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Bankless
ROLLUP: Trump Eyes Greenland | Davos Goes Crypto | NYSE Goes Onchain | Quantum Spooks Bitcoin | Farcaster + Lens Acquired
01:02:01
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- [00:04]
Ryan Sean Adams
It is the fourth week of January. It's time for the bankless weekly roll up. David Trump wants to take over Greenland. Is that good for our bags?
- [00:12]
David Hoffman
Trump land, Trumpland.
- [00:14]
Ryan Sean Adams
Yeah. We'll talk about the market's reaction to this. Also, all eyes on Davos this week. There's a couple of themes there. It was maybe Trump versus the world, but also crypto versus Tradfi. There was an appearance by crypto folks at the World Economic Forum. Brian Armstrong was there, Jeremy Lair was there. CZ was there.
- [00:32]
David Hoffman
Kind of the who of crypto.
- [00:33]
Ryan Sean Adams
Yeah. It is new to have crypto people on the same platform as all the Tradfi central bankers.
- [00:38]
David Hoffman
Also, the New York Stock Exchange has announced their tokenization platform using a lot of our words to talk about their new tech product, their new trading platform. We're going to talk about it if it's good or bad for the rest of crypto. Is this another tempo or is this people actually leveraging our blockchain? We're going to talk about that. Also not the greatest week for decentralized social platforms. Both Farcaster and Lens kind of throwing in the towel, getting acquired by apps inside of their own ecosystem. Interesting. Did decentralized social fail? We're going to talk about that. And also very large institutional investor at Jefferies. Don't know what Jefferies is. Ryan's going to tell me what it is. Says he's selling Bitcoin because of Quantum. And that is not. He's not the only one. There is starting to be a trend of the market not liking Bitcoin because of the existential risk of Quantum.
- [01:28]
Ryan Sean Adams
We also have an update on the Clarity act, of course, and an update on the next Fed chair. Is he going to be crypto friendly? Before we get to all of that, we got to thank our friends and sponsors over at Immunify. David, what's Immunify up to?
- [01:41]
David Hoffman
Immunify is helping crypto not lose money to hacks. So the crypto space has already lost almost $12 billion to hacks. It is a fundamental cap on how relevant and significant our industry can become. We need to become hack proof. That's what Immunify is doing. And that is why they are launching what they're calling their first security operating system for the on chain economy. Powered by Immunify AI. It is like a. It's like a unified, a command center, command and control center to help teams prevent attacks even before they happen. Also this month they are doing their ico, their token sale as well to better align all the project's researchers in their broader community. If you would like to learn more about what Immunify can do for your app or the Immunify sale Banklist, ccimmunifyico is where you want to go.
- [02:27]
Ryan Sean Adams
That's gonna be that IMU ticker. That ticker apparently was not taken imu. Um, David, let's talk about markets and why they're down on the week. At least one explanation for why they're down, and that's because Trump wants to invade Greenland. At least it seems like.
- [02:43]
David Hoffman
Greenland. How many people live in Greenland? How many people live in Greenland?
- [02:47]
Ryan Sean Adams
Right. It's like, isn't something like 50,000. I mean, it's not that many. Something like this.
- [02:52]
David Hoffman
How many people live in Greenland? 56 to 57,000 people probably would be pretty easy to invade, actually.
- [02:58]
Ryan Sean Adams
It's not about the people, though. It's about the resources, I guess, for Trump. So what went on here?
- [03:04]
David Hoffman
Okay, so this started a while ago, and this was one of many crazy things that Trump just murmured, and you can't give credit to all of them. And so this is one that actually was murmured a while ago and now has, in this last week or two weeks has become actually.
- [03:19]
Ryan Sean Adams
Wait, is this a real tweet? Is this a real thing from the Oval Office of the White House?
- [03:23]
David Hoffman
This was a real tweet from Donald Trump's Truth Social, which is a map of the United States and Canada and Greenland and also Venezuela, all with the American flag on it. So, like, kind of implying that, like, this is our domain, like, we are going to take all of these things.
- [03:41]
Ryan Sean Adams
Yeah, kind of implying that they all belong to America.
- [03:44]
David Hoffman
Yeah, because, like, six months ago, there were huge protests in Canada about how Canada doesn't want Trump to take over Canada.
- [03:50]
Ryan Sean Adams
Because they definitely don't. I mean, I have Canadian relatives. They definitely don't want.
- [03:54]
David Hoffman
Of course they don't. Of course they don't. But, like, Trump was like, yeah, we're gonna take Canada and it's gonna become the 51st state anyway.
- [04:01]
Ryan Sean Adams
Hilarious.
- [04:01]
David Hoffman
Now we're talking about Greenland. So Greenland, like, last week and this week, Donald Trump has started to, like, publicly and privately push for the United States to acquire Greenland, framing it as a strategic necessity. Mainly just because, you know, as the crow flies a straight line between Moscow and the United States and New York, Washington, D.C. flies straight over Greenland. So kind of in the same way that, like, Russia found its way into Cuba to, like, set itself up very close to the United States, that's kind of how they're positioning. Greenland is like, you Know, this is a strategic buffer between us and Russia. So for. For the United States national defense, for our strategic operations across the globe, we need to acquire Greenland.
- [04:46]
Ryan Sean Adams
Okay.
- [04:47]
David Hoffman
Greenland is. Is owned by Denmark, which is like.
- [04:50]
Ryan Sean Adams
A weird, weird thing, like a Commonwealth.
- [04:52]
David Hoffman
Of Denmark, something like this. They have their own flag. They have their own, like, rules, but something to do with Denmark.
- [04:58]
Ryan Sean Adams
Sure.
- [04:59]
David Hoffman
So Denmark and Greenland's government flatly rejected the idea, saying Greenland is not for sale, and also announced that they are moving their military into Greenland. And so they are. They are actually actively moving troops into Greenland in coordination with other members of the eu. So the EU come and take it. The EU is like, well, we are going to take this very seriously. We are going to move our military into Greenland. Crazy, bro. Trump states that anything less than US Control of Greenland is unacceptable. Says that the island is strategically essential for the United States defense against Russia and China. And then also during the WEF conference, which we're gonna talk about this week at Davos, says that the US saved Greenland during World War II and shouldn't give it back, leading to one of the most unhinged Donald Trump clips that I have ever seen.
- [05:53]
Ryan Sean Adams
Are we playing the clip? That's a long clip.
- [05:55]
David Hoffman
Let's play the clip. Okay.
- [05:57]
French Central Banker
We saw this in World War II when Denmark fell to Germany after just six hours of fighting and was totally unable to defend either itself or Greenland. So the United States was then compelled. We did it. We felt an obligation to do it. To send our own forces to hold the Greenland territory and hold it we did, at great cost and expense. They didn't have a chance of getting on it, and they tried. Denmark knows that. We literally set up bases on Greenland for Denmark. We fought for Denmark.
- [06:38]
Ryan Sean Adams
He goes on like that. I'm just gonna cut that off. Okay. He says, without us right now, you'd all be speaking German and a little Japanese, perhaps. Wow. Talk about. I mean, that. That was a long time ago. Talk about some stolen valor there. I mean, like.
- [06:50]
David Hoffman
Right?
- [06:51]
Ryan Sean Adams
Yeah.
- [06:51]
David Hoffman
Okay. This is something I learned this week. Did you know, Ryan, that we already have, in effect today, which continues today, the 1951 Greenland Defense Agreement between the United States and Denmark establishing a Cold War pact allowing the United States broad military access to Greenland for NATO defense. We already have what we. What he says we want from it.
- [07:15]
Ryan Sean Adams
Okay. Who knows? It's so hard to know what's going on. But there was some escalate. Escalation. Right. You mentioned some NATO forces on Greenland being deployed. Deployed. And then Trump said, what if you guys do anything here if you don't let me take Greenland, I'm going to tariff you. There's a 10% tariff to 25% tariff.
