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- [00:02]
Andrew
That's dope. Let's go. Welcome to the 9am hour Scott Melker show. Scott's on a plane headed to token 2049. So I have taken over the control. Controls. I don't know if that's a smart idea here on this show this morning, but we've got Eleanor here with us and John Deaton and we're going to talk all things regulatory, we're going to talk things price, we're going to talk inflows, where we're headed as it relates to crypto and the massive shift that has happened in the space over the last six months. And what does it mean, what does it mean for the future? What does it mean for certain figures from the past? We've seen a lot of changes, a lot of adjustments and getting their opinions on where we're at, where we're headed and where we have been. So thanks for being with us this morning. I want to start with Eleanor. Eleanor, you spent a lot of time covering, you know, very specifically the regulatory space under Gary Gensler and even up to the very end he was using terms like fraudsters and the like. Yeah, yeah. You know, going out of his way to make the crypto space sound like you should avoid it in every possible way to the public. And you know, one question that I have, and I've always wondered beyond the obvious versions of, you know, the previous administration and why they took that stance, you know, I just wonder if they, if every part of the SEC really believed in that stance. You know, was that something that the boots on the ground believed in or was it something like that kind of is what it is. We got to go on to get along.
- [02:09]
Eleanor
I think you see a lot of top down leadership from the SEC and you've definitely seen that with the administration change. I think staffers tend to listen to who's at the top. So we obviously saw what happened with Gary Gensler for those four years. Staff seemed to be following his orders. When you saw the bitcoin spot ETF approval. Right. I think for a few weeks, maybe even months, there was some question as to whether those were going to get approved. And then grayscale won its case in court and that was kind of the catalyst that lit the fire, so to speak, at the commission. And I thought it was really interesting that even though Gary Gensler was pushing hard against not allowing those things to come to fruition, it actually did happen under him and he actually voted yes. I think when we saw those breakdowns of the voting and the commission, it was like Whoa. Actually, Gary voted for this. This is interesting. But then you've also got to think about. Now, there was a court case involved, a court called the sec. Capricious. What is it?
- [03:06]
John Deaton
Arbitrary Capricious.
- [03:07]
Eleanor
Arbitrary Capricious. I'm saying John knows that. That pretty well. So when that. When a court rules that, you really don't have much of a choice. I think now with the change in leadership at the top, you're seeing Mark Ueda now, Paul Atkins, obviously, Paul Atkins took office last week. Just such a tone shift. Right? I mean, and I think there are staffers left over who were under Gary Gensler's rule who probably don't agree with what's going on. I know there's. There's some in the enforcement division that are still pursuing cases, you know, that we've seen a lot of cases be dropped. Ripple, Coinbase, Kraken, all the big ones. There's still. There's still a couple cases that staffers are pursuing. Unicorn is actually one of those companies that I was writing about, you know, two weeks ago. They're facing a little bit of different circumstances than what the other companies were. You know, there's allegations of fraud in there, misrepresenting information to customers, that kind of thing. But, you know, I do think that there's probably some holdovers there, and it's just. But to your point earlier, it's just been an incredible shift, and it's such a small amount of time, too. I mean, they took over in January and it's, you know, almost May. And we've seen such an incredible change in terms of momentum and messaging towards crypto with those roundtables, with the guidance that we've seen coming out, you know, every couple of weeks. The SEC has definitely been hard at work. And. And you seeing Hester purse, right. She. She was the real standout at the commission during, during Gary's years. And I think she got a lot of flack because, you know, she would stand up and she would say, I believe this. I think what we're doing is wrong. I think, you know, regulation by enforcement is not what we should be doing. And criticism crypto should be having some kind of chance.
- [04:44]
John Deaton
And.
- [04:44]
Eleanor
But she was drowned out, right, because she was the minority seat. And, you know, now she's. She's leading that task force. It's. It's definitely a big change. And I think Hester and Mark and now Paul, you know, have really been leading the charge on that.
- [04:56]
Andrew
Well, it's a, It's a, It's a dramatic shift. And try, try and give a little bit of a word picture to it. Right. So we had, you know, hucksters and fraudsters and Gensler would get on CNBC for. Every week for months and use that terminology. And now we've had, what, two different crypto roundtables, you know, literally the. What, three at the. @ the White House or adjacent to the White House. So, I mean, you've been to you. You. You were at one of those, correct? I mean, what. What is the, you know, what is the nature of the vibe in the room associated with it? Is it. This is a new world and how do we navigate it or just excitement and what do we do with this excitement?
- [05:37]
Eleanor
Right, yeah. So the SEC has had three roundtables, and the White House had one last month, and I was lucky enough to go to that. It was such an incredible experience. I think just covering it from the journalism standpoint for the last four years, it was such a vibe shift. And Brad Garlinghouse put it very well. When I interviewed him after that roundtable, he said, the Democrats wanted us in the big House, the Republicans want us in the White House. And I think there's. There's definitely. I mean, you maybe thought it was a little bit of, like an optics play, you know, having all the founders and, you know, congressmen and regulators kind of come up on the same day. And I think there was a little bit of that. A little bit of optics maybe, but also, like, this would never happen under the, under the other administration. Right. Crypto wouldn't even be thought of. There would be no special day at the White House for these founders to kind of, you know, to gather to. I mean, the roundtable itself was a setting where they got to kind of go around and air their grievances is what I understand understand. You know, David Sacks just said, tell us what's on your mind. And I think a lot of them really did. And they said, you know, this is how we felt for the last four years, and we're really hoping you can change this. And just the messaging and the tone shift has been. Has been incredible.
