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- [00:01]
A
Welcome to Galaxy Brains.
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B
An infinite amount of cash.
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C
Cash.
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A
I'm your host, Alex Thorne. The US banking system is sound and resilient. Bitcoin meeting new all time high.
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C
If you're not long. If you're not long, you're short. Satoshi is going to come on there, laugh hysterically, go quiet. All bitcoin's gonna be erased. Bitcoin. Bitcoin is the best crypto. Bitcoin is going to zero.
- [00:26]
A
Welcome back to Galaxy Brains. As always, I'm your host Alex Thorne, head of firmwide research at Galaxy Bitcoin. Not zero. We have a great episode for you this week. Dan Maczewsky from CMS holdings is our guest. He's back. We like to talk to Dan at least once a year to get his take on markets. This time we talk about prediction markets, perps markets, the state of the market. We compare this bear market in crypto to 2022 to 2018 to 2015 and 16. He's got a lot of perspective. Dan's been trading in crypto since 2013. It's a very fun interview with Dan talking about a wide range of crypto markets and crypto industry topics. We also check with our friend Bimnet Abibi from Galaxy Trading as always to talk about markets, huge market moves and impact from the war in Iran that happened and started this past weekend. We'll get into that Bimnet medium term bullish on bitcoin and he'll tell you why. Before we get to all of that, I need to remind you to please refer to the link to disclaimer in the podcast notes and note that none of the information in this podcast constitutes investment advice or an offer recommendation or solicitation by Galaxy or any of its affiliates to buy or sell any securities. Let's hop right into it with Bimnet Abibi. Let's go now to our friend Bimnet Abibi from Galaxy Trading. As always, Bimnet. Welcome back to Galaxy Brains.
- [01:43]
B
Thanks for having me.
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A
It's been obviously a very exciting week here in the world and in markets. Last week on the show you, you highlighted that geopolitical risk was your, you know, top near term focus area. And of course over the weekend the US and Israel struck Iran and of course there's now ongoing strikes back and forth. The Supreme Leader of Iran, Ayatollah Ali Khamenei was killed along with many other high ranking Iranian officials. And now disruption in the Strait of Hormuz. Generally, it's not clear whether it's totally Closed or not, but oil spiking and whatever else. What's your impression of the market reaction to these geopolitical events?
- [02:25]
B
I think the market reactions have been appropriate so far. You know, oil prices rising, you know, Iran being an oil producer and, you know, having some kind of influence over the Strait of Hormuz. I think that the commodity market is kind of appropriately reacting. And, you know, historically you do see some, you know, know, 4 or 5% dips on major war headlines. So I think the equity move is in line with what, you know, market participants, you know, should expect. I do think that the reaction in front end fixed income globally is probably a little too aggressive. So what we've seen is a pretty dramatic sell off across the board in bonds and notes and other fixed income products, particularly in Europe, simply because, you know, nat gas and oil prices went higher and that is typically inflationary. But my personal view is that the US will kind of achieve strategic control of the Strait of Hormuz soon, and so it's just a matter of time. Secondly, the insurance market that's broken down, I think the US is focused on fixing that in some way, shape or form, or offering some assurances such that that market can become a little bit better. And thirdly, I do think that higher energy prices, higher electricity prices, higher gas prices at this point in the cycle are kind of a tax on the consumer, not anything kind of beyond that. And I don't think monetary policy is the most effective tool at controlling commodity prices. And so, you know, when you've got so many folks that are living paycheck to paycheck, you know, folks that have a ton of credit card debt, ton of, you know, other, you know, personal loans, et cetera, and when they're focused on not losing their job to AI or a robot, you know, and they've got to pay more for their electricity bill or pay more for, you know, filling up the tank, it's really like, you know, it's really a tax. And so I don't think that, you know, monetary policy folks should, you know, readjust, you know, what they're thinking about the path of rates simply based on what's likely gonna be a short term shock to commodity prices. And so, you know, my favorite trades right now are kind of focused in the US and being long fixed income, now that you've kind of sold off so aggressively, I think Warsh is likely gonna cut at his first meeting in June. And I also think, you know, the cynic in me says that Trump wants to win the midterm elections and he wants to make sure the market is in sound footing going into those elections. And you know, you can certainly help that case by having rates lower. And so, you know, the cynic in me says warsh will come in and cut pretty much no matter what going into midterms. The other notable reaction that you've had in markets, you've had some pretty aggressive sell offs in some of the most popular trades in the market. So gold, silver, Korean equities. And I think those stories are more of a positioning kind of dynamic where those are really crowded trades at very elevated levels. And so you've seen kind of a flush out in some of those crowded trades. And then lastly, I do think that bitcoin trades incredibly well. And on the headline of the attack you traded down to 63,000, but you've been higher ever since. And now you're kind of approaching this 70k area. And I'm starting to get very constructive on it because of how, how well it trades. And I think it trades like a market that is exhibiting seller exhaustion temporarily. And so in the absence of sellers, I think the path of least resistance is higher. And I do think there's an interesting kind of fund dynamic to bitcoin in terms of crypto funds that are pegged towards broader crypto markets as kind of their benchmark for performance. A lot of those guys haven't been doing well on the way down and if it starts going up and they don't catch the up move, you can't really be a manager that isn't doing well on the way down and isn't doing well on the way up. And so you're kind of left with this weird situation where I do think there are likely force buyers of BTC on a break of 70, 72k area. And I think that sends you to potentially 75, 80ish in kind of the medium term horizon, which I would describe as the next kind of four to eight weeks.
- [07:41]
A
Interesting. So yeah, and you pointed out the crowded nature of the gold, silver, Korean equities trades. Bitcoin, it did field and then you said seller exhaustion for bitcoin because historically a couple years ago during weekend geopolitics events and headlines, bitcoin had been the barometer and the thing that you held that you could sell, but it didn't, it didn't really sell much gold. Gold ran, I saw at least prints over 5,300. And before coming back with equities today, you know, bitcoin, it didn't seem like, it seems like the macro tourists that would have pushed sell on Saturday have already sold for the most part. Yeah. So there wasn't a lot of juice to squeeze there. So when you talk about, you know, you're still though that, that possibility of forced buyers and a medium term move higher, you know, what would, at this stage in your mind, what level would it have to move to to tell you that it's no longer in that, you know, structural downtrend that we've been in. Like where would, like where would you be? Like crap, maybe we really are going way higher. And 60 was the bottom. What would that level have to be?
- [08:48]
B
That is like the 50 week moving average which is well north of, you know, 90. I still think we are in a structural downtrend in the asset class. And I do think that, you know, later on in the year, you know, you will be, you know, revisiting that, that 60k low, if not lower ultimately. But in terms of just the path that, that it's likely going to take is, you know, you need buyers to come in in order to, for the market to go lower because you have to have some, some for selling.
