C (2:22)

Yeah, I mean, I, I think that the best way to, you know, think about bitcoin is just kind of on a historical analog, right? And one of the better charts that I saw this week was just kind of, you know, days after bitcoin's peaked and you know, the performance in the last, you know, bitcoin cycles. And essentially we're following the, you know, 2022 kind of bear market cycle pretty closely. You know, I think we're around like 125 days since, since we peaked and you know, we're down somewhere in the ballpark of, you know, 43, 44% and the, the last Bitcoin correction, you know, 125 days and you were down like 43. And so I do think that the historical analogs are super relevant. And historically you've seen a high to low move of 70% ish, maybe a little bit more on average in terms of full blown corrections in the market. And so I do think that that's in the cards. I do think that's going to be a little bit later. Even myself, with the 200 week moving average, I was definitely a little surprised by the pace of the move, not surprised by where we got to. It's just the pace of the move was kind of unexpected even for folks that were very bearish. And so right here, right now, I think the most likely path is probably consolidation before resumption of the trend lower. I do think that until the 200 week moving average gives away a support that it should hold on the next test of that level on a weekly close basis. But I do think that there's probably a little bit more pain ahead. And the analogy I like to kind of go back to, besides the historical analogy is kind of what happened after October 10, right? You had this huge move with billions liquidated and you had a pretty sharp rebound thereafter. But as the weeks progressed afterwards, we realized there was a lot of damage done by that and there are a lot of dead bodies, to put it bluntly. And that led to significantly weaker liquidity conditions, some more aggressive, you know, for selling into, you know, thin liquidity, etc. And so given how quickly we've come, you know, I do think that there is some collateral damage in the market that will just take time to present itself. And so, you know, right here, right now, I think, you know, in terms of areas that are good kind of value areas, you know, in the near term, you know, I think any dip to the 200 week moving average probably gets bought. And I think the only reason that we truly have to break that level is probably a broader correction in risk markets and US equities in particular. I think that probably kind of is the next catalyst for a move lower in bitcoin through supports. And so, you know, I, and again, you know, you might not get that equity correction, but I do think that there is a lot of tension and angst in the market. And you know that that's for a whole number of reasons. But, you know, AI is definitely kind of at the forefront of that.

A (6:14)

And before, before we get deep into that and I want to talk about that, you're still eyeing that 200 week as a, as a good value zone. You're saying could go lower. I, I don't think you, you know, the other prior bull bear market drawdowns were your Last one was 70%. That would take us down to 37. 5. That, that seems extreme, does it not?

C (6:36)

Yeah, I think that that is extreme. I, I just, you know, I, I, I don't think we can get there because there's, there's been a lot of bitcoin that, that's been purchased that is not ever going to be sold. And so I do think that the floor is a little bit higher than, than, than past cycles. But again, I think you have to kind of respect history. But ultimately, like, you know, what we've done in past cycles around the 200 week is you kind of dipped a little bit below and consolidated before resuming your trend higher. And I do think that's probably what's going to happen. It's just, it takes time for markets to heal. And I think we're probably like, call it six months, six months plus away from, you know, the market, you know, truly having healed and feeling like, you know, we can can easily kind of go back higher. And so, you know, I'm optimistic for BTC kind of in Q4 of this year and possibly, you know, in Q1. And you know, to be honest with you, I think, you know, a lot of folks struggle to find a narrative that supports crypto at the moment, but ultimately I do think that narrative is something that follows price action and not the other way around, particularly in such an esoteric kind of asset class. And so I really do think that once you start getting a healthy rebound in crypto, that the narrative will naturally follow. And to be honest, the, the, the hard asset bitcoin gold narrative like, has not gone away. Like, it is not like the debt has gotten any better. In fact, we're we're still printing like historically high levels of, of of deficit spending relative to you know, g gdp. There's still kind of a big self custody component of, of of of crypto that, that makes sense in, in the world of today. And so like I, I don't think any of the things that we've talked about historically for crypto and that the value proposition has really changed and same thing you had this crazy correction in silver and gold. But at the end of the day central banks are still buying gold pretty aggressively. A lot of folks are keen on diversifying away from U.S. assets and you know, gold's been around for, for, for centuries and you know it will continue to, to preserve purchasing power. And so you know, there's, there's a lot of short term noise. But you know, taking a step back fundamentally, you know, there hasn't been too many things that, that have changed. In fact, I would argue that the moment that the narrative comes back in crypto, the financial access is there such that, you know, you can easily actually, you know, kind of surpass the highs you've had in prior cycles or the 120k. And so I think it's just a matter of time. But it might be, you know, six months to a year.

