D (3:02)

Almost one and a half, yeah.

C (3:03)

Wow.

B (3:04)

Incredible. So, yeah, we definitely want to dive in, but for folks who have just kind of met you for the first time here on the show, let's, let's not jip them of your introduction and a little background and then we'll kind of dive in, I think, just to the state of the markets. You're a markets veteran. We kind of want to get your view on macro, maybe how it's coming to bear on crypto, your long term views, and then we'll kind of dive into some of the specifics of what you're working on. Does that sound good?

D (3:28)

Yeah, absolutely. And so my background started, like many of us, probably in the traditional space working at Citibank, but way back when I got out of school and then kind of got the small startup entrepreneurial vibe as I headed into the fintech space. Helped build out a company that was in the equity research analytics field. Basically took a bunch of models from the sell side and helped the buy side understand where forecasts were and sentiment was on the streets. Revenue models on Tesla or whatever it might be, and had a nice stint there, but was investing in crypto on the side and so took my talents into Defi full time in 21, joined Robert Leshner and the Compound team. There was a business called Compound treasury that we were running, had about $600 million at its peak. Basically now that we're going into the rate cutting regime, this was 21, when rates were at zero and you could lend stablecoins at 8% and people were like, hey, how do I do that? But people didn't even really know what USDC was at that stage, which is crazy. Now that we have the genius act in place, it's wild to think that they were underwriting the risk of a stablecoin as solid as Circle's USDC. But yeah, through that product, we basically gave them 4% yield. We were actually before MicroStrategy, we were the first crypto company to get a credit rating actually. So also had a B minus, which was investment grade. But because of the novelty I guess of the credit rating agencies kind of looking at a crypto related business, it was a big milestone achievement. We paid 4% on cash investors, which again at the time was a large delta versus a savings account or a T bill at that stage which was, you know, had a 0 or 1 handle on it and you know, kind of we just lent those assets into defi which was largely into compound and earned the market rates and had a nice little NIM net interest margin business there as like rates started to raise, you know, at the same time. Obviously we all know that there was a big left tail event in crypto, a lot of deleveraging and you know, the yield really came out of the crypto markets. We decided as we watched the protocol continue to manage risk really efficiently, better than all the spreadsheets and the humans and the centralized desks that were doing it at that time, especially in crypto, we were like, why is this not being applied to traditional securities markets? And the ceiling for defi was like 5ft tall. And now it's going to be 50ft, 500ft, 5,000ft tall as more and more Wall street comes on chain. Because these systems are great at programmatically allowing users or investors to use their assets as collateral or to be able to trade and do really cool things using smart contracts that really you can't do in traditional finance. And so we launched Superstate about three years ago now at this stage to start with an asset management business. So as you said at the top of the call, we run two different funds. USTB is a money market fund, so sitting in T bills. And then uscc which is a carry fund that has Bitcoin, Eth, Sol and XRP on the long side and then shorting futures on the other side to capture the spread. That macro neutral fund yields like 13% just given the dynamics in the spot versus the futures markets. But we allow investors to tokenize those shares and then use them on blockchains. And basically our job is to connect the financial assets of the world with the programmability of blockchains and the applications that live in the smart contract world.

A (7:03)

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D (10:14)

Hey, Ryan Reynolds here from Mint Mobile. Now I don't know if you've heard.

C (10:18)

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D (10:24)

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A (10:30)

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C (10:31)

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D (10:32)

It is an introvert's dream.

C (10:34)

Give it a try@mintmobile.com Switch upfront payment.

E (10:38)

Of $45 per 3 month plan $15 per month equivalent required New customer offer first 3 months only then full price plan options available, taxes and fees extra.

D (10:44)

See mintmobile.com Fast forward to today. You know again a billion and a half in AUM across those two funds. We are going to start helping other managers that don't have the technical capabilities that we do use our Rails to bring products on chain. So you'll see in the not too distant future some partnerships of large asset managers and staking companies and the like that are bringing their funds on chain through Superstate. And then we also launched Opening Bell back in May which is helping publicly traded companies bring their equity on Solana or on Ethereum so that you and I that are holding shares in our brokerage account can instead hold them in our Phantom or our Metamask or Anchorage or whatever custodian and actually use them in the systems on chain whether it's trading or lending or doing a couple of really interesting use cases there. That's really 24, seven markets and self custody of your assets. That is totally different than the Traditional markets and there's a lot that's going to be built off of that. But yeah, a little bit about me and Superstate. I'm sure we're going to dive into all the things there.

