's a good question.

Ryan (14:59)

That's the debt story. You also have firms like Berkshire Hathaway. They have announced their cash balance is now up to a record almost $400 billion.

David (15:08)

They are aggressively sell selling into the market, which is what they do when markets go up. Markets go up. Berkshire sells. Markets go up even more. They sell even more. But, like, there is an acceleration Here, look.

Ryan (15:19)

This is the 14th consecutive net quarterly sale, 14 consecutive sales. They've been selling into this market for a while. And the cash on reserve they have is above 30%. This is Warren Buffett. This is what he says about the market. I want to play this for you, David. What does this feel like to you? Does it feel expensive? Does it feel like there are opportunities in some cases? Well, it feels like, you know, I've

David (15:43)

compared the markets to a church with a casino attached. And people can move between the church and casino.

Ryan (15:52)

And I would say there are more

David (15:54)

people in the church and more people in the casino. But the casino's gotten very attractive to people.

Ryan (15:59)

The casino has gotten very attractive to people is what Buffett says. This is the reason for their cash position. Stocks are not cheap. He said in his 60 years of investing, there's only about been about five years that felt inexpensive to him and cheap. So he is absolutely playing the long game. Does not like the price of stocks right now.

David (16:18)

Does he have time left to play the long game?

Ryan (16:20)

He's a legend, dude. Warren Buffett is 95 years old.

David (16:23)

Imagine being. Why is he coherent?

Ryan (16:29)

Look, he's built a legacy. Berkshire, he's playing the laundry. Like, yeah, legendary investor. So, I mean, what do you think? Are we frothy or, like, are that. Is the AI token demand insatiable? Is that going to pull everything else up?

David (16:44)

I'm not one to play the long game. I'm one to be in the market.

Ryan (16:49)

That is a long game we talking about, I guess.

David (16:52)

But he's selling because he's like, these are expensive, and I'm going to wait for these things to be sure, and I'm in. We are in unprecedented times. AI is. Is novel. And you're scared to be out. I'm scared to be out. I'm always. I'm always scared to be out of. I don't want cash. I want.

Ryan (17:10)

I want. Why would you want cash? Look at the. Look at the cash chart. Look at the debt to gdp. Yeah, man, I understand that. I understand that, too. Yeah. All right, well, we'll have to see how this. This all plays out. But what about Iran? What's going on there?

David (17:23)

Yeah, both. Not a lot and something at least somewhat notable. And so Monday, Trump announced Project Freedom, which is basically an attempt to open the Strait of Hormuz by brute force. He said that the US Will just man, guide and protect ships to assist them in crossing the Strait. Iran, of course, didn't like that. They really depend on the straight being closed. So they sent missiles and drones towards the US Navy, which the Navy intercepted. Iran also sent missiles and drones to strike a UAE oil facility. One actually did land in cause of fire, which I think is what might have caused Trump to put a pause on Project Freedom. Just less than 48 hours later, he said that. We are now back to talking in Pakistan to get a deal done with Iran, which is basically where we stand now. After a quick skirmish in the Strait, we are now back to Pausing while a deal is potentially being formulated and discussed. And so it seems nothing has really changed this week in Iran's trade of Hormuz still closed. We are still talking about a deal. The deal is being dangled in front of investors by Trump as it is every single week. Okay, I'll kind of propose that, like even though nothing's really changed, something kind of has fundamentally changed.

Ryan (18:34)

What's that?

David (18:35)

And that is oil is down big this week. Oil is down 15%, 15 to 18% depending on how you look.

Ryan (18:42)

Why? Because it is.

David (18:44)

Because I don't know. I don't know why. It just is and that's important. And so if oil is down 15 and 18% respectively between WTI and Brent, that's really good for the global economy. So pain is being felt less. 10 year yields down 2.7% over the week. Also great for the United States not experiencing as much pain. And so where did we, things, we leave things off last week? It's like, oh, this is a, it's a pain tolerance. It's pain tolerance. And with the equities at all time high yields down and oil down, all of a sudden like pain, the Iran is still feeling all of the same pain that it was prior because they're isolated and cut off and the rest of the world is feeling less pain. And so that's what's changed.

Ryan (19:26)

Well, I guess we'll check in on the project, in on where the pain pendulum shifts next week and just checking in on the poly market that we usually do. So the odds of a permanent peace deal between the US and Iran by June 30, which man that's coming right up. We're almost there. Is 53%. So still pretty high by the end of the year. 74% on polymarket, notably the June 30

David (19:49)

date, 55% as you said, is up 14% week over week. So a big green jump in that in the. Over the week.

