ROLLUP: One More Dip? | Saylor Sold | IPO Season | Ethereum vs ETH

Summary

Bankless Weekly Rollup: One More Dip? | Saylor Sold | IPO Season | Ethereum vs ETH

Episode Date: June 12, 2026
Hosts: David & Ryan
Podcast Theme: The latest trends, debates, and market movements in crypto finance, spanning DeFi, major asset moves, IPO hype, and the fundamental future of Ethereum and crypto itself.

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Episode Overview

In this packed Friday "rollup," David and Ryan return—fresh off playful Twitter tensions and a vacation—to break down the current state of the crypto markets, including a sharp drawdown, Michael Saylor’s eyebrow-raising Bitcoin moves, blowout IPO valuations, and the most existential debate of all: Can Ethereum thrive without ETH being a multi-trillion dollar asset? Along the way, they discuss macroeconomic headwinds, notable on-chain moves, tech IPOs, product launches, DeFi shakeups, AI’s impact, and evolving regulatory leadership.

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Key Discussion Points & Insights

1. Crypto Market Crash & Bitcoin’s Big Test

Timestamps: 00:51–08:17

• Crypto’s 25% Drawdown:

  • Bitcoin has “round tripped” the Trump presidency—back near Joseph Biden-era prices.
  • “$4.4 billion flowed out of the ETFs in over 13 days, and then Michael Saylor sold Bitcoin. He did the thing that he said you should never do—and then he bought more.” (David, 01:13)

• Bitcoin’s 200-Week Moving Average:

  • “Bitcoin tagged $59,000. It’s firmly below [the 200-week moving average]. It has since recovered to above it.” (David, 03:51)
  • Historic precedent: Only stayed below this average for a prolonged period during the 2022 FTX/Three Arrows collapse.

• Are We Due for One More Drop?

  • Both hosts agree another dip is likely:
    • “You think it’s going lower?”
    • “Yeah, I think it’s going lower. If you had 100% of cash, deploy 50 here, 50 for a final wick down – not a bad play here.” (Ryan, 07:47–08:01)

• Michael Saylor Sells, Then Buys:

  • Saylor sold 32 BTC for unclear reasons (“funds stretch dividend obligations for eight hours… why?“), promptly bought 1,550 more.
  • Theories: market signaling, creating “FUD” then buying lower, or preparing the market for future sales.
    • “Maybe he’s getting the market used to him selling so that if he has to sell in the future, the market has digested this.” (David, 09:51)

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2. Saylor’s Perpetual Strategy vs. Tom Lee’s Ethereum Moves

Timestamps: 10:24–20:24

• STRC and Confidence Wobbles:

  • Saylor’s preferred stock (STRC) dropped up to 10% off par, fueling “Luna” comparisons. Not undercollateralized, but a feedback loop exists: lower STRC = risk for forced BTC selling.

• Tom Lee: “Michael Saylor of Ethereum”

  • Bought $250M ETH this week, totaling $20B—at flat or negative prices.
  • Announced plans to mimic Saylor with an ether-yielding preferred stock.

• Implications for Ethereum:

  • “Tom Lee is the most important thing happening in the Ethereum ecosystem right now… it’s the story for Ethereum.” (Ryan, 13:51)
  • Potential for ETH as an ‘internet bond’ with native yield, leveraging staking.

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3. Ethereum’s Price Malaise & Existential Questions

Timestamps: 20:24–32:00

• ETH vs. BTC Price Structure

  • ETH is 34% below its 200-week moving average, lagging all-cycle.
  • Even with Tom Lee’s buying, $20B of buy pressure fails to move price meaningfully.

• Fundamentals vs. Sentiment:

  • Debate if Tom Lee’s aggressive ETH accumulation signals massive hidden selling (legacy holders cashing out?) or sets the stage for a new paradigm.
  • “For every buyer there’s a seller—so many willing to sell Tom Lee their ETH.” (David, 24:05)

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4. Macro: Inflation Surges, War & Oil, Interest Rate Hikes

Timestamps: 24:30–28:17

• US & EU Inflation:

  • May PPI jumps to 6.5% (highest since Nov 2022); CPI hits 4.2%.
  • Fed rate hike odds in 2026 spike to 51%.

• Energy Markets:

  • Despite Middle East escalation, oil stabilizes in the $80-110/bbl “new normal.”
  • “We’re at new normal for crazy.” (David, 26:29)
  • Opening of Hormuz viewed as potentially “so goddamn bullish”—not expected.

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5. IPO Season: SpaceX, Anthropic, OpenAI

Timestamps: 28:17–36:27

• SpaceX IPO:

  • $1.77T valuation, largest in history, but crypto pre-markets (e.g., LiDAR) imply even higher valuations.
    • “SpaceX shares are going for $135… $1.77 trillion. The largest IPO in history.” (David, 29:00)
  • “Pre-IPO perps” in crypto give retail a way to preview market sentiment.

• Anthropic & OpenAI:

  • Both valued at $1–1.6T in pre-markets, with OpenAI reporting $225B annualized revenue—but $27B annual cash burn.

• Critical View on US IPO System:

  • “Hate trillion dollar IPOs… It’s a fundamental failure of US capital markets that you have to be an accredited investor.” (Ryan, 34:00)
  • “It didn’t used to happen this way…You could IPO Amazon at $400 million…retail could realize the 600x upside. No longer the case. Now, you’re exit liquidity.” (Ryan, 34:20)

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6. Ethereum vs. ETH: A (Heated) Bankless Debate

Timestamps: 36:31–53:45

• Trigger Tweet:

  • Ryan: “You can’t have Ethereum succeeding without Ether the asset succeeding…If Ether isn’t a multi-trillion dollar store of value, it’s a failed project.”

• David’s Counterpoint:

  • Calls out doctrinal rigidity; warns against anchoring your portfolio to aspirations over what market is actually signaling.
  • “I don’t want…my financial position to be aspirational… if the market is not using it for that, then I need to reconsider my position.” (David, 43:15)
  • Sees present as an era where Ethereum’s main function is “ledger technology for the world’s largest financial institutions”—not strong DeFi or monetary asset status.

• Ryan’s Retort:

  • “Ethereum is nothing without Ether the asset…If not, it’s just a failed experiment like Webvan.”
  • Insists strong DeFi is the only thing that requires Ethereum’s guarantees; otherwise, you can do it on any ledger/Canton Network.

• Comparisons to “Blockchain not Bitcoin” Narrative

  • “Ethereum, the blockchain, is the point…ether has been a means to an end.” (David, 50:52)

• Semantics or Substance?

  • Both agree: If ETH price was at $10K, neither would be making these arguments (“You’ll believe it when you see it. Problem is, then it’s too late to capture the upside.” Ryan, 52:44), and existential angst stems from weak returns, not just lack of faith.

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7. DeFi Shake-Ups: Morpho Flips AAVE; Zcash AI Exploit

Timestamps: 55:42–62:10

• Morpho Flips AAVE:

  • Morpho—seen as “backend infrastructure” for major institutions—now eclipses AAVE in market cap, emphasizing the rise of financialized, less DAO-governed DeFi.
  • “This is weak crypto flipping strong DeFi.” (David, 55:59)
  • Ryan: DAOs (“tyranny of structurelessness”) have become a “millstone” around OG DeFi’s neck.

• Zcash Security Flaw Found by AI:

  • Anthropic’s Opus 4.8 identifies a critical exploit in Zcash’s Orchard privacy pool (active since 2022), patched before public disclosure.
  • “There’s no proof that it wasn’t exploited…new upgrade will allow us to check if someone triggered the double-my-money button a few times.” (Ryan, 60:16)
  • Arthur Hayes sells, ZEC drops 60% and then bounces 40%. Hosts frame it as an example of AI strengthening code security over time (“bathtub curve” for AI/crypto bugs).

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8. Regulation & Culture: Goodbye Hester Peirce

Timestamps: 63:03–66:02

• Hester Peirce’s Farewell:
  • Hosts praise SEC commissioner Hester Peirce for being a principled, thoughtful and dissenting voice.
    • “She’s been a light when we needed it most in the darkest of nights…Always the SEC’s biggest critic, which is why we love her most.” (David, 63:45)
  • Read notable portions of her goodbye speech, highlighting the need for governments to act as referees—not players—in markets.