A (9:46)

Yeah. And maybe a little more pain before that happens. Okay, that's great. Let's get back to what you were saying about equities. A lot of angst. I saw conversation, you know, I guess you always climb this wall of worry but in the, in the fall and in the early winter, it was a lot of angst around whether the big hyperscalers and tech companies can keep this level of capex spending on data centers up. Now it seems like people are really starting to worry about straight up job losses from AI productivity. What is in there? I saw, we talked about this, you know, big tech name was down a lot on concerns that their major, you know, productivity suite of SaaS software was going to be displaced by AI. I saw this morning on CNBC discussion about whether about wealth managers being displaced by AI. Is that at the core of the sort of the current wall of worry?

C (10:39)

Yeah, 100%. There's a lot of companies that are directly at being threatened by AI and the way I've seen it best phrased is kind of one from one of these banks. But essentially for these hyperscalers to get a reasonable return on invested capital, they have to essentially take market share away from existing companies. Right. Like if you're doing your tax and accounting on ChatGPT or Claude. Right. Your H and R block is not going to get that business. Right. And so it's a little bit of a zero sum game because everyone needs to file services, file their taxes, for example, but like, it's just a question of like who is going to be doing that filing. And you know, you could argue that, you know, prices in general will go up and so maybe, you know, these guys get, get more, more wallet share, but then it's coming from the consumer. And so there is like a zero sum element to this. And you know, a lot of folks think that, you know, having the dominant AI is kind of a winner take all market. And so even amongst the hyperscalers themselves, like there are going to be winners and losers and these guys are betting hundred billions of dollars, you know, in this AI arms race. And so I think as this, this trend continues, like yes, the labor market and you know, the commoditization of software engineering skills like that is going to be super relevant for the labor market. And right now it's being felt by recent college graduates, but you know, in a couple months there'll be, you know, more senior, you know, software developers.

A (12:30)

Yeah. The pace of, pace of AI development, frankly, if anything, seems to be accelerating, but even if it's, even if it continues on the linear path, it would still portend drastic. I mean, I mean look at these new models. They're so much better than just six months ago.

C (12:47)

Well, it's, yeah. And to your point, I mean these models are now like recursively learning from themselves and like improving on their own at a faster pace.

A (12:58)

Yeah. Anthropic said I saw in their latest model which came out last week, they disclosed in part of it in their docs that they had used Claude to help build this version of Claude. It starts to feel like a snowball gaining steam here or gaining size.

C (13:16)

Yeah. And then that's just on the software side of things. Then there's the actual robotics element as well. So you combine robotics with AI and this is kind of what you know, Elon's been preaching recently. And it, the, the implications are just insane. Right. You've got AI learning at a faster rate and robotics like advancing at a, you know, faster rate and robots can build robots. Right. And so it just becomes like this kind of like insane web that's just expanding faster and faster. And the implications for, for society, the labor market, broader, you know, financial markets is very challenging for, for people to predict. And so, you know, I think there's a lot of, you know, parts of the market that are trading out of, out of fear and lack of understanding and just uncertainty. You wouldn't know that by looking at the outright level of like the S&P 500 or, or the Dow Jones or, you know, the NASDAQ. But the, the, the carnage that's happened underneath the, the surface is, is, is immense. And, and you know, I think it's, it's quite telling of just like how uncertain and fearful, you know, market participants are.

B (14:35)

Yeah.

A (14:35)

All right, well, we'll stay watching it. I personally think if we get that AGI, they're going to want Bitcoin for their savings, if not stables.

C (14:43)

I think that's totally possible.

A (14:45)

Yeah.

C (14:46)

And I, I, yeah, I mean, there's just so many, you know, areas that, like, I truly just don't know.

A (14:54)

Yeah, I know, I know.

C (14:55)

Am I going to get replaced? Are we going to just have trading agents that you just clone us on

A (15:00)

this podcast as well? You know, I mean, we've got so much source material to learn from.

C (15:05)

Exactly, Exactly.

A (15:06)

All right, we'll leave it there today. Bimnet AB from Galaxy Trading. Thank you so much.

C (15:09)

Thanks for having me.

A (15:12)

Let's go now to our guest, Greg Exit Thalis, general counsel and partner at Multicoin Capital. Greg, thank you so much for coming on Galaxy Brainstorming.

B (15:20)

Alex, it's awesome to finally be on the show. Longtime listener, first time caller.

A (15:24)

I'm a big fan of you too, Greg. And before we start, although our guest this week is a partner of a registered investment advisor, nothing in this podcast should be considered an offer of multicoins investment advisory services or should otherwise be confused for investment tax, legal or other financial advice. Disclaimers out of the way. Greg, let's jump right into it. You work a lot on crypto policy for Multicoin, but, you know, there's not that many. It's not really that big of a group of people in the industry that are deeply involved in the formulation of an advocacy for crypto policy. What would you say just on the Clarity act, which is, you know, the crypto policy legislative item that's, you know, at the topmost of the agenda now, what is the state of the Clarity act negotiations in your mind today?