- [09:18]
C
Right, right.
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B
And so I think that this up move is characteristic of how bitcoin trades in bear markets where you do have these aggressive 30, up to 40% rallies in the midst of a structural downtrend. And I don't think we're out of the woods quite yet. And so right here, right now, I think you cannot be short bitcoin. You cannot. And you know, if, if you want it to be short, you gotta wait for better levels. And I think the easier trade right now is to kind of stack below 70k to try to get, you know, some exits, you know, north of 75K.
- [10:03]
A
Yeah, smart. And then you mentioned, I wanted to ask you about this. Cause I've seen reporting on this and I didn't quite understand what the issue was, but the insurance market, my understanding is it, it relates to, it's not that like tankers are being lost at the Strait of Hormuz at the moment or. But is it the risk they can't get through and there's delays or is it the risk that they do get hit or embroiled in the actual turmoil and then they end up having to call all this insurance? Because an enormous amount of the insurance is handled really just by Lloyds of London insurance on the tankers themselves and the oil that's in them. Is that where this is emanating from?
- [10:40]
B
100%? Because a lot of those tankers and the companies that actually own the supply there, they will not ship oil through the strait without insurance. They will not ship goods through the straight that aren't oil without that insurance. And so it's like you can't drive without insurance.
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A
Right.
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B
Unless you want like crazy liability and you're comfortable taking.
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A
Especially when like missiles and rockets are
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B
flying over and mines and you just don't even know. Right. Like there was, you know, there's been friendly fire incidents even.
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A
Right.
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B
And so it really does freeze that marketplace up or the straight up. And so you need some solution. But ultimately I do think that the path towards de escalation is there because this is quite an unpopular war domestically and abroad. The Chinese don't like it because the cost of gas is going up and the energy that, you know, they typically buy is, is, is either not viable or, and the prices are higher. You've got the Mideast, the region, they're getting struck by Iran directly.
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C
Right.
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B
The UAE, Bahrain, Qatar, etc. And so they don't want a prolonged conflict.
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C
Right.
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B
If you're the UAE and you're a nation of expats, like, you don't want all those expats leaving.
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C
Yeah.
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A
Videos of like their kids getting hit
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B
by a drone, like that's just videos
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A
of long lines at airports in Dubai, people trying to get. Makes sense.
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And so it's incredibly unpopular within the region.
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A
Europe, Europe has been not supportive, Right?
- [12:19]
B
Correct. The Europeans don't like it. I mean, the, there's the base in Cyprus that got struck and you know, I think the, the UK was like pretty anti the US using their bases for any of these, these operations. And so it's pretty unpopular with, with the, you know, the G3 in Europe, Germany, France, UK, um, and then domestically here. I mean, I haven't seen the poll results, I just kind of look at Twitter, but it seems like, you know, even the MAGA crowd is, isn't really happy with the situation.
- [12:50]
A
And I mean, I've been seeing videos of this. Trump will be the peace president. No new wars president. Right. We all recall that was a big mantra of his during the election. So I, I, I, I've seen, you know, again, without passing judgment, which I don't view as my place on this show, but I, I have seen discord even among his base, let alone, you know, in the opposition. So, yeah, I agree.
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C
Right.
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A
All of that sort of funnels you to like, probably they seek a resolution sooner rather than later.
- [13:18]
B
Yeah. No one likes war. I mean, the only side that seems to be you know, super supportive of this is, you know, I think the Israelis and you know, I think that's justifiable. I just think that, you know, the rest of the world is kind of like, mm, let's not make this a prolonged thing and let's figure out a way to de escalate because at the end of the day, like people want cheap gas and they don't want markets that tank like 2% a day and they don't want bodies coming back, you know, and so like nobody like likes war.
- [13:54]
A
The fear for the insurance thing is that like if you're a captain of a big. I mean, I don't know how much oil they hold, but an enormous amount each just one tanker. Right. So it's a huge amount of dollar value sitting in there. You're the captain or you're, you know, his boss, the ship, the owner of the oil or the. And even in the intended oil company, recipient of it. And they're just like saying stay put. Like, because the potential for. And so the strait is partially closed, sort of by definition. Whether or not it would be enforceable. People aren't wanting to test it.
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B
It doesn't, it doesn't matter even if like you can get through it because you can't insure it.
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A
Yeah.
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B
And so it is effectively closed. And you know, nobody wants that. Like, the region is trying to modernize itself. It's trying to attract a lot of, you know, foreign capital, foreigners, foreign companies, etc. It's trying to, you know, develop and you know, nobody, nobody wants. This is kind of the sentiment. So I think the administration is hearing that from, you know, pretty much all sides. I do think, you know, just to caveat, you know, the Iranian people have gone through a lot and they obviously, you know, deserve to changes. I'm not the expert on that and I just, I don't want to.
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A
Well, and it's really hard.
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B
I don't want this when, when, you know, local.
- [15:11]
A
Yeah, I mean, we talked about this a little bit in prior weeks, but this current uprising, which there has been one in Iran among by the people and that opposed the regime. I think most international estimates suggest that the, the regime had killed more protesters than all other prior uprisings combined since the 1979 revolution. But also the Internet has been incredibly sparse there. So it's very hard, I think from an open source standpoint to find out what is actually happening. Like, are these strikes actually working to embolden the regime opposition inside Iran? I think a lot of people hope that they are working to do that, but really remains to be seen. I mean, now I've been seeing US officials being questioned, rightly by the media on like, what is the actual strategy for like the next step, not just the exit of the war, meaning that strikes stop, but like, is this going to be in service of, you know, a new government in Iran? And I'm not hearing any information about that. I think people, both expats, Iranian expats, and people on the ground there who have long opposed the regime really hope that that will be the case. But we, I just don't think we know. Right.
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B
I mean, it's huge question and history tells us that, you know, the US isn't really good at, you know, rebuilding regimes in the Middle East.
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A
Yeah, I think that's a, that's an empirical fact, I think it's fair to say.
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B
And so, but anyway, moving aside from, from the geopolitical stuff, I do think bitcoin trades well, but I do think that the undercurrents that you had to the market before this geopolitical event are still alive and as real as ever.
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C
Right.