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9. Lightning Round: World Cup, Memes, Sign-Off

Timestamps: 66:04–67:25

• World Cup Polymarket:
  • Hosts bet on Argentina, but preponderance of capital flows elsewhere.
  • “$2 billion on this market!” (David, 66:50)

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Notable Quotes

• On Bitcoin price and cycles:

  • “It’s totally going lower.” – David, 07:28
  • “If there were more big sins to pay for, we’d have seen them already.” – Ryan, 06:02

• On Saylor’s moves:

  • “You sell 32, create all the FUD, price goes lower, buy back at a lower price—market can’t predict me!” – Ryan, 09:16

• On Ethereum’s predicament:

  • “Tom Lee is the story for Ethereum right now.” – Ryan, 13:51
  • “For every buyer there’s a seller—so many willing to sell Tom Lee their ETH.” – David, 24:05

• On IPO season:

  • “Hate trillion dollar IPOs… It’s a fundamental failure of US capital markets.” – Ryan, 34:00

• On the Ethereum/ETH divide:

  • “Ethereum is nothing without Ether the asset… If not, it’s just a failed experiment.” – Ryan, 45:10
  • “I don’t think it’s prudent to have my portfolio be aspirational for what I want Ethereum to become.” – David, 43:15

• On DeFi evolution:

  • “Morpho is backend infrastructure for financial institutions—flipping strong DeFi. This is weak crypto flipping strong DeFi.” – David, 55:59

• On security after AI-found bugs:

  • “We’re going to see a bunch of these with AI, but also find and fix them. Tools stronger than ever.” – Ryan, 61:05

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Important Segment Timestamps

• Crypto Drawdown, BTC Support: 00:51–08:17
• Saylor’s and Tom Lee’s Moves: 10:24–20:24
• ETH Price, Tom Lee’s Bet: 20:24–32:00
• Macro/Inflation/Oil: 24:30–28:17
• IPO Season, Pre-Markets: 28:17–36:27
• Ethereum vs ETH Debate: 36:31–53:45
• DeFi Shake-ups: 55:42–62:10
• Regulation—Hester Peirce: 63:03–66:02
• Wrap & Lightning: 66:04–end

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Tone and Style

• Candid & Playful: The hosts openly joke about their “fighting,” but wrestle seriously with the existential future of crypto.
• Deeply Analytical: Frequent, nuanced reflections on charts, market data, and history.
• A Bit Worried: Both hosts convey concern about the direction of DeFi, Ethereum, and even crypto’s core promise (“this is an existential questioning of crypto, the industry”—David, 52:58).

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Summary Takeaway

This episode is a must-listen for anyone tracking the crossroads of crypto finance in 2026. It brings the most essential charts, macro data, and real-time moves together—and doesn’t shy from the tough questions about what really matters for the industry’s long-term trajectory. Whether you’re a DeFi native, an ETH holder in existential doubt, or just tracking the collision of TradFi and crypto, this rollup delivers sharp insights, honest debate, and plenty of signals on the road ahead.

Transcript

[A]

And we're back for another bankless Friday weekly roll up. It's the second week of June. Ryan is back from vacation. Ryan. We were fighting. I guess we made up.

[B]

Wait, fighting on Twitter? Are you talking about. Yeah, that was not a fight. Come on. I was on vacation and I just felt compelled. I just had to. I just had to tweet at you, David. So actually it wasn't about you at first. It was kind of actually about you.

[A]

It was about my take. It was about some of your takes. I was like, I read that tweet. And I was like, okay, okay, dude.

[B]

Well, we're going to discuss that, right? I saw a meme, babe, look, Bankless guys are fighting. What's happening? So we got to resolve this and actually see where the daylight is between us on the question of the old asset that you formerly loved. And I still do love eth. The asset.

[A]

Do I not love eth? I love eth as an idea, but we'll get into that. The topics of the week. The crypto crap crash. The third 25% drawdown in crypto since November, the deepest yet bitcoin has round tripped the entire Trump presidency. Ryan, we are back towards Joseph Biden. Bitcoin prices.

[B]

Oh, my God. Is where we are.

[A]

Yeah, we never thought. I thought, take. So, Paul, $4.4 billion flowed out of the ETFs in third over 13 days. And then Michael Saylor sold bitcoin. He did the thing that he said you should never do.

[B]

What?

[A]

And then he bought more. So why did he do that? Why did he do that? I don't know. It's also IPO season. The SpaceX IPO is tomorrow, is coming up tomorrow, which will be today for you listeners if you're listening to this on Friday. Fortunately, in the crypto side of worlds, we have pre markets. We have pre IPO markets, which is something new out of crypto. And so we can take a look at what the valuations are saying.

[B]

It's too high. It's too high, I think, but.

[A]

Oh, you think the IPOs are too high?

[B]

God, they're so high. They're in the trillions.

[A]

Well, they are too high, but like, they could go higher.

[B]

Too high to buy. I mean, they could go higher, but they could also go lower. This is the kind of analysis that people show up for on a weekly basis.

[A]

So go lower. That is right.

[B]

Why don't you take us to charts? Yes, because it was. It was gross. On Friday, I looked a couple of times at prices and it looked disgusting.

[A]

Before I start sharing my screen. Ryan, we got to talk about OkX, our friends and sponsors over at OKEx, the Intercontinental Exchange, which is the parent company of the NYSE. They backed OkX at a $25 billion valuation with a plan to launch New York Stock Exchange stocks and derivatives later this year on the OKX platform. Tradfi and Defi in the same app, all in one place. Finally trusted by over 120 million users globally. OkX is bringing products to the US market that Wall street has been talking about for years, but OKEx is delivering them. This is the new Money app by OkX. Not just a vision, a roadmap with institutional backing to execute it. If you are not on okx yet, go and get a 6% match on rlusd. That's ripple stablecoin through the bankless link, not available in New York and Texas. So I won't be able to get it. But you can, Ryan. But that's not investment advice. Okay, let's go right into the charts. So the Iran war was technically bullish for Bitcoin because it was up. Bitcoin was up about 30% over the course of the war. I think we invaded. When did we invade Iran? Like something like March 1st or something.

[B]

No real reason why though. I thought like maybe stocks were up and it just dragged.

[A]

Bitcoin, I think it is a complete anomaly. It was just because bitcoin had fallen from its highs. If we're looking at the charts from its highs down to the Iran war minus 50% and so it recovered a little bit, but then we fell from the, from the peak about another 25%. Bitcoin is right on the 200 week moving average. It wicked below it. Yes, it tagged. Bitcoin tagged $59,000. It's firmly below it. It has since recovered to above it.

[B]

First time below the 200 week in this bear cycle since November, right?

[A]

That's right. Well also if we go back, we're going to zoom out on the charts here, Ryan, because since you have taken a vacation last week, I am now a pro charter.

[B]

Yeah, I see that. That blue line, that's gotta be the 200 week.

[A]

Yeah. Okay, so the only time we spent below the 200 week moving average in Bitcoin's history is briefly during the COVID crash for like maybe five to seven days back in 2020. And then the meaningful time it's been below the 200 week moving average was after the Three Arrows Capital FTSE drama, like the worst bear market worst in crypto. Below that Months, months below. So it spent 280 days below, popped back up, went back down below. But then as BlackRock issued or announced the filing for the Bitcoin ETF, that's

[B]

where we broke to the upside.

[A]

Yeah, we have never been below The Bitcoin, the 200 week moving average before that. So I think this is kind of the question that like market people who are buying bitcoin or not buying bitcoin right now are asking is will we do the historically normative thing of bounce off of the 200 week moving average or are we going to be due for one more 25% drop?

[B]

You say historically normative. We see both examples. Sometimes we bounce, but in 2022, as you just said, we stayed below for a while. We camped there only.

[A]

Only once. Granted, we camped there for a while, but it was only one time. And again, it was after ftx Three Arrows Capital, the worst contagion event in crypto's history.

[B]

Actual forced selling, capitulation for selling, plus

[A]

the highest interest rates in all of bitcoin's history as well. And they jacked up interest rates quickly. Now you could say interest rates are actually still somewhat high. And so maybe in a higher interest rate environment, bitcoin is more likely to go below the 200 week moving average. But there was just so many events lined up in 2022 through 2023 that pushed Bitcoin below. And I don't really see those same events this, this cycle.