- [06:48]
Andrew
John, you. You were on the front lines, you know, obviously, you know, as a lawyer in the, in the SEC and Ripple case. And, you know, got to see, you know, again, the. What it looked like, sounded like, smelled like, associated with the SEC from a legal standpoint. Talk to us about, you know, kind of what that process entailed, what you were up against, you know, over the last several years, and then what it felt like to be up against all of that and then immediately, poof, all of that is gone and it's an entirely new world what give us.
- [07:22]
John Deaton
Yeah, well, listen, I. Thanks for having me, Andrew. Listen, no one could have predicted the extent of the 180. Now I was out there saying when the SEC abandons their mission completely and think about this, Gensler would go out there and he would say, you know, listen, this isn't, you know, this is like a one trillion dollar market cap. Totally. It's not a big deal. Then why were you so focused on it, Elizabeth Warren? Why did you announce your whole announcement for re election as an anti crypto army? It was about protecting the banks 100 in my opinion, and the legacy. But we would have never envisioned what's happening today. I knew it was going to shift because when you abandon your, you know, mission for investor protection and engage in the way they did, I mean not just arbitrary and capricious, but in the Ripple case, quote, the prosecutors, the SEC lawyers lack faithful allegiance to the law that was written by a federal judge. Then you get to the death box case and the death box case where they're sanctioned for intentionally coming into court in line. So you take the ripple case, you take the deadpot case, you take the grayscale case. With the appellate court saying arbitrary and capricious, there was no doubt they were going to have to make a shift. Now anyone who claims that they would have predicted the shift that we witnessed, I, I think isn't being, you know, serious because no one, I believe, could have truly envisioned where the government not only takes its boot off the neck of the industry, but then basically we have an executive order that tells the Commerce and Treasury Secretary to acquire bitcoin, to literally acquire it in a budget neutral way. We would have never envisioned, to me, I would have never envisioned that kind of adoption. We got to remember President Trump in his first term said, quote, I hate bitcoin, it's a threat to the US dollar. And kudos to him and people like Vivek Ramaswamy who I think educated President Trump that Bitcoin wasn't a threat to the US dollar. And if we, if we're smart about our legislation, we could actually, you know, drive demand for the US dollar abroad with stablecoin legislation and using Bitcoin in strategic ways. And so. But no, I'm shocked. Listen, at the very beginning, it should be said that when the Ripple case dropped, a lot of the industry wanted to pretend that it's just about ripple. I was someone out there saying, listen, read this Complaint, this complaint, these words could literally be attributed to Bitcoin. Now, I'm not suggesting that they were going to go that far, but eat Solana, every other Altcoin, I mean, you could have taken their analysis and said, bitcoin mining is a common enterprise and you're relying on the efforts of the miners to gain profit and it's a speculative asset with no intrinsic value. Everything they were saying applied. And so there are a bunch, a few of us out there saying, listen, this is a dangerous threat to the entire industry. I did a video a year after the Ripple case. Well, actually it was six months after Ripple Case said every Token is in danger. And I think that the industry was just hoping, oh, it's a one off, it's just Ripple and, and Garlinghouse and Larson and we really don't care. And then of course, that was a preview of much more to come with Coinbase and Kraken and the entire threat of the industry. And then it came together. But for, for a while out there, you know, when I filed the case, people were calling me Coiner and I'm like, I got 80 of my net worth in Bitcoin. This isn't about token, this is about government overreach and the government trying to tell you and dictate who the winners are and who the losers. That's not a free market enterprise, that's not free market capitalism. And so now, of course, I think people saw what happened and it's a, it's a much greater day. But I, I would have never, I could never get on here and claim that I could have envisioned the bullish case. I literally say to people, you can give financial advice now, as far as I'm concerned, I consider Bitcoin the most asymmetrical trade of my lifetime at this point. I bought Bitcoin in 2016. It was significantly under 94, $95,000. Obviously, I think today is a better, stronger case to buy it than it was back then. It was much more riskier back then.
- [12:01]
Eleanor
Can I just add to that really quick? Just, I was thinking the SEC crypto task force publishes its meeting logs and I think part of this whole administration, not just Trump, right, but under him, the regulatory agencies have made a push to be more transparent. If you go on the crypto task force website, you can see they've had maybe more. Last time I checked, maybe a week and a half ago, it was more than 60 meetings, 60 meetings with different crypto companies. Blackrock, Coinbase, I, maybe Ripple, I can't remember Ripple's on there. But. But these companies that, you know, to your point, John, two, three years ago, you would have said, absolutely not in no way. This just isn't an industry that they're taking seriously. And now there's a whole department dedicated to it. There are roundtables, there are meetings. It's just been just, again, the shift is just such an incredible story. I think that is a story in and of itself. The story when I first got into covering crypto was that Gary Gensler was going after all the crypto companies issuing Wells notices like candy because of some theory had in his head that all crypto tokens are securities. And now we're seeing a complete 180 there.