- [07:32]
David Hoffman
10% tariff on several EU countries via talk of escalating it to 25% later in the year. This is when the market sold off. I don't know if you noticed your bags, Ryan, but they're not as great this week as they were last week. We are pertaining, we are saying that.
- [07:47]
Ryan Sean Adams
This is absorbing that.
- [07:48]
David Hoffman
Yeah, well, yeah, well, it's apparently because of the, the, the, the tariffs is why we're saying it happened. Also happy, you know, roughly one year anniversary of Independence Day, when we were doing the tariff scare about a year ago. I don't know when that was, but it's about a year ago.
- [08:01]
Ryan Sean Adams
Oh, that was like, that was like April, wasn't it? Was that April? Yeah, I think it was April. It was April.
- [08:06]
David Hoffman
Okay. Q1 last year was marked by like growing tariff murmurings and definitely the chaos.
- [08:12]
Ryan Sean Adams
Has been pretty consistent for the last year or so. So. But, but as I understand it, as of now, it does seem like there is a Trump Greenland deal that has emerged. So the tariffs are now off the table. This deal now involves small pockets of land for the U.S. the U.S. involved in Greenland's mineral rights. So the U.S. gets mineral rights. Indefinite timeframe designed to block Russian influence in Greenland. The US Puts a golden dome over everything and some infrastructure investment. Again, this is maybe Trump saying, okay, that's what I want, at least right now. And art of the deal and I created this deal. Now America gets Greenland. It's not quite, it's not that much different than what we already had.
- [08:59]
David Hoffman
Yeah. And like my, my attitude is like, we already know who Trump is. So like maybe it's naive to even say this, but like, wasn't there more constructive ways of getting here? Like, did we really have to do the tempest in the teapot strategy? Couldn't we have gone to Denmark and be like, hi, Denmark. We would like to expand the scope of our alliance. Yeah, let's work together and get me what, what we want. Here's what we want. What can we get you? But no, we had to be like, we're going to invade you guys.
- [09:25]
Ryan Sean Adams
It' It's a stylistic preference, David. It's just like chaos as a strategy. Let's look at polymarket, which is giving us some insight here. So will Trump acquire Greenland before 20? 27 is the prompt and now it's a 13% chance. So that's down from 20 earlier this week. So if you'd like to trade this market? You certainly can. The other market is will the US acquire part of Greenland by 2026? So the first poly market is part.
- [09:52]
David Hoffman
Of part of Greenland. For there are two different markets. One is all of Greenland and then the second market is will the United States acquire part of Greenland, which got up to 35% this week, down to 24% right now. But 24% where we just acquire part of Greenland. How would we do that? Would like, I don't know, I mean.
- [10:11]
Ryan Sean Adams
Like remember the Louisiana Purchase, you know, American bought Alaska.
- [10:17]
David Hoffman
Those became like states and stuff like. But like what, what would it be? Would it be like Puerto Rico?
- [10:23]
Ryan Sean Adams
I don't like a protectorate type thing. Or would it become a state?
- [10:26]
David Hoffman
56,000 people is fewer people than any state that we have.
- [10:30]
Ryan Sean Adams
Also, who do you buy it from? Also, what about the sovereignty of the Greenlanders? Like they should. Those 50,000 people should get to vote for this, right?
- [10:39]
David Hoffman
I don't know too many Greenlanders, Ryan. I'm guessing they don't really want to become part of the United States.
- [10:45]
Ryan Sean Adams
I don't know. There were some protest clips. It's hard to know. Maybe we should do a poll. But anyway, so this seems to be resolved and abated at least as of now. But this was the fallout in markets. This is kind of, I would call this more continuation in the capital flight or somewhat mild capital flight. But like you saw it on the week, which is the dollar goes down, equities go down, primarily US Stock market. Yields on bonds go up, US Bonds go up and gold goes up. Silver of course, goes up even more. And you know, someone called this on Twitter the capital outflow doom loop. And here's kind of what they mean. David, I was looking at some of the yields on the 10 year. And what's interesting about this is you remember in September 2024 we started, the Fed started reducing rates, right? So it was, I don't know, five and a half, something like that. And then we've been reducing rates since September of 2024. While that was happening, the yield on the 10 year has actually increased. So again the rates that the Fed decreases is kind of the treasury yield, right? It's the short term rates, but the ten year rates, which is like some kind of confidence of will America pay its debts, you know, what will inflation look like? That's been rising. So we've got higher 10 year rates than we started with And Joe Wiesenthal. Right. So we're reducing rates on the, on the short end but the 10 year rate, that's market controlled. That's. Do people want to buy our, you know, 10 year bonds? Yes or no. And if no, then you have to give them higher yield that's actually gone up. So this affects 10 year prices. This affects mortgage prices too.
- [12:32]
David Hoffman
Isn't this a inverted yield curve? Isn't that what that means?
- [12:36]
Ryan Sean Adams
Yeah, I don't know what like technically that means, but it just means that capital is, is fleeing the 10 year. Right. the same time we're, we're lowering rates. And so this is not good for 30 year yield and mortgage rates.
- [12:48]
David Hoffman
Yes, it's, it's not good for mortgages. The market is signaling that like in the longer term the dollar is going to be even less dominant than in the short term. Is how I read that.
- [12:58]
Ryan Sean Adams
Yeah, you have to pay investors more to hold your 10 year bonds. Right. Which is kind of some mild capital flight. And that's all going to the debasement trade. But how did our debasement crypto assets hold up on the week? What's bitcoin's price?
- [13:11]
David Hoffman
You don't want to know about that. Down 7.5% on the week, $89,400. Ether also not great. Down 11% to $2,950. We're below $3,000 on the mark. And this has just kind of been the story of just like people like gold and of all of the chaos and fear and uncertainty in the market about what this new future global, global status quo, global equilibrium is. People are going to gold. Not, not crypto, you know, some.
- [13:42]
Ryan Sean Adams
Somehow though, Michael Saylor found about $2 billion to go buy some bitcoin. So he actually made one of the biggest buys, the fourth largest buys in history for strategy. 0.11% of all Bitcoin supply. He purchased that last week. So he is still bullish. He's waiting for his moment.
- [13:59]
David Hoffman
So did you listen to Michael Saylor on our friend Alex Thorne's podcast when he was on?
- [14:06]
Ryan Sean Adams
That was in my queue, but I never got around to it.
- [14:08]
David Hoffman
I don't know if he went down just to interview Saylor, but maybe he did. He like flew down to Saylor's home and interviewed him in Saylor's home.
- [14:15]
Ryan Sean Adams
Okay.
- [14:16]
David Hoffman
Which is kind of cool. Really interesting episode about how he really.
- [14:20]
Ryan Sean Adams
Puts in the work as a podcast. He does not like bang.
- [14:23]
Larry Fink
Not us.
- [14:23]
David Hoffman
Not us, we say in the comfort of our own homes. But like really this whole idea, Sailor's whole idea is like, what does strategy do? Is it like unlocks this concept of digital credit. And that's what, that's what the Michael strategy does it like, it builds strategy. You always say it's this digital credit facility. I thought it was a pretty interesting way to like frame it. I also think it's a complete narrative, which is not incorrect. But he's like creating an idea and selling that idea.
- [14:58]
Ryan Sean Adams
Bitcoin, I hate to break it to you, but bitcoin is also just a narrative. There's narratives on narratives. It's narratives all the way down.
- [15:05]
David Hoffman
All right, Yuval.