Ryan (19:56)

Okay, well, I mean Polymarket knows things that we don't somehow, so I'm sure that's a good sign. So this being ended little bit sooner, David, we got more to talk about which is when will the Clarity act actually happen? We have a date of July 4th. What's the probability that we hit that? Also did the banks win that deal or did we get what we wanted out of it? Coinbase layoffs. We'll talk about that. And Saylor, on the record, he said this, he intends possibly to sell Bitcoin in order to pay a dividend, but

David (20:27)

he used sentence never uttered before by

Ryan (20:29)

Michael Saylor yes, what does it all mean? We'll get to all that more. But before we do, we want to thank the sponsors that made this episode possible.

David (20:36)

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Ryan (24:07)

Well, where we left things, it was all about yield, right? And the, the banks wanted their yields back. They realized that they forgot to negotiate harder over the genius bill last week. And so they wanted kind of a do over. And they didn't like the fact that Coinbase and other crypto exchanges could essentially give their users depositors stablecoin yield in

David (24:28)

a roundabout way where they're not in

Ryan (24:30)

our mind like the bankless stake here has always been. Look guys, you know, the banks are just taking the yield. They're trying to protect their monopoly interest.

David (24:39)

They don't have any good reason for keeping monopoly over that yield.

Ryan (24:43)

And that remains true. This is why previously Coinbase backed out of the negotiation. Still, they are a powerful lobby group in D.C. and in order to get things done, apparently you have to appease the banks in some way. So there was a compromise that seemed to have been reached over the stablecoin yield issue. It's somewhat nuanced though. We'll have to talk about who, who really won the issue. But what are the details here so far?

David (25:10)

Yar, the chief policy officer over at Coinbase, he tweeted out, in the end the banks were able to get more restrictions on rewards, but we protected what matters the ability for Americans to earn rewards based on real usage of crypto platforms and networks. And so big asterisks there. Big like that's the compromise here.

Ryan (25:29)

Wait, what is that? Can you go over that again? So if you, if the, if the stablecoins are just sitting there, they can't provide rewards, but if the stable coins are being used in some way, then possibly there's a backdoor to provide rewards to users.

David (25:44)

Yeah. So Alex Thorne, probably the tweet from Alex Thorne is probably most helpful here. He's the one who drilled right into the actual verbiage. He said stablecoin yield cannot be paid solely in connection with holding is the words so idle balances or in a manner economically or functionally equivalent to bank deposits. And so I think that that wording is like if it looks like a bank deposit, you can't pay yield.

Ryan (26:12)

I wonder what that means. So if it's, if probably if it's just on Coinbase sitting in a custody custodial Coinbase account that's doing set and

David (26:20)

forget behavior, I think the banks will then argue that that is like a bank deposit and you cannot pay yield on that.

Ryan (26:27)

What if the stable coins are on base in defi or something like that? That does not look like bank deposit.

David (26:32)

Yeah, that does not look like bank deposits. Yeah, right. Yeah. I mean I think this is where it gets very squishy. And so what is banned in section 404? This is the section we're talking about covered parties paying interest or yield to US customers solely for holding stablecoins. What's allowed is these are the words activity based or transaction based, rewards, payments transfers, market making, staking, governance or loyalty programs. And this will be get a continual. This will get updated within one year by the sec, CFTC or Treasury joint rulemaking about more clarity around that.

Ryan (27:08)

Oh, the SEC and CFTC and treasury get to jointly rule make.

David (27:12)

Yes. And so this issue is kind in some Way kind of being punted, but with a pretty clear like flag planting by the banks saying if it looks like a bank and it quacks like a bank, you guys don't get to pay yields. But then there are these words, activity based, transaction based rewards, payment transfers, market making, staking, governance, loyalty programs. And then within one year, the SEC and CFTC and treasury will do joint rulemaking, which means, by the way, those are our guys. Those are our guys right now.

Ryan (27:42)

They're very crypto friendly, Right?

David (27:44)

Yeah.

Ryan (27:45)

Okay. So that's why Coinbase must have thought that this is a compromise that they could somewhat deal with. Okay, so. So my understanding, though is that this issue is kind of closed, but not all the way closed. There was a report from Eleanor Terrett that banking trade groups plan to actually revamp and ramp up outreach to additional members in the coming days. And so they're not quite sure that.

David (28:09)

Yeah, because like, I think what they're doing is they're kind of just like drawing the lines, but then also punting the fight.

Ryan (28:18)

Okay.

David (28:18)

And so there's like, yeah, no idle yield. If it looks like a bank deposit, you can't do it. But then also we're going to give this up for interpretation later, which is why it feels like we kind of got over the hurdle.

Ryan (28:29)

Yeah.

David (28:29)

By simply moving the hurdle to a different place.

Ryan (28:33)

I see. Now regulators get to decide if you have crypto friendly, they might do that. If you have anti crypto, they might do that. Wow, that's fun. Okay, so did the banks win in your mind?

David (28:42)

It's tbd. Partially.

Ryan (28:43)

It is partially.