C (11:49)

Yeah, absolutely. And we're going to talk more about Opening Bell because it's a really, really fascinating program and product that you all have built. But a quick reminder for the audience, we've had Superstate on a couple of times and if you want to go back and listen to those and get like the real heavy rundown of what they are at their core, make sure to go back and watch some of those previous episodes. We've had Jim on, we've had other members of the team on, but today we're going to spend some time talking about just like the markets and of course some of the new stuff that you all have been developing. But I just want to make sure that the audience is aware of that. We do have other episodes that you all can go and watch if you want to hear more from Super State. But I mean, Jim, let's just talk about the market at the moment. We're recording this on November 4, 2025. And you know, like we said at the beginning of the episode, we're coming back down through 100k for the first time in, you know, several months. You know, we had this nice breakup. We held above it for a long time. Well, now we're coming back down. There's a lot of volatility and there's just a lot going on in crypto right now in general. Like my question for you is what do you make of all this? Because I think the one thing that stood out to me is that we've seen bitcoin and crypto alike struggling to break the highs for the last couple of months. But that's not necessarily what we've seen. If you look at the M2 money supply or if you look at gold, or if you look at equities, all of those have been trailing the kind of consistent new highs for the past couple of months. But we haven't seen that in necessarily crypto.

D (13:17)

Yeah, I think it really, if you look at it from two perspectives, you look at it from a top down macro view and then you look at it from a bottoms up fundamental view. It's kind of two different stories. But taking a step back, the Fed started a campaign of beginning to lower interest rates, which was signaled whether it was from the Fed themselves or or from the White House. That campaign was going to get started. We saw two monthly revisions from the Fed over the last two meetings to reduce rates, which has brought more liquidity to the system and has recognized the fact that inflation is starting to pull back. Maybe it hasn't gotten back to the levels that we all would like when we look at our grocery bills on a regular basis. But that campaign I think was definitely well known by the market and that was what you saw in a lot of the activity heading into those events because you look at futures curves that was priced in to a large extent. I think what kind of shocked if you will, the market for the last couple of days or weeks has been post the recent meeting, the question mark around whether there's going to be another cut and what the size of that campaign looks like, if there's going to be a pause or if there's going to be continued downward pressure on the front end of the curve. And you know, that's largely because just the information that's available is not as.

B (14:45)

Robust as it was the government shut down. So there's like no information available.

D (14:49)

Right, exactly. I mean like, you know, I forget the analogy that Powell used in his.

B (14:53)

If I'm driving through the fog, you slow down or something.

D (14:56)

Yeah, exactly. Which you know, I think is, you know, pragmatic. But it's also frustrating at the same time because you know, this, this does feel somewhat self induced as a, as a political maneuver to not be able to provide the public and you markets with information to be able to figure out what goes next. And so I think that gave a lot of people pause. And then you mentioned gold has had an unbelievable year. If you take that as a highly correlated asset to Bitcoin, you would expect to see similar moves in Bitcoin, but you just haven't seen that. And I think the accumulation that's taken place on the traditional stores of value, like, sorry, like gold and maybe even like silver and others, you know, has just been bananas. And you know, a lot of that is it's not retail people buying gold. Right. I mean that's some portion of it, but that's large institutional pension funds, endowments, sovereigns even that are, you know, maybe moving out of Treasuries that are no longer going to yield what they're yielding. And also like understanding the political and fiscal monetary situation in the US or like thinking about how do we reallocate our balance sheet to something like gold which is performed really well at some point in time, that becomes Bitcoin, that's just not there today. And open access to the ETFs has definitely given a conduit for larger allocators to get into the space. But the volatility and just the education still isn't quite there for them to really move in size. But I think that that'll happen at some point. And on the equity side, it's just, you know, continued MAG7 outperformance and the breadth in the market is just so ridiculously low that, you know, you've got companies that are 4 trillion, 5 trillion, who even knows, You've got some private market companies that are going to potentially IPO at a trillion dollars. Like, the amount of concentration of performance is kind of scary. And, you know, throughout the early days of this week, maybe a little bit late, but the big strategists are coming out and saying there's probably time for a correction. And when you have, like, just general angst in the momentum of a very volatile asset class, like, that's the first thing to, like, show you that there's going to be, you know, potential for a healthy pullback in the markets, which has just been bananas up into the right. And, you know, I think that that'll come back into crypto at some point in time. But it makes sense when you see, you know, the, you know, the original or the initial move going on the most liquid 247 asset class, while, you know, that might also be taking in other markets in parallel as well, too.

B (17:29)

Yeah, and like, on that point, you mentioned, like, you know, the next Fed meeting, I think, you know, that'll come up in December or something. But there was also another really big meeting. It was like the Trump President Xi sort of meeting that they had, I think, November 1st or something to try and figure out sort of the how to tamper down the flames of a trade war. And it seems like that's really what kicked things off in crypto to the downside was, you know, on the 10:10, October 10th sort of crash, it was them, you know, China starting to ban or curb these exports of like, you know, rare earths and magnets and all these kind of things that America's supply chain for their military and for their pharmaceuticals, like, we're all super dependent on China. And so then, you know, they kind of had that leverage over us. Then Trump was like, you know, all right, fine, 100 tariffs back on you, and everybody's like, all right, sell it all, you know. And then the markets crash, you know, 20 billion was liquidated. Do you think, like, is any of that kind of coming to bear still on the market? Like, are People still trying to suss that out because what seemed like, you know, this, you know, this month, they said, hey, we've got a good deal. You know, this is great, everybody's on good terms. I think that's kind of like bs, right? And the markets may be calling BS on it.