B (16:09)

Yeah, it's, it's been a big focus for me and a lot of folks in the industry both last year when we were focused on the House side and this year when we move over to the Senate. The bills are different in some respects. I think they've gotten a little bit closer together in the most recent iterations, but I think first, structurally, there's a big difference between a bill moving forward in the House and a bill moving forward in the Senate. And that helps define some of the differences in approach and why it seemingly might have been easier to get through the House. And we had fit 21 pass two years ago in the House and then Clarity passing last year, both under French Hills leadership and stewardship. I think the first principal difference is in the Senate you've got to get to 60 votes to move anything. So when you've got to get to 60 votes, the dynamics of negotiations change entirely. Ironically, I think in many ways that makes it easier for a bill to become bipartisan in the House because you have less whipping around going from, you know, 52, 53 votes to 60 when people are incented to, or it's easier to get a bill on the floor. Another big difference between the House and the Senate is in the House everything could be built in one bill. So when Clarity was going through the House, it was one document marked up in two separate committees, the House Financial Services Committee and the House Agriculture Committee. And in the Senate, it's actually got to be done as two separate bills that are then merged together on the floor. So we've seen the Senate Banking Committee led by Tim Scott and Cynthia Lummis as the digital assets sub chair, you know, guiding the, the banking portion of the bill which touches on taxonomy, things like resale restrictions, disclosures, stuff that is more cited in the SEC or the banking regulator framework, including things like, you know, certain portions that much touch on money, money transmission, money services, businesses, stablecoins, et cetera, et cetera. And then the agriculture side, we have, you know, things that are a, assigning spot authority to the CFTC and assigning authority to the CFTC and presumably the National Futures association as their self regulatory organization to actually regulate intermediaries. So the ag version of the bill is, you know, has, has intermediary in the name because that portion of the bill or that bill is regulating the trading platforms, the custodians, the brokers, the dealers, and giving authority to the CFTC over spot markets for the first time. And we actually have seen the ag portion of the bill go through a markup. So the ag portion is clear to get to the floor. Now that markup was, I believe a week and a half, two weeks ago, passed on a partisan basis. However, there was a lot of bipartisan feedback, an agreement that that bill, that portion of that legislation will continue to evolve as it works towards the floor. And I think it was a, what I would refer to as a very cordial partisan markup. And in the banking side, they've really been working for, you know, really since before the government shutdown is when the work picked up. And they've been working very hard on trying to get a bipartisan bill through committee and getting buy in from particularly a group of 12 Democrats who have been really working hard on trying to refine the bill with the Senate banking staff and other interested members on our side. That part of the bill is still actively being worked on right now. And I think there are. You know, Alex, I may be jumping ahead of your next question, but you know, the four sort of core areas of discussion around the banking side of the bill which are being worked on by all hands right now are one, this stablecoin yield issue where the banks have interposed themselves. The second is title 5 which addresses tokenization and the regulation of tokenization by the SEC and cftc. And the third segment is around Defi, which is title three and some of the illicit finance controls and rulemakings that are being mandated by the bill. And then the fourth is still some cleanup and touch up items in token taxonomy, including some of the disclosure burdens that are imposed on digital asset originators.

A (21:07)

So I appreciate that overview of those core. What I talk about as sort of the tip of the spear negotiating points. It feels like stablecoin rewards though is sort of like the main hurdle is that you know, and that perhaps those other items, there's a line of sight to a compromise that all sides could accept. Is that a fair way of thinking about it?

B (21:31)

I think, I think that's correct that I think there is a line of sight towards a compromise and a bill moving forward on all of these items. I think one of the distinguishing aspects of the stablecoin yield issue is the parties that are coming at opposite ends are different from everywhere else in the bill. So you know, the issue around stablecoin yield is in the Genius act, an issuer is not allowed to pay rewards to the holder of a stablecoin. It's a payment instrument. It's not a deposit account. It is not like other interest bearing investments. It's a payment instrument. Now that payment instrument will hold. The issuer of the payment instrument will hold typically U.S. treasuries or other relatively safe assets as strictly governed by Genius, and it will earn rewards on that. It'll earn income on, on that reserve. And what we've seen emerge, notwithstanding the prohibition on yield bearing stablecoins is that a company earns rewards. It's going to use those earnings for marketing and distribution arrangements. And those can be very diverse in their structure. What the banks are particularly concerned about is some of those distribution agreements look to them like yield bearing stablecoins. Just indirectly I have some criticisms of their analysis of this. I think it's a little myopic and they're not necessarily. They need to broaden their aperture to understand the entire environment. I mean, Alex, when I think I first opened a SunTrust checking account in Nashville, when I got to Vanderbilt, I think I got a toaster when I got that. And that's a reward for holders. Now obviously that toaster didn't come in the form of 3 or 4% rewards for holding a balance. But this is not something new that parties in business will deploy capital as a customer acquisition transition cost. And from the point of view of a stablecoin issuer, they are paying distribution to partners in a number of different, you know, structures to help broaden the use of stable coins. It is not simply, hey, I'm going to give you money, can you go pay it to someone who holds my token holders? That's not the way this works. And I, I think we need to assess the issue of stablecoin yields more from the idea of are we going to make it impossible for stablecoin issuers and their partners? Are we going to hamstring them from business development work? Because that's functionally what this is. And I did attend the, the first of two crypto industry and bank meetings last week at the White House. So got to participate and see a lot of the discussion there. And I do think progress is being made there. But the unique part of it that I was getting towards is in this particular issue, the discussion is not between crypto and Republicans and Democrats. The issue is not Senate banking and Democrats discussing the issue is not traditional financial services and any of those parties discussing. It's specifically, you know, the banks and the crypto industry participants who are interested getting into a room and trying to come up with a compromise on what works for both industries and then having it subsequently vetted by banking staff and the Democrat leadership in the Senate. And eventually, by the way, this will have to go back to the House and be looked at in, in, in as the two bills, the Senate version and the House version get consolidated into one one bill that hopefully goes to the president's desk at the start of this spring.