[B]

Yeah, I mean there's a comment Michael NATO made which is like we haven't paid for our sins yet, so maybe there's still some.

[A]

What sins to pay for sins. We had a lot of sins in 2021. I don't know if we have as many sins now.

[B]

I think if we saw some big sinning, like if there was some big sinning, we would have seen it already. Remember that the, the spooky stuff in October, never found the dead bodies. Yeah, 1010.

[A]

Yeah.

[B]

Like who knows what that was? We still don't know. Maybe there's still some sin that's just hidden from us, needs to be washed clean by this bear market.

[A]

I mean we didn't. No one expected Hero's Capital to go under because Suzu and Kyle Davies projected so much confidence. But, but who would be the sinners this cycle, like Michael Saylor clearly could be the sinner.

[B]

I mean there, there was a lot trump meme coin shenanigans.

[A]

I guess you pay for that bitcoin leverage, you know, Sam Bankman Fried was selling paper Bitcoins. Trump is not doing that.

[B]

The person we know with billions of bitcoin in kind of is Michael Saylor. He doesn't like to call it an

[A]

aggressive amount of bitcoin this week.

[B]

Well, so maybe it's Michael Saylor that's going to be coughing up blood by the end of this. I can't see how it dips and sustains below the 200 week. If AI stocks continue to do okay, but if they capitulate, that could just be full risk off. Oh my God, you know, it's over. We're effed. Get out of this market. And then I could see it sustained. So I guess the question is, what do you think, you know, or do you think that now is the time sort of to buy or like if are, if you're a betting man, are you waiting for one last capitulation down into the 50s or even lower?

[A]

My cognitive brain tells me that I can't find a big forced seller in this market right now. And I don't, I think sailors generally sound my, I'm looking at this chart and I'm like, dude, it's totally going lower.

[B]

I think it's going lower.

[A]

You think it's going lower?

[B]

Yeah, I think it's going lower. I mean, I, I, I think if you're deploying, like, look, if you had 100% of cash, you're trying to deploy of that 100%. 50 here and then 50 for final wick down. Not a bad, not a bad play here.

[A]

I feel like that's right.

[B]

I feel like that's right. And we're eight months into this thing.

[A]

They typically last year on the bear market is early on.

[B]

It's that early. It's like mid late. You know what I mean? It's like if we're eight months in, we usually bottom after about 12 months. And so that's kind of the backdrop.

[A]

Well, 12 months, I'm counting as like the middle of the bear market. And on the second half of that, you're on the, you're on the up and up.

[B]

You are, you don't know. It still feels bearish and it still feels really shitty. But like you will have bot bottomed by that point hopefully if this, if this continues. Okay, but what was with the sailor selling 32 bitcoin?

[A]

He sold 32 bitcoin. Stretch has been and continues to actually trade off par. And we don't really know why he sold the 32 Bitcoin because it was $2.5 million that funds stretch like dividend obligations for like eight hours.

[B]

But he only has six months of dividend obligations and cash in the bank to fund CRC holders.

[A]

Correct.

[B]

Which might be why it's trading off par right now.

[A]

Right, right, right, right. Why he sold 32 bitcoin and then this week bought 1550 bitcoin. Why he sold 32 at all, I don't. I don't know.

[B]

You sell 32, you create all the FUD. Bitcoin price goes lower, you buy back at a lower price. You go, ha, ha. Market can't predict me. You thought I was selling. I'm actually buying. I'm Michael Saylor F you and you tweet about it. You put a meme together, an AI generated meme, and then you go on your way. And people don't know what he's doing. Is he buying or selling? They don't want to try to predict him because he's unpredictable. He's a maverick.

[A]

Okay, that's the mischievous, plot plotting version of Saylor.

[B]

Yeah. What version of Saylor do you think there is?

[A]

I think that he was signaling to the market and he's getting the market used to him selling so that if he, if he has to sell in the future, the market has digested this and he sold 32 bitcoin knowing that he was going to pile on a f ton of cash to buy more bitcoin. He didn't plot the malaise of bitcoin to buy lower intentionally. It kind of just worked out like that. But he knew he needed to provide confidence to the market, and so he knew that he had hundreds of millions of dollars of powder lined up ready to go. It wasn't intentionally pushing the market lower. Somewhere in between these two things, probably.

[B]

Okay, I mean, I think we might be saying this the same thing. He's taking advantage of the opportunity. Let's say you are an STRC holder. How do you feel with the trading?

[A]

I hold a little bit of strc.

[B]

It's not trading par right now. Does that make sense?

[A]

They're not trading at par.

[B]

Six months cash to pay your juicy 11% dividend. You getting a little nervous, Mr. STRC Holder?

[A]

The amount of capital that the SCRC is off is. Is recovered by like two dividend payments.

[B]

This is down lower than I thought. We went down to like 93% or 93 on.

[A]

It went all the way down to 10% off of par. It has, it has recovered to 9641 when it should be trading at 100. So it is not. Is not clear yet. There's clearly a lack of confidence here. It is slowly being restored.

[B]

That's a buying opportunity, I guess if you, you buy it at 90 then. And you make that.

[A]

If you buy time. Yeah.

[B]

The yield of 10, 11%.

[A]

Yeah, yeah. So. So $90 buyers are. But like in the moment you don't really know. Like some people are comparing this to Luna, which is just not like Terra Luna. Yeah, yeah, yeah.

[B]

Well how is it like Luna?

[A]

It's just because, like I actually am slightly worried about this.

[B]

Although it's not under collateral collateralized in any sense.

[A]

No, it's not. But the lower it goes, like there's a positive feedback loop between Stretch and the bitcoin price. And if Stretch goes bitcoin is going down. It just means that there's an even greater lack of faith or confidence in strategy and sailor. And if he ever does become a forced seller of bitcoin, he has to sell bitcoin. At worst terms, what he did to solve his problems is he just hammered the ATM on the equity on strategy, on the mstr.

[B]

Yeah.

[A]

Which like who the F is holding mstr? Like why. Why would you ever hold mstr? Because you are.

[B]

I would hold MSTR at some price.

[A]

Sure, at some price. But over.

[B]

Over nav premium.

[A]

Yeah. It's been trading at one. And I mean it could be. It's not down that bad, but it could be down worse.

[B]

I don't know. I. It's possible. STRC and the whole strategy complex is the final wick down and the sin we have to pay for. I still don't think it's just so

[A]

much more sound than 2022 FTX capital Celsius. Like, come on, these are not comparable.

[B]

Yeah, yeah, exactly, I agree. How about the Michael Saylor of Ethereum? So Tom Lee impressing with some major buys even on the week in this bear market. He's down bad right now and he's down $10 billion. So what does he do?

[A]

He piled $18 billion into ether. He's down $10 billion.

[B]

It's Tom Lee's own blood and he's looking down at his blood and he's saying, I want more of this. You gotta admire that.

[A]

Right? So if he's gotta admire that. Tom Lee bought $212 $13 million of ether on Monday. Ryan, you don't know this because this happened about 10 minutes ago. But he also just bought 25,000 more ether. This was announced just now used was seeing on chain. So $41 million. So he's bought a quarter of $1 billion of ether this week.

[B]

Legend. That's crazy.

[A]

That is absolutely crazy.

[B]

Okay, in my opinion, we'll talk maybe more about this, but Tom Lee is the most important thing happening in the Ethereum ecosystem right now. It's not even close. Justin Drake with Quantum. That's all cool. But like Tom Lee for eth, the asset is the story for Ethereum right now.

[A]

That's right. That's right. Now, when I wrote my I sold my eth article, somebody asked what, what events would you say to like would make you like bullish eth again? And I said, the layer one burn.

[B]

Yeah.

[A]

Followed by Tom Lee issuing a stretch like asset that leverages the yield of Ethereum, especially under the conditions of the burn, to provide a stronger, more sounder version than strategies stretch. And last week, we talked about this last week on with Haseeb. But I want to talk to you about this now that you're here. Last week, Tom Lee announced that he is going to copy Staler's playbook to offer 9.5% yield with a preferred stock offering. What do you think about that?

[B]

Ryan, do you want to talk about this now? Because I know we have a section and talk about it a little bit later. Do you just want to talk about it now?