- [15:08]
Ryan Sean Adams
So total crypto market cap, we're hanging at 3 trillion, 3.11 trillion. Let's talk about Davos, because I think there was two interesting things that really played out, at least to me, that stuck out. One is Trump versus the world. Let's get the Trump side of things. This is Howard Lutnick addressing Davos and the international community. Here's what he had to say.
- [15:29]
Howard Lutnick
We are here to make a very clear point. Globalization has failed the west and the United States of America. It's a failed policy. It is what the WEF has stood for, which is export, offshore, far shore, find the cheapest labor in the world and the world is a better place for it. The fact is it has left America behind. It has left the American workers behind. And what we are here to say is that America first is a different model, one that we encourage other countries to consider, which is that our workers come first. We can have policies that impact our workers. Sovereignty is your borders. You're entitled to have borders. You shouldn't offshore your medicine, you shouldn't offshore your semiconductors. You shouldn't offshore your entire industrial base and have it be hollowed out beneath you. You should not be dependent for that which is fundamental to your sovereignty.
- [16:39]
Ryan Sean Adams
He goes on like this for a while, David, but the message that the Trump administration, all the representatives Trump himself brought to Davos, the World Economic Forum, was like, globalization, that era is over. America First. And by the way, all you other countries, you should do the same thing. What's really interesting about this, David, is this is such a departure From, I think US policy over the last 80 years or so.
- [17:06]
David Hoffman
But it's not a departure from what Trump has been saying from the get go.
- [17:10]
Ryan Sean Adams
No, but now it's just being said in this type of form and it's being said with the backing of policy like tariffs and like we're coming after Greenland and all of these other things that accompany it. But it's just kind of marking the end of the rules based international order that the US set up in the first place. I mean the US was very pro globalization and has been. That's been a strategy. In fact, the Indian Foreign Secretary commented on this speech. The US was the main force behind globalization. It was made possible in the collapse of the Soviet Union. Globalization was a product of the belief in the end of history in US circles. Remember that book, Fukuyama book, the End of History, which is basically liberalism, globalism, international order, like the rest of the world's going like, hey, didn't you guys set this whole system up? And now you're saying you did this.
- [18:04]
David Hoffman
You did this to yourselves.
- [18:05]
Ryan Sean Adams
Yeah, you did this to yourself. And also I thought it was a good deal for the US There was also on the other side of this, David, another speech that got some play. I won't play the full speech, but this is actually Canadian Prime Minister Mark Carney and he basically said the same thing that he said, wake up. The rules based order is broken. He said there's a rupture in the world order. The end of a pleasant fiction and the beginning of a harsh reality. A reality that we're great partners. Powers have begun using economic integration as weapons tariffs as, as leverage. If we're not on the table, we're on the menu. So stop invoking rules based international order as though it still functions as advertised. Call it what it is. Nostalgia is not a strategy. He's basically saying middle countries. Everyone who's not in the US like wake up, Americans are doing something different now. Don't live in that fiction. The world has changed.
- [18:56]
David Hoffman
Yeah, we have done a bunch of episodes in the past a while ago about the Triffin Dilemma. And the Triffin dilemma being the world reserve currency, being the United States dollar has this like trap where it hollows out the. Hollows out the middle class, hollows out the manufacturing base. And what do we get from that? Well, we get to print free money, but we don't have any domestic manufacturing that goes and is exported to China. The weaknesses of that show up during COVID where we don't have any masks. And like all of our supply chains are realized that like it's completely dependent on foreign powers. And then Trump gets elected based off of that. Like all of these swing states, the Pennsylvania, like the, all the manufacturing belt, all swing from blue to red. Elect Trump and then Trump does all of this stuff and then gold pumps the narrative. Like hindsight 20 20, like kind of makes a lot of sense. There was a meme that I saw this week that I kind of think summarizes this like everything you said was very smart, Ryan. Here is the explain it like I use crayons meme. So for those listening, it is a map of the world and there are three squares drawn on different regions of the world. The Americas. Have you heard of the, the, the thing that's been coined recently called the Don Row Doctrine.
- [20:09]
Ryan Sean Adams
Yeah.
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David Hoffman
Monroe Doctrine was basically saying the Western hemisphere is our U.S. don't touch it. Like that's, that's our, it's our manifest destiny to control that. Yeah. So being updated from the Monroe Doctrine to the Don Road Doctrine because of Donald Trump. So we have the Americas. You know, draw a big crayon circle around the Americas. That's Donald Trump land. Then you have the upper quadrant of like Russia and, and Ukraine and, and Eastern Europe and that's Mr. Putin's. And then you have like Africa and China and Australia and Malaysia. That is Xi Jinping's. And these are the three powers. And this is the world and this is how the world operates. And you know, this is, this, this is the three geographic domains and get in line under this new world order. Is that kind of aligned with what you're saying?
- [20:53]
Ryan Sean Adams
Yeah, I think that's, it's basically like rather than rules based international order, it's back to power, back to power brokers. And this is like Mark Carney was acknowledging this. Like the thing about this map that you're drawing is just like Europe is not. And some of the middle middling countries like a Canada or like even in India. Let's talk about in India. They have alternatives as well. Right. And they, they are actors in and of themselves and they can, they can make maneuvers based on this type of a chop up of the world. And I expect them to in the future. But what this all means is just like end of an era. And what does that mean for the dollar for Treasury Triffin dilemma that you mentioned? I think investors are going to have to take all of these things into account moving forward. One other thing that I noticed from, from Davos, which was fascinating was crypto people. Okay. Like from the industry. The first time ever. Maybe they were there in pockets before, but first time ever they had a seat at the World Economic Forum.
- [21:53]
David Hoffman
They were a force, Crypto people were a force at Davos this year with.
- [21:57]
Ryan Sean Adams
With the big boys. So Jeremy Allaire was there. We had, he was actually there, which is like so striking to me because like 18 months ago he was in a U.S. prison. Yeah. And now he's at Davos pardoned. But this is a really Interesting exchange between Brian Armstrong and a French central banker. I'm just going to play this.
- [22:17]
David Hoffman
I trust more independent central banks with a democratic mandate than private issuers of.
- [22:24]
French Central Banker
Bitcoin, which have a very useful role.
- [22:27]
Brian Armstrong
But bitcoin is a decentralized protocol. There's actually no issuer of it. So that's, that's in the sense that central banks have independence. Bitcoin is even more independent. There's no country or company or individual who controls it in the world. And so anyway, I think it's a healthy competition because, because if people can decide which one they trust more and I think it's actually the greatest accountability mechanism on deficit spending.
- [22:52]
Ryan Sean Adams
I love that, I love that exchange. There is now pushback at the world economic economic form on central bankers just getting like the ability to say whatever they'd like. There's now pushback from people in crypto who are like, well, you guys don't run the world.
- [23:10]
David Hoffman
I think it's why the crypto industry, this clip just rocketed around the crypto industry on Twitter these days. And I think why, why everyone appreciated it was that, you know, Brian isn't being a zealot. He's not being like ridiculous. He's not being a crypto bro. He's just saying, you know, matter of fact, you are correct, Mr. Banker, in that Bitcoin might just be irrelevant so long as all you central bankers are responsible with your monetary policy. And he didn't even have to say the between the lines of like, no one thinks bankers, central bankers are responsible with their monetary policy. No one thinks that. No one thinks that.
- [23:44]
Ryan Sean Adams
That's great. And you know who also sort of had crypto's back as well is this guy, Mr. Fink, Mr. Larry Fink. This is his comment on organization.
- [23:53]
David Hoffman
That's our guy.
- [23:55]
Ryan Sean Adams
He's very bullish. Let me play him.