D (18:46)

Yeah, I think so. I mean, so what's interesting about that move is the announcement about 100% tariffs was put on everybody's radar after markets were closed in the US which maybe is actually a good, at some point in time, segue into tokenization and why we're doing what we're doing on the equity side. But the markets that were open were digital asset markets. And so the largest drawdowns that could be executed were in Bitcoin Eth. Sol, you name it, in every asset. And, you know, because of the last few months of increased leverage that was built in the system with perps and, you know, all these various, like, hyper liquid competitors that have come to market, I think people really started to like, farm points and like, build up leverage. And then every. All of a sudden on that Saturday on the 11th, everybody was Googling, what does ADL mean? And like, sudden became like a topic. And, you know, my original view after that happened was the fact that we didn't crash further and that we snapped back was actually a really bullish signal. I've actually been convinced otherwise over the last couple of days. That maybe wasn't as bullish as I thought it would be because typically in a shakeout like that, if you snap back, then you flush out a lot of leverage and then you can start to build back positions going forward. I don't think the market is ready to do that quite yet. And that's clear in the performance of the assets as we stand today. And yeah, I mean, the meeting with XI was all hunky dory, I guess, but at the same time, we kind of forgot about tariffs for a couple of months or a couple of weeks. And then you had that just kind of drop on your plate on a Friday night. And then I think now people are realizing that that can happen again and are a little bit hesitant to put on some more risk. And crypto is so narrative driven. All the chats that I'm in and all the people I speak to, I was at a dinner last night with a bunch of investors. And what are you excited about right now? And there's like one or two themes that everybody is kind of like rallying around, but like, broad, broadly speaking, at least in the near term. There Wasn't like, you know, that major narrative that's really pushing things forward that like people can get exposure to like prediction markets maybe, like. But there's no token to trade on that, right? At least at this stage. Like you know, perps protocols, I continue to get more and more adoption. But like you know, has the, has hyper liquid won is the question. Right. And you know, when it comes to bitcoin, yeah, I mean there's a lot of, you know, relative store value that people are still very obviously interested in from a long term perspective. But like the near term flows aren't, you know, big institutions moving a ton of weight. You've seen outflows from a lot of the ETFs and you know, part of that is because, you know what I see is that the basis trade is also compressed a little bit as well too. So that also does add buying pressure. The more that the spreads are in the futures market, the more your larger hedge funds that don't trade spot will buy the ETFs and they'll go short futures against it and capture a spread. It's a nice trade for them. When that collapses, they're less interested in holding the spot because they just unwind the pair trade. So yeah, I think this is kind of temporary. We'll have to see our way through the holidays. And then 2026 might be a better, we might have more clarity, less fog, as Powell put it. But we're all waiting for the shutdown to end so that we figure out what the heck is going on in this country.

A (22:06)

Totally.

B (22:07)

And like this, this government shutdown, that's a whole nother thing. Like you know, we could talk about and if you have any insights there, I'm curious if you know, people are talking about the, the treasury general account or the repo accounts and all this kind of stuff, which you know, maybe if you want to unpack you can. But I'm also curious on your thoughts. Like you know, this four year cycle, historically Bitcoin has topped out, you know, 18 months or so after every halving and here we are 18 months after the most recent having and bitcoin topped out at 125. Was that the top. Is the four year cycle kind of still, still the dominant force?

D (22:47)

I don't think so, but I'm. Neither am I an expert. So I won't opine too further, too, too, too far into that. I'll just say I don't think the four year cycle matters anymore. There's real long term structural bid for this Asset. It's just a matter of like when the flows continue to get put back on again. But I think like from, from the, the shutdown perspective, you know, our business is, you know, now we're a year into the administration super bullish on the long term trajectory of crypto in America. As you alluded to at the top of the call. Like, you know, you've got Trump, you've got Besant, you've got.

B (23:18)

Right Besan just tweeted out like happy birthday Bitcoin. You know, it's a, it's a great thing. So I'm, I was like, wow, great.

D (23:25)

Yeah, I mean, well that, you know, they have bags too, so don't forget that. But the stable coins clarity getting some momentum. I think the challenge is the regulatory clarity that needs to come out of the sec, especially on the equity or just securities. Capital markets is really impacted by the shutdown. We were supposed to have a meeting with the SEC a few weeks ago, that got canceled and we're waiting for them to open back up so we could revisit that conversation. And 30 days of the government being shut down, the last thing that really matters to the country at this stage immediately is superstate having a meeting with the sec. But from a business standpoint and from an innovation and growth for the capital markets on chain, it matters. And so I think you're seeing a little bit of a slowdown in the progress that can be made for anything legislative or regulatory. That is at least the first time in my life really seeing on a personal level, like tangible impact from a shutdown to a business that is looking to make change. And so I think the concern that everybody has is, hey, we're a year into the administration. We've done a lot of really great things, but have we done all the things that we really wanted to do? Probably not. And that's okay. But there's still a lot of Runway between now and the end of the administration to continue to make progress. And you see that, you can feel it. But you still need rules and relief and clarity to really unshackle everybody to do a little bit more than what's going on now.