A (25:49)

It seems like there's, there's such a diverse range of stakeholders in this debate. Whereas during genius, which was also quite a complicated Legislative package to advance. There. There it was. It was a bit more narrow in terms of who cared about it. And the banks didn't seem to be nearly as active and activated in advocating during the Genius act negotiations last year. Is this too complicated to get done in this Congress, or do you think it's still got a good chance?

B (26:25)

Well, I think so. The interest the banks were at the table ingenious. And Genius regulated stablecoin issuers. What the. I think the distinction is now market structure is regulating additional intermediaries, exchanges, brokers, dealers, other platforms. So where the banks have come to the table with a very hard line on this is they want the prohibitions on yield from genius to be expend extended to marketing arrangements with these newly regulated intermediaries. So again, you know, the AG side brings digital asset platforms, custodians, brokers, dealers, et cetera, et cetera, all into line here. And the banks are looking to expand the restrictions to broader market participants.

A (27:15)

I think that's a fair, that's a fair distinction, by the way. I think a lot of people feel like the banks are trying to retrade on Genius. But your point is Genius didn't impose new regulations on intermediaries. This is the bill that would do that. And so here they are again saying, well, if you're going to, you know, have intermediary regulation, it should also include, it should extend. But it does feel like the banks are the ones asking for something beyond what exists in current settled law. And so they're kind of the ones that need a restriction to be added. Whereas, you know, Coinbase is paying rewards on USDC today. Right. So shouldn't they be the ones to blink here? It feels like they're digging their heels in, though.

B (28:01)

Yeah. And I'll say, you know, the more generous interpretation for the banks is this is not a retrade because now we have regulation of the intermediaries. I think a more practical interpretation of their actual asks is they are looking for a retrade. You know, they. Out of the meeting yesterday that took place place on Tuesday of this week. You know, we did see the banks put forward a document of asks, and those asks are dramatically more than anything that appears in the current version, the ANS of the Senate banking draft. And it does look like a retrade. Now that's a starting position. And obviously you don't start from what you want to accept, but it's a. It's a pretty aggressive. It's pretty aggressive. And again, having been in the room and, and heard what I heard last week and you know, having been involved in discussions, I do think they're, they're looking at this from a very sith like absolutist perspective that being able to deploy reserve earnings in any way should be prohibited under the guise that this somehow will crush community banks and the deposit flight. And there's quite a bit of, I'll be generous again and say exaggerated discussion of the risk there. And we saw this, you know, when money market funds were first introduced and presented a challenge to business accounts and saying this is a disaster for the banking system. This will cause deposit flight. There's an off site cited number that's attributed to treasury when in fact it was a bank bank report to treasury saying that there's 6, $6.6 billion of capital at risk from stablecoins for deposit flight out of banks, particularly community banks. That's like saying Bad Bunny did a Super bowl concert in Spanish. And therefore there were risk of $330 million, 330 million Americans moving from English as a first language to Spanish as a first language.

A (30:08)

Six, six billion or six trillion, they

B (30:12)

say $6.6 trillion of capital at risk. And to be clear, that is all of the capital in deposits, that is not actually what is at risk of departing, nor do stablecoins reasonably present a material risk to that. There are a lot of factors at play that impact deposit flight. Most notably, you know, we, we perhaps need to revisit FDIC limits because FDIC limits certainly give the perception of greater exposure for people at community small regional mid sized banks versus someone who's parking their capital at a G sib or you know, bulge bracket rank which is too big to fail. So if we're really looking and concerned about deposit flight, particularly at these small community banks, we need to be looking at what are the risks for bank failure. And I think people colloquially think of banks as this hugely stable thing. My money's parked in a bank. No, it's rehypothecated. And banks actually fail all the time. It doesn't just take a banking crisis. We had a bank fail last week. I'm blanking on the name of it.