- [23:57]
Larry Fink
I think the movement towards tokenization, decimalization is necessary. It's ironic that we see two emerging countries leading the world in decimal in the tokenization and digitization of their currency. That's Brazil and India. I think we need to move very rapidly to doing that. We would be reducing fees, we would do more democratization by reducing more fees if we had all investments on a tokenized platform that you can move from a tokenized money market fund to equities and bonds and back and forth. We have one common blockchain. We will, you know, we could reduce corruption. So I would argue that, yes, we have more dependencies on maybe one blockchain, which we could all talk about. But that being said, the activities are probably processed and more secure than ever.
- [24:53]
Ryan Sean Adams
So there he is. Stick it up for tokenization. Now, there were a lot of ethereum people who picked up on that one single blockchain.
- [25:00]
David Hoffman
That's what perked up in my brain. It wouldn't be nice if you did have dependencies on one single blockchain to have a blockchain that hasn't gone down in over 10 years.
- [25:09]
Ryan Sean Adams
What blockchain is he talking about? Or should we take him more figuratively on that? Was he just saying the blockchain space or was he talking about it?
- [25:17]
David Hoffman
No, no, no. When you say dependencies on one single blockchain, you're no longer talking about blockchain, the idea or blockchain, that technology. You're talking about the blockchain that could actually invoke that sort of question.
- [25:32]
Ryan Sean Adams
I think so, too. That's how I want to interpret Larry Fink.
- [25:36]
David Hoffman
Can we talk about decibelization, please? I've never heard that word before. I love it.
- [25:42]
Ryan Sean Adams
No, he had to translate that. We'll. We'll do an entire episode on decimalization if we can try to understand it. One last news from Davos, of course, is Trump mentioned that he was really close to picking the next Fed chair. And the person that is rising in the ranks, 45% of polymarket is a guy by the name of Kevin Warsh. Kevin Hart, you don't have to be.
- [26:02]
David Hoffman
Kevin Hassett, but now being replaced by Kevin Harsh. So either way, Kevin's going to win this week.
- [26:07]
Ryan Sean Adams
Yeah, Kevin's. Kevin Hasset's down to 6% though, David. So, like, Kevin Warsh has really surpassed him. The big question that every listener has is like, what's his status on crypto? What does he think about crypto?
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David Hoffman
Who is this guy?
- [26:19]
Ryan Sean Adams
Never hasn't said too much. Yeah, he's. He's like kind of a fan of stablecoins a little bit. He said that crypto is not really money, but something interesting. All right. He was an investor in the algorithmic stablecoin basis. Do you remember that?
- [26:34]
David Hoffman
I do remember that. You know what?
- [26:36]
Michael from the Defi Report
I.
- [26:36]
David Hoffman
Why I remember that? Because I remember that being the main inspiration for Do Kwon's pre. Terra Luna experiment. This is a fun fact that maybe, maybe listeners don't know about. Before Do Kwon did Terra Luna, he did another algorithmic stablecoin experiment.
- [26:53]
Ryan Sean Adams
Not. Not basis, though.
- [26:54]
David Hoffman
Not basis. I think it did start with a B.
- [26:58]
Ryan Sean Adams
It was a. It was a derivative. It was a crappier derivative.
- [27:01]
David Hoffman
It was a crappier derivative. And it's kind of where he got the information to be inspired to do Terra Luna.
- [27:07]
Ryan Sean Adams
Yeah. So I wonder what Warsh thinks about that, having been an investor in August.
- [27:12]
David Hoffman
I don't. I don't think he thinks about that. Also bitwise. He also did Bitwise.
- [27:16]
Ryan Sean Adams
So he investor in bitwise. That's smart.
- [27:18]
David Hoffman
2021 named things. Yeah, that's a good. That's an excep portfolio.
- [27:22]
Ryan Sean Adams
So much more to talk about. The New York Stock Exchange announcing their tokenization platform. Is that good for us? Did our dreams come true or is this going to co opt Defi? Also on Chain Social thrown in the towel, but Vitalik wants to double down.
- [27:36]
David Hoffman
Vitalik's like let's do it again.
- [27:39]
Ryan Sean Adams
All this and more. But before we do, we want to thank the sponsors that made this episode possible.
- [27:42]
David Hoffman
What if you could trade gold, Forex and global markets with the same tools and speed that you use for crypto? That's exactly what Bitget Tradfi unlocks. After strong beta demand, including over 100 million doll dollars in single day gold trading volume, Bitget TradFi is now live for all users Inside of your existing Bitget account. You can trade 79 instruments across forex, precious metals, indices and commodities all settled directly in usdt. No platform switching and no fiat conversions. This is Bitget's universal exchange vision in action. Crypto and traditional finance side by side. You get deep liquidity, low slippage and leverage up to 500x letting you apply crypto strategies to macro markets new to Tradfi. Start with Gold. The Gold USD pair is liquid, macro driven and a familiar natural bridge between crypto and traditional markets. Try trading gold on bitget now@bitget.com click the link in the show notes for more information. This is not financial advice.
- [28:35]
Michael from the Defi Report
Few people in crypto put real skin in the game when they make public top or bottom calls. The Defi Report is one of them. The week before the October 10th flash crash, Michael from the Defi Report emailed his entire newsletter saying he's going aggressively risk off and sold the majority of his book from crypto into cash. This is when Ethos about $4,000 and Bitcoin was 110. Michael runs the Defi Report, an industry leading research platform built on data cycle awareness, risk management, transparency and most importantly.
- [29:03]
David Hoffman
Skin in the game. We like Michael at Bankless.
- [29:05]
Michael from the Defi Report
We like his analysis and that's why you hear him on the Bankless podcast.
- [29:08]
David Hoffman
About once a month.
- [29:09]
Michael from the Defi Report
And the Defi Report is giving Bankless listeners one free month of Access to the Defi report. So if you're looking for some sharp, sharp data driven analysis to make better informed decisions around your portfolio, you can learn why and how Michael called the top and what he's doing next all in the Defi report Pro. Check it out.
- [29:24]
David Hoffman
There is a link in the show notes the New York Stock Exchange launching a tokenization platform. From their press release saying the New York Stock Exchange announced its development of a platform for trading and on chain settlement of tokenized securities for it which it will seek regulatory approval. The new digital platform will enable tokenized trading experiences including 247 operations instant settlement orders sized in dollar amounts. I think that means as opposed to like share amounts. You could just say I want 1000 fractional stocks. Fractional stocks?
- [29:54]
Ryan Sean Adams
Yeah.
- [29:54]
David Hoffman
And also stablecoin based funding. Pretty cool design. This Design combines the NYSE's matching engine which is like their technology, their IP basically with blockchain based post trade systems including the capability for multiple chains for settlement and custody. Interesting. I think that could only mean public blockchains that have to be smart contracts.
- [30:17]
Ryan Sean Adams
It's gotta be smart contracts. So you're saying all of this is on, is it gonna be on public blockchains you think? We don't know yet.
- [30:23]
David Hoffman
I. What I'm seeing is it is applying its, its proprietary matching engine to ingest tokenized things tokenized assets from public blockchains. And I think you like deposit it with the NYSE and then you can trade those things on using their matching engine. The platform will power a new NYSE venue that supports trading of tokenized shares fungible with traditionally issued securities as well as tokens natively issued as digital securities. Tokenized shareholders will participate in traditional shareholder dividends and governance rights. The venue is designed to align with established principles for market structure and via with distribution via non discriminatory access to all qualified broker dealer. So it's kind of a meld of those like hey, the trad world can now interoperate with the blockchain world via this brand new trading video.
- [31:15]
Ryan Sean Adams
I think it's, it's pretty interesting, right? And just some context. The New York stock exchange over 40 trillion in assets.
- [31:22]
David Hoffman
That's the biggest stock exchange ever.
- [31:24]
Ryan Sean Adams
Oh yeah, yeah. And it's like, I mean compare that.
- [31:27]
David Hoffman
NASDAQ is like a second place, a healthy second place but still not close.
