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- [00:00]
A
Good morning, everybody. Welcome to Crypto Town Hall. Every other day here on X 10:15am Eastern Standard Time. If you hadn't noticed, we were not here yesterday. We are trying to maximize the content of the show by making it a little less frequent and also obviously free up some time for the hosts, especially as there's less news to talk about. So we will be back likely on Friday after today. But there's a lot of news to go through today and we can discuss which items we wanna dig into first. I think some of the biggest stories here, a lot of people angry that Vitalik has sold $8.6 million in ETH this week. Strategy is the number one shorted stock globally, which came out pretty crazy. The ETH foundation has begun staking the ETH Treasury. Finally, Trump has no SBF pardon plans. I think we already knew that. Tether's teasing a new payments card meta planning a stablecoin comeback in the second part of 2026. Which is kind of wild when you remember the entire DM Libra debacle where they actually tried to be ahead of this in last administration and got completely slapped down. Kraken rolling out 24. 7, 365 perpetual trading on tokenized stocks. So we've brought our complete degeneracy now to the stock market and of course Coinbase rolling out stock trading to all US users 24. 5 rather than 24. 7. And I guess it should be noted that there was this little State of the Union thing yesterday. Potential war in Iran and a lot of other things going on outside of the crypto market. So first, I mean, I guess to set the table where we stand in the cycle or in the market, obviously we've had a bit of a bounce here. Trading at 66,800 for Bitcoin, it went down to the 62s, I believe yesterday we had a bottom a few weeks ago that was down just below 60. Whenever we consolidate like this, we get a whole lot of debate as to whether the bottom is in. I can tell you a few signals from my perspective that make a bottom possible. Can't say guaranteed, likely. I also think bottoming is a process. So 55, 60, 59, 64, whatever, all the same in my mind. But we had crypto fear and greed at 5 two days ago. I think it's at 11 today, the lowest it has ever been at 5. And this is the longest streak of having fear in the crypto market, which is just wild to me when we're trading at $65,000. But I think a lot of that has to do with obviously altcoins. Outside of bitcoin, we have microstrategy as the most shorted stock on the planet. I mean there's just a lot of bottom signals. We can get a weekly RSI on the Bitcoin chart when it went to 62 yesterday without closing there. But it touched the all time low on RSI on the weekly chart for bitcoin. Just a hell of a lot of reasons. Of course we have bitcoin going to zero. Google search is an all time high, a lot of them. So I would love anyone jump in, tell me your perspective on where we stand in the market right now, then we can sort of dig into some of these news stories. I'm counting on you guys, bro.
- [03:17]
B
No takers at all. I, I, I thought the funniest thing was, was, was meta that that was the thing that just made me laugh in that it was so early, so directionally right, but just the, the, the timing was not right with regulations and everything. I just, you know, it's like, I think I put out a tweet. It's like so early, yet so late. It's just, it's, it's kind of a bummer for Mark because I think that would have been if he was I guys were around, some of you might be too young to remember, but it was like they got everybody on board that thing. Everybody from Visa to the banks. Like everybody signed up for that thing. And then like a week later it was over and it was like what, what happened?
- [04:00]
A
Congress happened.
- [04:01]
B
Do you remember that? How, how?
- [04:03]
A
Of course I remember it.
- [04:04]
B
Yeah, I, yeah, I, I mean that flip flop was so epic where everybody was in and then a week later or whatever, two weeks later everybody was out. Anyway, that, that was just a funny thing. I just, I mean I think Zuck is just incredible. Just as an operator in a vision, that guy knew what was coming. But just timing is everything.
- [04:27]
A
Yeah, they, you know, that was obviously also when there was a lot of, well, it was justified obviously. But you know, election interference and Facebook FUD was at a maximum and the government saw Facebook trying to basically create a dollar competitor from a private tech company and just freaked, freaked out. Of course now we have that, but just not from the big tech companies, from companies that are, you know, just stablecoin companies.
- [04:58]
B
I mean and we've lost to a large degree that, that conversation about like a network state. And I think, you know, with Elon maybe finally getting his payment infrastructure set, we can begin having those discussions again. I mean, it's completely dropped off the conversation, but, you know, a network state, you know, idea. You know, I think, you know, Telegram still has a really good opportunity added as well, but Elon's probably got the best opportunity. We can have that discussion down the road a little bit, but something to keep your eye on.
- [05:29]
A
Lou, you were jumping in.
- [05:31]
C
Yeah. I actually think the Facebook news is. Is really big news. I went on CNBC the day that Libra was announced, and I said it was doa. At the time, it was obvious. And my assumption was, I mean, Mark and his team, they're brilliant people. They knew it was doa, so I think they just did it as a diversion and not quite sure to accomplish what, but I think that Facebook obviously has the opportunity to be the thing that brings crypto to the masses.
- [06:03]
A
Yeah, I think this is good news now, regardless. Just really interesting, sort of, as Adam alluded to, how early they were and how long now it's been since then. Matt, go ahead.
- [06:11]
B
Just a quick take here.
- [06:12]
D
Has anybody heard from Dave Marcus at all? I haven't seen any commentary from him regarding this. I wonder if he's kind of feeling like, I told you so, or how
- [06:20]
E
is he even feeling about this?