David (28:45)

Partially because they got their line in the sand. As in, like you can't just have naive bank deposits. Which is kind of what I was excited about. Like going bankless, doing, like taking banking away from the banks, like all this kind of stuff, that the simple path to get there seems to be closed.

Ryan (29:01)

Well, maybe it's still there for you, David.

David (29:03)

Creative complex, a little bit convoluted path. Definitely still open. Yeah.

Ryan (29:09)

Like if it's on base, for instance,

David (29:11)

what does loyalty participation look like?

Ryan (29:14)

I mean, you look pretty loyal. You're pretty loyal.

David (29:16)

I look loyal. I. I'll press a button every now and then. Remember to claim your reward as long as you press the claim button and now you get your hand and also vote on something. You know.

Ryan (29:26)

That's right. That's right. Okay. There's still some stuff left to do here, though. You remember the developer and defi protections that was kind of baked into earlier versions. It was called the blockchain Regulatory Certainty Act. Carol, a lot about this Coin Center's talked about this. That is still a little tbd. They're going to have some negotiations about it this week. It doesn't seem so contentious, but if we got that in Clarity Bill, that's a huge win. So still crossing our fingers on that. And also this might actually be the thing that derails the, all of this

David (29:56)

might be just for nothing.

Ryan (29:58)

The ethics provision, David.

David (30:00)

So the ethics provision, right.

Ryan (30:02)

There are some senators that are hardlining on Trump's, the Trump family crypto activity. The White House basically saying, hey, like there can't be conflict of interest here. You have to tone down the World Liberty Finance, probably all of these things. Right. And the White House says it's not going to accept any language like this because of course the President doesn't want to be individually singled out. So this is another thing that requires a different type of compromise in order for the Clarity act to go through. It might derail the whole thing. Polymarket, David, has shot up though to a probability of, at the time of recording mid-60s. So it got as high as almost 70% in terms of clarity act.

David (30:44)

It was down 45% not terribly long ago.

Ryan (30:47)

It was, I mean, just last week it was down in that.

David (30:50)

So we, so we went from, we went from 46 to 66%.

Ryan (30:53)

Yep, yep. So this is pretty good. I like these odds. It's much better. It's better than a coin flip and I think it's pretty accurate. So we'll, we'll hope for that.

David (31:02)

Dude. The real question is what are the odds that Donald Trump refuses to budge? He's like, no, I like, I like my grifting. Don't take my grifting away from me.

Ryan (31:12)

I don't know, maybe that's what, some sort of grift loophole still, you know, just if he's actively based on loyalty. Rewards based on loyalty. There were some layoffs this week from Coinbase as well. They let go of 14% of their staff. At the same time we have two pretty large multi billion dollar VC raises. Tell us about this.

David (31:34)

Yeah, so this is actually kind of a market cycle, right. Of passage. Coinbase has laid off employees at the bottom of every single cycle. I remember this happening in 2018, this happened in 2022, and now this is happening again in 2026. As you said, 14% workforce reduction. Talked about AI saying like we're, we're rebuilding the company to be less layered. So five maximum layers from Brian down to the bottom. Whatever you Call it the bottom of the org chart. Five layers max. And also no peer managers.

Ryan (32:05)

Yeah.

David (32:06)

So there are no pure managers at Coinbase. According to Brian, everyone is at least somewhat of an individual contributor.

Ryan (32:12)

I don't think this was AI though. I mean, I think it was.

David (32:15)

I think AI is a useful.

Ryan (32:17)

Yeah, a useful scapegoat.

David (32:18)

It makes everything more tolerable.

Ryan (32:20)

Yeah. And I don't even know if it's a scapegoat really. Like he, he didn't say that this was the reason necessarily. He just said, we're going to take this opportunity for efficiencies. Right. But to your point, they've done this every single cycle.

David (32:31)

Yeah.

Ryan (32:31)

There have been 1200 layoffs in crypto in the past five months. So Coinbase, that's the big one. Yeah, yeah, that's the big one. And to your point, you know, fun fact, these layoffs previously from Coinbase have marked the bottom. So June 2022, 18% of the workforce they laid off wasn't quite the bottom, but pretty close. Yeah, pretty close. Pretty close. So this happens.

David (32:57)

It's not a. I will, I will call it, we won't call it a bottom ticker, but it is a bottom signal.

Ryan (33:01)

I agree. I agree. Now let's talk about the raises though, because this is the other side of that. So if that's the bearish news, layoffs. There were some pretty big VC raises. A16Z and Han Ventures, is that right?

David (33:13)

Yeah.

Ryan (33:14)

And the total between them, 3.2 billion.

David (33:17)

Yeah, the timing of this was actually kind of funny. Han ventures announced their $1 billion raise on Monday. And then Tuesday A16Z comes in and says, we raised 2.2 billion.

Ryan (33:27)

Chris Dixon, just like dropping it.