A (31:26)

Yeah, one in Chicago, a Metropolitan or something, I forget the name.

B (31:30)

Yeah, that's correct. Like this does happen and we, the, you know, the FDIC act established a system to provide greater security. But Those limits are $250,000 for a customer account and looking at different ways where we can, you know, both improve the business opportunities for smaller regional, midsize and community banks, improving technological opportunities and there's actually a lot of things ingenious that are very interesting for tech forward smaller banks to be able to leverage this technology to use these open neutral networks as a way to get an edge or come closer to a playing field with some of the larger banks by improving the payment systems writ large. We've seen Erebor launch as a new bank this, this week. They got their charter on Friday and they are a bank that is leaning steadily into the narrative of new payment rails. They're going to be stable coin supportive of on day one and are building from a tech first basis now. Erebor is not going to be a small bank for very long. I think it's going to grow pretty quickly. But there are opportunities to leverage this technology that come both from genius and also from market structure itself in, you know, improving the Fed, the payment rails globally and within the nation. I go back, you know, 2015, the, the Fed now initiated the FedNow effort to modernize the American payment system. And crypto is a part of that. Stablecoins are a part of that. And when we look at deposit flight, when we look at the challenges of our distributed banking system in the United States, there have been a lot of pressures both from the government as well as from the market uncertainty sort of overall that have been pushing towards more bank centralization. That's not a good thing. We want smaller banks to be able to succeed. We want bank credit to be out there on the street. We don't want deposit flight. But this is creating a boogeyman out of stable coins which is not the issue at hand. Stable coins are not a material threat to to depart for deposit flight, particularly when looked at and ranked relative to some of the other risks. And there are efforts that are out there. Senator Hagerty has a bill to reassess FDIC limits. You know, French Hill has been a champion of community banks for a very long time and there are things that can be done to improve the situation for smaller banks that don't simply rely on tamping out a technology in an industry that when you draw back and expand your time horizon could actually do a lot to help these smaller institutions.

A (34:31)

That makes a lot of sense. What about just before we move on from clarity, a couple of the other issues you mentioned, you talked about Title three, which is sort of where all the defi related stuff is. I know this bill has some enhanced clarifications on front end defi website compliance. I know with ofax sanctions. Actually my understanding is that's not enhanced. I mean all American legal persons are required to comply with OFAC sanctions, whether or not you're a website or a person. But there's other stuff in there about a non decentralized financial ledger which seemed to set some thresholds on what would, what type of Even possibly an L2 might have to perform, you know, might be an intermediary and not a decentralized ledger. Where do those issues stand? And do you think if we get through some compromise between the stablecoin wing of the crypto party and the banks on rewards, will these present problems or has the industry and have lawmakers reached what seems like a viable compromise on the DEFI issues?

B (35:34)

I think there's a path there. You know, language isn't set yet. In addition to my role at Multicoin, I'm also on the board of DEFI Education foundation, which is one of the two entities associated with the DEFI Education Fund. And Amanda Tuminelli and the team at DEF have been doing a remarkable job sort of assembling feedback from the entire industry, both the larger stakeholders like venture funds or exchanges or what have you, but also the cadre or cohort of their, the industry that they represent DEFI protocols. And they've been working very hard. Amanda's been doing yeoman's work on working on solutions with banking and the Democrats. And I think one of the the issues that it is really hard to get legislation or regulation on DeFi, right? It's really hard because where these things are truly neutral networks and truly decentralized, like Paul Atkins said this in his Project Crypto speech in July of last year, to paraphrase it's we shouldn't speak into existence intermediaries. Just because 90 years of financial regulation in the United States has relied upon highly regulated and deputized intermediaries to fulfill the objectives and policy goals of the government doesn't mean that non intermediated systems can't exist and be legal. The first guidance in crypto on crypto from any government entity in the world was the 2013 guidance from FinCEN. And it made clear that the absence of an intermediary is not disqualifying. If you are a user, you're not a regulated entity. If you're an exchanger, you're a regulated entity. And if you're an administrator, you're a regulated entity. So to your point of the non decentralized systems, I think one thing this bill does which hasn't been there previously, is it tries to say not only what are the rules for DEFI or what are the obligations of participants in a DEFI ecosystem. But it also seeks to say, okay, what isn't the DEFI system? Because that is the biggest challenge the industry has is I genuinely believe that a lot of people say none of this is really decentralized. And you know, in many cases they're not wrong. Like Celsius was out there saying that they're a defi protocol. No, they were a centralized lending company. So just calling yourself defi doesn't get you out of the scope of some, doesn't give you some regulatory advantage. If you actually are decentralized, that's a different story. Now what we need to hold space for is things like security councils and some sort of sandbox environment where a protocol, when it first launches, has some controls in because those types of circumstances, whether it's a multi signature that is governed by, you know, a decentralized governance entity, a DAO or something along those lines, or a security council that is deputized with certain limited authorities to stop cybersecurity incidents or to patch a newly identified threat, you know, those things are policy goods. We should not be taking that away just because, you know, it might impact the definition of administration. So that's a very important, I think, good faith step forward. I think some of the concerns on Title three are a lot of the issues are punted to rulemaking, particularly from Treasury. And while you might have some more confidence in rulemaking that might be done now, no one wants a scenario where rulemaking can be weaponized in the industry in a way that would kill it. Because we have seen people who, who have sought to do that as recently as chex watch 14 months ago.

