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- [00:00]
Sid Powell
Hey prime members, have you heard? You can listen to your favorite podcasts ad free. Good news. With Amazon Music, you have access to the largest catalog of ad free top.
- [00:10]
Jen Sanasi
Podcasts included with your prime membership.
- [00:12]
Sid Powell
To start listening, download the Amazon Music app for free or go to Amazon.com adfreepodcast that's Amazon.com adfreepodcast to catch up.
- [00:21]
Jen Sanasi
On the latest episodes without the ads. My dad works in B2B marketing. He came by my school for Career Day and said he was a big roas man. Then he told everyone how much he loved calculating his return on ad spend. My friends still laugh at me to this day.
- [00:39]
Sid Powell
Not everyone gets B2B, but with LinkedIn you'll be able to reach people who do get a $100 credit on your next ad campaign. Go to LinkedIn.com results to claim your credit. That's LinkedIn.com results. Terms and conditions apply. LinkedIn the place to be to Be Ethereum Base and Solana are where we see most of the building at the moment. But when it comes to Challenger Ecosystems, the dark horse that I continue to hear a lot about is the tan ecosystem. I think there's been a lot of interest there, particularly given it has a mobile first user base. Everybody in crypto is using Telegram and so the fact that you can have applications that could be directly used in there I think is very attractive for the TAN ecosystem.
- [01:26]
Jen Sanasi
Hello and welcome to Market Daily, hosted by N. Sanasi. On this show we navigate the current shaping the crypto markets. So whether you're actively trading or simply fascinated by the volatility that is the crypto markets, this show is your compass to understanding what's happened, where we are, and where we're going. On today's show we have Maple Finance CEO and co founder Sid Powell. Sid, welcome back.
- [01:48]
Sid Powell
Thanks for having me, Jen. Glad to be here.
- [01:50]
Jen Sanasi
Of course. Glad to have you here. I've said this to probably all the guests I've had for the past week. What a time to be alive when we're looking at the crypto markets. Talk to me about what you're watching as we head towards the end of the year.
- [02:05]
Sid Powell
Yeah, definitely. I think some of the interesting stuff we've seen so far heading into the end of the year has been definitely more demand for leverage from folks. So trading shops, exchanges, hedge funds, we're seeing a lot of borrower demand. We're also seeing a lot of interest in new stable coins coming through. So you've seen, I think Binance the other day launched a new one that's going to be tied to Delta neutral positions. And so as a company involved in the lending space, we see a lot of interest in that and then also just a lot of momentum around defi coming through. I think particularly as we head into the end of the year and the possibility of regulatory change. That's definitely top of mind for folks.
- [02:47]
Jen Sanasi
Let's talk about each one of those three things you just mentioned. Let's start with the borrow appetite. Talk to me a little bit more about this. Make sense of it for me. What does this indicate to you about where we are in the markets and where we're headed?
- [03:01]
Sid Powell
It indicates early bullish sentiment. So what you're seeing is that folks are looking to borrow so that they can get leverage in their positions. And so this means that they want to be further along large caps like Bitcoin, Solana Eth and so they're looking to post those as collateral in order to borrow dollars and buy more or lever up those positions. So that's been a really strong trend that we've seen really since the election and even indeed in the weeks heading into the election. So it's generally, generally means bullish for the space and you're seeing that in basis that is, that is really repriced.
- [03:35]
Jen Sanasi
Upwards early bullish sentiment. I mean we hit a new all time high with bitcoin. I believe it was yesterday. I can't even keep up anymore. We're hitting all time highs like every moment I look at the ticker. What does that mean for 2025? What are you expecting to see? Price action?
- [03:52]
Sid Powell
I, I'm certainly no expert when it comes to, to calling the tops of price action but I think, you know, my target for bitcoin over this cycle in 2025 would be 150 to 180 and then we see a lot of interest from folks. I think previously it would have been in Ethereum but really Solana has picked up a lot of interest just given the momentum that, that, that it has enjoyed over the past few weeks. And so I would say if you, if you wanted lower volatility you go into Bitcoin. But if you wanted to pick up higher growth, I would be going into Solana. And I think, you know, I've heard people call potential price tops in 2025 of 450 to 500 on, on Solana.