[A]

Yeah, let's get it out of the way. Let's talk about it now. Let's talk about it now.

[B]

So I was kind like, okay, what in your mind, what. So I think we had a discussion about this and you were like, hey, Ryan, what do you think the probability of Thomley doing this? Bitmind doing this? And my take was like almost 100%, like above 80% and that just because the Tom Lee playbook has been to take what's working with Michael Saylor and have the second mover advantage here where you get in duplicate it so discard all the failed projects. So if he could, he would was my take. And I don't think he originally intended to or wanted to, but how is he not looking at STRC and saying, oh, this would work fantastic for Ether in particular because I have this native yield and I'm throwing off 200 to 300 million on my 3% staked ETH anyway. And I have my own validators, duh, why wouldn't I do this if I could? So I rated it higher. I think you rated it maybe lower. You thought it was a lower probability. So I would ask you why did you think this was lower probability? Possibly. And it's not out yet. They filed out. They filed SEC filings. There's probably still some hurdles in order to get this to market, but it seems like they're going to execute on this. Yes.

[A]

Yeah, they're going to do it. Yeah, this is happening. Yeah. So there were two reasons as to why I was less sure than you. One, we had a call with Thomley and we literally asked him this.

[B]

Well, well, well, we probably can't disclose all of those details, but.

[A]

Yeah, well, we had a call. We had a call with Dumbly. We asked him, what do you think about Michael? Michael Strategy's stretch? And he goes, if we do that, it closes down optionality to us. And so we. We want to preserve optionality. And so it sounds like they chose the door that they want to go through. Some doors as a result are going to close. But I think he was compelled by strategy's stretch. And now he's going to stretch or something like this. Yeah, yeah, yeah.

[B]

And again, 3% Internet bond native yield. Easy. Do it. How comparable is this to strc? Because we understand that product. We had Michael on the podcast. He described it in detail. When I looked at the filings and I got kind of a LLM summary, it seems like it's basically the same thing, except that part of the yield at least gets generated from staking plus any kind of defi magic on top of that.

[A]

Yeah, the staking element is important. Does Tom Lee sell the staking yield to fund part of the dividend is a question mark because you're not supposed to sell. And this is the other thing that.

[B]

That's the same thing with sdrc. Aside from like, you know, does Michael sell his acquired Bitcoin or does he.

[A]

He seems to be hammering MSTR at the ATM in order to. In order to pay for the dividends sooner than.

[B]

And Tom has that option, and then he just also has the additional option of the 3% yield, which he could also pull.

[A]

Yeah, but like, whether he sells ether staking yield or not is important in my mind. And the other reason, like, why I wasn't totally convinced that Tonley was going to do this was because he said, we're gonna hit 5% and we're done. You know, the alchemy of 5%. I think now, now I will re rate the chances of this happening, which is, I think Tom Lee's needs to blow past 5%.

[B]

Okay.

[A]

He needs to not stop. He has to. If he's gonna do the strategy playbook, he has to do the strategy playbook, which means, like, stop capping yourself. They. They earlier said that they are going to slow down their ETH buys as they approach 5%. I think they need to not do that. I think they need to go like 15%. They need to just go 15% as much as possible. That's the whole deal.

[B]

He's at 4.6% right now. He did this in 11 months from zero. Insane. At this rate, he would have 15% in two more years.

[A]

Yeah, I mean, if the price goes down even more, it can go even faster.

[B]

I am blown away that he has acquired the capital to do this in a bear market. Blown away at the conviction of launching this in a, like the Pro. This is the product to launch in a bear market.

[A]

I totally agree. People. People were making fun of Tom Lee for like launching it in the same week that that stretch was like coming off of its peg. And I'm like, no, this is the best time to. You want to launch it in the hardest possible moment.

[B]

Yes, Launch your. Launch your token in weakness, you know, like, because then you create, then you holders. It's all upside. But he's doing the thing, David, where, you know, Michael Saylor's thing is saying, oh, I've, I've converted. Bitcoin is not just a store of value of money, it's also a capital asset. And I'm doing my alchemy and actually turning this into a monetary capital asset. That's what's also happening to Bitcoin to ETH at scale. Like it is a check mark on one of your, like big. Eth has to do this in order for me to buy back in. I don't know why you still need a burn. This is worth way more than any kind of puny burn to me. I think you should buy back eth, David, on this news.

[A]

Okay, so can we look at the ETH chart? So we were talking about bitcoin. Bitcoin's hovering above the 200 week moving average. Bitcoin tagged $59,000. It's now up to $62,000.

[B]

Ether is this ether's 200.

[A]

Now we're looking at. Now we're looking at ether. Ether tagged $1,500 is now at 1643. Ether is 34% below the 200 week moving average. And the 200 week moving average for Ether has not gone up, Ryan, in a year.

[B]

Yeah, I know it is.

[A]

It is flat in a year.

[B]

Bearish because price is low and has been low. And the cycle was super shitty for ETH.

[A]

And so here, here are the two idiosyncratic moments of Ether was going from 2020 at $300 up to $4,600 at the end of 2021. That was the COVID bubble, that was the stimulus bubble, helicopter money, the NFT mania. Ethereum won that cycle. And then we have the return from like 1500 to $4000 with the ether ETF and it was really just following bitcoin. Bitcoin broke all time highs. Ether did not break all time highs. And so this is when ether malaise started to happen. And so I'll, I'll and I'll say that that was ether starting to lag behind everything behind the market. And then the next idiosyncratic event in Ethereum was with Tom Lee when, when Tom Lee started buying, when ether was 15 or $1600 back in April of 2020, he's round tripped all that, that's what's crazy. And it went up to all time highs, 4800. And now we are back at pre Tom Lee level. So Tom Lee has almost bought $20 billion of ether and we are at the same price. And so we had the COVID bubble with helicopter money and ZIRP and stimulus checks and the NFT mania and that allowed Ether to have like the 60x that it had.

[B]

Yeah.

[A]

Then we had Tom Lee and we have a race. Tom Lee, where does $20 billion of buy pressure come from?

[B]

I mean look at your chart and you could look at this chart and you could choose to be bearish or bullish. You can interpret it in both ways. You could look at this chart and you could say hey, last cycle, the 2021 cycle, Eth like grew so much, it packed two cycles into one and got way ahead over its skis. And it was destined to have a more muted second cycle. And this is the more muted second cycle. And now you have a lot of strong fundamentals being created, particularly the, the Michael Saylor of Ether. And he is viewing ETH as a monetary asset, as an Internet bond using yield, doing the same play that Michael Saylor is doing at scale and it's Tom freakin Lee and the guy has 5%. Like if you were bullish Tom Lee last summer, which everyone was, this is what the chart shows, right? And he was just promises, yeah, maybe I'll get to 5%. And you look at him, you're like, are you really, Are you like that's, that's cute. But are you going to be able to. Why are you not even more bullish when the guy has executed on 5% and now he's got validators, he's looking to get involved in probably the Ethereum foundation roadmap. I'm just saying you could look at this chart and you could take either side of that argument and I understand what you're saying. It's like, Ugh, where's 20 billion more? We're never going to have ZURP and helicopter money and it's over. That was the one spike we get. We don't get anything else. It'll just trade flat for infinity. I don't know. Maybe, maybe not though. Maybe not.

[A]

I think, I think the thing that concerns me the most is that like, you know, for every buyer there's a seller and there were so many people willing to sell Tom Lee their eth. I know to, to the point that it was just, we netted out.

[B]

It's all the, it's all the people from last cycle that were just like, yeah, I will like made so much money and just kind of, you know, it didn't, didn't happen as quickly as they thought.

[A]

Yeah, it is a timing thing.

[B]

I'm work on you. I'm getting to you.

[A]

I know it like this isn't this place for the weekly roll up but like we'll, we'll leave little breadcrumbs as well. There's like strong versus weak crypto I want to talk about but let's just get into the, the trad market because we have to move on into the weekly roll up. And so let's talk about inflation numbers. The May PPI inflation came in surging to 6.5%. That is above expectations of 6.4% and is the highest level since November of 2022. Yikes. Here is the poly market for the Fed rate hike in 2026. It was Ryan, just at 14 or 15% in May last month. It is now at 51% chance that we get a federal rate hike in 2026. Europe is increasing rates. The ECB raised Eurozone interest rates as the Iran war has stoked inflation.