- [06:23]
A
Yeah, I'm gonna. I'm gonna have to hit him up and have that conversation. I've had him on before. He's brilliant, but obviously he was sort of the architect of Libra, as he pointed on. I guess it was diem. I can't even remember now. Was it diem first and then Libra, or was it Libra first? Libra first Libra, then Diem. Yeah, and the Aptos guys, I think Mo, Sheik and Avery, all those guys were also early on the Libra project. And David Marcus, of course. Now lightspark, a lot of very viable projects and great thinkers came out of that Libra project. So at least we have that. I mean, circling back, B.C. i saw you had your hand up. I know you probably wanted to talk about the market more than the Facebook news, so just let's circle back to that.
- [07:04]
E
Yeah, just a quick one to let the smarter guys on that front speak. But from more of a technical level, I think it's quite mixed at the moment. You're seeing a lot of kind of open interest getting gobbled up on Bitcoin. If you look at the last few weeks, it's trying hard to kind of drive lower in a kind of uncertain geopolitical landscape as well. If you look at the equity markets, obviously focus on things like the index es, nasdaq for example, you can see they've basically been moving sideways for a little while. So the kind of risk appetite is a little bit, kind of shocked more than kind of off, I would say. If you look at legacy markets, right, we know that bitcoin has aligned itself very heavily with equity markets of recent times. I think one of the really interesting things that we're looking at over here is looking at that kind of risk bid and how it was so heavily towards AI is how it's becoming a lot more selective now. If you look at the kind of major systemic shocks we had to the system, we had it regarding, you know, the application of AI towards legal entities. And we saw those kind of major legal companies kind of pulled back. We've seen it with software as well. You know, looking at this as companies that are getting hit at the moment are the ones that are being seen that AI is a massive threat for. So therefore the kind of, I want to say diversification, but the kind of pivot a little bit is kind of moving in to that, you know, that quality bid. Okay, what does AI empower more than it threatens? Okay. And I think the market is kind of leveling off with that. Obviously you've got other catalysts coming in with the tariff situation and that as well. It's really easy to forget sometimes. I think that crypto is a massive beta risk asset is just swimming head on into this wall. But if you really, really zoom out here, we're coming back in towards the kind of 200 period SMA. You've got a lot of absorption starting to happen down here at the lows. I'm not saying that this is the bottom right for me personally, you know, and for what we're doing here, we're looking for a little bit more of an injection back into risk assets, especially from kind of a legacy side. But actually I think this could be getting hit a lot harder here. We're seeing a lot of absorption for the lows. So I think, you know, maybe when we see the traditional market size settle a little bit more, it seems like we're at a relatively good base back at that, you know, consolidation on bitcoin that we made back in started around March 2024.
- [09:26]
A
Love that anybody else takes specifically where we're at with the market right now. No takers. BC I'm going to generally kind of agree with your take. But I, I personally, like, if I had gun to my head, I would lean towards very close to a bottom here personally, just because of all those other kind of Bottom signals that I was talking about before. That doesn't mean though that I expect a massive rally up. Right? I mean, we could stay here for six months in this general area, which I think is a lot of people's base case. I mean, Gary, that's kind of how you're looking at it, right? I mean, even if we go lower that there's, it's going to be a while.
- [10:04]
F
Yeah, I think so, man. I mean, I just don't see what's going to drive this. Right. I was hoping that we would get a heavy, heavy flush out.
- [10:15]
B
We just need, we need, we need
- [10:17]
F
something to happen here and there's just, I don't see what's going to be positive to really push this thing in the short term.
- [10:24]
B
Yeah. What's the narrative? I mean, I see I, David Bailey tweeting about, yeah, oh, bitcoin's the base layer for AI. It's like, bro, come on, man. I mean, it's just like, yeah, it's like that should really just be quiet
- [10:36]
F
because I mean, I don't know what his posts are attempting to do other than keep him in the relevance factor. It's really pretty embarrassing.
- [10:46]
C
Hey, AI on bitcoin is a thing, guys.
- [10:50]
A
Yeah, but it doesn't mean it's going to be the best player.
- [10:52]
B
Yeah, it's a bad thing. I mean, come on, man, like, what do we believe the AI wants? Slow, expensive transactions? I mean, it's just not going to happen. I mean, we can have the debate whether it's going to be, you know, stable coins or some other crypto, but to think it's going to be bitcoin and Lightning network, bro, come on, man. I mean, not happening.
- [11:14]
C
I'm not saying it is or it isn't. I'm just saying, you know, there was a time when the experts thought that there were going to be 10 home computers. So I think none of us know shit.
- [11:24]
A
Yeah, I think that, I think everybody here has consensus that. And maybe we could be wrong, by the way, but that AI agents and AI the base currency level will be some sort of blockchain based technology. Right, But I don't see how AI Bitcoin as the base layer of AI makes much sense.
- [11:44]
B
I mean, they could come up with their own like currency. Like, who knows, man?
- [11:48]
A
Trading with meme coins by themselves.