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B
The concerns about private credit, the concerns about software as a service and what valuations need to look like in a world of AI. The employment story with companies like the block laying off 40% of their staff. You also have, I think this week Deepseek is going to launch a new open source model that I think is going to challenge the US dominant AI models pretty aggressively. That's a storyline that's upcoming. There's also, you know, anthropic getting shunned by the US government and the potential implications there. And so there's a lot of stuff underneath the surface that is still kind of percolating. Right. And so I think it's a matter of time before we move on from the geopolitics and move on to the substantive economic stuff. And right here, right now, the landscape is pretty easy. The world has made a massively levered bet on AI. The US Mag 7 are spending $650 billion a year on AI. Capex valuations are high in the private markets for these LLM companies. OpenAI did their last round of an absurd valuation and so did anthropic. And companies need to finance their activity, right? The data center, build out the GPU purchases, et cetera. And so there's a ton of debt that's coming onto the market or that is in the market, and that will be coming onto the market. And there's a lot of hope and a lot of money invested into this AI thesis. And so you're kind of at this point where you're priced to perfection. And you know, if you look at credit markets, you know, IG credit markets have been widening out a little bit, showing you know, some signs of concerns. Maybe that's the geopolitics but you know, there's other concerns there and ultimately like if the AI thesis is right, it probably means that, you know, the existing companies are probably going to have less of a moat and are going to, you know, their moat is going to get eaten by these AI tools.
- [19:08]
A
Yeah.
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B
And so the question is like, you know, at what cost to other existing businesses is this, you know, investment coming for?
- [19:19]
A
Well, yeah, that question does persist but for now we've got some short term stuff to that seems to be overshadowing the broader market at this very moment. But yes, I agree that remains the massive question in all markets globally and in the us. We'll connect again and follow up on that. Bimnet ab, my friend from Galaxy Trading, thank you so much.
- [19:40]
B
Thanks for having me.
- [19:43]
A
It's been. And I'll note that we're recording. I'll introduce you in a, I'll just go ahead. I was going to talk about overall read on the market. We can chit chat. I want to ask you about prediction markets that's new since we talked last year. Not new but like, you know, very right.
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C
Like they're like, they matter.
- [19:58]
A
Yeah, they matter a lot. And every day there's like a new controversy about resolution, logic or insider trading.
- [20:05]
C
Did you see the gals you won last night?
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A
Yeah. With the, I mean I, I, I get why they don't want death as a resolution criteria because that's like assassination markets. But still like surely they didn't, the market wasn't will he be killed? You know, it was like yeah, every
- [20:19]
C
market's like a death market in some level. Right. Like there's like a person like that's like a non zero like outcome. It's not that.
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A
Yeah. Like Brian Armstrong, he'll say these words on the earnings call but then he happens to die. Like he didn't say, I'm like that should be a reason that it goes to zero.
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C
I agree that's that should be baked into the contract.
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A
I think so, so I think how she up?
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C
I think that they, they, I think that was the wrong call. I understand what their like logic was but like I, I think they needed to publicly just say something that they're not making death markets but like they also needed to honor the contract.
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A
I Think that's right. And they did. The contract did say it though, in the. In the res. I think they missed. They shouldn't have written the. The death clause as invalidating the contract into the resolution logic in the first place. I don't think it wasn't a. Oh,
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C
wait, the contract said it doesn't resolve.
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A
Yes, it said in the event of death, it doesn't resolve.
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C
Which, like. Oh, okay, I didn't know that. I thought it was just out. Dude. This is the problem with these things. You gotta, like, meet all the weird minutia, like, and then you get the nerds on the Umahorum and Polymart, like, fighting you. It's just like. Yeah, that's always my beef with like the ones where, remember this was the big one when with Venezuela. And they're like, does it count as it war?
- [21:31]
A
They're like, well, you did put boots on the ground. But, you know, I agree this is super tricky. Before we go further, let me just introduce Dan Maczewski from CMS Holdings. Welcome back to Galaxy Brains. Dan, I think we've now talked. We talked every year for like four years or something like that at this point, right?
- [21:51]
C
Yeah. How long you been doing this?
- [21:53]
A
I think we've been doing the show since 21 now, so almost five years. I think we started maybe in the spring of 21. So we're on. We're on like episode like 150 or something. 140 weekly.
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C
That's a good run, dude. Being at one employer for four years is like a decent self.
- [22:10]
A
I. It's. Yeah, dude, it's pretty crazy. There. There were previous seasons of the show or years of the show where I wrapped the intro on every episode. There's at least one or two about you on the show.
- [22:22]
C
I. I did. If you can make my last name work, that's a feat itself.
- [22:26]
A
I think I did. I can't remember. I think it was the rhyme Matzewski. I can't remember what I rhymed it with. I'll have to go back. Maybe I'll pull that into the. Into the show notes here. Well, let's. Let's keep talking about prediction markets because they matter so much more now than prior years we've talked. I mean, I think the point about this resolution logic, you know, it makes sense that there would be markets that theoretically could resolve if the participant died. What, before market resolution? Like the mention markets, you know, if they say, is Alex gonna say these x, you know, 10 words in his interview with Dan? But then I just happen to have A heart attack. Well then I won't have said them.
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C
And like, shouldn't that should resolve? I. Yeah, I think you just like dance around it and you just never. Yeah. Like explicit state it. Because like that's obviously not the goal.
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A
Yeah, exactly.
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C
Because you never create a market where like that is like the only criteria of like why agree. Like, agreed. Like that is a terrible moral hazard and just bad.
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A
Yeah, yeah, like, just like just for extreme clarity for the audience. Right. If the market is will Alex Thorne die by someday, then you could come and kill me and can cause the market to resolve in your favor. That's what they call an assassination market. That's obviously bad and should not be allowed. But like, yeah, right. Like, yeah, like death. I was, I was giving this example to somebody earlier. Like if let's say there's a high profile movie and a major actor is signed on to do it, but for some reason, like in the tabloids, there might be a reason. There's speculation the actor might not follow through with ultimately doing the movie. Obviously depending on how the market is worded. Like if that, let's say the actor doesn't pull out but instead gets, you know, it dies in a car accident. Like, well, he didn't do the movie. Now like, isn't that, you know, who knows, who knows what the motivation for the better could be? It could be that they think the actor is overweight and could die of a heart attack and that's why they're saying he won't do the movie.
- [24:15]
C
Not be, you know, gotta, you gotta hedge that and pick up a life insurance policy.
- [24:19]
A
Yeah. Are you guys using like. Or thinking about watching prediction markets in event outcomes to help inform your investments in trading?
- [24:31]
C
Not really. I mean we watch them because they're fun and liquid, but there's not. First of all those products that are just crypto specific, they're like option products.
- [24:41]
A
Yeah. Like the five minute bitcoin price.
- [24:43]
C
You're just going to get your face ripped off. You should not be trading those. So no, we're not doing anything there. And it seems the people that are pricing it are pretty sophisticated. I assume that's what Jump and Sig and them are sort of doing. So there's not an inefficiency that we've seen there except they've got like liquid. So we're not doing anything there. And that's just like not. We don't have a need for trading those things. They're like basically just gambling and then like, I don't know, like the like Trading the Iranian situation in pie market just like doesn't like that's not, we don't have any edge there and also like that's not like a thing we're looking to like make investments in. Right. Like that's just gambling. Again it's like the same thing with sports betting. Right. Like you can do it but that doesn't mean it's like a positive EV sort of business line. So no, we have, we like I'm sure everybody here in their personal capacity is like traded it in some like way but we're not like taking like structural bets.