[B]

They're front running the Fed.

[A]

Basically their Fed is front running our Fed. And then here is the Fed graph that Ryan, I know you like this.

[B]

Yeah, this is CPI. So you mentioned PPI, which is kind of a leading indicator for CPI. Right. And that was high. It was 6.5%. The headline number that I think like probably is being reported on CNN and people are pissed about is 4.2% in May CPI, 4.2%. That feels like a lot. It was kind of like oh, you know, the Fed's Our aim is 2% and then post Covid we've been like, oh, I guess 2%, 3%. Eh, when you get to 4%, that feels high, doesn't it?

[A]

4% high.

[B]

When was it last?

[A]

I think 3. 3% is tolerable because fiat is weak and all of our central banks have a ton of debt and we owe a bunch of money. 3% tolerable, 4% high.

[B]

That was. And a lot of this was driven, of course, by energy prices, which we're starting to feel from Iran. Although oil is not crazy at the moment. What's the price of oil?

[A]

I mean, like, okay, the whole entire oil price during the Iran war, like the whole thing is crazy. But we have high crazy and low crazy and we have settled in low crazy.

[B]

We're new normal crazy.

[A]

We're new normal, yes. We're not. We're normal for, for being crazy. So WTI is trading at $89. Just again, for context, it's ranged between 85 and, and $110. And so the fact that we're in the 80s is good. I really want to see this break down below $85. I don't really know if it makes sense to talk about oil breaking down because that's very charity ta stuff. And what's the point of charting when there's Donald Trump versus the Islamic regime? Like, you can't chart that, but it

[B]

just looks like this. And you can only do it historically. Look at this thing.

[A]

Granted, there was an escalation in the conflict this week. Like we're approaching a deal like we are every week, the week before and the week before. And nonetheless, like missiles were thrown, bombs were dropped, strikes were had, but oil price stayed low during the market, during, during the turmoil. And so it is kind of indicating that like, the oil is like settling out and there's a new equilibrium being set, established, and we're able to supply the world with oil as we need it without prices going too high. And so that there is some cause for optimism if this drops, if this is goes down and like drops below. And also we do, we do get the opening of a Hormuz. That's going to be so goddamn bullish. I just don't think that's going to happen. I think this is the new normal.

[B]

Big macro questions right now. The AI trade, will it continue? And then also when Warsh gets in, what's he going to do? There was talk of him, so there's talk of him actually moving the goalposts on the definition of CPI using a different definition. That's like a lower definition. You know we're just changing how we

[A]

count things so we can report better numbers. Yes, that's how well that worked for the Soviets.

[B]

That's right. David, we should cut for sponsors. What do we have coming up?

[A]

Coming up next, we're going to talk about the IPO season. We got this base X IPO coming in tomorrow, Friday, today, if you're listening to this on Friday, the largest IPO in history. We're also going to talk about anthropic and OpenAI. We got pre market perps out of crypto that show us information. We're going to look at that information and and then Ryan and I will resume our fighting after we talk about

[B]

are we fighting now? The real fight comes. It's round two after sponsors.

[A]

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[B]

I think it's accurate, I think it's

[A]

probably accurate, but we're going to find out. So if we all open up our brokerages and we see SpaceX tomorrow trading at 2 plus trillion dollars, traders on lighter did their job.

[B]

Not the only IPO, right. You said it's IPO season. We have Anthropic OpenAI, some of the AI native companies coming on the scene. Is that all happening this summer as well? And what's the, what's the estimated market cap in the perps markets for those puppies?

[A]

So Both Anthropic and OpenAI have filed. Neither of them have dates. OpenAI is not soon, it's going to come at the end of this year. Anthropic could be soon, could be Q3, we don't really know. But the implied market cap for anthropic on LiDAR is 1.6 trillion.

[B]

Also about a Bitcoin or so. The entirety of all bitcoin supply.

[A]

The entirety of Bitcoin, Yeah. And then OpenAI 1.25 trillion. There's an interesting revenue story. Okay, so SpaceX made $18.5 billion of revenue in 2025. Reported a $5 billion loss because it just burns cash. Rockets are expensive.

[B]

Yeah.

[A]

But out of that revenue, out of the 18.5 billion, Starlink made 11.5 billion. So the satellite business, which is like, it's like its own, it's like a first party product inside of the larger product killer, the killer app on the

[B]

app platform of rockets, I guess.

[A]

Yeah, it's like the uni swap to Ethereum. Yeah. Back in 2021.

[B]

Yeah.

[A]

And so Starlink is making 2/3 of SpaceX revenue. Anthropic run rate. Reported revenue across $44 billion annualized as of May 2026. The company is on track to post their first ever profit. Approximately 550 million in the second quarter of to 2026.

[B]

Incredible product. Have you tried the, the Fable model?

[A]

Totally. Yeah. It's great.

[B]

It's just incredible.

[A]

Yeah. Super smart. It's just like, it makes me feel dumb because when I get a response back from Fable, I'm like, oh, my prompt was so stupid. Like, what I'm getting back is, it's like I'm asking a genius like idiot questions.

[B]

Yeah. Pretty soon I'm just not even a prompt. I'm just gonna blah. Just lean on my keyboard and just. It'll know and it'll do Fable.

[A]

I want something.

[B]

It'll prompt, yes. Find out what I want and then make that help me figure out what to ask you. God, what does that make us? Like, just. We just get dumber and dumber.

[A]

Dumber. Super dumb.

[B]

Okay.

[A]

Okay. But then. OpenAI revenue, the last private round for opening I valued at 850 billion in March 2026. Revenue has blown past $225 billion annualized run rate. But their cash burn is $27 billion for 2026. So not. Not yet. Pulling a profit.

[B]

Yeah. I just have to say, as we always say, look, I hate trillion dollar IPOs.

[A]

It's something about that is bad and wrong.

[B]

Wrong. I mean, who can we blame? I like Paul Atkins, regulators, Gary Gensler. Why did you do this to us? It's. Look, it's not any SEC person. It's the laws on the books. It's regulation, it's. Who do we blame? Sarbanes, Oxley, who do we blame?

[A]

Like too much money, too much fiat money.

[B]

It's a fail. But it's just a. But it's not just that. It is that but it's just, it's also a fundamental failure of US capital markets that you have to be an accredited investor. Yeah, that this all happens privately. It didn't used to happen this way. It's like, it's like, tell your kids this is not normal. In the 90s you could IPO Amazon and it would be $400 million and the public 401ks that the average investor retail could actually realize 100x, you know, 600x whatever upside on that, that is no longer the case. So they IPO and then your exit liquidity and whatever, it goes up a few trillion. Who cares?

[A]

Yeah, well, I think there's two parts of the story. One part is that it is encumbering to be on the public market because of compliance and regulation and it's costly and so only big companies can do it in the first place. So we need to open. We need to stop being public Be such a stick. We need it to be more of a carrot than the stick.

[B]

Yeah.

[A]

And so we create the barriers.

[B]

Lower.

[A]

Lower the barriers. The other side of the equation is that it's just so much benefit, so much better for founders and companies to take private money. Part of. Part of the reason is because the

[B]

same side of the equation, honestly, the point. Don't want a ticker or they don't want like quarterly reports. That's all.

[A]

Part of it is that they can take private money because there is so much private money out there. Because there is so much money out there. There's so much money out.

[B]

I think it's both. Both sides of the same coin, but it's the same root issue. It's just. It's a failure of the US Capital markets. But whatever, we're not going to solve that today. I just. This is not good for populism, is it?

[A]

No, it's not. It's not. I do like that we are trading these things on an Ethereum layer two ahead of the ipo, months ahead of the ipo for sure. It doesn't quite solve the problem at hand, but it's pointing in the. In the correct direction.

[B]

Like we are democratic. It's more democratic waiting for your brokerage to list this thing after it's hit like $3 trillion.

[A]

Yeah, that's right. All right, do you want to tell us we got. Okay, round two?

[B]

Yeah. Okay. So there was a tweet. I think this is the meme, babe, look, the bankless guys are fighting.

[A]

Oh, I actually didn't see that one.