A (39:40)

Yeah. And on that point, Greg, just to wrap up clarity, how important is it for crypto that we get something to pass? Because it seems like we're going to get most of what we want in the absence of any new legislation from administrative guidance or administrative relief interpretive guidance from the existing regulators, at least during this administration. Is the primary issue here that 3 years is good, but codifying in statute for 100 years is better? Right. It's more to prevent against a rollback in the case of another administration that's hostile to crypto. Yeah.

B (40:18)

So the best defense against future hostility from the next Gary Gensler is build products that are good for people, that people want and that people use. It's much harder to kill an industry that has traction among real consumers. And we've seen that in some instances where things are being adopted. And stablecoins is a good example of that. Another good example is even something as simple as like helium, where there are two and a half million daily active users of the helium network. Most of them probably don't even know they're using it. But this is the way you create a foothold. You show policymakers this is a real good that users want. So that's the first, most important defense. Whether or not we need clarity. I think the SEC has a lot of flexibility to create good rules. And those rules aren't necessarily going to be everything the industry wants, meaning it's not going to be no rules of the road. Paul Atkins is an incredibly principled individual and he's driving to create real rules of the road that protect investors, protect consumers, but allow innovation. That's what he's trying to do. It's not no holds barred, it's not an industry giveaway. He's putting substantial rules and imposing duties and obligations on market participants. And most market participants are welcoming that. We want clarity, we want regulatory certainty. And more importantly than anything else, we don't want bad things to happen to good people. Where it's a little tougher is Mike Selig, who took over at CFTC at the end of the year. You know, he's got a little bit less flexibility. He needs the AG half of the bill to get authority over spot markets. And that authority over spot markets is really important for the industry as a whole. We don't want a hodgepodge of 55 different states and territories creating money services regulations that are imposed on again, trading platforms, custodians, brokers, dealers. You want that to be pulled up to the federal level, not only because you don't have to file with 55 or 54 jurisdictions, because Montana doesn't really regulate money transmitters, only cattle and good skiing as well, big skies and whatnot. But you don't want 54 different sets of rules. But you also want a well resourced regulator that can understand this industry because it is different than that which came before. And even in New York, which, which has done probably the best job of any state. At dfs, it's tough for them to stay resourced. And when people learn enough about the industry, they're not typically staying that long at dfs. So it's a good for consumers, it's a good for, it's good for just about everyone to bring that regulation up to the federal level and cited at the cftc. But Mike can't do that on his own. He's, he needs some legislative authority. There are other things he can do around the derivatives markets in crypto and other crypto adjacent areas like prediction markets, where he can get a lot done there. But if we really want a good comprehensive set of rules that improve market quality, market structure, and consumer and investor protection legislation that can lead to rulemaking at both agencies, including a lot of joint rulemaking. And one of the priorities for Paul Atkins and Mike Selig is harmonizing some of these rules for crossover areas where people are dual registrants. That's been a big focus. And Mike announced that private Project Crypto at the CFTC was merging with Project Crypto at the sec. We're really excited by that. I think that if we don't get legislation, it's a little bit harder for the CFTC to accomplish everything that they want for the sec. I think they, they have a much more clear path to execute and have a lot of stuff ready to go to, to get done on that end.

A (44:22)

All right, this was great, Greg. Let's, let's shift gears a little bit and talk about Multicoin. I saw that Kyle Samani, co founder of Multicoin and, you know, original, probably general partner, I'm assuming, is leaving Multicoin. Give us an update on. I know that I saw that Multicoin put out some updated theses on their investing. Your partner and your general counsel there. What does the future look like at Multicoin? Is it different? Or Give us the overview on this rejuvenated thesis that Multicoin has put out.