- [31:30]
Ryan Sean Adams
Right? Compare that to say Ethereum assets under management if you will or TVL. Right, Ethereum, it's about 90x Ethereum. Okay, so it's like really big. Also one question is sort of what's different versus this than something the Nasdaq. So the Nasdaq, we talked about this in the roll up, which is another major exchange. They were talking about tokenization. What's different here is this is Simon Taylor. Maybe I'll comment. Everyone else is building infrastructure to tokenize existing assets. Like remember the news of the dtcc? They tokenized existing custody securities. State Street News. They were tokenizing existing money market funds and ETS and the Nasdaq too. They were tokenizing trading alongside of like traditional for existing tokenization. But the New York Stock Exchange and what they're announcing, they're building a new way to bring equities on chain and also a venue to trade them. Okay. So they're doing a whole separate blockchain thing that is instant settlement. 247 fractionalized equities. It's a bit, it's a, it's a bigger step than anything that's been announced by the NASDAQ or the dtcc. It's bigger in scope and it's kind of cool. I mean a big question though is does this kill Defi? I thought that was what we were doing.
- [32:54]
David Hoffman
Yeah, this feels very similar to like Tempo where it's like, hey, fantastic blockchain technology and tokenization technology you guys have over there. It would be a shame if we just took all of that and used it for ourselves. And none of the value of all that technology actually flowed into public blockchains. Is that, is that kind of the question?
- [33:12]
Ryan Sean Adams
Yeah, that, that's sort of Jeff Dorman's theory. Here, I'll read out this tweet. So he says this crypto really is an exist, is in an existential crisis right now. Everything we thought would happen on blockchain is now happening, but little if any of the value accrues to any stocks or tokens in our ecosystem. That protocol thesis is long dead. He goes on to say, you have, you have. Bitcoin has nothing to do with any of this blockchain growth engine stuff and the real world assets. And then he just thinks that only a handful of defi tokens will win. Maybe stocks like Galaxy and basically Tradfi is going to co opt all of our cool stuff and they're going to make it their own. And I don't know, like Defi's dead. Crypto's dead.
- [33:54]
David Hoffman
Jeff, I think you're doing a lot of assumptions as to the success of this platform that got announced yesterday, of which we have very, very few details. Details, yeah. Is it an EVM like They won't want to use a blockchain. Is it an EVM chain? Like anything about what chains are they using?
- [34:09]
Ryan Sean Adams
We know nothing. Right.
- [34:11]
David Hoffman
So I would agree with Jeff if this was a somehow some sort of statement of success of this platform and not a PR release of this platform. But we were in the very early st of this. I'm more leaning to the Alex Thorne take side of things where he asked the question what advantage do you even get from trading tokenized stocks in cefi? Without the ability to pull the stocks out, self custody them, trade them peer to peer, tokenized stocks will be regulated to a back office tech upgrade that 99% of investors won't even see significant benefit from. I think there will be some benefits to this like 24 7, 365 markets, instant settlement. There will be back office upgrades and like maybe the 24 7, 365 benefits traders. But I agree this is like this is not where the innovation is. And then Omid, Omid Malik and who we had on the show a handful of times, he's a professor at Columbia, I think he says the New York Stock Exchange announcement is just mostly marketing with no substance whatsoever. Key technical and economic details are completely missing. And he also added that the entire New York Stock Exchange business model depends on centralized regulated market structure and delayed settlement, which conflicts with how crypto and tokenization actually works. I see this as just like another debate that we've had since the beginning of crypto, which is the blockchain, not bitcoin debate. And this is the blockchain technology is the cool thing, but public blockchains, not that cool. Don't think those are that cool. But in fact, as we've learned time and time again, it's actually public blockchains that are the cool thing. And private applications of blockchain technology are marginal at best.
- [35:51]
Ryan Sean Adams
This is why I'm not worried about this. This is why I think this is net bullish crypto because this is now tradfi kind of capitulating and be like, well you guys were right about tokenization so we're going to try our thing. Yeah, it's sort of like.
- [36:03]
David Hoffman
But let's, let's try the blockchain, not bitcoin thing again now that we've given you this.
- [36:09]
Ryan Sean Adams
But what they're not understanding is the thing that is different about crypto is it's permissionless and it's open like the Internet. So this was as if, this would be as if, you know, like AOL, let's say was in operation for 40 years. But you know, AOL, the closed border Internet was only open from like nine to five, no bank holidays. And now AOL suddenly announces that it's going to be 24 7. And we've got Instant messenger and we've got the AOL ecosystem, so you don't need that other thing called the Internet. Right, but that's just going to be a closed garden. All of the interesting things and the developers and the applications and the permissionless innovation that's going to happen on the open network side of things, that's going to be all on the Internet. And whatever Tradfi does is not going to stop that. It's only going to help that and further that. So, like, mark me in the camp of like, great, this is bullish. I'm not worried at all. Come to the party, Tradfi, like, try to compete against our.
- [37:06]
David Hoffman
You're almost there. You almost got it. You've almost figured it out. You're not quite there yet, but you're. You're so close.
- [37:13]
Ryan Sean Adams
What about this, David? Is this the end of On Chain Social, at least the end of an era. Farcaster and Lens were acquired this week.
- [37:22]
David Hoffman
Why does this always happen? Like, there are so many weeks where there's two independent bits of news and they are so congruous with each other. So this week, NAR acquired Farcaster and Mask Network takes over Lens. Now, both of these things, NAR and Mask Network, are teams that have raised money and are inside of the respective ecosystem of the thing that they are acquiring. So it's like something in the app layer that has the funds and the money acquires the platform that the app was built on in the first place.
- [37:59]
Ryan Sean Adams
Feels backwards, right?
- [38:00]
David Hoffman
Feels, yeah, it feels like a little bit of like, tail wagging the dog, like cart leading the horse, but, like, whatever. Nonetheless, we can talk about how that came to be. So NAR has bought control of the Farcaster protocol app and related infrastructure from Merkle. Merkle is the company behind Farcaster. And now we'll run the network end to end the Protocol, the main client, and also Clanker. Clanker is like the most significant app in the Forecaster ecosystem. Makes the most money. NAR is a social infrastructure provider. Raised money from Han Ventures, Union Square Ventures, Coinbase ventures, raised like $14 million. And that's where they got the money to acquire this. Why is this happening? Well, we've known Farcaster has, like, kind of said like, hey, we tried on Chain Social. Our best product that we've ever built is the wallet so actually we are now going to focus on the wallet. But it was kind of a capitulation, it was kind of throwing in the towel and I think they just saw the opportunity to sell everything to NAR N E Y N A R and.
- [38:55]
Ryan Sean Adams
So yeah, that's hard to say. You know Dan Romero though, and his other co founder, they've been at this for five years. Like I, from my perspective, you can't say they didn't try and lend Lens as well. I feel like they really gave it a try here.
- [39:06]
David Hoffman
Yeah, yeah, I did. Like this take from 0x Hubar. He, he wrote Farcaster is one of the more respectable wind downs I've seen in crypto. They ran a lean team with a healthy burn throughout. They took a contrarian bet on a huge market cap. They built real decentralized tech. What they didn't do was launch a useless token chill vaporware products and run copy pasta forks. Any of these alternatives would have drastically worse for users in the community. And so he kind of was saying like, hey, they tried and they also didn't do like the shitty things that come with many of the frequently failing apps that we have in the ecosystem.
- [39:41]
Ryan Sean Adams
Yeah, credit to both and credit credit. This is probably, it's probably going to be in better hands at some level if the team is pushed as far as they can. And now, you know, the kind of the apps are taking over, maybe this resurrects in some form and that that's possibly a hopeful future there. There's also the take here, David, that this is like the end of an era.