David (33:30)

3.2 billion is not a small amount of money by crypto funds. These are crypto funds and they're not the only one. So Dragonfly, previously RA, raised 650, Parafi raised 125. Blockchain capital raised is raising 700 million. Paradigm, which is not just crypto, it's also AI and robotics. 1.5 billion. So closing it on $6 billion crypto and now crypto adjacent funds. And so you can't really be bearish. This is, this is healthy for the industry. New capital, new round of startups refreshed for what it takes in 2026. I think kind of the big question is, what are these people deploying into?

Ryan (34:11)

Well, did you read it? So it was new financial infrastructure, a lot of stablecoins mentioned, new assets and markets, agentic economy, that kind of Thing mentioned, things not mentioned. I didn't hear much. Defi for instance.

David (34:24)

No.

Ryan (34:24)

Now Haseeb reminded everyone that all of these funds, including by the way, Dragonfly, their mandate is broad so they can totally deploy into bitcoin and Ether and zcash and any other liquid crypto token out there as well. But that was not the stated reason for the fundraise this time.

David (34:44)

No layer ones, no DeFi apps, no NFT platform, notably missing. What else?

Ryan (34:49)

Yeah, yeah.

David (34:51)

Lots of tokenization, lots of Wall street stuff, lots of neo banks, lots of payment stuff.

Ryan (34:55)

As you'd expect in 2026, David Michael Saylor said the words out loud. The thing he should never say that he was thinking about maybe at some point selling some bitcoin. This was all over my channel.

David (35:09)

Why would he sell bitcoin? What would he need to sell bitcoin for?

Ryan (35:12)

I think he's got to pay some, some of the people that are lending him funds. David, dividends.

David (35:17)

Lending him funds to buy bitcoin?

Ryan (35:18)

Yeah, that's right.

David (35:19)

So he's being lent funds to buy bitcoin and then he's selling bitcoin to pay the dividends for the capital requirements for the people who he sold the equities to.

Ryan (35:29)

He's selling a little bit in to raise kind of the interest payment dividend type.

David (35:33)

I don't believe it. It's fake. He never said it.

Ryan (35:36)

It's not fake. Let's play the clip so people can hear it.

David (35:39)

You buy bitcoin with credit, you let it appreciate and then you sell bitcoin to pay the dividend. And as long as you're, you're issuing credit in excess of the break even point, then this business works and grows forever. You know what I love about this, Ryan?

Ryan (35:58)

Yeah.

David (35:59)

You and I would debate with bitcoiners as a pastime in years past. One of our most fundamental arguments against bitcoiners is that they always have this fundamental assumption that bitcoin just goes up forever. It's in the bitcoin security budget arguments and it's now a stapler's quarterly earnings report of you buy bitcoin, you wait for it to appreciate, you sell a little bit of bitcoin to pay back the dividends. Yeah, all bitcoin has to do is appreciate.

Ryan (36:29)

I mean, I think it works though. Honestly, I just don't hate it. I think it all works. It's not a lot of bitcoin that he would sell, but this is him opening the door in order to do that. And I think this is he needs to do that with products like Stretch. Right? You need to have this option. The structure of microstrategy of strategy this time around is much different than it was previously. And the only way you're going to entice more Stretch buyers is to actually open the possibility that you may have to sell some of the underlying bitcoin as collateral in order to pay them back, or they're not going to continue buying your Stretch product and your other preferred shares products.

David (37:09)

I think that that's totally right as, like, I think you and I bought a little bit of stretch, like a $500 of stretch just because. And like, the reason why I'm not doing more is because, like, oh, what if Saylor wipes me out? Like, what if he goes like, ah, I ran out of money, but I'm definitely not selling my bitcoin, so Stretch, it's going to zero. So that's why it can't be a savings account. But if Sailor is publicly saying, I will sell Bitcoin to fund the yields, it probably opens up the tam for the interested buyer of Stretch, which opens up his ability to buy more Bitcoin now. And really, I actually don't think there's anything fundamentally wrong with this.

Ryan (37:44)

Of course, there's nothing wrong.

David (37:46)

What is his whole deal is he is arbitraging time frames. And so if people want 11% now and Michael Saylor wants 30% later because he thinks that's what bitcoin is going to appreciate by over the long term, he will. He will give you that arbitrage opportunity.

Ryan (38:04)

That's right. What's wrong with it? If there's anything wrong is it's off script. Michael Saylor, at every point I've ever, never sell your bitcoin. Never, ever sell your bitcoin.

David (38:14)

He literally tweeted out, sell your kidney if you have to, to buy.

Ryan (38:18)

Yes.

David (38:18)

So is he going to sell his kidney before he starts to sell bitcoin?

Ryan (38:22)

I think he's got to pay some preferred shareholders.

David (38:24)

I think he should do it as a bit before he pays actual kidney, before he sells any bitcoin to pay Stretch dividends. He should sell his kidney first.