B (44:53)

Yeah. So Kyle stepped away the end of the month and has shifted into an advisory role. Kyle's still around. He's still going to be tweeting a lot about Solana and supporting our portfolio founders from a lot of different verticals within our investment investment portfolio. It's a big change in that Kyle has been the face of the firm. But what people see externally is very different from what folks see internally. And there is a tremendously strong team and bench at Multicoin. You know, over the course of the last couple of years, a lot of our venture work and thesis formation has shifted from, you know, Kyle and Tushar, who's the other co founder and managing partner on the venture side, a lot of that responsibility has shifted already to Spencer Applebaum and Cheyenne Sengupta and the other members of our investment team, including Matt Shapiro and Vishal Kankani and Eli Khan. So that's been in the works for a while. And most of our recent deals for the last couple of years have really been led by Spencer and Cheyenne and then Tushar not as public facing as Kyle, still pretty public facing. But he's been the core managing partner who's sort of managed the liquid side of our portfolio for really since inception and has also been really key in thesis formation in a variety of areas that touched on sort of market structure. Also been one of the leading architects of the Deepin ecosystem from his seat at Multicoin. So it's been a very smooth transition so far. Gotten a lot of positive feedback from our LPs, the portfolio community. It's been really nice to see the amount of love that Kyle got on Twitter which is probably a bit of a new experience for him because he's a little controversial on Twitter. But I think people have a lot of respect for the ideological imprint that Kyle has had on broader thesis formation, particularly around the idea of modular and integrated chains and some of the structural issues. You know, his departure was somewhat paired with, with Vitalik's L2 discussion, which is something that Kyle had spoken a lot about. So I think it's, it's, you know, Kyle should feel really proud about his time at Multicoin. His work, building up a team that's been here for really, really long. I think the average tenure of folks at Multicoin is a little over five, five and a half years. And for an industry that hasn't really been around for much longer than five and a half years from, from a venture perspective, you know, Kyle and Tushar built an institutional firm and you know, now it's multicoin 2.0 and we released our first new true iteration of our investment theses since 2019. Tushar, Spencer and Cheyenne worked really hard on that as well as the rest of the team and it highlighted, you know, minor shift of focuses. A lot of those foci really relate to what it's always been at Multicoin. But we touched on about eight themes in that paper and that paper is and maybe you can drop a link in the show notes but you can also find it at Multicoin capital. It's a 30 page report, really some interesting stuff and it really talked about eight core areas. Fintech 4.0 is first. That's you know, stablecoin enabled financial services. How do we move from, you know, traditional banking and payments infrastructure to what Fintechs brought and now the types of programmable Rails that stablecoins can do to give more control to their users and more programmability. We talked about the defi mullet. My hair doesn't grow enough to get a good proper Defi mullet myself. But it's thinking about, you know, front ends, middleware and back ends of Defi and how that will integrate into broader finance. It's also financial globalization, broadening access and deepening liquidity within a global lens. The new forms of credit. And as a lawyer I always am reticent to say credit with respect to crypto borrow in because it's not true credit in most instances outside of a handful of areas like Maple. But more efficient borrow lend that can come from protocols like AAVE and Camino. We've also talked a lot about entertainment finance which are things like predictions and betting markets, which leans sometimes a little into the financial nihilism era. We talked about programmable ownership which is coordinating people's jobs capital. Credibly neutral blockchains is also an area of tremendous importance both from the policy side as well as the investing side. We think that credibly neutral blockchains are the where most of this activity will be cited. And then also cryptographic primitives, some deep tech, whether it's things like FHE or quantum and things of that nature. And I think if you're looking for a change in or shift in the theses versus what we've talked about in 2019, I think part of it was that we're looking at web3 in most instances as more longer term narrative. And there's been some discussion about this. The Rails have to get there first and the adoption of the Rails have to get there first before we can see some of the Web3 economy taking off in the near term. Now there are areas where the Web3 economy has been successful and we've seen some tremendous work in the Deepin area. I know Deepin is not the hottest sector right now from a price action perspective, but from an adoption perspective it's really picking up whether it's things like helium or geode or a lot of the compute market type of stuff. So we see some activity there for idiosyncratic nature of infrastructure. But the consumer web3 we think is trailing a little bit more and view that more as a longer term thesis rather than a short to medium medium term thesis. But the conviction is still very high in those core theses. And as the venture market has been somewhat distracted by some of the later stage and public equity type of work recently, the builders aren't and we're still seeing interesting things come online and you know, are very excited by what this current marketplace is going to bring as new new founders come to market.

A (51:42)

All right. And Greg, I'd Be remiss if I didn't end this conversation with some discussion about the Vanderbilt Mafia. Our audience probably doesn't know both of us went to Vanderbilt. And and I want to ask you about there's a surprising number of people, particularly in financial services policy and legislative, you know, and in Congress that went to Vanderbilt as well. Would you. This is not private information, but it is nonetheless not widely known who who give us a flavor of who else is a Vanderbilt alumni that's in this especially in the sort of the crypto financial policy complex.