- [11:50]
B
Yeah, exactly. Who knows? But to think that it's going to be bitcoin, it's just, it's just such a, it's a so weak a narrative and really just, I mean, give me The. You give me the best.
- [12:01]
D
How.
- [12:01]
B
How could it possibly work on bitcoin? I mean, anybody.
- [12:04]
A
Is he saying that it'll be the base technological level level layer. Excuse me? Or that they're going to transact in bitcoin, by the way? Yeah, I think both of those are nonsense.
- [12:12]
B
It's gonna be the. Yeah, both are, both are nonsense. But I guess at the core you could say, oh, well, it's going to be the base value layer. But I mean, bro, that just that. That conversation is so weak and doesn't really have anything to do with what's happening in the AI agent space right now at all. And yeah, it's just, it's such a terrible narrative and I need to see some bitcoiners leaning into it. Oh, I got my Noster hooked up, bro. I mean, have you ever looked at it.
- [12:39]
A
Have you ever looked at the metrics on Noster, by the way? They're publicly available. They have it on their own site. Like it's. No, I mean, it's like that, but more. And I haven't looked in a while, to be fair. So I'm quoting past knowledge because, you know, I, I looked at it and I was like, maybe I'll use this. But the rate of retention of users is like astoundingly awful. You know, people. And I think we've all probably experienced it, but you try it once, you do it for a week, you do it for a month, and then you just lose interest and you fall off. And like every metric shows that there's just. Yeah, conceptually, it's a great.
- [13:11]
B
Yeah, look, decentralized social just didn't work right. People threw a lot of money at it. I mean, I'm all for it. Like, I like the idea. Right.
- [13:20]
C
It hasn't worked.
- [13:22]
A
It hasn't worked.
- [13:22]
C
We haven't found the thing. It will be a thing. We all know it'll be a thing.
- [13:28]
A
I agree with that.
- [13:29]
B
Well, we definitely don't. We definitely don't know it's going to be a thing. I mean, you believe it will. I kind of do too. But maybe it's the type of thing where it's only a thing if your society is so terrible that you need that.
- [13:43]
A
I will say, though, Adam, I mean, maybe AI strengthens the case. I'm not, by the way, this is just totally for conversation, but AI strengthens the case because I think we all know that X and meta and everything is going to be intolerable. AI slop run by non humans entirely. And you could have.
- [14:03]
B
Are you Going to get that next week. Slop on Noster Man. Yeah, I mean it's just there's so even whatever you find you have to have a wallet spun up to prove proof of identity. But I mean we all know that that can be gamed. I, I just don't, I don't actually see a way to not game systems like humans just do that. And to think that the AI aren't going to do that is kind of wishful thinking. But I don't think, I mean it's already. Go ahead.
- [14:27]
C
No, I was just going to say I don't think we need perfection. Right. What we do know is the current system is so bad, so horrible for humanity that pretty sure we can come up with a better one.
- [14:45]
B
Well, I might push back and say it's not bad for humanity, but yeah, you know, I mean we're, we're in the crypto space so we, we accept,
- [14:53]
A
so we accept that everything's 97 broken and we can push the ball 3%.
- [15:01]
B
It just might not be one of those ideas that works, not at this time. I mean it just doesn't, it doesn't work. Like obviously forecaster basically not shut down but you know, moved on. That was the best effort, the biggest effort and they basically turned into a wallet.
- [15:17]
C
Right.
- [15:18]
B
And pets.com did everything you need to know right.
- [15:20]
C
Until they got their timing right. Nothing, the bottom line is almost nothing is works yet. Right. But we're at the beginning of building these tools to make them work. Busy.
- [15:36]
E
So I just keen to kind of get your guys thoughts on this really. As you know, I kind of look at the markets a lot more from a kind of legacy book, but still more of a kind of technical level as well. I mean, do you guys think that probably for the. Not the first time, but there's more of a kind of case that people are kind of questioning the, the amount of time bitcoin's been around now. It's not this new shiny, super exciting asset that people are looking to rush into that are seeing this kind of future adoption that a lot more people, you know, in traditional circles especially kind of questioning its use case a little bit and it's mass adoption. I know this is definitely out of my wheelhouse, but a lot of conversations that I'm getting with people I'm speaking to at the moment are talking about things as far looking as the threat of quantum computing and stuff like that right now. Look, the market conditions simply don't support the risk bid for things like crypto at the moment. And it has been that way for a little while in my experience anyway. So I think bitcoin and crypto is fighting against a pretty strong current anyway. But I've been seeing a lot more of this coming out in research papers now. People kind of like looking at the use case for bitcoin, people looking at the length of time it's been around. People looking at disruption coming in from AI, looking towards the future with quantum computing and kind of you know that maybe the return to risk element is becoming a big problem for it.
- [16:55]
G
Sure.