[B]

You did not see this? It was in one of the replies. Okay, so I was on vacation last week and there was. It was like. It felt like I very. I didn't look at my ex timeline very often. The few times I did, I looked and I was like, God, man eth. Sentiment is so bad right now. And I understand why. And we could take back to the chart, the price chart you were just showing, it's been flat for five years. Right. Like we haven't done anything from a price perspective. This is why there were errors made in the L2 roadmap. All sorts of reasons we could get to the one thing. None of that. I mean, it's disappointing. That's disappointing to me. None of that triggers me. The only thing that triggers me is just a little bit is the idea, this mental fallacy that Ethereum can be a successful platform without Ether, the asset being worth a shit ton. And by that I measure shit tons in the trillions. Many, many trillions of dollars. It has to be a global reserve asset or else the alternative, because the entire purpose of the platform is so says bankless thesis. So says the reason like I started talking or writing about Ether the asset and Ethereum to begin with is strong defi. Okay, so you can't have strong defi on the back of a dollar custodial stablecoin called USDC or tether. You have to have strong defi on the back of a crypto native asset that does not settle in meatspace, that settles on chain and in the shared security strong defi setup of the Ethereum ecosystem. That asset is ether. And so I don't care so much that people are like, hey, it was a good run. We put 10 years into this thing and it's just like it's not working out or it's kind of working out, but it's just like, ugh, we're not going to get there. And Bitcoin has taken all of that narrative. I understand people thinking that. I don't blame them. And I think that way too. I'm like, oh, I thought we'd be, you know, further along than we are actually now. I thought some of the strong defi experiments actually might work like single collateral DAI or like other crypto native stable and they haven't. A lot of those things just haven't worked and things have gotten more tradfi. But the fact that those things haven't worked just points to the possibility that Ethereum is a failed project. In other words, you can't, you can't say, oh, Ethereum has succeeded without Ether the asset also succeeding. I'd rather people just say, looks like it's not working out. We had higher expectations. The project is just like not working out. What triggers me a little bit is when there's some sort of idea that no Ethereum is successful, it's just Ether the asset is successful. No, if Ether the asset is not successful, Ethereum wasn't successful. It was an urban esque niche like sideshow thing that didn't change the world at all and actually didn't achieve the crypto native aspirations. It's set up and that's it, that's all. And so that's what I tweeted out, which is just like, hey, I find this triggering. You can't have Ethereum succeeding without Ether the asset succeeding. And so that was not targeted at you necessarily. Although I, I felt some kind of inclinations towards that where it was kind of like in your post, why I sold my eth, there was an idea that Ethereum could be, oh, EF could be a successful nonprofit. Right? Remove the successful piece out of that sentence. And I probably might agree with you that that would be the failure mode. It would just be a failed niche nonprofit type project that just didn't succeed or impact the world. And I guess the reason I feel somewhat strongly on that is because it takes me back to 2019 and 2020, which was just like the same sort of thing. ETH is gas. Ethereum could be successful. ETH doesn't need to be money. And it just was like, oh, I thought we already talked about this. No, it may not be successful, it may not be money. But a precondition for its success is that Ether becomes a store of value, reserve asset. So when I put it like that, I'm wondering how much daylight is actually between us in this debate.

[A]

Not too much. What I want to emphasize and see if I can get you to agree with so we can like stand on that foundation and move forward. Is that what you are? What I see you doing here is that you are prescribing a win condition for Ethereum. That is your opinion and aspirational and what you want to happen. And it is not inherently what is capital T true about what Ethereum is. Kind of in the same way where, you know, when Bitcoin was born, it was born as a peer to peer digital cash system. And then it turned into I don't know what the next narrative was. And then the next narrative was Bitcoin is digital gold. And now Taylor's trying to adapt the narrative into Bitcoin as digital capital. Bitcoin was never a peer to peer digital cash system. It was never digital. I actually don't think it's digital gold. We are collectively learning and prodding at what Bitcoin is. We still don't know what Bitcoin is. We are learning how it fits in people's portfolio, we are learning how it works as a financial instrument and we are updating our models as we go. We can do the same thing with ethereum where in 2019 when you are saying this was triggering to you because it was back in the old days of eth is just gas. In 2019, we had, we had strong defi ahead of us. Strong defi was being built. We were excited about it. It was somewhat working and it was going to be working even more going into DeFi summer in 2021. Strong DeFi and strong Ethereum was like the big thing. Now we are looking back on that and we're like, it's not exactly working very well. And what is working very well is that Ethereum is like a really good ledger upgrade technology for the backend of the world's largest financial institutions who are paying $20 a year in layer one settlement costs to have an improve ledger technology in as their, as their database. And that's just not strong defi and strong crypto and that's not strong ether the asset. But that is Ethereum being adopted. You know, that is, you know, institutions building on Ethereum. That is Ethereum the ledger technology proliferating across the world. And so I'm, I'm, I'm. What I'm trying to do as an investor when I talk about Ether and my decision to sell my eth and saying that like ether price is what it is and I don't really see it going anywhere is that I'm trying to not be prescriptive about what I want Ethereum to be. Although I, there is zero daylight between you and me about what we want Ethereum to be. But I'm trying to like not, I don't want, I don't think it's prudent to have my financial position be aspirational, aspirationable about what I want Ethereum to become and what I want Ethereum to be used for. Because if the market is not using it for that, then I need to reconsider my position.

[B]

I see. I think that maybe this is more semantics then in terms of where, where it kind of breaks down because I guess to me, I don't know if you'd agree with this, but to me so goes strong Defi, so goes Ethereum basically. And this is kind of the strongest case that you make with respect to looking at this as an investor and saying strong defi hasn't worked out so far. Right. And I see that too, it hasn't worked out. What has worked out is some of the ledger technology. What has worked out by the way, is the thing that Bitcoin is, which is whatever you want to call it, store of value, asset, right on chain bearer, instrument, that kind of thing. So you could say that strong defi is not worked out. But I think if you have to say, at least I believe this, this is not necessarily just a subjective win condition that I'm making. It's certainly my preference. I think it's actually more objective because if weak defi is the only thing we get, we get Bitcoin and we get weak defi. Ethereum is way over provisioned. It's back to it has too many nines. It doesn't need the security guarantees and the censorship resistance and the privacy and the open source and the. I think I did crops right there. Right. It doesn't need all of that. You just do it on Canton network. Fine, you're done. Call it a day. We got some super validators done. We got some nice ledger technology. We got some, you know, you don't need Ethereum. The only thing you need. It was back to. Do you remember when donkrad was like, what apps actually need crops? And then people are like, this, this, this and this. And he's like, at the con, my submitted. And I was like, ether, the asset needs it. And some defi. Like Uniswap does. And he was like, oh, yeah, that's probably the answer. That's the only thing that needs crops, guys. Strong defi Ether, the asset store of value. And so I guess what I'm saying is what you'd have to do is you'd have to look back at Ethereum and be like, yeah, it was a cool attempt and it did the EVM and then a bunch of. Then the blockchain proliferated and it has a spot in history. But ultimately the dream kind of failed because Ether never became a store of value asset. And strong, strong crypto didn't work anywhere outside of Bitcoin. So to me, this is why it's probably semantics to me describing what your case is and why you sold your eth, that's just called Ethereum failing. And you could be like, I'm selling my eth because I think Ethereum is going to fail and Ether the asset is not going to appreciate. Again, it's probably just semantics. We're probably saying the same thing. But that's the piece that triggers me just slightly is because I feel very strongly that Ethereum is nothing without Ether the asset. Aside from, like, we tried that thing and it didn't work. Like, we tried Webvan back in, you know, 2000, and we were really waiting on like Uber Eats for food delivery, something like that. Mm.

[A]

Yeah, There's a lot of people on Twitter are saying, like, the whole eth, not Ethereum, is just a reincarnation of blockchain, not bitcoin. And I want to throw a flag at that because that's an incorrect comparison. Because when the whole phenomenon of blockchain, not bitcoin, was literally just blockchain technology, not bitcoin, the blockchain. And so they were going to use IBM Hyperledger, you know, Intra database blockchain technology, literally the blockchain technology, but without any sort of asset. That was a complete failure. The actual reality is it's public permissionless blockchains, not your private intranet. That's the real innovation.

[B]

But there was a similar thing which is they were fading. The digital bear asset, the store of value. That was rat poison squared. That was a Ponzi scheme. That was speculation. That's not the thing that's important. Oh. It turns out that's the only thing that's important for Bitcoin. And I'm just saying that's also the only thing really that's important for Ethereum is ether the asset plus some strong defi around it. Everything else you could do on the Canton network or something like that.