- [25:34]
A
Yeah, that makes sense.
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C
I think most of the macro stuff I know people like to get a little ahead of themselves and be like these are better than like the existing toolkit but I'm not bought on that either. What does it matter what CPI is going to do? Is not like a trade where sort of putting on.
- [25:52]
A
Right, right. I've heard of examples though with some things like for big businesses putting on nine figure hedges on like elections for example like because you know if it goes one way it's better for their business and if it goes another way it's really bad for their business. Granted I think most of those like OTC and not through like Polymarket as an example but like there, there could be like for certain types of businesses a hedging, you know, benefit. Right?
- [26:19]
C
Yeah, you could say, I mean like the big ones, like the big political outcomes like make sense but they're few and far between. Also I don't know how much you can really put on them. Like I feel like low 8 figures but like a 9 figure bet would be pretty material. I forget what like the open interest was in the presidential contract to the last cycle for P market.
- [26:41]
A
Yeah. And that's, it's hard to find. That's another problem.
- [26:45]
C
They don't want you to see it. Yeah. And they also quote lifetime volume on the contracts which is like kind of weird because it's like, like that's not super useful to me sometimes.
- [26:55]
A
Yeah, totally. And like the other thing I wanted to ask about we've been debating a lot is like insider trading on these markets. Right?
- [27:02]
C
Yeah, I, it's going to happen because
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A
ostensibly it's actually, I mean Robin Hansen, this famous professor who kind of invented them academically explicitly says that incentivizing insiders to bet is the reason is one of their primary purposes. Right. Because that's how you surface, that's how you turn them into information markets. But that's obviously in tension with you Know the market regulators and stuff.
- [27:27]
C
Yeah, it gets into a super dicey territory. I mean like sometimes it's completely above board. Right. Like if I like if you're betting whether or not I'm going to say a word on the earnings call like I have the right to like trade on that information and then like.
- [27:40]
A
Right. Because there's a first amendment protection as well.
- [27:43]
C
Yeah. There's no like and you're not stealing any information. Like I own it, it's mine. Like I'm not taking it from anyone. And people get really outraged about that because they think like that's insider trading and that should be. But like insider trading is just like theft. Right. It's that you have information that's valuable and you're taking it from somebody else when you're not like supposed to. But like in this instance like that is my information. So like that doesn't sort of get covered. What you have problems with is corporate earnings like M and A stuff and then obviously the government does not think this is funny and like they've been hammering people that they keep catching doing like military related stuff which I think is going to probably be the most heavy handed because that is like clearly a breach and also there's like real world implications that they are going to just bury you on.
- [28:28]
A
Yeah, this is like that's such a good example. Yeah we are and I saw there was one with two IDF soldiers who bet on like will Israel attack Iran by some date this is back in January and Israel caught them and they had obviously misappropriated classified intel in their jobs. But the thing that's interesting to me about this is that's like a perfect example of something that could be very impactful to the world that the broader world might want to know. Like is that manipulating the market? Like to me is that a CFTC issue? It's definitely an IDF issue. No one I think disputes.
- [29:05]
C
Yeah, it'll just never get to the safety. Right. Like it's just going to get like this is these people are never going to like get past their like the military, they're going to handle themselves. So like we probably just like won't ever see a resolution there. But my guess would be that that is the same way you get all insider trading. Right. Like it's depth of information from the military in that instance and you have a clear responsibility to keep that information.
- [29:28]
A
That's right.
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C
Yeah. So I think that's a layup.
- [29:32]
A
Yeah, yeah you're right for certainly for the employer and if that employer is the Government. Your government.
- [29:38]
C
Yeah, you just like. And then in the court of public opinion, you just like, nobody's on your side.
- [29:41]
A
It's hard to defend that. One more example that I thought that was recent, that I, that I liked a lot, was somebody bet on the exact second length of the national anthem at the super bowl. And they went, and then they went to the stadium during the days preceding the super bowl and sat outside it and could hear them practicing. And to me, like, that's fair game.
- [30:04]
C
Yeah, yeah, that's fine. Yeah. Anyone is in a public place, I see no issue there.
- [30:10]
A
Yeah, it's kind of interesting.
- [30:11]
C
If that guy were an employee of the stadium and was working, like, I don't think that flies, then the stadium could have like real an argument and could like potentially make that an issue. And like you could say that that was, that's of information there. But if he's just, I don't know, there's nothing.
- [30:27]
A
He's on the street. It's like if he's on the street, it's kind of like those like Pentagon pizza trackers, right. Like, you know, all we did was see if like they ordered a bunch of pizza late at night at the Pentagon.
- [30:38]
C
Right.
- [30:38]
A
Like it's not technically you have access to the Pentagon pizza supply chain by following it.
- [30:46]
C
Yeah. People get hung up on the concept that like it's like a quality of information, but that's not the case. It's like, who, if the information has value, who has a right to it? And like, do you have a duty to like protect that information? That's kind of. I don't know. Because they buried, they buried the guys on the NFT thing on OpenSea. Like that was like a clear one where like it's less so that it's like. And that people get caught up like, oh, it has to be stocks. And it's like, that's clearly not the case either. Anyway. I don't know.
- [31:13]
A
Yeah, very interesting.
- [31:14]
C
It is going to like continue to be a problem. The problem generally is like there's junior employees at a lot of these places that I actually don't think understand this concept. Look, if you work in finance, you know this, they beat this into you pretty quickly, right. That you like can't be doing this. But if you work at say at random tech company and you have information and it could one market like did somebody did with the Spotify markets, right. Like what was going to be like top. It's probably unclear to you immediately that like you can't do that if you haven't sort of been told by compliance that you shouldn't be doing it. So that's where I think people are going to get a little bit outrage and probably get caught.
- [31:52]
A
Yeah, I think you're right. And you're going to start to see employment contracts and stuff like start to include this probably explicitly. And obviously in the case of like a publicly listed company like Galaxy, we already know that, you know, misappropriating, you know, material non public information is illegal. But like if you're not a public company, you're just some company. Right. It's not as obvious maybe to those.
- [32:15]
C
Oh yeah. If you work. Yeah. If you get hired right. At just like a random sort of run of the mill tech company, like they're not going through like a compliance thing with you. Especially if the company's not public about like duty of keeping information. I don't know.
- [32:29]
A
Or like you said the super bowl, like the staff of the super bowl, like they probably weren't saying like, hey, don't dimension markets or timing markets related.
- [32:38]
C
I would bet a lot of the sport, like I don't know how it is now, like I assume that you're not, if you're an employee of a NFL team, you're not allowed to gamble, right? Like, I think that's probably the case. I don't know. But I would bet good money, I would bet that they're just gonna wrap, they're gonna just cover. Right. They're gonna be like no prediction markets at all. Like just like cut that out.