C (25:11)

Yeah, I mean it is fascinating and I think people are quick to forget everything that we have done and everything that has gone on. And you even look back a year from where we are today and we've come a long way. I think the real question that I see from, from people is what about the state of altcoins? Because similar to your convert, similar to your thought that you had earlier where you said if you look at the stock market, it's kind of been carried by Mag 7 to a degree. You kind of look at the crypto market and it feels like the large caps were the big winners here over the last maybe year, last several months. You look at bitcoin, you look at eth, you look at bnb, you look at like a lot of these that have been at least been able to get back to all time highs. And I think for the average altcoin you haven't seen as much of that. And altcoins have been at least so far a little bit weaker than I think the public was expecting. So what do you think about just like the state of altcoins?

D (26:07)

Well, I think the majors moved because of institutional flows and institutional like every single day on cnbc they say bitcoin, they say Ethereum, they say Solana and whether it's Michael Saylor, Tom Lee, Kyle Simani, you name it, going on talking about these assets, it resonates with investors and it's clearly where a lot of the activity is happening today. Stablecoins. If you look at the growth in Stablecoins we hit $300 billion in stablecoins which is largely on the chains that I just mentioned, excluding bitcoin. But like that has from an institutional standpoint then become an awareness factor for them to say okay, now I know what a stablecoin is, like how do you use it and where does it trade and like where does it get issued and what's the use case? So I think that's mainstream wise, brought a lot of attention and the DATs I think have also been great voices for the networks that they represent. On the altcoin side, I don't think you've seen an explosion in TVL and DeFi. I mean we're still below our all time highs in total TVL across DeFi and that really hasn't onboarded the masses yet. And I think the unlock for that biased of course in the statement I'm about to make is you got to bring assets that people actually care about onto these systems and then you bring the fundamentals and the revenue and the buybacks and all that kind of stuff follows to the altcoin market where a lot of the activity has been meme coins and the same assets that we all know trading in probably the systems that we all know. And it hasn't really expanded into the longer tail of projects that will see a tailwind at some point in time. So I just think it's A matter of the moment that we're in and we're definitely not seeing what we normally see in past cycles, which is a movement in bitcoin and eth and sol then turns into a rotation into the long tail of assets. And it's been more of a go into majors back to cash, go into majors back to cash. Which has been frustrating, I think, for folks that pay a lot of attention to the really great opportunities that are going to exist in altcoins, but the flows haven't been there. If you're an institutional allocator and you have two proposals in front of you, one is from blackrock to put some money in bitcoin, which has been up, what is it, 50% this year. And then you have another proposal from a 2 in 20 hedge fund that has who knows what kind of performance for the last couple of years, or maybe it doesn't even have a big track record. It's pretty easy to say, I'm going to write a $20 million check to Bitcoin versus the hedge fund until that space matures. And I think a lot of the deployment that goes in some size to the altcoin market are those types of funds that right now are struggling to pick up capital to be able to move the needle in those markets.

B (29:05)

Yeah, I mean, you couldn't be more spot on. It's certainly been a tough altcoin market. You know, there's, there's some, obviously some great ones that are out there that have, you know, real revenues and growing TVL and all that kind of stuff. But there's, you know, more than just a smattering of coins that are, are fugazi. Right. And that don't have any value backing them and that are just pure speculation. And so feels like we're just in the middle of like a rinse, like the TAO getting squeezed, you're dropping, you know, all these drops of just, you know, people, you know, altcoin traders, tears essentially. And, you know, things are things, you know, it's always darkest before the dawns. I know a lot of people out there are, who are listening to crypto101 consistently are altcoin traders and are probably licking their wounds right now. And so, you know, you gotta, you gotta. This is why risk management is always so important and like, you know, having your trades and having your invalidation points kind of set up beforehand and like, hey, if, if you've kind of got this trade that you think is going to go right, well, at what point is it wrong? Right? And when can you kind of get out of that trade? And so that's, that's something I definitely want people to be thinking with, is, have your mental stop losses been hit? Have your actual stop losses been hit? I know, I know some stop losses on October 10th, you know, people had those stop losses, but they actually didn't get hit. Like, there was just no liquidity to fill that stop loss. And so. Right. Even if you had a physical stop loss, you, you couldn't get out of the market. So a lot of crazy things going on in the market, but I think, you know, to kind of like put a punctuation on it, you know, risk management is, is key, especially during times of like, heightened volatility. And, you know, what goes up, goes down. What goes down, goes up. I mean, we've seen this. You know, crypto has had, what is it, 500 obituaries or something written about it from, from $0 to all the way up to $125,000. So, you know, I don't think this is the end of crypto's story. You know, on my crypto Twitter timeline, people are depressed as all heck. And so that's typically a good sign that, you know, we're about to turn the corner. We're kind of at that final squeeze, but the jury's still out. Hopefully by the time folks are listening to this on Friday. We've, we've, we've cleared some of the air, but we'll see. But I do want to talk about. Oh, yeah, go for it.