- [13:03]
John Deaton
The only thing I would add to what Ellie said is, except with the caveat that Gary Gensler was meeting with Sam Bankman Fried after Sam bankman Fried donated $10 million to the Biden administration. The testimony at trial was, why did he give 10 million? And. And the comment by his ex girlfriend was for regulatory access. He told me he was buying access and he got private meetings with Gensler and all of that other shenanigans. And so when that is your system, it's going to fall. It fell shorter than I thought it would. I thought it was going to take us, you know, much more time. And I certainly didn't envision President Trump completely adopting the industry. I mean, the President United States posted a post about xrp, right? He said, xrp, Solana Cardano. And then, you know, within an hour later said, of course, Ethan Bitcoin as well. But just imagine that the President United States posted about XRP when everyone was like, oh, the SEC case against ripple. XRP's dead. And so it's a, it's an amazing, you know, difference.
- [14:13]
Eleanor
And tribalism too, now that you're seeing. I mean, I wasn't in crypto, crypto space prior to 21, but I heard that in 2017 the tribalism was quite crazy as well. And then now you're seeing. Because basically the SEC was public enemy number one, right? Everybody could hate on the SEC together. Everybody had a common enemy. And now that the SEC is turned friendly, I've noticed a big shift in communities going after one another. Oh, you're a shit coin. Oh, you're the worst. You know, that's.
- [14:41]
John Deaton
Which is much healthier, which is much healthy. Sorry, it's much healthier than the government picking the winners and losers. And by the way, Andrew, there was someone who posted, oh, you know, Deaton is only talking about xrp lately, like, so I, I wore this, this right here it is for him. And, and we have XRP holders that say, oh, why do you talk about bitcoin so much? And then we have bitcoiners saying, oh, you, I like Deaton, but I wish he didn't talk about that coin. I mean, you know, but to me, that's healthy.
- [15:12]
Andrew
Yeah, it's, it's, you know, it's, it's, it's part of the overall, you know, crypto community. There's going to be tribalism that's existed for, forever across all sorts of industries. You know, we just had the NFL draft. You know, that, that's, that that breeds on tribalism in your particular team. That's no different than, than in crypto. Everybody has a team. There's a reason why they have that team. You know, I get DMs from people saying, you should sell all your bitcoin and just invest in xrp because it's the future. You know, there's a world in which there's opportunities for, for all of these tokens to do something unique and to provide real value for the people that hold them. You know, bitcoin in and of itself is what it is. And it's not going away, is never going away. You know, we look at, you know, inflows having to do with the ETFs, which, which really is the ground floor and the architecture by which the industry will continue to grow. On Monday, BlackRock's ibit product brought in nearly a billion dollars in one day. I think it's third or fourth largest day that it's ever had. What's interesting is on the institutional side, there's significant increase in adoption, adoption being ownership at this point, and a real interest in the space, understanding the space and investing in the space. For example, Bitwise held an event last week for corporates associated with having a bitcoin strategy and the launch of their new etf. That is corporates that hold Bitcoin as a certain percentage of their balance sheet is going to be in their etf. That was well attended. It was really publicized. Point being is that institutionally there is significant interest. Why? Because of the shift in the sec, because of the regulatory shift. So before you had banks, and this is my theory, using the Democratic Party to try and crush crypto. That didn't work. That didn't happen. So now the banks, there was just an announcement that SOFI is adding back crypto trading and ownership onto their platform. Right. So the banks now are like, well, that didn't work. So we're gonna have to figure out a way how to adopt it, how to own it and then how to use it as a product inside of our organization. So now we see this shift. There's going to be all versions of adoption and use cases, products, different types of products associated with Bitcoin, Ethereum. There's going to be Solana ETFs that get approved, XRP ETFs. A slew of ETFs are going to get approved over the next six months. They're going to cover the industry. So talk to me about that, about the, the institutional conversations you guys have had. People leaning back into the space when before they're like no, I'm not going to touch it because it's probably going to die again. That's a huge shift on the institutional side. There's a chance this is going to die and the government's going to kill it to. Now wait a minute, I've got to make a shift. We got to have a bunch of meetings because we have to now add this to our platform. That's a huge shift.
- [18:30]
John Deaton
Yeah, Charles Schwab is now going to be trading crypto. Charles schwab, that's a 10 trillion asset manager. BlackRock is 11 trillion asset manager. And I think, and then. Sorry to if I went first, Ellie, but I look, I made a comment yesterday about, I think it was yesterday or the day before I, I look at this ripple acquisition of hidden road is probably the, the best example of traditional finance meeting defi. And what you're seeing is now institutions and banks that the biggest threat to them was defi, let's face it, that was their biggest threat in my opinion. And now they're figuring out ways to, to how to capitalize on it. And so if you look at how Bitcoin and xrp, the fact that Bitcoin, you know, did not fall further with all that macro trade war stuff. The fact that XRP basically maintained above $2. You know, I've been in this for, since 2016. I've never seen them act so stable. And I think a lot of it is to do with the institutional money and adoption coming in. And so I just, I sometimes I, I've told you this before, Andrew, but I wake up and I think that I'm missing something. I'm going to be proven to be a again because I, I can't, I don't see, you know, there's always risk and all that, but I just don't see how you can't be bullish on, on several of these big tokens like XRP and Bitcoin. Personally, I just don't see how you can't be bullish on it right now.