- [16:56]
A
Anybody else feel free to jump in. If not we can move on to other topics. Yeah, I say this, listen, I think we have some actually very interesting topics here that we can discuss and I think one of them obviously that's the most interesting to me is the Kraken news. The Kraken is going to 247365 trading of tokenized stocks with perss. Like this is crazy right? So it's not only is it that 247365 tradable stocks by the way if I, I will just say and nothing against Kraken. I think it's amazing they're doing this but like if you're going to trade like Tesla Perss in off market hours, okay, good luck. But either way the fact you'll be able to now we're bringing 247365 to trading stocks. Those stocks are using blockchain rails and are tokenized and we're bringing the Bitmex created perps to legacy markets. So three headed monster there. Good, bad. What does this mean? What pressure does this put on legacy exchanges? This obviously at the same time that we got an announcement of stocks being traded on Coinbase 245 so not on weekends would love your guys takes Robert, you got to be paying attention to this as a legacy market guy.
- [18:16]
D
Yeah, I mean I think it's pretty dumb if, if that's what the market wants I guess like it's good but it kind of just goes to like the financial nihilism thing. We were talking about that yesterday with Kalshi and the surge and kind of prediction markets and all that. Like I understand the, the argument that the tech kind of acceleration bros. You know try to make for, for all that but I don't know. I, it's hard to see how it's not just like complete degeneracy. I mean I, I, you know if I could go long on, on financial nihilism and, and you know gambling and kind of degeneracy in that way. I would. But yeah, it's just, it's kind of sad and I think it's a reflection of, you know, where the average young man is too because you know, who, who trading. That's not going to be your average boomer.
- [19:15]
A
Yeah, that's my point about just getting wrecked. I mean, can you imagine the volatility and it's not actually tracked by the actual price of the stock elsewhere. And what happens when there's a reset on Monday when the real volume and actual traders come back?
- [19:28]
D
Exactly.
- [19:28]
A
Sunday night, Asian hours. Like I said, I love that they're doing it because it's obviously giving access to people who don't necessarily have it to these products. But just be very, very, very, very careful. I would say if you're going to actually be trading these things. Perps are wild. And I had Ian Weisberger, Dave's son, actually on my show this morning. They run coin routes. They basically are running derivatives and perps and very deep on what you can and can't do. And he actually told me that Kraken's still going to have to have T plus one settlement for these. They're not going to auto liquidate like normal perps because that's not legal in the United States. So you're still going to have T +1 margin calls on 24, 7, 365 tokenized stock perp. So it's going to be very difficult from a mechanics perspective to get this right initially at least it's pretty wild. I pinned an article, Robert, that I wrote above months ago and actually something I've been talking about probably for seven or eight months, people looked at me as crazy. But to the financial nihilism point you're making, I think that the death of the altcoin market has largely become happened because of the rise of prediction markets, certainly silver and such as well. But I think that you gambling on everything 24, 7, 365, if we're being intellectually honest, eliminated the need for 99% of the volume on all coins that people were just speculating on because they wanted to gamble 247365 and didn't have access to it. Add in the hot ball of money in metals to that and the fact, to your most important point is that when people start to speculate and gamble on everything, it's usually more of a signal of distrust in the system or despair at inflation and what's happening in their lives than anything else. I mean, Weimar Republic, who was the Height of gambling because people had to carry their cash to wheelbarrow one.
- [21:21]
D
And what's it mean for bitcoin too? The value proposition for bitcoin, does that kind of vanish? If you're a young zoomer, young kid working two jobs, paycheck to paycheck, you know, and you have, I don't know, $200 a month that you can speculate or save, you know, putting it into bitcoin where it might 2 or 3x, you know, versus putting that 200 into some parlay where you can 20x in an afternoon, I think that, you know, we got to have a serious conversation about now. Look, smart money might utilize bitcoin for the kind of store value prospect, but you know, how much new retail money is going to come into bitcoin, which is kind of, you know, where I focus. I don't see how production markets haven't dramatically reduced the bid for bitcoin from the kind of younger, you know, young men, retail kind of corner.
- [22:24]
A
Yeah, I wonder. I guess the natural question there is were they ever the buyer anyways, right? Or are they needed in this market? Because I think, you know, to some degree, I think those, I think they were the buyer in 2006, 16 and 17, before ICOs. And because you have to remember that back then bitcoin was the currency for trading. There were no stablecoin pairs. So anybody who was here in 16, 17, you bought Bitcoin, you moved it to Bittrex and then later Binance, whatever exchange, Poloniex you were on, and you had to trade from bitcoin to altcoins. Right? So I think those people, even the speculators, had to touch bitcoin back then. Once stablecoin became the unit of account for trading and speculating, you didn't need Bitcoin to be that. So I would argue that back then bitcoin started to become an asset that was more familiar to an investor than a speculator already. But I could be wrong. And so I think that the case for bitcoin is institutional money and people with actual portfolios that want to allocate a certain percentage unless the people trying to get ahead of their hyperinflating currency. But you know, I think it's a worthy conversation.
- [23:35]
B
Well, I mean.
- [23:37]
G
Sorry, go ahead.
- [23:38]
D
I just real quick. I think, you know, there is the potential for that to emerge. You know, if, if we really get kind of the degree of inflation that
- [23:47]
H
I think is this space was downloaded via spaces down.com visit to download your spaces today.