Ryan (38:33)

Yeah, that's right. How convicted is he if he's not willing to sell his. Come on, he's got two.

David (38:38)

He said it.

Ryan (38:39)

How many chairs are you sitting on?

David (38:41)

How many kidneys do you have, Michael Saylor?

Ryan (38:43)

How many do you need? That's a great idea. I hope he's listening, David. Coming up next, we got to talk about Ethereum. It is scaling There was a meeting of the devs in the Arctic Circle.

David (38:55)

I'm going to tell you about that summit.

Ryan (38:57)

Yeah, a summit. Also the Strategic Bitcoin Reserve. An announcement that within weeks there's going to be something to announce. I actually have a bullish take on this. We'll get to all this and more. But before we do, let's thank the sponsors that made this episode possible.

David (39:11)

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Ryan (41:02)

They were part of Defi United. Right. So those UN like those frozen funds were going to contribute towards the restoration of the RS ETH collateral.

David (41:10)

Yeah. There's like, 116 ether whole from the exploit Arbitrum was able to recapture 31,000 ETH that it yoinked from North Korea.

Ryan (41:20)

Is that like 60 million? 70 million.

David (41:22)

70 million. I think there's a small little hiccup that happened, which is kind of posing a big question about daos and defi. There was a court order from the U.S. district Court of the Southern district of New York issuing a restraining order on Arbitrum Dao from moving the 31,000 ether that it froze from North Korea. What, why and how and what happens next? The order introducing a competing legal claim from a completely unrelated case. Unrelated people who also have damages, damage claims against North Korea for unpaid terrorism judgments against the DPRK with claims totaling over almost a billion dollars.

Ryan (42:08)

So nothing related to crypto. Nothing related to crypto.

David (42:12)

But there are these people who have legal claims against North Korean assets.

Ryan (42:17)

Okay. There's some US Court that said, okay, yes, Kim Jong Un, and North Korea owes you guys $877 million, and that claim has just been outstanding somewhere.

David (42:26)

Yes. And so these people's lawyers argue that the frozen ether constitutes North Korean property. Oh.

Ryan (42:34)

Oh.

David (42:35)

Because layer zero attributed the April 18th hack to the North Korea Lazarus group. Because the hack was done by the Lazarus group, and so therefore, it's North Korean property. And there are these people who have claims on North Korean property. And so the New York court said, arbitrum, don't move that ether. That ether is contested.

Ryan (42:54)

It's contested.

David (42:55)

Contested.

Ryan (42:55)

Okay. They didn't make a ruling on it. There's no way this holds up. There's no way. You can say I'm not a lawyer,

David (43:01)

but, like, holy hell, no way, dude. That's.

Ryan (43:06)

That's what AAVE is essentially saying. I did see this tweet. AAVE, LLC has filed an emergency motion to vacate a restraining notice served to the Arbitrum Dao. So AAVE getting involved here about this 71 million in ETH, and they said this. This should be pretty obvious, I think. A thief does not gain lawful ownership of stolen property simply by taking it. And the law is clear on this?

David (43:29)

Yeah.

Ryan (43:29)

All right, so if the law is clear, what's up with this hold order? How did. Like, why is the court doing this? And what's the legal team behind this?

David (43:38)

Yeah, I think it's really. Who is the legal team? Is the Very big question because this is the same lawyers that in 2021 sued, compound and aave in frivolous lawsuits and also pooled together.

Ryan (43:49)

Okay.

David (43:50)

This was, there was this Elizabeth Warren staffer or ex staffer.

Ryan (43:53)

They were involved in that.

David (43:54)

Who. Yeah. Who put like $26 into pool together a prize linked no loss lottery and then lost the money because of gas. It was like gas payments or something. Right, like lost because of gas payments. They go to this same law firm and they file a frivolous lawsuit which pooled together had to fight for years and won, but completely sucked pool together drive funds. Fighting the legal case.

Ryan (44:19)

Yeah.

David (44:20)

So the intent, these are the same lawyers.

Ryan (44:21)

The same lawyers. Okay. The intent there in that case, in the pull together case seemed to be just to cause a ruckus. Cause a ruckus defi. Right. Just sow some chaos. Is that the same intent here or are they actually more like. Because you know, obviously the ambulance chaser type of lawyers with frivolous lawsuits, their incentive is generally to get some commission on the legal payout there. There's a profit incentive there. Are you saying this is more of a like we hate defi. We're going to sow some chaos or is there a profit incentive here for this law firm?

David (44:50)

I don't know how else not to interpret it as these people just hate crypto and they keep doing frivolous lawsuits that always lose, but they just cause a ruckus in the meantime and they, they just drain legal funds.

Ryan (45:03)

All right, well so this probably, there's no way this holds up in US courts of course, but it does open the nexus for this, the security. Right. It's, it's 12 multi sig signers and they don't get paid a lot in order to be a multi sig signer. In fact, I, I thought it was something like 5k a month or something like this.