B (52:20)

Yes. You've got kind of two generations and the crypto native ones are in the later generation, not surprisingly. But this really started in the late 70s. In the late 70s on campus undergrad you had at the same time John Rose, who's a congressman on financial services and has been pretty friendly on crypto stuff. But you also had French Hill and Bill Haggerty as undergrads and good friends on campus in the late 70s, French Hill obviously chair of House Financial Services, the architect of clarity in the House, Bill Haggerty on the Senate Banking Committee, who was the architect of genius and the principal proponent there alongside Cynthia Lummis and Kirsten Gillibrand and Tim Scott. And I'm forgetting someone there was a fourth may have been also Brooks. And then Bill Hagerty moved over from the undergrad campus, took a few steps over to the law school where his classmates his roommate was a guy named Paul Atkins. His their classmate was a guy named Christian Carlo, crypto dad, former chair of the cftc. Also Governor Abbott of Texas was there at the same time. But we've got to get him a little more engaged on on the crypto side down in Texas where they've had great boon and help from bitcoin miners with ERCOT. But you know, you fast forward about 20 years or so or 15 years and my freshman hall had myself Bart Smith, who ran crypto for Susquehanna for a number of years and now is as president of a digital asset treasury company focused on Avalanche. Trey Shelton, who's a headhunter in the space at Position Company and then a little after that, my fellow Blockchain association board member Bill Hughes, who runs Poor policy at Consensus, was on campus with me at the same time, around the same time, Colin Lloyd, a partner at Sullivan Cromwell, who's one of the preeminent attorneys representing large crypto institutions. You came along around that same time in your seat at Galaxy, the head of policy at the Blockchain Association, Lindsay Frazier, would have started probably a little after you so we've got a nice run of really policy focused Vanderbilt Commodores. And actually as luck has it, when I was down in D.C. for the yield meeting last week, I got to run into Chancellor Diermeyer, who's the outstanding leader of Vanderbilt and got to thank him for the fine work he's done for the school and especially for his support of the amazing athletics department, led not only by Diego Pavia, who is the man, but also the success of the baseball program who was the number one seed in the SEC tournament and one of the preeminent programs in the country. But then our basketball teams, Alex, you know, the women have lost only I think two games this year. Like they're 21 or 22 and two and the men are 20 and four. And it's been a generational run for Vanderbilt athletics over the last year and, and for some programs like baseball and tennis and. And women's bowling.

A (55:45)

Who knew Decades for those teams and, and, and Vanderbilt football, I think peaked in the AP rate rankings in last year in 2025 at number nine. Incredible. I think 10 and 3 overall when I was there was when Jay Cutler was the quarterback and I think we got our first bowl game and decades by just going 8 and 8 as an SEC team. Like that was unheard of at the time because Vanderbilt won.

B (56:13)

I think we won a grand total of six or seven games while I was on campus.

C (56:16)

Yeah.

B (56:17)

Over four years.

A (56:18)

Well, because you're playing against Auburn and Ole Miss and Louisiana and Tennessee. I mean these are huge teams. Right. Like Alabama. Right.

B (56:26)

I'm still convinced Louisiana State used to, to put their defensive linemen on a horse. Steroids. You know, the defenses you'd face, the, the offenses you'd face. It's, it's fun as a Commodore fan to actually see in this new Nil era, this era of greater exposure, the team compete in a, in a world where you didn't think they could before.

A (56:51)

Well, even I, I watched basketball. We had a tough loss. I think. Sorry. We win last night against Auburn. I think they're ranked 19th at the moment in the NCAA and you got the tournament coming up next month. Great squad on the men's basketball team. Tyler Tanner and others that just look good. They just look good. And I always laugh. People don't know the Vanderbilt basketball. I forget the name of the name of the stadium, but it's got a raised court. It's like the only one in the ncaa. Literally. It's like a stage. Like the, the team sits and the audience the first row of the audience is at like eye level with the court. So I, you know, the Baseline Memorial

B (57:28)

Gym, it's, it's a magical place. It, it doubled as a concert venue and basketball stadium, which is why it has this odd architecture, but a really historic gym with a lot of personality. And Vanderbilt's football stadium, you know, used to be mocked as something that looked like a lower tier Texas high school football stadium. They weren't necessarily wrong, but they've done a remarkable job job of renovating that. And Hawkins Field, where the baseball team plays has for years been just one of the most fun in a sort of intimate venues with some personality on it. Got a big green monster. It's just a magical time for Vanderbilt and another example of athletics helping to boost a university overall and from an academic perspective. Alex, I don't know what your SAT was like, but I'm not sure I'd be able to get in if I were applying today.

A (58:20)

It's definitely improved a lot. This is great. Well, go doors anchor down and Greg X at Thalis partner at Multicoin General Counsel at Multicoin Greg, thank you so much for coming on Galaxy Brains.

B (58:32)

Thank you and happy birthday, Alex.

A (58:34)

Thanks, Greg. That's it for this week's episode of Galaxy Brains. Thank you to our guest Greg X et Thalas, the partner and general counsel at Multicoin Capital, and our friend Ben Abibi from Galaxy Trading. As always, everyone have a safe and happy weekend and we will see you next week. Thank you for listening Galaxy Brains, the weekly podcast from Galaxy Research. I'm Alex Thorne, head of Firm Wide Research at Galaxy. Follow me on X at Intangible Coins. Follow Galaxy Research on XLXYResearch. Read our written reports@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.