- [23:53]
D
Coming. Should we get this kind of AI deflationary shock, the amount of stimulus and money printing is going to be insane. Backstop, private credit backstop, you know, the, the U.S. treasury market, which is going to be probably at least 15% of GDP. The deficit in, in a truly kind of deflationary, you know, economic contraction, you're talking about at least a 15% of GDP deficit. So probably closer to 20, you know, the Fed will be backstopping that, they'll be backstopping private credit. There will be UBI or some kind of jobs program. Like the amount of money printing in that world, if AI works, the amount of deflation and therefore kind of the second order effect stimulus to counteract and deal with the kind of deflation. You know, you could see bitcoin emerge then, you know, but we just might be a couple of years early in that case.
- [24:52]
A
Somebody was jumping in.
- [24:54]
B
Yeah, I was just gonna say, I mean, I, I think your point on, on kind of the use, you know, when we saw use of the cryptos, you know, when we saw in the 21 bull, you know, you had to have eth to buy NFTs, right? And, and obviously during the meme coin cycle, you had to have soul, you know, to buy meme coins. We just, we, there's so many things against crypto right now. We just don't have anything like that right now. There's people just aren't really using it. There's no real need to use it. Right. When you're on polymark, even if you're on Polymarket or whatever, you're not really, you know, there's no native, you're not using crypto, you're using a stablecoin. So I, I just, yeah. There's a reason why we're at this, this fear index, right. We don't see it, but I, I do believe, I mean, I'm, you know, obviously big in the AI space and I, I do believe this is kind of the narrative that will kind of bring crypto back. It does feel like that to me, but it doesn't. That narrative isn't going to catch on Bitcoin. So bitcoin either has to become money again, which seems unlikely given, you know, the current state of, of bitcoin maxis or it's got to be a store value and it certainly hasn't shown that in the current market. So I'm kind of with Gary where this just might take a year or more to kind of hash out.
- [26:12]
A
Mati.
- [26:14]
H
Yeah, thanks. Great to see some of my favorite people on the Internet.
- [26:18]
D
Here,
- [26:21]
H
literally, I couldn't disagree more with what most of the panel is saying and they certainly couldn't disagree more with what the market is doing right now. We're in a unique paradigm shift or regime shift moment as far as markets are concerned with gold skyrocketing while the dollar is weakening and the stock index is just kind of holding steady. This is not normal market behavior. And it's certainly foretelling of more than even just a flight to safety, much more extreme minimization of risk. And it's interesting to see it happening during a time of tokenization. You know, Kraken doing their tokenized stocks is, is, is fascinating in the Nasdaq as well as Robin Hood, all kind of tokenizing stocks. The reason for this of course, is because it's more competitive, which obviously, you know, brokers have enjoyed a position of what happens if markets move over the weekend and they could basically set prices on the open. And you know, that's very good for market makers. And they're giving up that advantage not lightly, but because they have to remain competitive against, you know, cryptocurrencies and blockchain settled transactions. Why are the markets behaving like this? So in my mind there's a lot of uncertainty, in fact, unprecedented uncertainty. We saw the global world index of governments using the word uncertainty in their reports shooting to an all time high, five times that of the great financial crisis. Google trends for the word uncertainty. I've also spiked way above normal at unprecedented levels. As well as stock analysts and corporate leaders using the word uncertainty more than ever. And very likely that it has to do with ongoing geopolitical tensions, trade wars. Some people must be, at least some people must be trying to price in World War III at this point, along with Aliens and the Epstein files, which just basically go to show that people don't trust their leaders. Fed credibility has been seriously undermined by Jerome Powell who came out against the President and basically accused him of politicking against, against the Federal Reserve. And the Federal Reserve's credibility hinges on its independence of politics. And so by making it a political organization and dragging it into politics, they undermine the credibility. All the while the government debt, not just in the United States but across the entire planet is skyrocketing. Governments are notoriously bad with money. They're good at kicking the can down the road, but eventually you got to get to the end of the road. And so I don't think Ray Dalio was very far off when he said that we could be looking at a total collapse of all fiat currencies. I'm not trying to raise any alarm bells, but for the people questioning what's, what is bitcoin's narrative? I mean bitcoin's narrative hasn't changed. It's been the same since Satoshi wrote the white paper. It is the alternative, alternative to fiat debt based government issued currencies. And I believe that the market is getting it completely wrong over here and creating a generational opportunity for those who are interested, especially now that Wall street has all of their structured products and bridges built right into Bitcoin's heart. With that, I will drop the mic, Lou.
- [30:11]
C
Well, I will second everything that Mati said. People talk about the narrative, the what gives me my uber bullishness on it is all bitcoin has to do is exactly what it's done every day for the last 15, 16 years. This is what it's done, this is what it will continue to do. And as Mati just made a good case for, there is a global need from every person on the planet. Even if they only make $200 a week or whatever it is, their life would be better if they put $5 a week into bitcoin starting today. And you know, I don't think bitcoin has to come up. What, what is going to make it turn around? You know, I don't think anybody knows that, but I think, I feel with complete certainty more people are still every day joining the community. That doesn't mean the price goes up every day, week, month or year. But what it mean damn well means is every 10 years it goes up a bunch.