- [04:33]
Jen Sanasi
Well that's interesting that you said, you know, previously we'd be looking at Ethereum but Solana is really kind of taking the spotlight there. Talk to me a little bit about your observations With Ethereum, where do you expect to see the second largest cryptocurrency by market cap had in 2025?
- [04:52]
Sid Powell
It's a good question. I think what is the tailwind for Ethereum is that it continues to be the place where most of the liquidity is. If you look at almost all DeFi projects, including us, typically most of the liquidity and most of the TVL is on Ethereum. So I think that generally buoys the price action. However, when it comes to roadmap, you do hear a lot of criticism about delays, and I think that has shifted some of the focus towards coins like Solana. And that's where ecosystems like Solana have benefited because they're perceived as moving faster and shipping more rapidly. But I do think Ethereum obviously has a lot of mind share and so that's not something to dismiss. So I wouldn't be bearish on Ethereum, I think, but I just think momentum lies elsewhere.
- [05:40]
Jen Sanasi
What's the likelihood, you think, and I'm asking for your pure opinion here, of another protocol, another ecosystem popping up, promising many of the same things that Ethereum once promised or Solana promises now, when it comes to scalability, faster, better ecosystem and displacing both of these in the, I guess, as the cycle progresses?
- [06:04]
Sid Powell
Definitely it's a perfectly valid question, and it's one that's on a lot of people's minds. Ethereum Base and Solana are where we see most of the building at the moment. But when it comes to Challenger Ecosystems, the dark horse that I continue to hear a lot about is the Tan ecosystem. I think there's been a lot of interest there, particularly given it has a mobile first user base. Everybody in crypto is using Telegram and so the fact that you can have applications that could be directly used in there, I think is, is very attractive for the, for the Tan ecosystem. And then the other one, which I think really has a strong community, would be Bearer Chain that's coming out. I, I always hear a lot about Vera Chain and I think there's a few, few other founders I talk to who have a really high conviction about launching versions of their protocol on Bearer Chain. So those would be two others that I would keep an eye on as we head into 2025.
- [06:56]
Jen Sanasi
Okay, perfect. Now, one of the other points you made as we kicked off the show here was that Defi is due for a re up, maybe a Defi summer. Talk to me about what you're seeing when you're looking at the Defi ecosystem.
- [07:09]
Sid Powell
It'd definitely be nice to have another DEFI summer. I have fond memories of the last one. And I also remember 2023 DeFi being relatively unloved in favor of infrastructure. But what I think is positive for DEFI is you have the potential change in regulatory leadership, which really was a bit of a dampener on growth and development and adoption of DeFi over 2022 and 2023. So I think that's, that's what I look at as somebody who's in the defi sector as a real positive catalyst and why I think DEFI will rewrite. You know, you also have the. The president elect had launched a DEFI protocol. So I think that also suggests positive sentiment from the incoming administration towards it. And I continue to see that DEFI is one of the sectors that has the most adoption from users.
- [07:59]
Jen Sanasi
Talk to me a little bit more about that adoption piece. When you say the most adoption from users, what kind of users are we talking about here?
- [08:09]
Sid Powell
Well, I think, you know, when it comes to. So you have certain core DEFI primitives like trading. So you've got. Uniswap is obviously very well known. And then you have lending and borrowing. And so you have AAVE Spark compound. But these are widely used around the world by retail users. So when you have a, you know, if you, if you're holding a small cap defi token, by and large the best place to trade, that is going to be uniswap. So that is very real user adoption. And you can see that in the fees that are coming through on some of these DEFI protocols. So, Athena, uniswap, these are consistently generating very strong revenues at a protocol level. And I think the market will recognize that. But I would say that those core users tend to be more retail users, probably more offshore from the US but it's people who have a genuine interest in getting savings or yield. They're holding stablecoins like USDC or usdt and they're concerned about inflation in their local currency. So they love DEFI as a way to preserve purchasing power and manage their savings.