- [20:11]
Eleanor
What's fascinating to me is how companies are now putting Bitcoin in their Treasuries. Right. And to your point, Andrew, last week, bitwise, at the event I was there, I moderated a panel with Howard Lindsin, who's the CEO of Stock Twits, Tad Smith and Christina McLaughlin. So we talked about the individual investor view. And it's not even just corporations. I think the corporations is probably the more significant part of the story, putting Bitcoin on their balance sheet, but also individual investors. But last time I checked, 94 more public companies now have Bitcoin in their treasury. So they're copying this, this blueprint that Michael Saylor and MicroStrategy laid out. And, and it seems to be gaining steam. I think that's been really interesting. And to your point, just the, the, the amount of how it's all happened in the last three months, it's been, it's been like a rush to Bitcoin. Right. And I think it's because of the regulatory shift. It's because of the messaging from the top. And yeah, that's. Institutions really, really are coming in. I think also they were quietly building behind the scenes. I was at a tokenization event a couple of weeks ago and talking to people like Franklin Templeton, right. They have a money market fund called Benji that's like, pretty well established at this point. They've been, they've actually been in crypto since 2018. But for my conversations that I've had with people at the institutional level, it's, it's very much like, you know, we've been interested in this for a while. We've been quietly sort of maybe interested, maybe building a little bit behind the scenes. And now we're able to actually talk about it. Like, you know, we don't think we're going to get sued now. We're actually free to be able to advertise this and sell this to our customers because it's much more accepted. And it's just crazy that for four years that was just, it was so taboo that institutions, banks, you know, everybody that, you know wanted to get into crypto that wasn't already in crypto just felt like they couldn't because of this, you know, this, this taboo nature that I think Gary Gensler and Elizabeth Warren and the Biden administration just, you know, forced on everybody. Pretty much.
- [22:07]
Andrew
Well, if you're an investor and you're, you know, a reasoned investor, you know, you're evaluating risk. And a year and a half ago, you know, investing in any token outside of Bitcoin, you thought to yourself, there's a chance that there could be laws that are enacted and this thing immediately goes to zero. So my capital will be vaporized. So I, I probably have to be very careful. If not stay away for it, away from it, until there's a green light instead of a red light or a yellow light would be nice and maybe I can dip my toe in. You just mentioned that there's 94 public companies now that have some version of Bitcoin treasury sort of policy. The truth of the matter. And again, this is the speed and pace at which this is happening goes to the shift from a regulatory standpoint. I think at the end of last year, Matt Haugen talked about this with Bitwise on this show that, you know, in 2024, there were about 35, 37 companies that, that had a policy and were openly doing it, that were public companies. We're now at 94. That's. That's a 3x immediate, just like that. That's a 3x. That's not going to slow down. You know, they. Bitwise put out a paper from Matt that says not only is this a trend, this is going to be a megatrend. Right. So where are we at in that process, where that trend continues? Where are we at when a corporate event like the one you attended and did a panel on, by the way, Howard Lindson is a great case associated with where we're at. People don't, you know, great entrepreneur, has started lots of companies, sold lots of companies, built brands that people know about and are aware of. Been involved in tradingview, which is a behemoth. Been involved in stock twits, which is also a behemoth.
- [23:59]
Eleanor
He's launching crypto twits. Andrew, we broke that news on stage. I don't know if that got much publicity, but he's. He's launching crypto twits now.
- [24:06]
Andrew
Yeah, so. So there you go. While at the same time, Howard Lindsen hates Donald Trump, okay? Literally hates the guy, if you follow his ex account. He can't stand him. He calls him Fat Nixon all the time. But there's a reality on the ground, the reality on the ground associated with the industry, associated with the wide open spaces now, versus a bike lane that was Bitcoin and Ethereum ETFs. And that's it you now have wide open spaces. So a smart investor like Howard Linson is going to start crypto twits now and that will probably become a very, very big brand and something that people are using a lot in the next 18 to 24 months. Right.
- [24:50]
Eleanor
And you've got Cantor Fitzgerald launching a similar vehicle that they want to take public to compete with MicroStrategy. That's, you know, that'll be the next thing. With Jack Maller as the CEO. How would Lutman is the commerce Secretary? You know, I think people see Kanter as a pretty well established Wall street firm at this point. And a guy who's in the Trump administration who is literally blessing this business model is just crazy.
- [25:16]
Andrew
We're gonna find our.
- [25:19]
John Deaton
Sorry, go ahead, go ahead, John, go ahead. No, the President of the United States told a guy who's his commerce secretary who owns up to 5% of tethered and now is starting this enterprise with Jack Mer's 21 shares to acquire Bitcoin. I mean it's just a fascinating thing that even, even Scott Besset is a bitcoiner. I mean it's, that's why I keep saying it's just you could never envision this in my opinion.
- [25:49]
Andrew
You know what I wonder? And again, my theory that it was, it was, it was bank backed. But I really wonder why, you know, Democrats went down the road of being, you know, just violently anti crypto. And, and what did they, what was the potential outcome of that? Again, John, from your point of view, like crypto seems to be, you know, open roads for even if you've got 150 bucks and you want to invest in something, you, you have more opportunity than if you're in the stock market with 150 bucks right there, there's for the little guy. It's, it's open roads for the little guy. An opportunity there. Right. So I, I still wonder. There's still a question in my mind as to what the why was behind it and to watch it flame out so fast. Right. So like you said with, with your opponent in the, in the Senate race, the anti crypto army, that's nowhere now. They, they, they, they probably wish to delete that from the Internet, right? Crypto for Harris. I mean, the minute that, you know, on election night when it was kind of obvious that she was going to lose that account, deleted everything and was gone. Right. So I just wonder about the why and the who will and the what behind control.
