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- [00:01]
A
Bitcoin bled $235 billion in market cap last week and there's zero consensus in the industry on why the sell off happened. Michael Saylor saying that it was AI related. Jeff Dorman at ARCA saying that Michael Saylor is gaslighting us and Marcus Zealand from 10X Research saying it's all about inflation and neither of them are right. We're going to unpack that and everything else in the news today, of course, with Andrew and Tillman, but with special guest Bill Barheid from opera. Let's go.
- [00:31]
B
Let's do.
- [00:46]
A
What is up, everybody. Happy Tuesday. To those of you who celebrate Tuesdays, it's great to see none of you through the screen, but to know that you're here. I've got Bill Tillman and Andrew. Good morning, gentlemen.
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C
Good morning. Good morning.
- [00:59]
A
How's everybody doing?
- [01:00]
B
Hey there. Good to see you all.
- [01:01]
A
So, yeah, I want to start with the first story here because, Bill, I've got you and I want your opinion. I've talked to these guys a lot, obviously about Saylor and, and the, the sell off. But Sailor blamed AI for bitcoin crash. ARCA has one word for that nonsense. And then as I said, we have some research that says that the real problem is probably inflation and, and neither. So listen, there's a lot of. We'll call it FUD for now, around Sailor, around what he did, what he should do. The signal from the 32 bitcoin that was sold. I mean, how do you frame this whole thing?
- [01:38]
B
Well, there's a lot in there. So, so the, the 32 Bitcoin, I think he kind of had to do that. I think we talked about it the last time I was on. As soon as he started marketing to retail, the whole narrative shift and, and the legal requirements for what he needs to be able to do show, you know, disclose whatever changes significantly. Right. Because the narrative used to be, you know, if, if you're in retail, just buy bitcoin, like that's what he would say, like, don't buy my stock. Now of course he's out saying buy my stock. And, and not, not mstr, but, but stretch, which he basically uses then to buy bitcoin. So I think he had no choice via, you know, his kind of legal cohorts. But, but I don't think that's why bitcoin's been selling off, if that's the question. I think bitcoin's been range bound for several weeks and I think it's bottoming now. I think liquidity is coming back into the global system. I think maybe mid July to mid October we're going to start to see moves upward unless liquidity changes. Unless, you know, war expands. Which I think is probably the single biggest issue that would prevent a catalyst from moving us higher. Meaning if we get clarity and we don't move higher. I, I can only see that being some kind of war oriented thing. I, I, There is some truth to the fact that, that a lot of money is, is moving into AI stocks but that tends to be different money than was coming into crypto in the previous cycles anyway. There's a lot of money out there, okay. It's not all the same. So this idea that oh, it's only over here or it' here, it's only over here, it's just, it doesn't, that doesn't really work for me. So, so I think what's been, what's been holding crypto down for, for a while now is two things. One, I think there's a lot of truth to the narrative from, from Q3 of last year that as Bitcoin hit 125000 it was an IPO moment for the space where very, very long term holders took, took profit. And that's not unreasonable. If, if you're, you know, if it's newfound wealth and you want to sell 25 or something like that, that makes a lot of sense to me. And then the last thing is just the, the global liquidity narrative, right? I mean we never got to reset the interest rates the way Bessant wanted and there's a lot of reasons for that in the late stage debt cycle. And, and I think that they know or believe now that they're unlikely to get those interest rates down and so they're going to bite the bullet and start implementing something that looks like quantitative easing, yield curve control, whatever FUD narrative you want to give it. That basically avoids the reality that we're going to be buying our own debt, pumping money into the system and resetting expectation narrative probably closer to 4 to 5%.
- [04:31]
A
I do have a corollary to that though to ask. So I agree that liquidity is not all in the same buckets, right? There's different pools of capital. But we do have SpaceX IPO this week. OpenAI just announced their intention. Anthropic announced their intention. If all of these are going to be funded and traded as heavily as we think that is a shit ton of liquidity, no matter where it's coming from. And I would imagine it has to come from all buckets just to, just to keep the market afloat with the size.