- [40:00]
David Hoffman
Like basically, how can you believe in on Chain Social at this point both of our two significant platforms are kind of like winding down. How could you ever say that? Like we didn't try on Chain Social.
- [40:13]
Ryan Sean Adams
That's right. That's right. And you know, Chris Dixon, you would.
- [40:16]
David Hoffman
Be silly to ever say that we haven't tried on Chain Social and we should just try harder. No one would ever say that, right Ryan?
- [40:23]
Ryan Sean Adams
Well actually so Vitalik said that on the week. Well so like you know, one take is like we tried it and it failed. Like the Read Write own era that was part of Chris Dixon's platform, I suppose, was the idea that you own your own post, that sort of thing that we tried that in crypto and it's dead or it's not going to work. Right now the timing is off. Vitalik on the other hand posted this week and actually he's quote tweeting the Lens acquisition news. So it's very relevant in 2026, I plan to be fully back to decentralized social. So when they zig, use egg. Okay, so Vitalik makes the point that, hey, we haven't, like, I know we've tried it, but we haven't done it, like, correct. It's been a lot about speculation. It's been a lot about token stuff. Crypto social projects, he said, have often gone the wrong way. Too often we in crypto think that if you insert a speculative coin into something, that counts as innovating. And he says moving forward, what he's going to be doing is posting through aggregators, so hits, like, all the social networks. And he's pretty excited about actually, you know, Lens and Farcaster into the future as well. And he is encouraging others to basically use decentralized social. So, like, what's your take on that?
- [41:35]
David Hoffman
My take on this is Vitalik wants to see a future world that is good, and this is how he sees us getting there. He sees us doing on chain social to get there. This is also emblematic of a lot of Ethereum's malaise that it's experienced over the last two to three years is like, Vitalik is a spiritual leader of sorts, you know, philosopher king of sorts about what's good. And, like, I trust Vitalik. I think he's got, like, some of the highest moral compass that anyone has.
- [42:06]
Ryan Sean Adams
It would be great if this worked.
- [42:07]
David Hoffman
It'd be. It would be great if this worked. It'd be great for Ethereum if this worked. It'd be great for humanity if this worked. It is not good product leadership for Ethereum when in the last two years the Ethereum community has been like, we need product leadership. We need to, like, turn this ship around. We need to, like, ship on time. We need to be a little bit more aggressive. And so it's antagonistic to that. But, you know, Vidal gets to do whatever, whatever he wants to do. You know, you could also just say that, like, you know, what, decentralized social, 10 years too early. You know, like, maybe it works out in the future as well. I will say, like, he. He says things like, you know, I encourage everyone to spend more time on Lens forecasts or broader decentralized social this year. We need to move beyond everyone constantly tweeting inside of a single global info war zone. And he's kind of like showing, throwing shade at Twitter. It's like, too loud, too messy, the algorithm is terrible, all that kind of stuff. I don't know if crypto fixes that. Like, do we need a blockchain for that or do we. Are there other adjacent technologies? Like, does the blockchain fix the malaise of Twitter? I'm not sure about that.
- [43:13]
Ryan Sean Adams
I don't think it does. I don't think it does. I feel like we've tried it. Like, so if you were to ask, what is Ethereum for? And if the answer to that question is it's for decentralized social, I think you're going the wrong direction completely. You know what I mean? Like, that can't be the answer. Like, we tried that. And this is kind of a take I have about. This is like we're 10 years into the. The Ethereum experience and it's always been about finance, it's always been about assets.
- [43:38]
David Hoffman
I'm sorry, that's what it is.
- [43:41]
Ryan Sean Adams
The product market fit for our ledgers, which is like, not surprising because they are ledgers. So you have debits and credits, they're ledgers. Right. And you've created smart contracts around them. It's going to be assets, it's going to be money type money.
- [43:54]
David Hoffman
It's finance, it's defi, which is an incredible upgrade to humanity that we still have so much juice to squeeze.
- [44:03]
Ryan Sean Adams
It's a big win. It's a really big win. My personal take, I earned the prize.
- [44:08]
David Hoffman
I own the prize.
- [44:09]
Ryan Sean Adams
Stay focused.
- [44:10]
David Hoffman
Stay focused.
- [44:11]
Ryan Sean Adams
I really feel like, I mean, part of the bankless mission was just like, about Ethereum focusing on Defi. And I feel like our social layer sometimes gets distracted.
- [44:20]
David Hoffman
I mean, we try it and I think we integrate entre and social. It'll be integrated in your DEFI activities and everything will feed back in on itself. And turns out those were more discongruent side quests than we could actually wrap into the decentralized finance experience.
- [44:40]
Ryan Sean Adams
At least for crypto. I mean, crypto can't do everything. Ethereum can't do everything. And maybe it's just like, at least right now it's not going to do decentralized social, but it's got a lot to go, a lot more to do on the Defi front. And I, for one, would love to see us continue to focus there. David, we got more to discuss. The Clarity act seems like it's on pause. What's happening? And is the Trump administration mad at Coinbase for pulling out? Also, institutional investors and Quantum fears they're starting to sell Bitcoin because of Quantum. We'll dive into a Jefferies analyst report on this, all this and more. But before we do, we want to thank the sponsors that made this episode possible.
- [45:18]
Michael from the Defi Report
Hey Bankless Nation, it's David. If you're hearing this, that's because you are listening to the free Bankless podcast feed. Did you know that there is a premium Bankless RSS feed? The premium feed has extra interviews that I do for my own personal research and just deeper questions that I want answered about the crypto industry. Questions that I want to answer so I can be more informed as an investor both at Bankless Ventures and also just in my own personal portfolio too. Also, there are no ads, which means if you listen to the premium feed instead of the free feed, you'll get about 20 hours of your life back every year because you choose to support Bankless directly. So if you're in interested in getting extra content all while skipping the ads or you just appreciate what we do here and want us to keep doing it, we'd appreciate it if you signed up for Bankless Premium and there is a link in the show notes to get started. Cheers to a good 2026.
- [46:00]
Ryan Sean Adams
All right, David. So the news on the Clarity act this week is a delay. You know, we spent so much time talking about Clarity and the back and forth of it last week. This week the update is the bill is likely delayed until late February or March as the Senate panel pivots to the Trump housing push. So the Senate is moving on to other things and somewhat Clarity act is in some purgatory. The remember the Ag Committee, they had their own version. We're talking about the, the Senate, the Banking Committee's version in the Senate yesterday. Well, the Ag Committee did publish their version, so that's a step in the right direction. The problem is it was kind of like a bipartisan sort of publishing it. It was kind of the Republican leadership on the Ag Committee saying, well, this is our version. We can't come to agreement with the Dems on this specific committee. So we're just publishing our version separately, which is not a good sign because you obviously need bipartisan consensus and enough Senate votes to get this thing through. And they don't have it yet. And so that's the status. Unfortunately, we're on pause. We're on ice for a little bit. The probability that the Clarity act is signed in 2026. Oh, just dropped what we were talking about on polymarkets, a 39% chance. That was like 42% or something like that last week. So it's gone down a little bit, but it's pretty flat.
- [47:22]
David Hoffman
Crypto definitely sold off on this news as well, especially the Smart contract platforms. Ether I think that's why ether was down like 4 or 5% more than bitcoin was this week. There's also. I think Coinbase is kind of being. Maybe singled out isn't the right word, but at least the White House, I think, is angry at Coinbase or what's the rumor? Pointing their finger at Coinbase. Because Coinbase was the one that, like, we are drawing a red line at stablecoin yield. And if we can't have stablecoin yield, then, like, that's when they say that line, a bad deal is worse than no deal.
- [47:53]
Ryan Sean Adams
Yep.