David (45:22)

I, I guarantee you when the people who signed on to be an arbitram security council multi sig signer, they, when they sign, agreed to do this, they did not think about how the Southern District Court of New York would might potentially hold them liable if they violated a court order. And that's why it's a real story.

Ryan (45:40)

Yeah. So when I saw some of this, I'm like okay, these layer two want to throw away the keys and get rid of their security councils and get to stage two as soon as possible. Because if this vector does exist, you're going to get more of these types of cases and they don't want to.

David (45:56)

It's kind of interesting that this has happened so quickly post the recovery of the assets, where like the big question was like, oh, is this going to put more liability on the Security Council? And now here we are just a couple weeks later with a court case.

Ryan (46:10)

Yeah, it's exactly like as, you know, as we predicted, as we expected it to play. Do you say Taylor Monahan, she was having a meltdown. I'm not even gonna read this tweet. Dude, it's hilarious.

David (46:21)

You have to read it.

Ryan (46:22)

Yes. Little effing who can't do the work, so they come chase after people who did the work. Bite me. Worse than effing ambulance chasers. Stg. What's stg?

David (46:31)

Swear to God.

Ryan (46:33)

I think this is part of a series of tweets. Little can go F themselves. You want some money? Go effing do the work.

David (46:40)

Wow. If you don't know who Taylor Monahan is, that's kind of important context for understanding why Ryan is saying this.

Ryan (46:46)

Taylor, by the way, she is a fantastic person. I think she's just really unhinged on Twitter.

David (46:53)

And usually it's pretty entertaining. Yeah, but sometimes it's accidentally pointed at you. But usually it's just entertaining for everyone involved.

Ryan (47:00)

Exactly. So I'm enjoying the entertainment of this. She's part of the SEAL team. She's done so much for the crypto space. She is angry, expressing some anger. Anger against these lawyers who are just trying to sow some chaos here. David, you want to hear about Ethereum and what they're doing with L1 scaling? Not L2 L1 scaling.

David (47:19)

I have always wanted to hear that.

Ryan (47:21)

I know you have. I know this has been a passion project of yours around scaling the L1. Well, do you remember that thing that came out last year was an eip? Kind of a Donkrad eip. And he said, wouldn't it be great if we could 3x L1 scale every single year from here on out?

David (47:41)

Right? Yep.

Ryan (47:42)

You remember that?

David (47:42)

I got really good.

Ryan (47:43)

It looked like this. Then there was a slide that Justin Drake put together. It looked like this. And it had different mega gas targets. Gas limit targets for 2025, 2026, all the way to 2030. And if you do accomplish the 3x per year, you get to 1 giga gas by 2030. Well, there is another hard fork coming. The Glamsterdam hard fork. EPBS is in that. The bal. What is that? The Block Access List update was in that. Some kind of esoteric updates. One of the other things, though, is the increase of max block Space From I think 60 million to 200 million.

David (48:24)

200. Yeah.

Ryan (48:26)

And so I charted this out. I had my quant chart this out.

David (48:29)

This is a mantron atoms chart. Oh, this is where all your tokens are going.

Ryan (48:32)

I'm spending some of those Claude tokens. Dude, this chart probably cost 20 bucks. Okay. And this is like showing TPS and block space of Ethereum and projecting that based on the 3x per year line. And David, with this glamsterdam upgrade, we will be right on track. Right on the 3x trend line.

David (48:52)

We are lagging behind the original prediction. But the. This catches us right back up.

Ryan (48:56)

This catches us right back up. So it catches us back to the trend line. So this would be a 3x. Sorry, excuse me. A 7x in transactions per second and block space availability on the L1 in 12 months.

David (49:09)

Yeah.

Ryan (49:10)

Which is pretty astounding because we went to, you remember this, we went to 30 million. We were at 30 million for like four years. And then just last year we went from 30 to 45 to 60 and now we go from 60 to 200 and that results in something close to 80 to 100 transactions per second. So L1 is actually scaling like they're actually doing it. I think this means that we're not going to see any L1 fees anytime soon.

David (49:41)

I think blockchain fees as a concept are kind of just gone.

Ryan (49:45)

Oh my God. I've been saying this. I've been saying this.

David (49:48)

No chain has fees anymore. What's one chain that has fees?

Ryan (49:51)

Why would they.

David (49:52)

Bitcoin has no debt demand, so they have no fees. Of course, Ethereum scaling.

Ryan (49:57)

Yeah.

David (49:57)

Also has much less demand than in the past. And then what other chains are left? Like Mega Eth, Brand new chain is like negative fees because it's the theoretical limit of throughput. Solana. Solana is going even faster.

Ryan (50:09)

You only get fees.

David (50:10)

Tron. You are right. Tron has fees.