- [27:07]
John Deaton
Andrew. Yeah, people like Elizabeth Warren, Sherrod Brown and others like that Gary Gensler, they want five major banks that they can control. Like that's really what it comes down to, you know, and in my opinion, and, and I, I scratched my head when, when Elizabeth Warren announced and it was anti crypto was the announcement, her whole re election was, I'm going to build an anti crypto announcement. I almost fell off the chair because I was like, my God, illegal immigration is bankrupting Massachusetts, inflation. We're the second most expensive state to live in, people being priced out of the economy and what are you doing? You're talking about crypto. And then she went on Meet the Press with Chuck Todd and said, America is ready for a Federal Reserve issued cbdc. And then I was like, ah, there you go. It's all about control, right? And so that, I mean, that's the only explanation I could ever come up with because it really is. The suppression of innovation was unmatched. If you look at when the Internet was here, you know, America flourished. And after the Internet you could say blockchain, why they would want to suppress innovation? I mean even companies, you know, like arch public wouldn't exist, you know, under there, under there. So you're suppressing innovation. That I could never understand. I could never understand why crypto was deemed to be a partisan issue. That's another thing that I guess I'm naive that I would have never thought technology innovation should never be partisan.
- [28:46]
Andrew
Eleanor, talk about, you know, you were in the room at that Bitwise event and so, you know, I assume like you just said, you know, crypto twits. There were probably a lot of other things that were, were mentioned. I know there was, you know, a viral moment associated with Jeff park and him sitting there with Michael Saylor and them talking and, and all those things. But what else did you hear while you were in there that this audience needs to know about and hear about? In other words, going forward, what will we hear about in six weeks that comes from conversations there? What will we hear about six months that comes from conversations in that room and with the folks that were there?
- [29:24]
Eleanor
Wow, that's a great question. You know, I think just from everything that I saw that day, is that, you know, really bitcoin and. Well, not just bitcoin. You would be surprised at a bitcoin event how much Solana was also talked about. You know, to me, and I said this to a few people, out of all the coins that I thought institutions would pick up on, I didn't think Solana would necessarily be it. But you know, there is the institutional appetite now for things beyond bitcoin, you know, the bitcoin story I think were really, really early. Like I said, the 94 public companies and that was, that was last week that I checked. So I think you're going to keep seeing that. I think the states as well, we talked a lot about the state level initiatives going on. You know, with the legislation. You saw Arizona yesterday pass a bill in both the House and the Senate to set up a strategic bitcoin reserve at the state level. Something that Donald Trump is obviously trying to implement at the federal level as well. But the states are definitely leading. It's just an interesting model, right? It's an interesting economic model. These states are looking to put up to 10% of Bitcoin in state treasuries. But why? Because bitcoin is now finally being recognized as a store of value hedge against inflation. Digital gold as bitcoin maxis like to call it. You know, it really is starting to look like that you've got outlets like Bloomberg actually calling it digital gold and showing charts of, of how much gold or how much bitcoin is really sort of competing with gold at this point. I think that is going to be the continued narrative. I think we'll continue to see a lot of companies copy microstrategies play. I mean Saylor is just, when you see him talk on stage, it's just, you know, he kind of brings the house down. He had these chart, he just like a lot of different slides, right? And just this data, you know, because I think, you know, he obviously has a vested interest in, in making sure bitcoin stays on top and bitcoin doesn't fail. Clearly.
- [31:21]
John Deaton
$4 billion.
- [31:22]
Eleanor
Yeah, just a little bit. But, but you know, I think when you look at the data and he was showing the data in his presentation, you know, microstrategy outperforming the S&P 500 microstrategy. You know, he said the Uber driver in Nigeria outperformed like the top four hedge funds in the US this year just because they own bitcoin. And I'm also, I'm listening to a lot of it. I'm reading bitcoin, the bitcoin standard actually right now. And just learning about, you know, how it is so rare what bitcoin is, you know, and I think a lot of these coins too. I think XRP has utility. I think a lot of them do. And to your point earlier, Andrew, they have a place in the ecosystem. You know, they'll always be tribalism, but I think, you know, they Each have a place for, you know, a specific, a specific use. And I think Bitcoin will be the store value, XRP will be the utility, Ethereum's utility. So just continued interest in the institutional level and, and also on the retail level as well.