- [31:12]
B
One question for you guys and I'm, I'm with you but one question for you guys and I think the market is kind of feeling this, is that the gov. U.S. government's move to this kind of stable coin infrastructure which is going to, you know, require buying of, of U.S. debt. Do you feel like that's kind of, you kind of kicked bitcoin's can down the road, if you will, for another decade or something. And that's one of the reasons why people aren't wanting to hold it right now.
- [31:37]
H
Stable coins are pegged to the US dollar. So if, if currencies start to plummet and people are looking for alternatives, they're not going to go to stable coins, are they?
- [31:51]
B
Well, I mean what I'm thinking is the way that the market's perceiving it is that basically the U.S. this has given the U.S. the ability. What people are seeing now is with all the AIs and Stuff coming out and this kind of infrastructure layer of stablecoins is that the US Basically found a bigger global buyer which is basically everybody on earth to buy their debt. And so in that way basically kick the can down the road a little bit. I don't know how long, but kick down the can down the road a little bit where they're going to be able to keep printing, they're going to be able to keep raising, you know.
- [32:32]
C
But, but can't anybody now print a dollar?
- [32:37]
B
No, no. You have to. I mean in theory, no. So say, let's take Zuck, right? Zuck's going to create a stable coin, any bank, US State.
- [32:47]
C
If, if, if you want to get regulated by the United States then you have to do certain things, right? But outside, you know, it's a big world. Actually it is far, far, far, far, far bigger outside the US Than inside the U. S. So we're going to see tons of people who are going to be, you know, printing US Dollars all over the world and not giving a. About having us the U.S. government telling them what to do. And the U.S. government able to at, at a moment's notice. Right. Like they do with tether and circle, take your money.
- [33:22]
B
So you're thinking that people are going to print stable coins and people are going to actually use stable coins that aren't US Regulated stablecoins.
- [33:32]
C
I, I would far more like to have a stablecoin backed by bitcoin, a stablecoin backed by gold than I would a stable coin backed by the US Government.
- [33:41]
B
Let's stick to U. S. Stable coins as we're, as we're speaking of them, which is US Dollar peg stable coins, right? I mean, show me an example of one that isn't going to be regulated in the U.S. i mean I think
- [33:52]
C
it's pretty clear anyone who doesn't want to be regulated in the U.S. yeah,
- [33:55]
B
but, but who's not doing that? I mean everybody wants to.
- [33:58]
C
Anybody who. Look, look, if you tell me there
- [34:01]
B
is no market, show me an example today of one that's working.
- [34:05]
C
Nothing's working but tether, circle. We're at the very beginning of something. And if you're telling me that you think that's the way it's going to
- [34:13]
B
end, do you think that's only going to expand? They're only, we've already seen it. There's already movements. That's what, that's what matters. Just shown us everybody's going to move in that direction. Of course all banks are going to be US Based stables, right? So what you've done is you basically given every transaction globally can happen on US Rails US Dollars rather than whatever.
- [34:33]
C
Again, again, if you want to get regulated by the US government and then you've got to meet certain requirements that the US government sets. One of them is obviously that the US government can take whatever money they want at any time and there is going to be a large swap, a large part of the world who is not happy with that arrangement. Isn't that obvious to you? That a large part of the world does not want the United States government at their whim to be able to take their money? Do you agree with that?
- [35:07]
B
Currently? No, no, no, not currently.
- [35:09]
C
Okay. No. You think everybody is thrilled?
- [35:11]
B
Definitely not currently.
- [35:12]
C
Okay then.
- [35:13]
B
Not currently.
- [35:14]
A
No.
- [35:14]
B
I know.
- [35:14]
C
Let's open up a poly market bet about it.
- [35:19]
A
All right, sure.
- [35:20]
B
Figure it out. Figure out how to do that. I'm happy to take that bet. I, I think, I mean, look, this is what the market's telling us is that right now, show me the how bitcoin fits into this. This is why bitcoin is super bearish right now. We don't feel, I mean it could be wrong. The market may be wrong. But I'm saying right now people have this idea of, you know, US backed stablecoins. It's a big idea and it's given the people, given investors this idea that oh, the US government may be able to kick this can down the road for another, I don't even know, decade, 15 years.
- [35:53]
C
Okay.
- [35:54]
B
I'm just saying that's what I, I mean, if you disagree with that, you
- [35:58]
C
know, I personally try and minimize my mind share thinking about governments to two very simple beliefs. Belief number one, the government is not our friend. And belief number two, tomorrow it's going to be worse. And I'm here because in fact, it doesn't really matter.
- [36:10]
B
I agree with you, brother. I do agree with you. I do agree with you. And I, you know, I think all us in the, you know, crypto space realize that this is going to collapse at some point. Right. And you want to hold Bitcoin for that point. My feeling is though that just, it's been the, the, the stable coins gave the government this ability to kick it down the road quite a bit. And that's why, that's my thesis on why the, the price is still going down.