Ryan (50:12)

You only get fees on a blockchain if there's block space contention. If demand exceeds supply and if you are creating more supply and supply exceeds demand, you don't get feeds fees. And so you know, like if your bull case on ether is just about fees, then you also have to not care about scaling. Right. Anyway, yeah. This is why for decentralized blockchains, my thesis on like how they accrue value is all about store of value. It's all about money. Bitcoin's always been right. Yep. Ether is a store of value. My opinion is always right. There will be times where we'll oscillate and we will generate some fees and that will go into the burn and that will slightly reduce issuance. But eth is either a store of value asset and a money or it's not worth very much because it's not worth much on fees alone.

David (51:03)

Right.

Ryan (51:03)

This is a whole separate rant. You guys know my position on this.

David (51:07)

Basically, Ryan is saying that as Ethereum's throughput increases, ETH becomes more and more money like, rather than revenue like.

Ryan (51:16)

That's right. That's right. I believe that. David, you want to hear about the strategic bitcoin reserve, that there was something

David (51:23)

out of consensus Miami, which is happening right now.

Ryan (51:25)

Oh, yeah, yeah. Actually, I forgot to tell you, by the way, because we talked about the Arctic Circle meeting. The Glamsterdam upgrade was all the devs met somewhere in the Arctic Circle. Can you pronounce that?

David (51:36)

You pronounce this place Salvbard.

Ryan (51:39)

Salvbard for the Sologen.

David (51:42)

What country is that? Is that like Finland?

Ryan (51:45)

It's somewhere very cold. All right, anyway, the devs met there and that's where they came.

David (51:50)

Everyone's in Miami and they're in Salvorg with a weird line through the o. It does seem real houses in Miami.

Ryan (51:57)

Yeah, the eat devs go to the Arctic Circle. Like, why guys, you don't have to go.

David (52:01)

I mean, they definitely don't want to go to Miami. So.

Ryan (52:03)

Yeah, anyway. All right, so back to the bitcoin, the strategic bitcoin reserve. So this is the third tease we've had, the biggest tease over the past three weeks. So. So you remember last week we talked about Pete Hegses, the secretary of war, talking about bitcoin as a matter of security, saying there could be an announcement in the future. Eric Trump was in Miami. He said big things are coming, that the US government has 300,000 Bitcoin. It's won't sell it, he said. Now we have Patrick Witt, who is actually the guy at the White House who is responsible for crypto and implementing the policy. And he said that this, the strategic bitcoin reserve is coming. An announcement is coming in the next few weeks. All right, so what could he be announcing?

David (52:49)

An announcement of an announcement.

Ryan (52:51)

Yeah. And it's going to be a big deal. There could be all sorts of possibilities here. What do you think the possibilities are?

David (53:00)

Oh, God, I have no clue. Really?

Ryan (53:02)

Like no clue at all?

David (53:08)

I mean. Yeah, I have no idea, actually.

Ryan (53:11)

Okay, so Patrick Witt, do you remember Bo Hines? He's now. He used to be in Patrick Witt's situation. He used to be the crypto council executive director. He's now at tether. Patrick Witt is the guy who replaced him. I think what they're going to do here is I don't think they're going to announce a program for purchasing bitcoin. What I think they're going to do is actually announce the execution and implementation of Trump's executive order, his strategic bitcoin reserve executive order. That really hasn't been implemented. And I think what they're going to do is go down the process of creating a Fort Knox for crypto. I think that's the part of it. So if you recall, there was an executive order of March of last year that called for a few things. One, centralized cold storage of all of the bitcoin that the US Government had. You recall, all the bitcoin, all the crypto assets seized were scattered across the doj, you know, cold wallets and desk drawers. Like there was. Remember that US Marshals case where somehow 30 million of there was like a

David (54:16)

seed phrase in the evidence room and then the associated bitcoin magically disappeared because the police officers stole it or the investigators stole it.

Ryan (54:24)

So you need something centralized, some cold storage, some Fort Knox type of infrastructure in order to do this. I think also an audit framework will be part. Part of this. I think they'll formalize that we're not selling bitcoin the teeth behind this. And I think they will do this. They will give bitcoin, maybe some other crypto assets a reserve asset designation. So that puts it in kind of the class on the, on the Fed balance sheet, alongside gold, alongside other fiat currencies that they might hold and, and SDRs. So I think that's what they're really going to do. And the US government does have about 300 to 328,000 Bitcoin, although a chunk of this is court bound, is tied up in courts.

David (55:08)

Victims have claims, not necessarily the government's owed to people.

Ryan (55:14)

So the Fort Knox pile, the part they would put in the strategic bitcoin reserves, probably closer to 150 to 200k bitcoin. That's what I think they're going to roll out. And that is, in my opinion, very bullish. Now, it might not be as bullish.