- [32:18]
Andrew
Well, I, I, I go back to the, you know, dot com era and then the dot com bubble. And the truth of the matter is there isn't one Internet company, right? There isn't one Internet company that runs everything that is the Internet here in the world. There's a multiplicity of one. There are ones that build the architecture, there are the ones that do the ux, there are those that do the UI there, there are, you know, we can name a dozen of them and oh, by the way, that dozen are the top, are in the top 20 to 25 most valuable companies on the planet and the globe has ever seen, right? So you go from a difficult era in the dot com bubble and out of that dot com bubble and the bursting of it were born companies that became the biggest companies that the world has ever seen. We're in a time frame where smart people, again, the Howard Lindson's of the world, you know, are smart enough to know that this is an opportunity to build some cool stuff in a space that over time is going to explode. You know, Bitcoin, Ethereum, Solana, XRP and maybe a few that haven't even been invented yet will end up being really, really, really, really big companies that end up being the architecture, the pipes, the levers of how we transact, how we communicate, how we listen, what we watch over the next 10 to 20 years. People forget that, you know, in 2000, you know, Amazon.com was, you know, something like $3 a share, right? Priceline, which is now booking.com, which is, I don't know, $4,000 a share right now was 99 cents at the time. You know, these companies were nearly going out of business, but then they turned into these behemoths that people use every day for an enormous amount of things, right? So that's where the crypto space is headed. And people that have time horizons that are 5, 10, 15 years. You know, I think the interesting thing about this show today is your information, Eleanor, that, you know, an investor that has built a bunch of stuff and doesn't need any more money is excited about building something in crypto that is social in nature and will grab eyeballs and users that hasn't really been done successfully in the space over the last 10 years, you know, has there been A crypto channel on tv. They've tried, it hasn't happened. You know, crypto, Twitter on Twitter or X has existed. So this is a new venture that I think will do incredibly well. We'll watch it live and breathe. And what will it be? Will there be little tokenized, you know, toys on it? Will you get, you know, because you put out a particular twit that went viral, do you get some salon? Who knows what they're going to do? But it's going to be interesting to watch and because the, the road has been widened by such a significant level, allows people to, to push into the space and it's, it's fascinating to me. It really is.
- [35:29]
Eleanor
Yeah. We had Sergey Nazarov, founder of Chain Link, on crypto in America the other day and he said to us, it's just amazing how quickly the government moves when it wants to. Four years of Gary Gensler in the Biden administration, absolutely nothing happened for crypto. And you've seen since January, everything we've seen out of the sec. We've got two crypto bills going through Congress right now, stablecoin and market structure and a White House who's totally on board and supporting the entire process. And I think that has been an interesting thing for me to cover as well as sort of the, the relationships between like government, they're all talking to each other. You know, the sec, the cftc, the Congress, the Sen. It and the White House. It's kind of like this well oiled machine. At least it appears that way from the outside and just that difference, it's just incredible.
- [36:15]
John Deaton
There's one group.
- [36:17]
Andrew
Go ahead.
- [36:18]
John Deaton
Oh, I was just going to say that the, the one group that I'm glad might be a little depressed are the securities lawyers bar. Because you know, under, you know, you, if you're going to start a business, you're like, okay, we're gonna have to allocate 3 million, you know, for legal fees up front. But those lawyers, you know, at Sullivan and Cromwell, Simpson, Thatcher, all the big firms, you know, they were making a lot of money because of it being so vague and oh, are we going to get sued? And of course Gensler was suing everyone under the sun in crypto. So it was a boom. If we look at how many, how much money lawyers made in the years that Gensler was the SEC chair, I guarantee you they outperformed anyone and everyone.
- [37:02]
Andrew
Yeah, I said, I said three years ago that the, you know, the, the best company and the most, the fastest growing company and the best job to get in crypto at the time was at Sullivan and Cromwell. They're going to make the most money in crypto and grow the fastest in crypto because of, you know, everybody had to use them in some way, shape or form.
- [37:23]
Eleanor
Yeah, you know, Coinbase actually put in a FOIA request to get the information out of the SEC how much money they spent on crypto. Regulatory, regulation, by enforcement during the Gensler years. They said we want a dollar, we want a dollar number. Like let us know how much you guys spent of public funds on this regulatory crackdown. So who knows if they'll get the information. And a FOIA is notoriously slow process, even though, you know, there's been some promises to reform at the top. But that'll be an interesting number to see as well, just how much public money was spent on that crackdown.
- [37:56]
John Deaton
If you just take Ripple and Coinbase and Kraken, I guarantee you $300 million in legal fees between them. I mean Garland House and them spent 150 million and I'm assuming Coinbase hit 100 million and crack and probably hit 50 million. So that just, that's just think about that.
- [38:18]
Andrew
Throw Gemini. Throw Gemini in there too.
- [38:22]
Eleanor
Gemini, yep.
- [38:23]
Andrew
The SEC tried to absolutely put crypto out of business in the United States. Coinbase, Gemini, Kraken, Ripple. Right. Those are the four biggest United States based, you know, crypto companies, without question. And that represented, by the way, Coinbase has 100 million customers. Kraken has 10 plus million, Gemini 3 plus million. Think about that. That's a, that's a hundred and almost, almost 120 million customers at those exchanges where for all intents and purposes the government and the SEC was saying you're not allowed to do business here. Like you, what you are trying to do in the United States in some way, shape or form, invest or invest in your future. Any decisions that you're making, you're not smart enough to do that. We're going to take control, put these companies out of business and you've got to go put your money back into the banks.
- [39:13]
John Deaton
And we have conclusive proof. Look at Coinbase. I just ask anybody to look at Coinbase. I can prove to you in. When Coinbase filed for its ipo, they asked for it to be accelerated. In order to accelerate it, the SEC must make a public determination that it is in the best interest of the American public to grant acceleration. They did that. So they made a determination, this is in the public's best interest to allow this accelerated IPO for Coinbase. Then the orders came down two years later, the s same SEC says the entire business of Coinbase is illegal in their complaint that they're selling unrestricted securities. So the order that. That's what I mean by proof that the word came down that in what Andrew said, let's end this industry and nip it in the bud right now. And I think that that Coinbase example just proves it.