- [47:54]
David Hoffman
And like other people, like, I listened to the chopping block interview with Peter Van Valkenberg, who's singing the current praises again, maybe that was a little bit more singing the praises, maybe a little bit much, but, like, being very positive about market structure.
- [48:08]
Ryan Sean Adams
Bill.
- [48:08]
David Hoffman
And it's kind of just Coinbase who's like, really hung up on the stablecoin yield aspect of this, which this current bill does not.
- [48:15]
Ryan Sean Adams
They're not wrong, though, David. They're not wrong. The freaking banks shouldn't have stablecoin yields.
- [48:20]
David Hoffman
Totally.
- [48:20]
Ryan Sean Adams
It's a separate thing. Clarity, action.
- [48:23]
David Hoffman
I love Jake Stravinsky's point of those. Like, there is no policy precedent to protect the banking yields whatsoever. Bank deposits, that's. That shouldn't be in policy. Nick Carter replied to Brian Armstrong's post about, like, defending Coinbase's position to pull out the bill. And he's. And he's like, good job. Hold the line. It's critically important. Yeah.
- [48:45]
Ryan Sean Adams
Because hold the line on stablecoin yield that, you know, that would set back stable stablecoins for generation if we don't get it right. So there's some division here. In fact, Brian Armstrong is saying that, like, no, we're in sync with the Trump White House. But there was a reporter, Eleanor. Eleanor Terra, who's doing great work on this, or actually said the Trump admin was saying were mad at Coinbase and just being like, if Coinbase isn't on board, it doesn't get their act together. We'll pull out. That's a little back and forth there, that we don't know what the truth is. But we do know this is Patrick Witt. He is an advisor to the White House and he's quoting the no bill is better than a bad bill type of idea. And he's saying what a privilege it is to be able to say those words. Thanks to President Trump's victory and the pro crypto administration he has assembled.
- [49:30]
David Hoffman
Let's not Trump. Those are Trump Words. I know Trump when I see it. That's what. That's Trump speaking.
- [49:36]
Ryan Sean Adams
He's. He does make a point, though. And basically his point if you read this tweet, is he's saying, like, this is the best deal you're going to get, because in the future, there's going to be more Democrats in Congress. You might not have Trump around. And so, like, you better take this deal, because you don't want, like, a deal under, like, you know, President AOC or something like that.
- [49:56]
David Hoffman
I don't. It's worth considering.
- [49:59]
Ryan Sean Adams
It's worth considering. Yeah, it's worth considering. But anyway, we're stalled out for now.
- [50:03]
David Hoffman
So I know this announcement just absolutely rocked your world, Ryan. Gusto enables businesses to pay international contractors on chain. So Gusto, if you listeners don't know, is like a HR platform.
- [50:15]
Ryan Sean Adams
You.
- [50:15]
David Hoffman
You put all your employees in there, they set up their direct deposit in there and all their healthcare benefits.
- [50:21]
Ryan Sean Adams
People would call it payroll. They do payroll.
- [50:23]
David Hoffman
Payroll, that's right. Payroll. HR services. Our COO loves Gusto because it basically does half of her job. Assists her in doing, like, half of her job. So you can now pay people in Gusto with USDC on base, and so you can fund your Gusto account with uscc. And then when you need to pay your employees or your contractors, you can. You can do it with Gusto. And just to tell you exactly how big of a deal it is, we have a quote from our CEO that I snapped right from our discord, where she says, this is the lamest news, but this is actually huge for me, lol.
- [51:01]
Ryan Sean Adams
I think it's a big deal. It's stuff like this that happens in the background. Like, I. I remember when we first started using Gusto for Bankless, I was like, God, someday we'll be able to.
- [51:12]
David Hoffman
Do this in stablecoins.
- [51:13]
Ryan Sean Adams
Stablecoin payments here.
- [51:14]
David Hoffman
Yeah.
- [51:15]
Ryan Sean Adams
Right? And here we are, and no one's really noticing it because it's happening in the background.
- [51:20]
David Hoffman
It's such a boring update, but I'm.
- [51:22]
Ryan Sean Adams
With our COO on this.
- [51:24]
David Hoffman
Getting Stable coins into Gusto is big. Hang on, we're going to cut this pause out, but I'm going to ask how much Gusto runs on payroll every single year. Tens of billions of dollars, Ryan, is how much Gusto processes through payroll. And now you can put some of that on chain.
- [51:41]
Ryan Sean Adams
Amazing. What. What a beautiful time we're in.
- [51:44]
David Hoffman
Beautiful time.
- [51:46]
Ryan Sean Adams
David, let's talk about the time that that Bitcoin is having with respect to Quantum.
- [51:51]
David Hoffman
Feels like transition, bro.
- [51:56]
Ryan Sean Adams
Okay. Christopher wood dropped his 10% bitcoin allocation because of quantum fears, Quantum concerns.
- [52:04]
David Hoffman
Who's Christopher Wood?
- [52:06]
Ryan Sean Adams
He is one of the most widely followed Wall street strategists.
- [52:10]
David Hoffman
Okay.
- [52:11]
Ryan Sean Adams
He created this. I believe it's a fund. No, it's a. It's a model portfolio called Greed and Fear. And in the Greed and Fear model portfolio, there are all the assets that you should want to own under greed and fear types of conditions. And previously, bitcoin had been in that greed and fear portfolio construction at like 5%. But now Chris Wood, again, he's at. Jeffrey is a big investment banking company, very respected, he said. So he's selling the 5% bitcoin allocation and replacing that for gold. And the reason he gives is because of quantum fears and the uncertainty and bankless. Listeners will know because we've talked about this a lot, even had Scott Aronson on over a year ago to talk about this. Quantum. We think that quantum could. Is a concern for Bitcoin right now.
- [53:06]
David Hoffman
I think that's understating it.
- [53:08]
Ryan Sean Adams
Yeah, I think understate it.
- [53:10]
David Hoffman
Then Quantum could divide Bitcoin by zero. It could end Bitcoin.
- [53:15]
Ryan Sean Adams
Wow. David, David, he's not mincing words here.
- [53:18]
David Hoffman
Okay.
- [53:19]
Ryan Sean Adams
He's like. He's going straight to zero. All right, well, so, yeah, this is what's interesting about this, is an institutional investor starting to say that. So this narrative is kind of propagating. Coinbase's head of research, David Duong, agrees with Wood on this. So he talks about the 33% of bitcoin supply that could be at risk from quantum attacks. You know, El Salvador has recently, you know, this has been on their radar. They've actually moved addresses to be like, in more quantum safe addresses. So what do you think this means for the market? Do you think that investors are really looking at the quantum concern and starting to price this in with net outflows of bitcoin.
- [54:05]
David Hoffman
So that's what Nick Carter has been saying on Twitter is like the malaise of bitcoin. You know, the poor price action of bitcoin over the last six months and three months, especially in contrast to gold, is the market pricing in quantum risk. And like, you know, to his point, you don't. The market doesn't need to price in risk loudly. Like people quietly, you know, looking and researching about quantum being like, you know what I would like less exposure to that shows up in the market gradually. It doesn't have to be an acute event.
- [54:35]
Ryan Sean Adams
I've actually heard this in pocket. So I've heard this From Ray Dalio. He's been on the circuit. I've been listening a lot about him. And whenever he's asked about bitcoin, which he often is, he always talks about bitcoin's having a hack type risk. And so he doesn't typically talk about Quantum specifically, but he's like, I like gold because it's got this history and it can't be hacked. Like it's not soft. Lindy is the point.
- [55:01]
David Hoffman
You know, bitcoiners love to talk about Lindy and like especially with Lindy with relation to every other crypto asset, like bitcoin has the most Lindy.
- [55:09]
Ryan Sean Adams
Yeah.