- [32:56]
A
Right.
- [32:57]
C
It's not part of your job. Like we're just going to have to say that you can't do it. Which I think is. It's the same way, like if you work at Fidelity, you can't like just trade single stocks like all day. You got to like get approval. You got to put it like you can't. You just kind of, you take a really broad approach that you just ignore this problem entirely.
- [33:12]
A
Yeah, that makes a lot of sense. Look, Dan, you guys at CMS are some of the, you know, larger principal traders in crypto. You, you've been trading in crypto for, I don't know, has it been a decade? Probably.
- [33:23]
C
I mean, yeah, usually because I, I started doing it full time in 2013.
- [33:27]
A
Oh, wow. So more than a decade. What is your overall read on crypto markets or bitcoin majors also? But where are we right now? Because we're obviously down 50% in Bitcoin and worse than a lot of altcoins. What's your sort of overall take.
- [33:45]
C
Yeah, look, I think my read on the whole thing is there's this massive, like, sucking of capital in the world into like specifically AI, but like a lot of the AI, Jason things too, right? Like all the pieces that go into that and then you've got like robotics being like an interesting thing that people are putting, but like in space anyway. Call it like cutting edge tech, right? Like where there's a ton of money just like coming in from every corner of the world and it's like creating this like liquidity vacuum where it's just all people want is exposure to that and they're willing to sell other assets sort of like to get there. And I think that's been like the biggest trend is just all that money is getting like sucked out of like, crypto and other things. By the way, like, crypto's not like the only unique one that's getting like obliterated on this thing too, right? Like, there's a lot of traditional markets, like the big one, obviously that people like put up against it is like the SaaS companies. But like, there's other sectors too of like traditional stuff that like, it's just all the money sort of going there and that is like, obviously, like painful, right? Like you can't like, look at the funding. Like, there's very little venture dollars being put into like new crypto sort of stuff. Nobody's really raising any funds. Like Dragonfly had that one come out. MJ had a little bit of money. I think he had like 65, but that's like not a big raise. So there's like very little new sort of interest in sort of this as all the money's sort of getting sucked into that. And you got a What? You got four or five big IPOs slated now in the next 12 months. SpaceX OpenAI Anthropic. They're all looking to get out. And that's another thing, like, that's just like sucking like capital in is like, you see it like there's these SPVs that are layered on top of each other. Everyone's just clamoring, sort of getting into it. So look, it's like the least interesting, sexy thing right now and the money is just sort of going elsewhere. Is it going to persist forever? Like, no. Do I know where the bottom is? Like, also like, no. But I like to think we're like closer to the end than not. I mean, you're starting to see some real capitulation, right? Like hash rates jack down a couple times. That's usually Like a pro predictor of people like really puking it. These dads are just dead. They haven't structurally unwound, but they're basically out of business. Besides a couple of the bigger ones, that's a big thing. And you've had a handful of people sort of leave too, which is obviously not a net good. But it's hard, it's hard to know where the end of sort of that trade is. But it's not forever. And assets, it's not disappearing and it's not being made illegal. So it'll be here and you just got to sort of survive. Like that's like kind of the biggest thing. You got to just like make sure you can like live another day.
- [36:12]
A
Yeah, I mean, that's been the tale a couple times in, in crypto's history and certainly as long as you've been in the market. How would you compare, like, the sense of this bear market, the sentiment, the feeling, compared to, I don't know, 22, 18, you know, 15 and 16, like, is it, is it different?
- [36:28]
C
I would say 18 felt the least bad because, like, everybody knew it was coming. Like the hangover from like the ICO boom. Like, you just knew it was going to happen. Like, it was just bananas. Like the top of that thing was like. I still say today, having done this for a very long time, that was the wildest period I ever like, traded through. And like, hands down, like, this just the shit that was going on, there was like a whole nother level of sort of mania and like probably the purest mania I've ever like been a part of. And then like the second one was that didn't feel as bad, was probably 22, despite, like, it actually being like locally, like a real issue for us, just because, like, we were like involved in trading on FTX a lot. But that one sort of, it was like, here's the problem. There's a credit crunch, These entities are toast. It'll be fine. On the back half of this, you just gotta live through and it's suck for a while. Which was kind of how it went down. The problem now is there's not like a thing that happened where you're like, oh, we just got to get past this. It's just got to be like, we've got to just stop, we're sort of bleeding. And then like, hopefully it'll come back organically, so it's a little harder. The only time, the worst time by far, and the time this was probably, I'd say Now is the second worst time, the worst time was 2015. There's a period in 2015 where it was dead. Like it actually might have like felt like it was kind of over. I remember. So Bobby, one of the partners here, was working at Cumberland at the time I was at Circle and we were looking at, you remember, trade block. Yeah, yeah. They were like, we use them a lot for the pricing thing. And they had on the right hand side the 24 hour volume of like the top eight dollar exchanges. Right. Like that was like the little toolbar and Bitfinex, which was the biggest liquidity venue at the time, had traded under a thousand bitcoin in the rolling 24 hours. And Bitcoin is probably like 300 or so. So I was like, all right. I was like, the biggest exchange in the world is going to trade 300 grand for the rolling 24 hours. I was like, this is just like not sustainable. I was like, none of these businesses can survive. I was like, we aren't making any money. The exchanges aren't making any money. I was like, this is toast. I was like, nobody cares. This is actually over. And that didn't really change until like 2016 and Eth got a little popular and then people started piling back into bitcoin and then it sort of like obviously 2017 was mania. So like that was the worst time. This is probably coming up on the second worst time. But I don't know, it's. It's weird when there's a catalyst and you can point to it and be like, oh, this is like why we're getting toasted. It always feels a little bit better if it's just sort of like bleeding out for not a lot of reason. Like that sucks.
- [38:54]
A
Yeah, I agree. I feel like this time it, you know, especially when you had the president, the vice president promoting it, a wholesale improvement in the regulatory outlook and rollout. It's kind of like, you know, how much. And yet we still, you know, experience the, you know, a topping and a pullback like this. It's sort of like, well, what more could, what more of an external catalyst can there be right than what we got last year?
- [39:18]
C
Yeah. I also worry about like the looming like we have risk now politically the other way, which is like not great. Like if the regime changes in the next presidential cycle, we're going to get buried. So I hate that. Like, that sucks to have like on the horizon and I'm not making any opinion about what will or will not happen, but like it's not a non zero chance that like the admin changes like it happens quite often. So like we are. We have that like working issue now, which we like previously did.