D (31:20)

Yeah. Before you jump in on, there's one indicator that I follow which, you know, I have the very. I have an eagle eye view on, because I sit on top of it every day. I'd be interested, and I haven't done this, and I probably should. Is the correlation between the flows into US tb, our money market fund, versus the total market cap of crypto, or, you know, performance in crypto, because, you know, it's probably not a surprise to you, but a lot of the really sophisticated managers that perform really well on the liquid or venture side, they actually use USTV as their cash and USCC as their cash position. So as I see a lot of inflows coming in from really, really smart customers into those funds, it's actually kind of a good indicator for me that they know something about the market that feels like it might be topping out. And so maybe it's something to throw on the 101 dashboard at some point in time of what's, what's the. What's the flow of the momentum into US tb because like the more people are putting in cash, the less that they're, you know, out buying in the market. And then as you start to see that unwind, that means that buyers are starting to take cash off the table and put it back to work. So. Yeah, anyways, that's a personal favorite indicator of mine.

B (32:34)

Yeah, that could be.

A (32:36)

Yeah.

B (32:37)

Supreme alpha there.

D (32:39)

Yeah. So nothing, nothing to hide there.

B (32:43)

Yeah, no, I love it. Super cool. Well like let's, let's talk about these funds. The USTB fund, USCC just at a high level, you know, what are they doing and how can folks at home potentially even get involved with them?

D (32:56)

Yeah. So we run two funds. I run an ria, you know, SEC registered, registered Investment Advisor that basically is the manager to two different funds. One of them is called ustb. It's the US treasury bill fund that we run and it literally is short duration T bills sitting in bank of New York Mellon. So what's great about it though is that you can get 24. 7 interest on it. We calculate literally buys the second how much has accrued to the nav based off of the underlying holdings. So for people that want to earn interest on the weekend. Cool. Park your cash into USTB and then take it out on Monday. You've earned 48 hours of interest. It is very buttoned up. Like I mentioned, the T bills are sitting in banking New York Mellon and it's a Delaware trust. So it is bankruptcy remote. It's as institutional of a product as you can imagine. But the bells and whistles that Superstate built because we've got amazing engineers and product folks is that we can take stablecoins, we can do redemptions instantly with available liquidity. And like I said, you can earn interest 24. 7. So it's earning fed funds rate. So it's got a three handle on it now. But that's a very safe liquid asset on the carry fund that we run which has like $600 million in AUM. Now that one is still a cash vehicle for folks that want to park idle USDC or Fiat. But instead of us buying T bills and you know, and just owning that in the fund, we have a market neutral higher yield strategy. And the way that that works is we're basically trading basis. It is long spot, short future. And a very simple example is let's say you can buy Bitcoin for 100k and short a future that expires in November for 110k. So that's a $10,000 spread. And because you're long one unit on one side and short one unit on the other side, you basically capture the delta between those two which turns into yield for investors that is historically been low double digits in CME markets because there's a lot of demand for buying futures. And so it kind of creeps up the price of the futures. And so like we're taking advantage of that as like an arbitrage trade. We do that for Bitcoin eth, sol, XRP and we're actually staking the like SOL and ETH underneath the hood so that we can earn more yield. But same kind of institutional structure. We actually partner with Anchorage as our custodian on that for all of the spot assets that we keep, which is, you know, an OCC chartered bank and you know, great bells and whistles on that too. Want to mint and redeem shares with USDC or with Fiat? You can. And then hold your assets as collateral and what's really. Sorry, hold your shares as tokens. What's really cool about that is in aave, AAVE is one of the largest or the largest defi lending protocol in every ecosystem. And they spun up a specific market for real world assets. So products like USCC and USTB in the market, you can take USCC, which yields again like 13%, post it as collateral in AAVE and then borrow stablecoins against it. So really high quality, low volatility collateral that you can then use in Defi because there's a token that you hold in your wallet which is compatible with AAVE and then you borrow stable coins, you either buy more USCC so you can leverage your returns up to like 20, you know, 25% or you are borrowing against the collateral to go maybe buy Bitcoin today if you want to, because it's dipped. So that intersection between a very traditional instrument. If we didn't build any technology, we could offer that fund to investors and it'd be very successful. But the added benefit to it by having a token means that it's compatible with systems like AAVE where you can do the things that I described. And that's the like the secret sauce infrastructure that superstates built as a, as a tech powerhouse. But yeah, they're great, they're great vehicles. And as a superstate tech powerhouse that I mentioned, you know, there's many other ETFs and private funds and other types of securities that can also be compatible with AAVE and Uniswap and Raydium and Jupiter And Orca and Camino and Drift, like you name it, all these different protocols that exist that your Meme Coin trader or not Meme Coin, sorry, your altcoin traders, sorry, no offense to any of the projects there. We make it compatible so that securities can be accessed as collateral or to be swapped and whatnot in these various systems. So it's a really unique position that we're in. And to your point about Larry Fink talking about tokenization, tokenization to me is the stablecoin moment for finance. And it's taking what exists off chain traditionally and making it something that can move around in the Internet 24 7, 365 and interact with these systems, which is what makes a dollar more interesting as a stablecoin than it is in your bank account. So, yeah, those two funds have gotten us to one and a half billion in AUM across the board. And for folks that are accredited investors that are looking for that type of exposure, you know, go to Superstate and get set up. It takes you no time at all to register and you can become a client and, you know, we'd be happy to have you.