- [05:00]
B
Well, it depends what you mean by liquidity in this case. Right. Because bringing a new stock to market in and of itself doesn't, even if it's worth a trillion dollars, doesn't increase liquidity. Not everyone is. Well, unless everyone is selling at the same time and, and everyone starts buying at the same time. I don't know if that's going to happen.
- [05:19]
A
But again, liquidity from everything else for the FOMO to buy those three.
- [05:24]
B
Well, that's what I was about to say. I, I don't, I'm not convinced that that's going to take money, more money out of crypto. Crypto is tiny compared to, you know, cme. Like CME is basically going to drive the floor on AI in the short term. Right. Meaning, meaning what is the, the put call ratio look like on, on Micron, on Nvidia, on, on certain other shares that basically act as the benchmarks for AI. That's what smart traders are going to look at to figure out where that, where that floor is. And you know, is, Is the play exhausted? I don't think it is. But you know, I don't, I don't follow it as closely as I used to. So, so I, I don't buy into the narrative that that's sucking liquidity. It's certainly sucking attention away from the broad public, but the attention's been gone from retail crypto for quite a while. And, and that's what makes me believe we're chopping around the bottom because we need retail for the price narrative, for the defy narrative, which is just booming. I've never seen so many exciting announcements happening at the same time with Neo banks and cards and you know, Morpho raising 175 million and Abra launching, you know, yield bearing tokens. I mean, it's awesome what's going on, but that's not a retail narrative. Right. So, so if you want retail, you, you, you know, you need to give them, them something. And I think that something is going to be money to spend very soon and, and we'll see. But I think there's a lot of different things happening in the markets at the same time and people like to conflate things to create a, a story that links everything together.
- [07:01]
A
Yeah. So Tobin and Andrew sticking to sort of the Saylor versus ARCA versus Inflation. I mean, just quick takes on what you think of what Saylor did. Obviously the 32 bitcoin sale. I think we all agree with Bill's narrative on that. But I guess maybe we can expand to the fact that he bought 1550 Bitcoin, added 100 million to his cash reserve. But in this one case, it was not increasing bitcoin per share. It's dilutive to microstrategy shareholders, which is where a lot of the criticism is coming from. If you zoom out, I think on the year, it's still up like 15 or something. But this week, obviously, you know, that was not a benefit to microstrategy or strategy shareholders.
- [07:41]
D
I think, you know, just like I couldn't have said it any of that better than Bill. I mean, obviously when the printer, when the printing press finally gets turned on, we're going to see a lot of their narrative shift. And I think there's going to be a domino effect of good news that comes down the pike. I think gas prices and, and the burden that that is on everybody on a daily basis, I think is a reminder to everybody that's hard to get ahead of. Until the prices come down, it's going to be difficult for the normal family to focus on anything else, in my opinion. Especially as travel, you know, picks up in the summer months. There's just, there's, there's people are, you know, there's bigger fish to fry, if you will, in, in most people's lives than the talk that we have about all these different macro. I think we're going to see relief when there's more money for people to spend. And I think that's coming soon. I think the AI narrative, the one thing that has floored me about the potential here is, you know, if, if public private partnerships are the way in which we choose to push a lot of that liquidity out to market, I could see this as being a major portion of how the money gets distributed. The economic boom that these centers cause in the towns, you know, if you take it at scale and then you ex, you know, extrapolate the, the race that we have, the narrative around, the race of AI and how much intensive build out is needed in order to keep up with China, you kind of have a recipe for an endless print. I mean, that, that Bill could get beyond comprehension big. And if you're trying to find the biggest vessel to inflate into AI is probably the one I would choose as well. And so I, I will say this, that the bigger AI gets and the bigger that this, you know, Web three of the future gets, which in, in a lot of cases is just going to be agent to agent transactions, Bitcoin and, and crypto are going to be at the center of that. And to Bill's point earlier, I mean we see that in Defy Growth and Total Value locked on a lot of these utility based layer ones that are coming out, for example. So it's, it's, it's a good time to be alive.