- [39:47]
A
Well, how important is it in your mind then that something like the Clarity act gets passed into federal statute now to help prevent against a rollback, then
- [39:56]
C
you might not get it the next time. Yeah, I think it's pretty big to get that stuff. I mean, the midterms are soon, so I'd like to see that get done by summer. I don't. It's hard. I don't have like real good inside baseball into that. But yeah, yeah, it's pretty important I think, to get this stuff through what you can.
- [40:13]
A
Yeah. The risk of a rollback seems to be like one of the main, you know, in the case of a. Of a hostile administration, seems to be one of the main impetuses that people are pointing to for why you need clarity. Because otherwise, like we're, you know, big C clarity. Right? Capital C clarity. The Clarity Act. Otherwise it feels like we're getting most of what we wanted from the current regulatory agencies.
- [40:34]
C
Right, right, right. But if it's not codified into law, that can change. So it's like then you're just subject to the whims of whoever's in there at least. I think the OCC charters are kind of hard to roll back. So hopefully that has some stickiness to it, which would be helpful.
- [40:48]
A
Yeah. And there have been a bunch of them granted, recently. What's your take on Erebor Bank? Do you have one? I mean, I only point that one out. They recently got an OCC charter.
- [40:57]
C
Yeah.
- [40:58]
A
A very fresh de novo bank.
- [41:00]
C
They do. I put a small check into that, which I snuck in and Ro's there now, which is great. So I think. So we're onboarding with it. We haven't gotten it yet, so it's hard for me to like, I can't be like, this is the greatest thing since sliced bread. I haven't used it. The pitch is great, but like I said, until I'm using it, I don't want to say anything. But we're excited about it. I mean the Stablecoin in out is like the big sell because our flow currently is kind of just like USDC to Coinbase to circle to our bank to do stuff. Like there's really no reason to have that hop in between. So hopefully this is like the smooth transition. And yeah, I'm excited to use it, but like I said, having nothing. It's still really early on it, but. And there's a couple Others that are looking to do a model.
- [41:46]
A
Yes, that's right. I don't know about each of their models but you know, Anchorage has had one. I saw Ripple is getting one or got one. Right. There's a bunch of others that have applied as well. I wanted to ask. Yeah, yeah, go ahead.
- [41:59]
C
I think Ripple did get the OCC charter.
- [42:01]
A
Yeah, yeah. So but you know, in 23 of the things that went down literally in 23 was the real time payment networks at Silvergate and Signature which sort of were the method to move cash around in a, in a lightning fast manner. And obviously those got taken out like have stable coins. Especially if you could get this like more seamless on and off ramping. Have they like filled that gap by now for you guys?
- [42:34]
C
Yeah, I'll say this like the most we ever really used the send network was like obviously like when we were OTC trading. I think most settlement just happens in stables and I don't think it's really a function of the banks like falling down. It was just like easier. You just needed sort of everyone to do it. But I would say even by 23 like when those networks got toasted like we were still pretty much settling in stablecoins. If we were doing any OTC activity, it's just like cleaner and like as long as there wasn't like a ridiculous like charge for doing it. Like people just, I think most of the time it's just easier especially if you have them. Like we, we would avoid like having to like this is the scenario you don't want. It's like I got to pull USDC out of like the crypto world into the bank to then send a wire to get crypto in. Like that's just silly. So like it kind of gotten short circuited probably like going into there. But yeah, I mean like those banks getting popped. I think the bigger issue is just like that was like the only like people use them for payroll ops, like just normal sort of like expenses. Like that was the bigger issue is like people didn't have like an operating bank for a while.
- [43:32]
A
Yeah.
- [43:32]
C
And the backup like the thing was always you use Silver Gate and you had signatures the backup and then they both got like wiped. I mean like we were lose like like I personally got popped at SVB and First Republic within like three, three months. And then like here we lost silvergate and Signature probably in like an even faster timeline. And like we had kept an operating account at bank of America that we like didn't use. But it was like a real like Emergency bank account which we were able to lean on until we got Western alliance stood up after. They were like filling the void. But like, the problem is like, you like all the other banks that would be willing to bank, you were like the ones that the people on the news were like, this is the next one to go down. And it's like, well, I don't really have a choice here. So like, what am I? Like, obviously they're willing to take my business because they're in trouble. So like, I might have to like, sort of go where they're like. And like there was a list that was going around of like all the banks you could use that people kept like trading. They were like, oh yeah, they'll take you. But it's been good now. Like that's, that's really not a concern for us that we think about too much anymore. But there was definitely a period of time where we're like, what are we. Yeah, like if we lose all of our bank accounts, like, what are we going to do?
- [44:34]
A
Like, that was the core of the operation. Choke point 2.0 wasn't even the destruction of the payments networks, but the riskiness via supervision of just normal banking of crypto that made it impossible for most banks to even, you know, again, provide CMS with payroll accounts. Right. Like basic banking.
- [44:53]
C
The one thing I will say on the bank's behalf, not that I'm like in the business of sort of defending them, is like, the fraud that flows through crypto is real and like, it's like a very expensive business to like bank. And if you're just like running regular banking services as a customer, you're kind of like a terrible client. Like, you cost probably more money in compliance, like stuff than you're like keeping in the bank to justify sort of the business. So like, I, I understand a lot of their, A lot of like why a lot of businesses were like, I just like, don't want to bank you. Like, I can't. Like, this is like a losing proposition for me. So like, I'm not interested in it. It's just like, it's unfortunate that like crypto is a great thing to steal because it's a bear asset. And like anytime you touch the tradition banking thing, you just like, it sucks. You're just like in a like world of pain.
- [45:36]
A
Yeah, let's. Can we talk about PERS markets? Because I mean, they've been around for a long time at least like since Bit Bitmex, which was huge in Perss. But now, you know, there was A whole trade in meta around the launch of new onchain Perss markets last year following, you know, hyper liquid ascendancy. How important is hyper liquid generally to what you guys do? Or is that where your trading Perss these days or, or where are people trading Persps?
- [46:01]
C
So I mean I still think that look, I mean it's definitely one of the biggest venues now. I still think Binance is bigger. OKX is like bigger. It's hard because like those volumes are a little fugazi sometimes. But it's useful, right? It's really useful because it's. There's no KYC and it's seamless and you can just like onboard and sort of like start. You can just, you could be on board of trading in like five minutes. Like it's very, very convenient to sort of doing it. It's great that they've moved into a larger product suite. I think that's like super important for them to like hedge some of the like crypto sort of exposure of the business. I. My biggest concern with the whole thing is if they're opening themselves up to regulatory scrutiny. I don't like. Here's where I think it gets a little iffy is you effectively have people trading US stocks but like you don't own like you're not really. Because you're trading the forwards on it but you're changing the underlying. Right. Like it's not like happening in a vacuum and you don't have like the KYC info on those people. And I don't know how the regulatory regime obviously right now it's the friendly it's going to be but I don't know if that's going to be a permanent thing through time. So I don't know. I remember this was always. Because when Circle had Polo this was always like a thing they were like we should launch stock trading and let it happen. And the pushback then, and this was obviously into the Biden era was under no circumstances can you be having non US people trading this thing just in a black box. So I know that there's regimes that definitely think that is like a thought so anyway. But I think it's very useful for them like it. I think if you even look at the OI on some of those, they're like materially higher than some of the altcoin markets now. I mean that's what people want to trade. You got to like give them what they want.