- [40:12]
Eleanor
Yeah, and you gotta, you gotta put these things into laws. Right. I think that's why we're seeing a big push in Congress from President Trump to get these bills cross finish line because there's one thing to put out guidance, but the minute a new sec, a new administration, a new SEC chair, they can change on a dime. So. But to your point, John, it's interesting that it was the same sec, under the same SEC chair who then brought the charges against Coinbase after green lighting their ipo. But we'll be interesting to see who else goes public this year too, obviously Circle, and then I think there are a couple others that are in the pipeline as well. So that'll be a good indicator of where we are in the market too, I think.
- [40:46]
Andrew
Yeah, absolutely. Ellie, thanks for, for joining us. We are now going to talk about arch public, so we're going to allow you to exit stage left if you'd like. Sounds good, but thanks for spending the time. Everybody go follow crypto in America. Everybody go follow, follow, follow Eleanor and, you know, engage in her new podcast. It's fantastic. The people that she's able to interview on a weekly basis are absolutely on the front lines of everything that we're talking about right now. She's going to be at the bitcoin conference. We'll be there. John will be there. We'll all be there. Looking forward to spending some time together and thanks for the time today, Eleanor. Appreciate it.
- [41:27]
Eleanor
Of course. Thank you, Andrew. And just a note for your viewers, we are dropping our episode with French Hill tomorrow, the chair of the House Financial Services Committee. So you won't want to miss that one.
- [41:36]
Andrew
Amazing. Thank you.
- [41:38]
Eleanor
Thanks, guys. Have a good one.
- [41:39]
Andrew
You bet. So, John, here we are. I am going to pull up something that you talked about yesterday with, with hearts Public and, you know, talking about, you know, over the past week and a half, there's been, you know, questions about, you know, are you involved with us? You know, what, what to what extent are you involved with us? You know, you did a live, which everybody thought was fantastic. I thought it was fantastic because you did a little bit of videoing of your, your office and the papers and the floor and all that stuff. That's, that's the best. To me, that was the best part of it because it looked like all of our offices. But talk about, you know, what you find compelling about what we do. Before you do that, I'm just going to go over a little bit of what this looks like. You know, if you're using our XRP arbitrage algorithm, you know, just over the past month, you've created a tremendous amount of cash yield. You know, huge amounts of cash yield. Even in our free product, we're talking about more than $2,000 of, of, of cash yield that has been created on our free product with limited amount of capital. In our Tier 1, it's plus $20,000 of cash yield in the last month. That is taking the volatility inherent in the crypto space, taking the volatility inherent in XRP and using that to generate income and cash yield without lending, without leveraging, without giving up control in any way, shape or form of your spot position in xrp. We do the same with Bitcoin, Ethereum, Solana. You never have to give up your ownership or control of your crypto to be able to use, use our algorithms and use the tech that we've built. And you know, our conversations with John have been extraordinary. You know, he really believes in what we're doing and how we're doing it because we're giving people think of this, right? Our product is free, and then at the same time, you can put $200 into our product and watch it work. You can barely dip your toe in and say, wow, this, this is something that I haven't been able to find anywhere else in previous cycles. The only way that you were able to create yield was by giving somebody your assets and then them promising you that they're going to give you a certain yield. Not only with our products do you create yield, but you're also accumulating more XRP along the way, accumulating more Bitcoin along the way, accumulating more Solana along the way and generating yield. Extraordinary stuff that doesn't exist anywhere else. John, you get to talk now.
- [44:32]
John Deaton
Well, listen, I'm not really ever. You know, like I said, when I like something without being paid, I'll, I'll comment like in that live. I talked about how I'm a customer of Uphold and they, they handled me great. You know, I was being, trying to be hacked and their fraud department was amazing. So I started talking about how much I liked Uphold and a lot of People thought, oh my God, he must be being paid by uphold. And, and so in this situation, you know, I gave you the ultimate test when I was, when I found it as a, as a customer and was like, wow, I would never be talking to you if, if anyone had to give up their, their, their XRP or their Bitcoin or lend it out or any of that kind of stuff. But my test for you was like, listen, you know, I'm not a tech guy. I love the concept of, of retail holders being able to use a tool that they've been excluded from in the past, where hedge funds use this and, you know, the galaxies, the Geminis, whatever, like those big players get to use these tools and the little guys always kind of left out. And. But the test that I said to you guys was, listen, I'm. I'm Mr. Transparent. Like, everybody knows my portfolio. They know how much money I got because I disclosed it in the FEC with my Bitcoin holdings, my XRP holdings. I said, you know, I don't mind talking about it, but I'm going to be transparent and I'm going to show people my account, and if it works, it works. If it doesn't work, I'm gonna get up there and say, look, it doesn't work. And I said, so, you know, be careful what you ask for, Andrew, when you get deep, you know, because there's no way I'm going to like, shield stuff for, for, for, for money or anything like that. And so, you know, I got excited. You know, a lot of people thought I was hacked because I normally don't get involved in stuff like this. And I just said, listen, I'm excited because I know what it's like, man. Trust me, whether, you know, you don't have to have the poverty that I went through, but I know what it's like to be 33 years old, have two kids, and you're in student loan debt and you're just trying to put a little money away and you're trying to build some wealth, and it just seems like you can never get ahead and this little guy always gets on. And so if we're able to, like, you know, as far as I'm concerned, this is the biggest, best thing about capitalism, man. If, if you can help regular people.
- [47:07]
Andrew
Yeah.