- [36:37]
H
We need to see the. Thanks. Stable coins are basically an extension of the tokenization of everything. So they're the tokenization of fiat currency. And your question is very interesting because what you're Basically saying is because stable coins like Tether and Circle are mandated to have reserves of U.S. treasuries in their, you know, and basically anytime anybody prints them, they need to buy U.S. treasuries. And if we're talking about a total tokenization of the dollar, you're saying there's basically going to be an onboarding into crypto which is underneath the surface, actually going to create demand for Treasuries. And certainly that cannot be discounted. However, it doesn't negate the picture that I've or my thesis that I've laid out, the idea that government debt is toxic and that it relies on credibility and the government now is undermining their own credibility at unprecedented rates. That would, in my mind be a much, is a much more powerful narrative than the onboarding into stablecoins. And especially those who are purchasing stable coins. I mean, any bank can, can print money, can print dollars. Any financially regulated institution, they loan, they loan money. They don't even need to have a reserve anymore. That was, that was completely discontinued in the COVID crisis. They don't even have to have a reserve anymore. They could just lend money to somebody, print it out of thin air, and therefore money is born even at a local bank. And I think that that's happening a lot more than anything that's happening to stable coins. At least people who are involved in stable coins and who own stable coins, I believe that they're a bit more financially savvy. And so the way that it's going to show up, if there is the, on the credibility erosion that I'm talking about, is in the yields on treasury bonds. And once the yields on treasury bonds start spiking to extreme levels and people are still not buying them, I don't think that people are going to say, okay, well, I gotta, I gotta get my move into stablecoins right now. If the dollar is tanking, right? And so that's the underlying metric. People realize the erosion of the currency, they're not going to be buying stable coins. And then actually, the dynamic that you're describing works in reverse because when people are out of stables, those stable coins have a, have a less reserve requirement. And if they don't trust the governments anymore, and believe me, they don't, they're going to dump some of those Treasuries. So it does go both ways.
- [39:46]
C
Robert.
- [39:48]
D
Yeah, so when it comes to demand for treasuries, I would agree that probably further out the curve there are credibility issues. And you have seen, you know, over the past, what Two and a half, three years. You have seen the curve steepen. But the plan here with stablecoins is to cut the federal funds rate because we all know, you know, the 10 year, the 20 year, the 30 year, they don't op, you know that yield is not based on what the Fed is doing. If anything, you know, if the Fed is overly easing, those rates might even go up. Which is exactly what we've seen since the Fed started to cut rates. But the short end, you know, the, the, the T bills, the one month, the three month, the six month, those just follow the Fed with a little bit of variation, you know, for, for what the Fed is going to do in the next couple months. But generally they just follow the Fed. So if you have a situation like the US government where interest is growing at 15% year over year in terms of the outlay, where you know, the average, if you take all the marketable debt, the average rate is 3.3 and there's nowhere on the yield curve where you can issue at 3.3, you have a problem. You know, right now it's about three and a half billion dollars per day. The government taxpayer is spending on interest, just on interest. So you have a problem. Well the way that you can kind of reconcile the fact that you can't really necessarily term out the debt, you know, an issue at the long end, the way you solve that is to cut the fed funds rate to I don't know, 1% and T bill yields will follow. Then you just issue all your debt and T bills, you finance the US government in the cash market which is very emerging market like thing to do. But you know, you can do it, it's dollar negative. So you know, when it comes to the dxy, I would expect, you know, depending on what Europe and other countries do, it's dollar negative, it's inflationary, all those things. But you know, it, it is one way to kind of force the interest expense to stop growing. Because you have to, once you start issuing at 3.3 and, and your average issuance is at 3.3, then the 1.2 trillion per year, three and a half billion per day, that, that just stops growing, right? It doesn't go down, it doesn't go down until you're able to bring that average of 3.3 lower. Well again we kind of know, you know, the 30 year is probably not going there anytime soon, 10 year neither. So you just, you know, cut the fed funds rate to I don't know, 1%, 1 1/2. You issue all Your debt there. You financially repress the tivo holders, but you need, you know, repressible balance sheet because, you know, money market funds. There's demand for the, the front end all the time. You look at the, the T bill auctions, the bid to cover is like three and a half. You know, there's huge demand at the, at the front end. But you know, is there going to be that much demand when you're financially repressing T bill holders, you know, and running negative real rates? Probably not. So it raises the question of like, well, how do we get new balance sheet to basically financially repress? Right. To, to force people, bondholders, T bill holders to take a loss in real purchasing power terms. Stable coins are kind of the option. Now the question becomes how much actual new balance sheet comes in during negative real rates. I don't think it's going to be a trillion or 2 trillion or 3 trillion. I think it's going to be probably 200 billion or 300 billion.
- [43:30]
A
Anyone, thoughts? Feel free to jump in. Darkseid, I know you requested to come up on stage. Oh, he just left. Later. Now I'm lost. Yeah. Anyone comment on Robert? It's an interesting conversation. If not, we can go in search of another topic. Let me take a look. Strategy now being the number one shorted stock globally is very interesting to me to be honest, when I see dark side adding a bit. Dark side, Dark side. You came back when you heard your noise from the, from the audience. He's connecting. So this is going great. Dark side, you there?
- [44:11]
G
Yeah, sorry about that man. I glitched out.
- [44:13]
A
It happens to the best of us.
- [44:15]
G
Great space. Crazy to hear all the doomer talk, man.