[A]

Yeah, there, there's some benefit to like, you know, using a public permissions blockchain, credible neutrality, censorship, resistance, all of that stuff. And that's why Wall street is using Ethereum, not Canton, because of the public permissionless blockchain nature of it and as a shelling point of where everyone else is building. Yeah, but anytime like I, I talked to the figure guy who's putting helocs on chain so you can go buy helocs and get like 9% yield, great financial opportunity, we're democratizing access to that. They get to tap the world's capital markets, people get access to heloc investments. That is Ethereum the blockchain. Yeah. I think using Ether the asset is just not relevant in that flow.

[B]

Oh, I agree, I agree completely with that. But like I think that they are using it and they're issuing on Ethereum first because of network effect. And I think that part of the reason Ethereum is getting that network effect is because of crops and that propels it. So for example, I noticed Circle this week they launched a bitcoin custodial kind of tokenized product and they launched it on Ethereum first. It's because Ethereum has that strong network effect. I don't think they're launching it on Ethereum for crops, for their wrapped bitcoin products.

[A]

Definitely.

[B]

And their second chain is their own chain, it's Ark. Right. That's the other place they're launching it. So I think the benefit is kind of a side benefit and it comes from network effect, not because the real world tokenized asset actually needs the crops guarantees of Ethereum. Does that make sense? I think that's probably a subtlety you'd agree with.

[A]

Yes, yes. And overall the point that I'm, that I'm Making is that, you know, ether the asset. And I have said this on banquets thousands of times throughout the year. Bitcoin, the blockchain by bitcoiners is viewed as an encumbrance upon BTC, the 21 million hard cap unit. And if the philosophy of bitcoin could do this, they would do away with the blockchain so that they could just have 21 magical units. But turns out you actually just need the blockchain and proof of work as these minimum viable mechanisms to secure the assurances of 21 million units. And so you have to deal with the encumbrance.

[B]

I agree with that.

[A]

But the philosophy is Bitcoin is 21 million units, and that is bitcoin and everything else is just a means to that end.

[B]

Here's the last thing on this, and we can. Oh, did you have more to say? Go ahead.

[A]

Yes, because we. Because when we talk about Ethereum.

[B]

Yeah.

[A]

That relationship is inverted where Ethereum, the blockchain, is the point. Ethereum, the block space with crops, is the point. But an ether, the asset, has been a means to an end of providing World War III resistant block space. And when we were talking about ether's money in 2021, a lot of that money talk was out of an emergence of properties. Not any one specific mechanism other than the burn. Not any one specific mechanism. But that's because the economy is built on Ethereum. Ether emerges as money because of all these money episodes that we. That we did.

[B]

I think part of the reason you're saying that is because that's how Vitalik and crew have pushed it. And the narrative has been set is

[A]

like, that's also the era that we are in now is strong. Crypto is out. Retail crypto is crypto. Believers are out and Wall street is in. And it seems to be we've. We are just handing the torch to Wall street and be like, here's our sick ledger technology. Put any of your assets on it and forget about ether.

[B]

Maybe. I don't think it's over yet. If you're right, the second thing that makes Ethereum a failed project by my definition.

[A]

By your definition, do you. When you say Ethereum's a failed project, it's still producing blocks, it's still crops strong.

[B]

It's not crops. It's not. USCC is not crops. USCC is crops. For what, though? For something that Jeremy Ally can freeze? Anyway, we could debate this for. I just have one last kind of thing that I think is kind of somewhat interesting or somewhat funny and this is not a, like a poke. I think it's the actual truth. So what would you be saying this if ETH right now was trading at 10k?

[A]

Certainly not.

[B]

There you go.

[A]

But no, my counter argument to this.

[B]

That's not an argument. That's. I think the truth of it is that you will believe it when you see it.

[A]

Totally.

[B]

The problem is when you see it, it's too late to appreciate the upside of it. And you will buy Ether at the price you deserve if this all comes true. That's the bitcoin thing too.

[A]

I'd also like to emphasize that this is not necessarily just like a lack of faith about Ethereum the project. This is an existential questioning of crypto, the industry. Yeah. Which is largely defi. Is crypto largely represented by Ethereum? And so when people say, like, my conviction in crypto is gone, Ethereum gets the brunt of that because it represents crypto in the hard sense.

[B]

I get it.

[A]

But it's just like, dude, what are our products that generate and capture value? It's perps and it's stablecoins.

[B]

I get it.

[A]

And then. And then maybe it's also privacy. Like, maybe we can get privacy here too. And that's why zcash is cool. And if we had privacy on Ethereum Layer one, it'd be better.

[B]

And we're gonna get that.

[A]

Yeah, let's.

[B]

Let's leave it here. I think this may be an ongoing discussion as I come in as guest host for the weekly roll up, but I appreciate the engagement here, David. We got a few more things to talk about, though. What else do you got for us?

[A]

We're going to talk about Morpho raising $175 million and flipping AAVE in market cap, and then Zcash dropping 60% right after I buy it. What did I do? What did I do? We're going to get to all of that and more. But first, some of these fantastic sponsors that make the show possible. Trading is changing, not gradually. Right now. OKX just launched trading bots directly inside the OK X app. Grid trading, DCA arbitrage. You set your strategy once and it executes around the clock. No staring at charts all day, no manual entries, no missing moves while you're asleep. And for the first time, automated trading actually feels simple. But OK X is thinking bigger than just trading. They also launched the Agent Payments Protocol, an open standard that lets AI agents execute full commercial transactions on chain. The Ethereum Foundation, Uniswap and AWB are already building on it. And now it's live inside the United States and new users who deposit and trade can get up to $500 in Bitcoin through the bankless link. The link is in the Show Notes to learn more, not investment advice. Not available in New York or Texas.

[B]

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 Naito. 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.

[A]

Now announced last week is Morpho, raising $175 million, co led by Paradigm, a 16z crypto and ribbit with also participation from Apollo Circle Ventures, Van Eck. In that same week, Morpho, $1 billion market cap, $1.2 billion FTV flipping AAVE.

[B]

Whoa.

[A]

At $970 million market cap and a $1 billion FDV. To me, Ryan, not to be a dead horse, this would be the last thing I say about this, but when Morpho flips aave, it is backend financial infrastructure for the world's largest financial institutions. Minimum viable use of Ethereum. Flipping strong defi. This is weak crypto Flipping strong defi.

[B]

I don't know. I think Morpho is pretty strong defi. It's as strong as aave. It's definitely as strong as aave. From a smart contract perspective, I get that there's all stablecoins doing this. I think that the way it's sort of a weaker defi is they're not as dao y as aave, which by the way, to me has been like a millstone around aave's neck. And a hindrance is like, oh, first we gotta talk to the dao. And like Morpho is just like, no, we've aligned all parties and Like, Paul is running the thing and it's got the founder energy and it's not like tyranny of the structurelessness. And he just like runs the thing and he does it well. But the smart contract level, really, I mean, you tell me if I'm misunderstanding it, but the difference is you have segmented vaults with risk, whereas aave, it's all pulled together in some ways. Morpho is even more like strong defi,

[A]

particularly if it was hardened to defy. But the idea of everything being on chain and then on chain assets governing over risk pools, to me, that is. That is strong defi. And so like daos are strong defi. And so what you're saying is like, yeah, these are centralized team who can move fast and like shake hands with Apollo, the largest private equity firm. And I'm like, yeah, dude, that's weak crypto. That is ledger technology for the world's largest financial institutions. And then like AAVE token holders, risk managing on chain is strong crypto. And that's just slower and harder, I guess.

[B]

That was like v1 crypto. I think daos are a bad idea. I think daos were one of the bad ideas. There was like structurelessness, like, you know, we're all going to make it crypto, which ended up being the wrong path. Tell me about zcash. Okay, so what happened?

[A]

Okay, so this is actually an AI topic. On May 29, a security researcher was using anthropics, Opus 4.8, and he basically typed in the prompt, find me an exploit in zcash, make no mistakes. And it found one critical flaw in the Orchard pool. So zcash has privacy pools. So you have the transparent supply of zec. That's the UTXO set. That's a set that's on exchanges. You can also just hold this as an individual and your ZEC is like accounted for in the. Or you could put it in the privacy pool and then you shield it at the point and you mix it up with everyone else's. There was a vulnerability discovered in the privacy pool that would allow an exploiter to mint unaccounted for zek.