C (38:28)

Yeah.

B (38:28)

And I. It's incredible. I mean, I remember when it just started off and, you know, it certainly didn't start off at a billion, billion five. So congratulations, and I think I owe you a beer or something to go celebrate because that is a huge number. So how's it feel like, you know, how's the team morale? How's everybody, you know, is everybody still heads down or are you guys kind of taking a little celebratory, you know, president's club vacation to Bermuda?

D (38:54)

Never.

B (38:56)

No.

D (38:56)

And you and I, Bryce, we both had kids, so, yeah, we don't sleep at all. No, I think, you know, we're. We're more hungry than ever. And it's partly because of the tailwinds that we described, you know, earlier in terms of the embrace from the US Markets, regulators, legislators, to allow tokenization to thrive. When we started the business, to your point, Bryce, I think there was $100 million in the first six months of those funds. And so to see the growth has really been a testament to the growth of the overall ecosystem, plus additional demand for these types of products. Whether it's so in the USTB fund, what's really cool, there is Bridge, who was bought by Stripe for a billion dollars way back where. It was in their press release when they announced the product called Open Access, that they have their reserves managed by BlackRock, Fidelity and Superstate. And because we have really great technology that interacts with Bridge. We also have over $100 million in from Spark. So like two stablecoin businesses that have tons of assets that are looking for really high quality collateral or reserves, they come to Superstate. And so that's been a great tailwind for us to grow. But there's always new things that you can do, new protocols you can integrate with new chains that you can launch on, new products that you can launch. So it's quite the opposite. I'm actually here in our office in New York for the week because we are growing. We've added a number of members to the team. We're seeing clients in person and it's an exciting time because aside from the funds business, the opening bell equity side of our of our product suite is really starting to take off. There's been a lot of attention from the public capital markets. I'm getting calls from large sell side banks asking what the heck we're doing because they're seeing their issuers do tokenization. When the headlines are tokenization is coming, they're like where? And then they all of a sudden see Galaxy Digital tokenizes their stock through Superstate. And they're like holy crap. It's a $15 billion market cap company that's working with a tokenization firm that really knows the regulatory side and the technology side and they're trying to figure out where does this go next. And that's what we're really excited about. It is so nascent today. It is the very cliche. We're just getting started. But it's true. We have the regulatory license as a transfer agent to be able to record ownership on chain. And that's pretty unique compared to the legacy transfer agents that don't know what blockchains are. And so we're going to try to unlock as many of the 6,000 publicly traded companies as possible to get on chain and to really help Defi. Not from a completely permissionless standpoint, but from a securities trading, SEC lending, you could call it that. Collateral markets that can interact with all the assets that right now sit in People's Fidelity and Robinhood and Schwab accounts and instead give them access to that through their wallets at some point in time. All of those platforms that I just mentioned will also give you access to DEFI markets through a Fidelity. Right. They built their own money market fund. But it's just getting started in terms of unlocking the composability or the integrations with those assets into various markets. So that people get more of a reason and utility to hold their assets on chain than just holding it in their brokerage account.

C (42:38)

Yeah, I mean, I. It's fascinating, man. And we've seen this talk of tokenization go on for, you know, it feels like the last year or two now and it just continues to grow and grow and grow. And it's like you said, you know, these bigger names continue to kind of pile into it, which brings even more attention and it turns even more heads. And so the idea of this opening bell, what I really kind of take as the important takeaways, is that it lets real companies, both private and public, tokenize their actual shares and not in a synthetic version and make them tradable on blockchains. And I believe it's supported on both ETH and Solana. Correct me if I'm wrong there, which is fascinating. Right. And it seems like that's kind of the direction that the ball is headed. And people are trying to be forward looking, especially the tradfi sector. They're trying to be forward looking and saying, okay, well it looks like the ball's going in that direction. Let's see what we can do right now. And I think it's important to phrase it like that again. You're gonna, I wanna, I wanna have you talk about this, but I think it's important to phrase it like that because it shows that we're not in the end game of this yet. And I think that we're still in the process of like the ball has maybe just been kicked off and people are still like looking down the field saying, you know, that is where it can be and it's not already there.

B (43:59)

Just to add to that real quick, just like, you know, what is it about, you know, all of these asset issuers or asset managers like BlackRock, like, why are they getting into tokenization? What does it do for their business? You know, in the same way that ETFs reinvented the mutual fund or whatever, like what are some of those really key advantages? What gets a guy like Larry Fink to go on to, you know, the world stage and say, we're completely re architecting our business around this stuff?