- [47:36]
A
Yeah. There was this weekend during the, you know, attacks on Iran and vice versa in the Middle East I saw that even Bloomberg was quoting hyper liquids. You know, perps on oil.
- [47:46]
C
Yeah, I mean it's liquid and it's open.
- [47:49]
A
Yeah.
- [47:49]
C
I mean you'll probably see his Globex go to like 24 7. Right. Like they'll just have to like they're not going to just like take it lying down.
- [47:57]
A
Yeah, it makes sense. What about perps on equities like through cme, like regulated ones? I know CFTC under like under Caroline Fam has been working on this and now Mike Selig.
- [48:07]
C
It's kind of weird. So, so single stock futures used to be a thing and then nobody really wanted to trade them so they kind of got rid of it. Like this isn't the first time in history that we've had sort of single stock futures but retail has gotten really into trading perps instead of options where they can. So this is just what they're going to have to feed them. So yeah, you're going to see it. I mean it's really just like a leverage sort of instrument than it is like a hedging sort of tool. But people like it better than options. So I think you're going to continue to see pushing forward to that in
- [48:38]
A
like the tradfi world you talked about earlier, Dan, the like leverage unwinding and stuff. Credit crunch from 22. How do you view the leverage and credit landscape in crypto today?
- [48:49]
C
There isn't much like you don't have like there was a lot of shoddily collateralized if not uncollateralized lending going on in 22 right between Blockfi, Celsius. What was the other big one?
- [49:04]
A
Voyager.
- [49:05]
C
Voyager, yeah, Genesis.
- [49:09]
A
Genesis.
- [49:09]
C
Obviously like, like look there was, they were gigantic and like we borrowed a ton of money from pretty much all those and it was a great time to be a borrower but it was a terrible time a year forward to be a lender. Right. So it all the problem was it was very daisy chained and like nobody really had a good risk. Look, I'm sure there's a pretty good amount of lying going on from like some of the counterparties too of like what their like actual exposure was. But they were all very daisy chained. Right. And like one lenders counterparty was on the other lender and like, like they're posting the collateral here. It was, it was pretty much a mess. So when three AC toasted and the whole thing just sort of unwound pretty quickly, that was the first time there was a real, a real credit contraction in crypto because that had actually built up pretty big and that unwound pretty quick right from the start in May to FTX falling down is like eight months. So that was a pretty quick sort of through it but it was like every other month you'd have a lender fold out and the thing was like in May they were all insolvent just like nobody was owning up to it. Like it was just like sort of one group was like they couldn't fake it anymore and they would like drop every two months later. But that was a shitty time because we had a lot of outstanding borrow and like every month somebody would come in and be like hey, I have to call all the borrow back in and be like the fuck. Like I just like. And then you got to just keep unwinding stuff and if you had anything termed it was like okay. But you knew like that was going to be a problem coming forward. So yeah, it was not great dealing with that but that's kind of gone. There's not really that leverage in the market.
- [50:35]
A
Yeah, a lot of DEFI usage now. I think our data shows that defi is bigger than CEFI lending. I bet just barely.
- [50:43]
C
And that's all over collat. I mean like Maple's gotten kind of big like they're out there, we'll syrup whatever it is now but the credit quality is a lot better and they're just not giving you enough rope to hang yourself anymore.
- [50:54]
A
Yeah, it seems like maybe some self regulatory vibe has especially among the CEFI or C5 slash DeFi lenders. Right. Like, but defi has been good.
- [51:05]
C
Yeah, it's still in everybody's back of their mind. Right. I mean like yeah. You still think back to it.
- [51:11]
A
Yeah, you do. And aave a massive lending platform or protocol these days that undergoing a major governance debate at the moment too because it's one of the you know, biggest lending facilities in the world and also is you know, decentralized. It's like a very interesting. And it also is one of the only ones that's making money consistently.
- [51:31]
C
Right. And of course then they got to start fighting right? Yeah, like I don't have a dog in the fight but I do hope they can come to a good conclusion on it because like it's pretty important that that doesn't like die. Yeah, it's like, it's like the one thing you can point to in crypto and be like oh this works like yeah, great. If that were not like and disappear on us though. It seems Morpho has been taking a good chunk of their market share Now?
- [51:53]
A
Yeah. What do you think about. I've been doing a lot of work on this with tokenized securities, specifically equities. Obviously there are some in the market, including tokenized GLXY and then, but then on one sort of one design side of the spectrum and then X stocks and ondo. On, on sort of a different side of the spectrum. Do you think this has a chance of becoming big one day?
- [52:14]
C
Yeah. My biggest concern with. Is that I don't think people totally understand what they're buying all the time. I think like, and I'm not like a huge like the market regulators need to be sort of in there, but I do think there should be pretty good disclosure about like what the exact thing that you're buying is and what happens in the event like the issuer goes bankrupt or if something like, like this is, this is how it ends poorly. Right. Is like I'm not going to name it, but like an issuer goes out there, puts a ton of tokenized stock in there, they go bankrupt and like suddenly there's like no claim to like the stock inside the thing. Right. Like, and I, and I don't know anything about how these things are structured in any capacity, but I just know that it's not clean cut. Like you're not just like in your brokerage like buying. Right. Yeah. Like it's a little bit different. So like people should understand exactly what they're getting.
- [52:57]
A
But you do see, I think they're
- [52:58]
C
going to be popular though.
- [53:00]
A
Yeah. I think, you know, this is one view I agree with you on. The, the structure mattering and disclosure of what the structure is being crucial is one of the reasons for Tokenized Galaxy. We ourselves, the issuer tokenized it and we didn't file new issuance, we didn't issue new shares, you know, or we haven't, I should say. Instead we just let you convert them, you know, on our books and records into a tokenized format. That's much. And thus they are literally our securities, according to us, the issuer, as opposed to some third party. But that's also impeded the utility of them because there's so many regulatory questions if they are real securities.
- [53:40]
C
Yeah, yeah, yeah. My, my concern is that who's playing the fastest and loosest is going to like.
- [53:45]
A
Right.
- [53:45]
C
I do worry you're gonna get in a scenario where somebody's just gonna be issuing stock they don't even have and they're just like putting it out there. Right. And be like, oh, well, you, I mean, I get very concerned because people have pushed this obviously already and they're putting like tokenized anthropic and Andre and stuff like that out there. And I'm like, do you even know if this person has shares anywhere in the stack of this thing?