- [09:17]
Jen Sanasi
Well, then I guess, given what you've just said, talk to me about the correlation then between a new administration in the United States and a resurgence in defi when you know the popularity among some of these protocols is happening outside of US borders. Talk to me about how the two are correlated and why you expect there to be more entrance, sorry, interest under a new administration, given that DEFI is borderless.
- [09:45]
Sid Powell
That. That is very true. But I think if you unpack that statement, you'll see why is Defi not more used within the US and it is indeed because there's been more of a hostile regulatory environment towards it. So I think that change will allow more people within the US to use it. It's, you know, it's very common that when you try and log into a Defi app, if you're in the US like us, it'll tell you that it's blocked in your jurisdiction. So I think if you had the possibility of, you know, not having to geo block the US and making it more available to US users, they're very tech savvy, they have a high degree of savings, they're generally early adopters of new technology. And so I think you'd see a large increase in the user base within the US and the big thing that really interests me as well, coming from an institutional background, is institutional adoption. I think we really saw a massive step forward when BlackRock launched the tokenized Biddle Fund and then it was integrated by teams like Ondo. And so I would love to see more institutional partnerships like that. And I think that would be a huge catalyst for, for the Defi sector in the U.S. i think a lot.
- [10:55]
Jen Sanasi
Of people listening to the show or are hearing what you're saying and really loving it. I want to talk about the third point you brought up and that was stablecoin, seeing less people holding onto stablecoins, looking for a longer market beta. Talk to me about what that means because traditionally we, we look at stablecoins, people holding onto stablecoins and we, we think, you know, liquidity is about to enter the markets. Talk to me about why less people are, why people are holding on to less.
- [11:22]
Sid Powell
So I think what you're seeing is that as, as I mentioned earlier, we're heading into this more, more of this bullish environment. And so people don't want to be sitting in stables, they prefer to be long the market. So they want that capital appreciation from Bitcoin or Solana or Eth or Tonight. And, and so they're selling stable coins to buy into those assets. Whereas when people expect the market to turn down, you see them taking profits. So selling those assets for stable coins, then looking to, to, to earn yield on them. I think more stable coins are very bullish because it bring, it does bring more liquidity that people can use to then buy those assets. But I would say in the short term, what you're seeing is people are rotating out of, effectively out of what you would call fixed income and into, you know, into growth assets like, you know, large Cap and mid cap tokens. What we are seeing though is that there's a massive proliferation of new stable coins revolutes entering the market. Ripples entering the market. Binance just launched a new one as well. So I think that is, that is definitely a trend to keep keep an eye on.
- [12:31]
Jen Sanasi
Talking a little bit about I guess the increasing market saturation of stablecoins. Why do we need all of these different stablecoins?
- [12:44]
Sid Powell
I think the ultimate answer is that we don't need all of these different ones. And similar to any kind of infrastructure frenzy, what you're going to see is that a lot of people are entering this market and railways and canals in the past. It will take a lot of investment from these players to try and achieve scale and at the end of the day there will only be a few winners. I don't think there is room in the market for 10 different US dollar stablecoins and so I think it's good for consumers in that it will bring costs down, bring more availability of stablecoins. But I think it's probably a bad move for a lot of these companies trying to enter as you know, enter the market perhaps a little bit too late. I think you know circle tether even to some extent PayPal and, and Paxos, these were the early adopters of stablecoin. They kind of cemented a bit of a market position. It will be hard to catch up background I look at, you know I, I do think stablecoins in any investors portfolio are good to have because it just gives you some flexibility to dollar cost average or, or tactically enter new positions. And so I think I, I would advise people to hold some stablecoin allocation heading into 2025.