D (44:28)

Yeah, I mean, I can see it firsthand. So a good anecdote is like, our carry fund has a cash component to it when investors put dollars into that vehicle. And it normally in traditional finance would take a middle office person to send a wire to a money market fund or to do a trade. And you have processing delays and times and reconciliation and people involved that's because it's. And that, by the way, that's only like Monday through Friday, night of five. So you can't be doing that 365. You know, when we get $10 million comes into USCC instantly, we take that USDC and we subscribe to ustb, our money market fund, so that we're earning interest that second. So like P and L wise for the fund, it's advantageous because you don't even lose any time from the funds landing in your bank account or in your fund until they actually get deployed. And it's instant. Like that's what the great. That's the superpowers of blockchains, right? You have instant settlement 24 7, 365. So it doesn't matter if that subscription comes in at Saturday, at 3 o' clock in the morning, we're going to start earning interest at 3:01am on Saturday. And typically you can't do any wires on the weekends in tradfi. So I think I use that example because it to me is a operational and also a financial improvement than the traditional business. And if you run $10 trillion and you have thousands and thousands of middle office and back office people that are just doing rote work, it's kind of similar to how AI is going to disrupt and just enhance the human experience in the workplace.

B (46:11)

That's a great analogy. I haven't heard anybody put it like that, but it's spot on.

D (46:14)

I mean, tokenization is going to do the same thing, right? It's just like, why do you need a human being to go and say, I got $10,000 in, let me write this down and then let me take that $10,000 and send it over to something else and then, oh, let me confirm that that was settled over there and then come back and write it down. And oh, by the way, now it's two days later I got to reverse the same thing I just did. It's like, why, by the way, I.

B (46:33)

Forgot a decimal point or I added a comma and you know, things just what the heck, you know, there's human error just with the keyboard.

D (46:40)

Yeah. No, it's insane. And like, as a guy who started, like I said, at Citibank, like I saw the black and green mainframe screens that like these guys use in the back office to, you know, reconcile billions of dollars of transactions and you know, having. And just losing it honestly, like, where the heck did that money go? And you got to like send a bunch of emails and find somebody who can Say that they, that they know how the break happen, but, but yeah, so I think automation, you know, same thing as stripe buying bridge, right? Like they have a real opportunity to increase the gross margin of that business by automating a lot of the financial workflows that they have behind the scenes on chain instead of on fiat. So, so I think that's, that's like the main area. And like to, to Brennan's point, what's been really great has been the institutional agreement that this is the future for capital markets and it's gonna not happen. Like everybody in crypto is so short term, instant gratification. Gen Z, you know, Millennial maybe minded where it's like we need this to happen tomorrow. Like it, you know, it doesn't. And especially when you do it the right way, it takes time. And I think there's a three stage journey to this way. I look at it like the first stage is legitimate companies and technology providers, regulated businesses that are merging these two worlds from an issuance standpoint. The second phase to that is taking the issuance and making it and integrating it. So you've got issuance integration and then the next stage of that is capital formation. And like to me that's going to be a huge unlock to really spin the flywheel of capital markets because now you have assets that exist, assets that can be created and an integration in between where people can buy, sell, trade and interact like they do on their brokerage accounts today. But do that all on one platform. That issuance formation and integration to me is asset class agnostic. You could do that for equities, fixed income funds, real estate, you name it, Private equity, private cap, private credit. That's the beauty of a blockchain is that you have all of these different asset classes that can interact and settle instantly and reach a global audience without needing a bunch of human beings in between to make that happen. And it's a phased approach to get there. But I think we're going to turn the corner in the next couple of months where all of a sudden you're going to see what the treasury bill chart looks like. If you go to RWA xyz, it was like this and asymptotic for so long and then all of a sudden it took a hockey stick up to the right. Securitize has done great work. Circles, USYC has done Network, Wisdom Tree, Superstate. Like all these early adopters are now sitting at like $8 billion of value. It is going to be hilarious when you look at that chart. In 10 years. And you realize that's still the asymptote because $8 billion is so small compared to the total pie. And I think the equity side is going to look very similar and catch up to that in the next couple of months as well too.

B (49:43)

Yeah, I love it. There's a lot running through my mind. But one of the things that kind of just comes to the forefront is that with all of this institutional adoption, regulatory clarity, all that kind of stuff, it kind of feels like in a sense crypto has lost its, you know, revolutionary spirit. And I don't know if you feel that and Brendan, if you felt something like that, but when we all started back in, you know, nine, 10 years ago or whatever, like it was all about like, let's stick it to the banks, let's take money back, you know, control of it, you know, the government's, you know, debasing things. And so let's have this sort of non dilutive, super secure, you know, crypto system like Bitcoin and then let's have this level playing ground on Ethereum where everybody could do whatever they want. And like now it, it feels a little co opted by the banks. And just from our Crypto101 community, I've heard people say like Bryce, how, you know, why are you all excited about Larry Fink? Like, do you know all these bad things he, you know, he does or whatever not to like, you know, again, these are just hearsay and all that kind of stuff. But I'm like, where do you kind of fall, Jim? Like, is this the path forward? Is it just going to be institutionalization and the crypto revolution? I wrote the book Crypto Revolution. It's no longer a revolution. Did the revolution win? Are we in the middle of it? What's going on? Just like that sentiment.