- [54:03]
A
Like yeah, the private.
- [54:04]
C
But it's in spv. And I'm like, well, does that SPV actually have the shares? I was like, you like there's a lot of risk on this thing.
- [54:10]
A
Yeah, absolutely. Before we wrap too, I wanted to ask you just generally about altcoins. You've been posting hilarious and great memes about the Christmas. Altcoin market was some of my favorites around Christmas. I mean the sentiment feels very negative on not just you know, obviously like meme coins NFTs, you know, the sort of long tail risk curve on the risk curve of, of altcoins, but even in the, you know, the L1 space. Right. Like it, it's, it's. The sentiment is people questioning the overall utility of the future of blockchains and it feels like that's impeding sort of the. Even, even some of the majors. I don't know. Where do you, where do you think
- [54:51]
C
the altcoin market is? I think it's just general with the market, right. Like, I mean like if bitcoin catches a cold like altcoins get the flu, right. Like that's like the kind of. And like people when they're scrambling for liquidity, they're selling that stuff and it just like there's, there's not a buyer of last resort in a lot of that stuff, right. So like it just bleeds out hard and if like not goes to zero. So I, I do think it's a function of like the market just being weak and it's just like the weakest of the week and you never really saw a lot of interest in it in the sort of run up in bitcoin, right. To want to kind of like skip the whole cycle. Yeah, I mean like look this is. You see this in the venture stuff in particular, right? Like they're not raising new funding to invest in new sort of deals. So what should happen is like the, the universe of investable names should shrink. Stuff will die off. This stuff hopefully that has some more quality and some stick to it. We'll stick around and like that'll sort of catch a bid. But there's just too many names and it's got to. The universe has got to get strong. But it's weak, right? Most stuff is opening materially lower than its last round to trade like raised At.
- [55:53]
A
Yeah. So the lock.
- [55:55]
C
Right. So like you can get liquid on a lot of these names at a third of the cost of the venture guys who did it a year ago and they're subject to the lock. I also think the locks, I think the lock stuff is going away. I think that's just like a terrible market dynamic.
- [56:12]
A
Yeah. Well, do you think we're going to get like a new like token issuance framework? Because I know Hester Purse, the SEC commissioners talked about like a safe harbor for token launches for a long time sort of as a regulated pathway alternative to the ico. Because you didn't have the locked dynamics with the ICOs in 17 the way you do now with the private to public token launches.
- [56:33]
C
I mean you see people doing it right. Like right now like people are just ripping it, like they're just putting it out there. So I think that'll continue. I just think this idea that like you lock investors up for four years and you just bleed supply out there is bad because you have this boom bust scenario that just ends poorly because you're just like, you're not matching supply and demand well at all. You're just like, you have supply at this fixed constant sort of thing. And you could argue be like, well Bitcoin did that and it worked. And I was like, yeah, that's true. And that worked for them because they were the first. But for the rest of the stuff that's issued, it has just been a disaster. Like it is just, it obliterates the chart. People get angry. So I don't know. There was one. I remember Algorand did this and they changed it and I thought it was a really good idea at the time. I actually think the way it played out was a little poor because it was too aggressive. But the supply unlocked as a function of price. So you basically had these call options where your tokens became liquid. But also it had a time based vesting but then it defaulted also back to the price based best thing. And that was able to sort of match the supply and demand as it was coming online. The problem was it was too aggressively skewed toward the unlocking. It all unlocked too fast. Yeah, but I don't know, there's ways to jigger it. I think people are gonna change. I think the best thing is going to come in.
- [57:56]
A
Yeah, I think some teams are starting to talk about for the team supply some sort of milestone based unlocks. Right. If the team, you know, develops the thing to X, Y, Z volume or whatever, which seems better.
- [58:12]
C
But I actually Think the team vesting on a fixed cadence of time makes sense. I mean, that's what you see in equities anyway, right? Like, I mean, because that's their comp. Like, I. I just think it's a little weird for, like, people that have, like, given cash to then be subject to. I don't know, maybe you could do
- [58:27]
A
warrants or something like, based on their, you know, involvement and support of the project and sort of treat them like that.
- [58:34]
C
But yeah, I'd love to see you just go back to the ICO model. But yeah, the back half of the ICO model wasn't great either. But the biggest projects that still stand did that. Right. ETH was an open ico.
- [58:48]
A
You could imagine with an SEC regulated pathway with significant disclosures and stuff like that, that a return to the ICO could make sense and sort of some, with some guardrails could be, you know, better for the investors than 17 was, but at least allow, you know, projects to get directly to interested investors rather than just bleed them out over time. Yeah, you can imagine it. People.
- [59:13]
C
People are definitely looking at it with like, how do we do this better? I mean, Coinbase, they've only done one, but in theory they were going to get in this business.
- [59:21]
A
Yeah. I wonder maybe why they stopped. They. They made it seem like they would. There would be one a month. And that was, you know, four months ago.
- [59:26]
C
I don't think there's any demand. I think they're like, yeah, great, so we're gonna wait. And I think a lot of the teams they had queued up are like, we want to wait.
- [59:34]
A
Yeah, true. Into bad market, you know, conditions make sense as well. Before we wrap, Dan, you know, we talked a lot about various things of this, but what either has you excited or worried or any catalysts on your mind for the rest of the year, like, what you guys are tracking as important to follow, that you'd love to share, would love to hear it.
- [59:53]
C
I think the biggest things for crypto are not really crypto related. I think it's like you have a massive boom still in all this, like, IEO and frontier tech. Right. That's like clearly driving the whole narrative. And then you've obviously got like, geopolitical issues all over the place. Like, I think those are going to just drive markets for a while. Like, I don't think we control our own destiny. I think it's just like, we're along for the ride.
- [60:17]
A
So it's survive is the mantra.
- [60:19]
C
Yeah, survive and hope they cut rates.
- [60:23]
A
That's great. Dan maczewski from CMS Holdings. Thank you so much, Dan.
- [60:27]
C
Awesome. Thanks for having me.
- [60:30]
A
That's it for this week's episode of Galaxy Brains. Thank you to our guest Dan maczewski from CMS holdings and our friend Bimnet Abibi from Galaxy Trading. Everyone have a safe and happy weekend and we will see you next week.
- [60:46]
C
Foreign.
- [60:58]
A
Thank you for listening Galaxy Brains, the weekly podcast from Galaxy Research. I'm Alex Thorne, head of Firmwide Research at Galaxy. Follow me on X at Intangible Coins. Follow Galaxy Research on X at GLXY Research. Read our written report@galaxy.com research and don't forget, if you like Galaxy Brains to like and subscribe on your favorite podcast platforms like YouTube, Spotify, Apple Podcasts and more. We'll see you next time.