- [55:09]
David Hoffman
Bitcoin's got 15 years, 16 years. That's not that, that's not that long. That's not that long at all. That's very, very short amount of time.
- [55:18]
Ryan Sean Adams
Yeah. Raoul Paul, on one of these comments, he also confirms this from what he's hearing. I've had numerous concerned emails from people on this article already. That was the Jeffries article about Quant. So he's in kind of the circles of investment macro fund traders who are like, oh shoot, Quantum. I didn't realize this could be a threat for the fixed supply of bitcoin or whatever they think.
- [55:41]
David Hoffman
Totally. Coinbase is doing something about this. So Coinbase this week announced their independent advisory board on quantum computing. This is Coinbase just doing things so proud.
- [55:52]
Ryan Sean Adams
Good job guys. They're going to say bitcoin.
- [55:54]
David Hoffman
Good job again.
- [55:55]
Ryan Sean Adams
Good job.
- [55:56]
David Hoffman
Coinbase. It's designed to prepare the crypto industry for potential security threats posed by future advanced in quantum computing. Three main objectives from this board, publishing papers to assess the state of quantum computing and its impact on blockchains. Two, issuing recommendations to guide developers and organizations to safeguard against long term risks. And three, real time responses. So providing analysis during major quantum.
- [56:19]
Ryan Sean Adams
What about shipping code? We got some code to ship on the bitcoin core side. Huh?
- [56:23]
David Hoffman
Yeah, but like that's kind of the issue is like the bitcoin core people are just being like nana, Nana, nah, like not real plug my ears, stick my head in the sand. Which is like the tense, the typical bitcoin like core developer response. This, this board actually has some, some chads on it. So Scott Aaronson, the like the Quantum guy again, like Ryan said, we had him on the show. We had him on the show with Justin Drake. If you want to learn anything about bitcoin and quantum, go listen to that episode. Let's.
- [56:51]
Ryan Sean Adams
And that was a year ago and so much has changed since then.
- [56:53]
David Hoffman
It's accelerated So I think, I think I don't want to put words into Scott Aaronson's mouth, but I bet you if we had him back on and we asked him like, like, yo, has like it's been one year. Has, have we done like maybe more than one year's worth of advancements of Quantum, and I think he would go like, yes, we certainly have.
- [57:09]
Ryan Sean Adams
Yeah. He'd be like, hell yes. And it's interesting, like he wasn't, he was sort of vaguely aware of crypto now, now he's on the board that you're talking about that Coinbase is assembling. So he is like neck deep in the crypto stuff. Yeah.
- [57:20]
David Hoffman
Dan Benet, he's like a cryptography Chad over at Stanford, Justin Drake, who we know, it's Sriram Kanan from Eigenlayer and then a couple other names who I don't recognize. So like, this is, I, I, I'm about what these people are doing. I'm need, I need to be more optimistic about what the bitcoin core developers are doing because right now, to Nick Carter's point, which I got into like a very short argument with him about like a couple years ago, weeks ago, like he was saying, like, if bitcoin falls due to Quantum, it's going to drag the rest of the crypto market down with it. And I was like, yeah, maybe in the short term, but like eventually all the quantum resistant blockchains that did the work to protect themselves will like rise from bitcoin's ashes and actual will perform well. But right now, Ryan, we are in the short term in which bitcoin drags all the other blockchains down. And I think that's kind of also what's been happening lately and why our bags are sad.
- [58:11]
Ryan Sean Adams
Yeah, they should just fix it now. There is an element though, I should say, okay, like I will say, right.
- [58:16]
David Hoffman
They should just fix it.
- [58:17]
Ryan Sean Adams
They should just fix it. Okay, so, but there is an element of this where like, I think narrative is following price. So maybe bitcoin was always going to sell off this year and now people are like, well, because Price is down, it's because Quantum. So I don't want to undertake Price.
- [58:36]
David Hoffman
Could follow a narrative on this one. Because I do think that quantum, it's a fundamental quantum, isn't going to actually impact bitcoin for three plus years.
- [58:43]
Ryan Sean Adams
Yeah.
- [58:44]
David Hoffman
And people are becoming aware of the narrative of Quantum and then prices following it.
- [58:49]
Ryan Sean Adams
I guess what I'm saying is I think this narrative is not just fud in that it can Be fud. That is dismissed. But it will go. It could go quite a bit more.
- [58:59]
David Hoffman
Too far. Depends on the condition.
- [59:01]
Ryan Sean Adams
Too far. And that could be the story of this year. Like, it'd be like bitcoin could hit. Like, I'm gonna say sacrilege, but like, oh, no, Michael, NATO is talking about this. 65K. Okay. It's like Bitcoin hit 65K. And why? If it's trading at that price, it's because of Quantum. It's because of Quantum, that's why. And there's no solution. Blah, blah, blah. We'll probably get out over our skis if this heads in a negative direction.
- [59:22]
David Hoffman
Maybe that's what it'll take to get the bitcoin developers heads out of their asses.
- [59:26]
Ryan Sean Adams
Yay. There you go. Well, you. You know what, David?
- [59:29]
David Hoffman
We would know from the Ethereum community.
- [59:31]
Ryan Sean Adams
We should become bitcoin developers. Just go solve this, okay?
- [59:35]
David Hoffman
I am a bitcoin core dev. I don't know if you knew that.
- [59:37]
Ryan Sean Adams
Just vibe, code it some quant.
- [59:40]
David Hoffman
Vibe, code some quantum into bitcoin.
- [59:44]
Ryan Sean Adams
The US Government will add seized bitcoin to its digital asset reserve. They always said they would and now Treasury Secretary Besant is actually doing it. So there you go. So it's all the seized bitcoin. They're no longer going to be selling it. They're going to stop all the auctions. I hope they put it in the reserve.
- [60:02]
David Hoffman
A new map of the globe. And instead of having like the western hemisphere blanketed in America flag, they just have which countries own the most bitcoins.
- [60:11]
Ryan Sean Adams
Oh my God. Go kidnap their leader and take their bitcoin.
- [60:14]
David Hoffman
Take their private key.
- [60:15]
Ryan Sean Adams
Jeez.
- [60:17]
David Hoffman
Out of the more serious end of crypto. Ondo is expanding its ecosystem. Ondo, for those that don't know, has. They issue tokenized securities. You can go. You can go buy half a million dollars of Google on Ethereum right now. And it's an Ondo token. Pretty cool slippage. Very low slippage. Yeah. They are also coming to Hyper Liquid and Solana. Why are they doing that thing? Well, for obvious reasons, Hyperliquid has perps. So now we have tokenized equity perps on Hyperliquid. That's pretty cool. No other Tradify platform has that, including Robinhood or Coinbase and then also on Solana as well to roll them into like Jupiter and all that other stuff. So pretty good. Pretty big expansion out of the Ondo universe.
- [61:00]
Ryan Sean Adams
Yeah, it's like an open finance answer to what the New York Stock Exchange is doing.
- [61:03]
David Hoffman
Exactly.
- [61:03]
Ryan Sean Adams
Really?
- [61:03]
David Hoffman
It's public blockchains. Public blockchains.
- [61:06]
Ryan Sean Adams
Well, we don't know if 2026 is going to be bullish or bearish, where we're going to end the year. But I do know, I have this confidence, David. This is going to be the year of tokenized securities. All right. We're seeing that everywhere.
- [61:15]
David Hoffman
Totally. And real world assets, tokenized securities and quantum.
- [61:22]
Ryan Sean Adams
We gotta leave it there. Of course. You know, crypto is risky. You could lose what you put in. But we are headed west. This is the frontier. It's not for everyone. But we're glad you're with us on the bankless journey. Thanks a lot. No, Dave, don't do it. Don't do it. That'll destroy the podcast. Okay. Oh, my God.