D (51:00)

I mean, look at the chart of zcash. The revolution is still happening, guys. I think, honestly, and I've been actually saying this for a while, even from my compound days, I think is going to be parallel activity happening in crypto, One side of which is very much the revolution that you described, which is to each his own. And I think there's a fantastic element of seizure resistant assets, privacy in transactions, self custody. But in the reality is that while crypto's big, it was a $4 trillion market cap. I don't know what it is after today's moves, three and a half, but like, you know, it pales in comparison to the activity and size of traditional assets. And so I think there's a world where both exist, which is a great benefit to crypto. And I think the one thing that people don't appreciate about tokenization is it actually does kind of stick it to the banks. And sorry to all my bank partners and friends out there but you know, I own Galaxy Digital as a share in Fidelity. I have like very limited options in what I can do with that. Meaning I go to Fidelity and say I want margin against this, they're going to quote me a certain LTV and a certain loan. That's because I'm stuck in their world. If I move my assets to my Phantom or my Metamask and I am now on Solana and let's say that I could lend it out on Kamino, I could put it as collateral on drift to trade perps and do the basis. I could LP in a orca pool. I could do a whole host of things that I choose to do 24 7, 365 based off of my own preferences and I survey the landscape on where my risk tolerance is and you give me the best ray and the best ltv. That's where I'm going to deploy my assets. So that is still very much a revolution because you're bringing power back to the people.

B (53:02)

Yeah.

D (53:03)

And they're now self directing like where their assets are held and used. And that to me is very much in line with the ethos of crypto. And I think the other thing too that is going to be really interesting to see is the. I tweeted about this a couple months ago but banks became so big because they had great technology and global distribution. Well, guess what has great technology and global distribution. Solana, Ethereum, you name it. And so the other way to bring power back to the people also is give them the ability to go deploy their assets into the investable opportunities and allow companies on the other side to reach audiences and loyal investors all over the planet. Like imagine you drive your favorite car in some jurisdiction where you can't buy the stock of that company. Well, I've been, you know, a loyal, call it GM driver for a number of years. If I'm in a region that doesn't have a brokerage account where I can buy GM stock, like I don't get to benefit on the upside of what I think is a great company, you can do that with a token. So that's my soapbox on that. Tokenization is not killing the revolution.

C (54:16)

No, yeah, I think we would all agree, you know, tokenization is a net good for crypto and it's super innovative. And it's just innovative at its core. And so we're excited to kind of see the direction that it continues to go. We're big fans of tokenization over here. But to wrap things up, looking forward, we see Trump packing the Fed with doves. Right? We're going to probably get a new chair who wants more cuts. And I'm curious, in a lowering rate environment, what happens to USTB and USDC or uscc? Excuse me?

D (54:50)

Yeah, good question. So I actually think that they might be opposite. And so USTB clearly is going to follow Fed funds, right? Like the mandate of that fund is to actually perform in line with what Fed funds is. So I think you'll see a reduction in yield, but I don't think you'll see a reduction in assets under management because stablecoins have a mandate and genius to put their assets into short duration treasury bills. So that's a big client segment of ours. And even for like a, the liquid in venture funds that I mentioned, to the extent that they want to move back to cash, getting 1%, 2%, 3% on T bills is still betting better than getting 0% on a stablecoin. So while it might be less attractive from like a collateral, you know, in defi perspective because the rates are going to be higher on USDC or your borrow rates are going to be higher, I still think there's just structural demand. And you know, I don't see the $7 trillion in money market funds getting unwound tomorrow. Even though the Fed is lowering rates on the carry fund depending on the risk appetite of the market. If the Fed lowers rates and you see bitcoin ripped to 250k, you're going to see spreads in basis blow out to 20, 30%, especially in the purse market. And so I actually think that that'll be a really healthy rate environment for superstate on the carry fund because we'll take advantage of the spreads in those yields. So you know, kind of like I'm bullish on both sides and maybe I'm just a, you know, eternal optimist but, but I do think, you know, structurally just the demand on a relatively low base at the, at the beginning, while one and a half billion is great, there's still just so much more structural demand behind that.

B (56:31)

No, I, I love it. And I'm an optimist too. Despite the propaganda that Big Short had. Well, the pessimists always sound smart, but the optimists make the money in the long run. So I hope everybody at home watching enjoyed this conversation. I know you did. It was super timely. Wanted to get you in here to kind of comment on the market action and all the exciting things that you're doing, Jim. So we'll let you go until next time. But just, you know, things will be down in the show notes for where to find you. But in case people don't want to click into the show notes, where can people kind of follow along on X or any blogs or websites?

D (57:05)

Yeah, go to superstate.com you'll see all the great things that I, I walked through here today. And then, you know, I'm at hiltnergy on Twitter. I'm not the the most prolific social media guy, but every once in a while I like to surprise folks. So stay tuned.

B (57:22)

Love it. Well, hey Jim, have some safe travels there in New York. Stay toasty warm. I heard it's gonna be a really cold fall and winter. So until next time. We'll see you soon.

E (57:44)

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