David (55:28)

Yeah. Like, the reason why I kind of thought this was a nothing burger is because, like, there's no way that they're announcing that they're buying bitcoin and that's really what people want. And that's just not. That's so Unfeasible. Yeah. I think what you're saying is that, like, this is just an increasing legitimization of bitcoin because we're creating process and structure and commitment to holding bitcoin.

Ryan (55:48)

Yeah. A giant government vault for it.

David (55:50)

Yeah.

Ryan (55:51)

Yeah. Like, if you told. If you're not. You're not excited about this, you don't

David (55:55)

think this is thumbs up?

Ryan (55:56)

Dude, five years ago, if you were to tell me that the US Government was going to create a Fort Knox for digital bear instruments, I would be blown away. I'd be like, okay, well, we won. It's over.

David (56:09)

Yeah, you're right. But, like, we already had the announcement. It's just like, hey, we're doing the thing that we said that we're gonna do. Yeah. And it's 20, 26 and it's 42 years later, but, like, yeah, okay, you're right. You're like, we got there. Yay.

Ryan (56:24)

You're right, though. I mean, they're not going to announce that they're going. I don't think they're going to announce that they're going to be purchasing bitcoin. There is a way that the treasury could do that, by the way. It's called an ESF Exchange Stabilization Fund. They could. So Besant could, outside of Congress actually start purchasing bitcoin. There's no way he's going to do that. And then you remember Senator Lummis? She had a proposal called the Bitcoin act, which was to actually buy 1 million. That's a congressional act. That's not going to happen either.

David (56:51)

Happen. Not in the same time where our debt to GDP ratio just passed 100.

Ryan (56:57)

I mean, it's probably the right time, though.

David (56:59)

It's probably the right time.

Ryan (57:01)

Bullish. So the probability, according to polymarket, of a US national bitcoin reserve, as defined, you know, in the way I defined it, is 33% right now, but rising. But it rose on the week. So there you go. You don't seem excited about that.

David (57:18)

I guess it's just remarkable in the sense that, like, I kind of forgot that they didn't do it. They just announced. Announced that they did it.

Ryan (57:24)

That's right. They did.

David (57:25)

Now we're actually doing it. But I just don't want to, like, applaud for them for just being late. It's.

Ryan (57:31)

It's so exciting to me to think about what a. What a crypto Fort Knox would actually look like.

David (57:37)

Sure.

Ryan (57:38)

Yeah. Like, how are they locking that down? Is the government doing this? Like, oh, my God, that's Kind of scary. I mean, does.

David (57:43)

Because that means like, the government will have a ethereum wallet and a bitcoin wallet. It'll be a bitcoin wallet.

Ryan (57:49)

Well, they already do, of course. Right, right.

David (57:52)

But I wish they had an ethereum wallet because then we could send meme coins there and like other shenanigans like that. Like, yeah, isn't it cool to just like, this is a government's bitcoin wallet. It's this. And also here is the ethereum wallet.

Ryan (58:07)

I mean, will it be protected physically? Like the way Fort Knox is. Will there be like an army there?

David (58:12)

But like, you can still expose the public keys. Yeah. And we can like meme coins.

Ryan (58:17)

I mean, will foreign adversaries be trying to attack it, for instance, trying to infiltrate it, trying to break in? Like, just.

David (58:24)

Why wouldn't you. Like, if you're in North Korea, why wouldn't you go after that?

Ryan (58:27)

Of course. That would be an incredible prize for them. And like, is the US Government actually competent enough to pull this off or do they really, like. I don't think I trust the US Government.

David (58:37)

No. They should just hire fireblocks or Anchorage or something.

Ryan (58:42)

But then that's like a nation state target anyway. I find it very interesting.

David (58:45)

Yeah, yeah. Can the United States government self custody? It's bitcoin.

Ryan (58:51)

Is Trump going to just have it on his.

David (58:54)

Steal a bunch of files and hide them in his bathroom after?

Ryan (58:57)

It's going to end up in Marlock, dude.

David (58:59)

Trump's going to take the private keys with him when he goes.

Ryan (59:02)

It's on a ledger somewhere in Mar A Lago. That's the bitcoin strategic reserve.

David (59:08)

I'm just picturing, you know how there's like the drawer in the desk of the President is a. I don't know if this is still true.

Ryan (59:15)

True.

David (59:16)

But it was. It's a drawer full of gifts that like, I remember this old story of like Nixon when Elvis visited the. The White House. Nixon needed to get a gift for him. So he pulls open the drawer and like, here's a watch. I just imagine just like a gold ledger just being in that drawer. That's just where it is.

Ryan (59:35)

I think you could give that to Trump but not actually have the private keys on there.

David (59:38)

Just say they're hold it up.

Ryan (59:40)

And he would be pretty happy with that. He would hold it up. Up. Oh, my God. All right, guys, gotta end it there. You know, crypto is risky. You could lose what you put in. But we are headed west. This is the frontier. Not for everyone. But we're glad you're with us on the bankless journey. Thanks a lot, Sam.