[B]

And so if you infinite, basically as

[A]

much as they wanted up to the amount that is deposited in the privacy pool. So you could only withdraw the amount that's in the privacy pool.

[B]

Double your money every time.

[A]

Exactly. And so it would be a transfer of ZEC from privacy pool depositors to the theorized exploiter. There is no proof that this exploit was ever exploited.

[B]

There's no proof that it wasn't there's

[A]

no proof that it wasn't. This is true. It was patched and then a hard fork was shipped very quickly before it was announced. So a hard Fork on June 3rd fixed the privacy pool. And then the public disclosure came on June 5. But the news that no one can prove that it wasn't exploited sent Zach tumbling about 50%, $100 million of liquidations. And then Arthur Hayes saying that he's out there is a. An upgrade coming. Iron wood hard fork that brings in a new shielded pool. And zcash does this. There's like new pools every now and then to like upgrade the cryptography, make it stronger. Just like software updates. You know how you update your phone, like software updates for the privacy pool. And then this time it's also going to be formally verified. And then there's also AI assisted just circuit analysis of the ZK circuits. Just some much more rigorous assurances around never happens again. Privacy pool, stronger assurances that this doesn't happen again. That's right.

[B]

This, this vulnerability was active since 2022. Right. So it was a long.

[A]

Was it possible to be. To be found since 20.

[B]

A long, long, long possible window. But in my understanding things, I think I read this, that with the new upgrade, they'll also be able to tell if it was actually exploited. So it won't forever remain a mystery. And that's a key part of the puzzle is once this upgrade happens, you can tell if someone triggered the, you know, double my money button a few times.

[A]

Correct. Every time we hop from privacy pool to privacy pool, every time there's a privacy pool upgrade, you can get assurances that it was not exploited in the past. Yeah. Yeah.

[B]

I think that this is sort of quite possibly if you're bullish, Zach, long term, which I'm not sure if you should be, but if you are, this is sort of a buy the dip type moment, probably because people did buy it.

[A]

It's up like 40% since there's a

[B]

bathtub curve with AI related issues with bath. Like, have you seen this with. You have flaws at the beginning stages of something and then they dip down, right. And get kind of a bathtub floor and then maybe they dip at the end. Everything fails or whatever. But anyway, I guess what I'm saying is we're going to see a bunch of these types of issues with the advent of AI, but then we're going to find them all with the advent of AI and resolve them, protect against them, equipped with tools, stronger than ever, and then they'll be stronger than ever. And we won't have these flaws in the future. That, at least, is the hope. But I think that's kind of what I expect to happen here.

[A]

Yeah, part. Part of my calculus in my decision to sell ETH was that, like, dude, everyone's scared to put their money in defi.

[B]

I get it.

[A]

And. And. But also on the flip side of that, there is the equal and opposite to exactly what your point. The other side of the bathtub. They're scared. They'll be scared We've ever used.

[B]

Yeah, we'll be in the bathtub for. We'll be in the bathtub, and it feels good. The water feels good. And then everyone will hop back in. Into the bathtub. Be all one shared bathtub together.

[A]

Dude. Okay.

[B]

I told you, I'm out of Fs to give.

[A]

We're going from bankless boys are fighting to bankless boys are in the bathtub.

[B]

What about this Jason Calcanis? Three years ago, he tweeted this, and I remember being absolutely livid. He said this. Really? If you're in kind of. I was just annoyed. Can't you say something nice about crypto? Jason, we're dying out here. This is 2023. If you're in crypto, pivot to AI. Did that age well? Did that tweet age well?

[A]

Yeah. I mean, hard to say.

[B]

It's not age well.

[A]

You can't say. Yeah, but at some point. At some point, crypto is down bad and AI is IPOing at multitrillion dollar valuations. Yeah.

[B]

Maybe at the point Jason's taking victory laps. Maybe that's when it ends. Huh? I guess we're wrapping this up. But I did see Hester Pierce.

[A]

We would like to give a shout out to Hester Pearce, who wrote a blog post, typed, or gave a speech titled Purse Almost out. Hester Purse, commissioner of the sec, has been at the SEC as long as we've been doing the Bankless podcast. She has been a light for when we needed it the most. In the darkest of nights, when Gary Gensler was releasing office hours, Hester Purse was releasing incredibly poignant remarks, critical remarks. And so as she's been on the podcast, like, eight times, we. She's been at the regulator.

[B]

Regulators.

[A]

Mom. Just like, just round of applause for

[B]

Hester Person, but also, like, just like, base fundamental principles of, like, why am I a regulator? What are the principles I am as a public servant called to uphold? She you hit those ethical standards. And she delivered such eloquent speeches. She get. I actually, she's such a well spoken person. I think maybe Bankless podcast could use a co host energy and I don't know if purse is looking on the market.

[A]

Hesser if you want, if you're looking for a job, the revolving door, you know, you leave regulation.

[B]

Come to join a podcast.

[A]

Join a podcast. Let me read a few remarks, just a few sentences from her, from her, from her statements. I'll just read the beginning of the end. So this is the very beginning. Thank you Jim. She says thank you to the person who introduced her. I'm delighted to be a part of the summit. My views are my own as a commissioner and not necessarily those of the commission or my fellow commissioners. My days of giving that disclaimer are rushing to an end. After nearly 30 years in D.C. i am leaving the city and moving to the beach then she gives a number of. She gives a number of points. Her main points in this speech is that capital markets succeed because governments stay out of the way. United States capital markets are the world's best because the government acts as a referee, not as a player. Government power must be tied to consent. And recently the SEC commission has been correcting course in a way that feels more aligned with her. But that did not stop her, Ryan, from giving further dissenting marks about where she thinks the SEC continues to need to improve, regardless of who is in the chair seat. I think she's always been the SEC's biggest critic, which is why we love her the most. And then she finishes with, thank you for indulging the meandering reminiscence of a soon to be former regulator. I am sad to be leaving a place that has allowed me to engage in the important work of regulating the finest capital markets in the world alongside fellow commissioners and wonderful staff who are committed to doing that task as well. Happy 250th anniversary to the nation I'm so honored to serve.

[B]

Well done.

[A]

Thank you, Hester.

[B]

Yep. Thank you. Thank you for the service.

[A]

And does that wrap us up?

[B]

Yeah.

[A]

Thank you for listening to the weekly roll up. One last Polymarket before you go. Ryan, as the world's greatest soccer fan, who do you think wins the World Cup?

[B]

The World Coin Cup.

[A]

The World Coin Cup.

[B]

The World Cup. Okay, I'm not going to look at these answers. Isn't it probably a South American country, right? Or European?

[A]

You can pick Argentina.

[B]

Argentina. Argentina gonna be my guess. What's Polymarket say?

[A]

So it's pretty close between Spain and France at 17 and 16%. Portugal is number three, Angla number four. And Argentina at number five. But, you know, it could be anyone's game. Dude, there is $2 billion on this market. Okay, $2 billion on the polymarker product market fit.

[B]

Why didn't you do sports betting? Oh, my God.

[A]

Sports betting on chain.

[B]

Wait, that's.

[A]

Oh, wait.

[B]

Oh, okay.

[A]

Anyway, it's on Polygon. Put it on the layer one.

[B]

Yes. Yes. Burn some eth. And then, Dave, burn some eth back in it. Are they stopping by? Because it's in the US this year? Is the World Coin cup stopping by New York City?

[A]

World Coin cup is in New York. It is in Atlanta. It's in Seattle. It's in Florida.

[B]

Those are places you can get to.

[A]

I might go to a game. Maybe I'll go home and see my family. In Seattle. I'll go to a game there.

[B]

I think you should go to a game. Tell me how it is, big sports fan.

[A]

All right. Well, we'll stay tuned for the world's best coverage of the World Coin Cup. That's it this week. Bank Station. Thank you much for sticking with us, Ryan. We'll be back on vacation next week. Just one week he's in, one week he's out. You never know what he's going to throw at you. But nonetheless, crypto is risky. You can lose what you put in. This is frontier. It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.