- [13:56]
Jen Sanasi
You named four stable coins. There are those the four that you think can withstand the competition as more coins enter the market?
- [14:08]
Sid Powell
Well I think definitely the two largest are in the strongest position. So usdc, usdt and then I think if you are going to bring a new stablecoin to the market you better have a really strong balance sheet. So I think PayPal has a natural advantage in this respect. I mean they were able to spend tens of million tons of millions of dollars on marketing and then you've got Ripple and Revolut both I think have strong balance sheets in order to push the growth and customer acquisition cost. But it's, it is hard to get that adoption. So I think PayPal already has a massive install base potentially Ripple and Revolut. Um, but it may, it may be a struggle. I think it could be A struggle really beyond the top three.
- [14:54]
Jen Sanasi
We talked already about the new Bitcoin all time high. We talked a little bit about your institutional background. I want to talk now about the IBIT options that went live Yesterday. At nearly $2 billion in notional exposure, Bitcoin hit a new all time high. Huge. Make sense of this news for me. What, what does it mean? How's it going to impact market structure?
- [15:17]
Sid Powell
So options having the ability to do options gives large institutions more flexibility to hedge and manage risk positions. So what that can allow them to do is come into the market and participate in a larger way. Previously, if it was going to take you days to hedge out a position, then if you were a large institution, say a Millennium or a Citadel or any of these other large trading shops, you might think twice about the size that you would put on into that position. But now with the ability to use options, you can hedge much more effectively. These are a mainstay of traditional finance, traditional financial markets. And so I think it signals the growing maturity of the, of Bitcoin's place within regular regulated financial markets. And it also signals that now that institutions have that ability to hedge, you are going to see a lot more participation and a lot more entry from those more mainstay traditional finance firms into the Bitcoin, you know, into the Bitcoin ecosystem. What you're able to do with options is either generate yield on your Bitcoin position by doing call overriding or without actually, you know, putting much of your balance sheet in. You can, you can get that upside exposure through the purchase of call options or the use of puts to kind of hedge your downside. So that, that is really what an options instrument like IBIT opens up here.
- [16:49]
Jen Sanasi
You know, we talked about Bitcoin ether already. We talked about the growing interest in Solana. Do you think we're going to see a Solana ETF in 2025?
- [16:59]
Sid Powell
That would be my bullish take. I think we will. I think there's enough interest there. I mean it's, you know, it's pushing 100 bill market cap. So I think there's now the size there. And there's also a massive interest just from the lens of the momentum behind Solana that I think will push institutions, private wealth managers, to look to be able to offer that exposure to their clients. And that's ultimately what drives the interest in creating ETFs like this, is that, you know, customers are asking for it. Ultimately this is how competition should work and that's what should drive things forward. So my pick would be a Solana one for 2025.
- [17:40]
Jen Sanasi
And just before we wrap up, I know Maple Finance has some news. You launched your governance token. Tell us a little bit about that.
- [17:47]
Sid Powell
We did. So we did the migration to the Syrup Governance token earlier this month and as part of partnership conversations with the base ecosystem, we are pleased to announce that it is now available on aerodrome on base. So this is. I know fees were a big barrier for a lot of people who'd been trying to access it and to hold it on eth. So hopefully this goes some way towards making it more available for those smaller defi participants who are really fee sensitive. So this is part of how we want to kind of democratize institutional lending.
- [18:23]
Jen Sanasi
Said I appreciate you joining the show. As always, it was a pleasure having this conversation with you and I'm sure we'll talk again soon.
- [18:31]
Sid Powell
Thanks for having me, Jen. My pleasure.
- [18:33]
Jen Sanasi
And for everyone who watches Markets Daily and listens to Markets Daily, if you don't already subscribe, please do so. If you listen, you can subscribe to the Coindesk Podcast network that is available on all podcast platforms. And if you prefer to watch, we are on YouTube. Subscribe, give us a thumbs up. It is a pleasure having you on this journey with me to better understand the crypto markets. We will see you next time.