- [44:19]
C
Wild. Yeah.
- [44:21]
G
Look, I think that the point I would make is I agree with a lot of what's being said as far as the gambit on stablecoins, but you have to point out the obvious. That is, if we go ahead and force the dollar down the throat of the world, what does that do to 140 kind of shitty fiat currencies around the world. Do we hyper inflate away the overwhelming majority of the entire world? And what does that do? I mean, I can't envision a world in which Russia, China, kind of other global superpowers allow us to destabilize the entire world.
- [45:08]
A
I mean, isn't that what being the global reserve currency means?
- [45:13]
G
I don't think so.
- [45:13]
A
They don't have a choice. They don't really have a choice. I think that's. I mean if they had a choice, they would have replaced it. I'm not saying the dollar doesn't eventually die. Every global reserve currency eventually gets replaced. The question is if it's violently or slowly. But it's the brics talk and not using dollars for trade and selling off treasuries to buy gold. Those are narratives that have been happening. And that's a drop in the bucket, I would say against the United States dollar.
- [45:40]
G
I guess so. But again, you're talking about global political destabilization, right? That, that's the needle that's been thread, is that. Yes. While the dollar is the global reserve currency, nations around the world have been able to have their own currency. Their governments have had the ability to print money. Now you're going to yank that, you're going to yank that rug and expect that that's not going to cause massive global instability. And I think it does. I don't think that gambit works.
- [46:14]
A
I guess I'm lost. Like why, why, why would they, I must have missed it, just the meeting there. Like why would they not be able to print money? We have hundreds of governments that can.
- [46:24]
G
Yeah, but why would the, why would anybody use. Let's, let's just use the Egyptian pound? Why would anyone use the Egyptian pound if all of a sudden they had full access to tether, which they don't?
- [46:36]
A
I mean the IMF wrote about that, right? I mean that is a fear. The IMF said that it could basically. I don't think they said it would replace currencies in their initial report, but it was replacing the central banks of foreign governments.
- [46:47]
G
And then what are they going to do? I mean, does that gambit create, you know, 50100 North Koreas all over the globe that just cut off the Internet to save themselves? And I think that's the real fear that you go down, you go down a really scary road where global governments begin to have massive crackdowns on their own people.
- [47:13]
A
The basically the idea which has been long discussed that stable coins export hyper dollarization around the world and that, I mean I don't see why I would stop at foreign central banks, not at the Fed as well.
- [47:24]
G
By the way, I agree with you. What's the purpose of the Fed at that point? You might as well just retire all long term debt and just have the treasury issue issue debt directly to the stablecoin providers. I mean it's a massive gambit, right? Like I think.
- [47:43]
D
Well yeah, but dark one, one consequence of financing the government at the front end is the Fed. You know, should there be an inflationary you know, an increase in inflation that we won't be able to hike rates.
- [47:57]
G
No, so there won't be any rate to hike. The treasury should be issuing those bonds directly to the stablecoin provider. What's the purpose of paying the Fed interest? I mean you basically force the Fed into yield curve control because as you said Robert, if you go down this road, the long term bond just goes through the roof and you can't have that happen. So now you have the Fed basically in full blown yield curve control and let's just retire the 30 year, the 10 year, the 5 year and let's just finance everything in 90 days or less.
- [48:32]
D
Yeah, I, I, yeah, no, I, I, I don't disagree because then you know, the, there will be inflation, there will be probably another, you know, I don't, I don't think we're never going back to 3 or 4% CPI and you know, you get into a situation where okay, well we can't really hike rates to combat inflation. That's very dollar negative. That's what you see. Emerging markets get into where the, they, they've lost the ability to defend the currency. And you know that it's very, very negative for the currency.
- [49:04]
G
Right. Which leads to the death of fiat. I'm not sure who was saying that earlier, but I agree completely. I mean Fiat is, is on its dying days, right? And these are, you know, in the dying days of your currency, you, you try gambits, you try crazy concepts to maintain it.
- [49:23]
H
So it was, it was Ray Dalio who said that.
- [49:27]
G
No, I know radio, it was you, Matt. Marty. I'm sorry Maddie, my bad. But yeah, no, I, I don't, I don't see a, I don't really see a good way out here. I, I'm with Maddie on this. I, I, I think the stablecoin thing is a massive gambit. I think it fails, I think it leads to yield curve control and then the death of, the death of Fiat globally.
- [49:55]
A
Man, you came in hot with scared of the doomerism and we got even. Doomerism?
- [50:00]
G
Er, I was being a little sarcastic there, brother. Yeah, no, I know.
- [50:05]
A
It's always when we really get into the actual meat of the discussion on why Bitcoin matters and what is happening underneath the surface, it's impossible. Not for there to be, I think some doomerism. If you actually have spent time here so important to talk about, to continue. I think we've covered everything we wanted to. We're about five minutes from the end, so we're gonna be back in a couple days. Next, Crypto Town Hall. Everybody in the audience. Give everybody on stage a follow, at least a wave or a emoji or kiss, I don't know. And otherwise, we'll see you in a couple days.
- [50:39]
B
Thank you.
- [50:39]
A
Bye.