- [47:07]
John Deaton
And, and you're providing a product and arch public makes money while helping, you know, people, regular people. That's the beauty of capitalism to me. And so, so yeah, what I, what I talked about was I find I downloaded all the stuff and I have a Gemini account and I funded my account and I'm using the product and, and I'll show people. And what I tweeted out was, and I warned you, good, good, bad or mixed results, I'm going to share it with people. And to your credit, you said do it brother. Like, you know, like I'm not. Do what you need to do. And we stand by it and we'll see, you know, and so I'm going to share it and be an open book.
- [47:50]
Andrew
Yeah, not only is John gonna share it, but internally we're, we're going to create a, a John Deaton account case study. Right. So we have a bunch of case studies on our, on our website. You can see our site there, archpublic.com you know, underneath our support section, you go into our support section. There's an enormous amount of, of information there associated with case studies, recipe stacks, an incredible amount of information. There's your XRP arbitrage case case study right there. Over the next month, we're going to create a John Deaton case study. He's opened himself up to be transparent. So we're going to take a look at, you know, his Bitcoin arbitrage, his XRP arbitrage. What does it do and how does it do it? So this isn't back testing, this isn't hypothetical. This is real world live stuff. And we're going to publish it, share it with people and you can make your own decisions. But then on top of that, as John's doing, what is doing? A reminder that this is institutional tech that doesn't exist anywhere else. And again, it's available to you for free. So if, even if you've got $500, $1000, $2000, $1500, you can take even the arbitrage tech that we've built and buy $50 of XRP at a time. And then when you want a little bit of Yield, you're selling $20 of XRP when it triggers a sale. Right? 50 and 20 arbitrage, you can't, you cannot find that anywhere else. And by the way, you can't do it on your own because you have to be up at 3am to trigger the perfect sale or the perfect buy at the bottom of a candle or a top of a candle. So listen, I'm clearly passionate about what we do and how we do it. It's so rare to build products that are a one of one and you don't have any competition. You can't find this at exchanges. You can't find this at any other provider. You may be able to do that in 12, 18, 24 months as the crypto space continues to grow and the economies of scale get built around it. But right now we're the only ones that do it. And we could charge enormous amounts of money if we wanted to because of what the tech is, but we want to give it to people for free at the retail level so they have a shot at building meaningful stacks of crypto that they think over time are gonna be real meaningful as it relates to, to their wealth. Right, John?
- [50:24]
John Deaton
Yeah, listen, the proof is in the pudding and you know, still haven't been paid anything by Arch public. I'm just passionate about this thing. But you know, to me I said, listen, I'm only to, to you and Tillman that I'm only going to like talk about my own personal excitement. If you allow me, I'm gonna share everything and, and I'm not gonna cherry pick. There's no effing way I'm gonna be like, oh, here is, here is just this where it performed. But you know, we're gonna, we're gonna see. And the fact that you welcomed that challenge said a lot to me.
- [51:07]
Andrew
So, yeah, I mean you either you believe in your product or you don't, period, end of story. And, and you allow pure unadulterated transparency. So that's what we're doing here. Any final thoughts, John? Just on the crypto space overall, where we're headed over the next few months, regulatory or otherwise, before we shut it down for the day.
- [51:29]
John Deaton
Yeah, I mean, I think the, the real question is I just hope that the administration doesn't lose this opportunity because what, what Eleanor said is true. You know, a year from now, Andrew, we'll be in the middle of midterm election cycle for the, the midterms. And the midterms, you know, historically don't go in favor of the party in control. So the, the Republican Party needs to, and President Trump need to accept that there's a real possibility that the House flips, probably not the Senate, but it's possible. But there's only three, you know, Senate seats in favor of Republicans and there's only like three or five in the re House. And so I just hope that we get that stable coin legislation, we get a market structure bill and we get some real clarity, you know, maybe some tax relief issues on, you know, using crypto for payments where you don't exercise. I'd love to see you can pay your federal taxes in bitcoin. Or XRP in a small percentage, you know, a fraction of 1% goes to the reserves and stuff like that. There's so much excitement to be. I just hope that we don't, they, we don't lose that opportunity.
- [52:46]
Andrew
Well, we're gonna find out. I, I will say, you know, several months ago I put out a tweet that said, you know, when Trump was at the bitcoin conference, again, just at a remarkable moment when he showed up there in person, the promises that he made have all been fulfilled. I mean just flat out, boom, boom, boom, boom, boom, boom, boom. And so it's an extraordinary time that we're in. It's an extraordinary opportunity to build cool stuff in the space. And yeah, we're going to have some, you know, there's going to be some spin outs that happens in industry as it grows and evolves and matures. That, that, that's bound to happen. But at the same time, you know, I think the, the, the real meat on the bone, you know, can be represented in, in for example, what you know, bitwise hosted for six hours last week. You know, you have real builders, people of substance, people of value coming and saying I want to build in this space as opposed to, I want to, you know, I want to send out a meme token, right? It's now about companies, it's now about value, it's now about bringing communities together that create that value in a real way. And again, I'm, I'm, I think people should really look into that. You know, that announcement about crypto twits, that's a, again, that's a meaningful thing. People have thought about the opportunity for crypto to, to really be something that's social, decent, you know, a little, Is there a decentralized nature to it? I don't know, but we're going to find out. And you know, I think it's a really, an exciting time. So thanks for spending the time John, really appreciate it. Everybody follow John. Pretty much everybody does already. If you don't, you should listen to them. Great guys in the right spot and we're happy to work with them. Have a great day everybody. That's dope. That's dope.