- [10:08]
B
Andrew.
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C
Yeah, to the point about Sailor, you know, I would simply say that the narratives are comical at times. I don't know if it's boredom inside of retail crypto, Twitter and they have nothing else to talk about, but until somebody comes along and, you know, does what he has done and continues to do unabated, by the way, okay, sell 32 bitcoin like that, the level of comedy that that is in terms of how small that that particular sale was and then the conflation associated with, okay, what can we assume out to levels and levels and levels and levels and levels from a 32 bitcoin sale got frankly crazy nuts inside of our space. So I look at Saylor as somebody that has figured out a way to do what it is that he does at such an incredible scale until somebody comes along and does it or does it better. You know, let's stop questioning the guy. You know, he has so many levers to pull and continues to pull those levers. And I don't, I don't care how many times Peter Schiff screams at Saylor as a reply guy, it's irrelevant. It doesn't matter. Beyond that, there's no stoppage to the lending that banks are doing with Saylor and Microstrategy that hasn't slowed down in any meaningful way. I don't expect it to until somebody comes along and does it better or does it meaningfully differently. So that there is an argument associated with Saylor, the idea that he's in trouble. The I, you know, I saw, you know, tweets that got enormous engagement associated with margin calls for Saylor like that, that, that is just poppycock stupidity.
- [12:13]
A
By the way, that was signal at 17,000 when he sold and bought back. And apparently he was going to be liquidated on the way down. So, you know, if you want a bottom signal that could be repeated, we had a small sale from Sailor which he immediately bought back the next week when everybody said it was over.
- [12:31]
C
Yeah, and so there's, there's absolutely no noise, very limited noise associated with sold 32 and then bought 1500 back at a lower price. Very, very limited commentary about that because he just makes everybody else look stupid for the past week and then of course, you know, just different parts of the media grab onto it. So until, yeah, until otherwise, until it becomes clear that somebody else has figured it out and doing it better, just stop, you know, stop creating narratives where they don't exist.
- [13:08]
A
Yeah. So like, you know, I've had the battle here kind of with, I guess with Jeff Dorman from, from arca for my own personal reasons. But you know, he's saying like any company can raise capital at 11.5%. Bullshit. Like no way. Right. First of all. But two, like they keep saying that either STRC, Bitcoin or MicroStrategy has to be sacrificed. And like I've asked this question and first of all, I have a checkered past with him. I will go out on a limb. I wrote about there, but I mean he's CEO of arca. I was very proud when I CIO avoided the Luna collapse. And then I got a letter from them when Luna was 24 saying that they'd done their risk management and they were doubling down on Luna at 24 and it was a dollar three hours after they sent the thing and blew up the entire. So maybe I take issue with people who have literally the worst risk management in history discussing other people's risk management. So I will put that out there that maybe I'm biased but nobody will answer for me is what happens if bitcoin just goes up from here?
- [14:07]
C
Yeah, his reply is absolutely epic. I've been doing the work on MicroStrategy and Saylor for five years, right?
- [14:15]
A
For three months.
- [14:17]
C
Do you realize the self own that that actually is five years and all the things that you thought may or may not go wrong haven't happened.
- [14:29]
A
But like Bill, like bitcoin just goes up. All the stress is gone. Right. I'm not saying it will, by the way, and I'm not saying that's their plan, but like the leverage reduced the M Navigator, sure.
- [14:39]
B
But no, no, no, no, no, I don't agree with that because if the price goes up the left they're going to start buying more because the banks are going to open up again because the banks are sheep. But he takes advantage of the sheep. So, so he's at 11. I think their balance sheet is about, I think it's about 11 levered right now. Now in, in bitcoin terms, that's nothing. And, and so the difference is the retail narrative of stretch. Right. So now I don't use equities for yield. If I did, I'd be buying stretch at 92. I, I mean that's that's a 20% return on something that should be in the S P 500. So not, not stretch, but, but MSTR, the underlying. So, so, I mean, that's a good deal, right? For, for a balance sheet that's 11 levered. And, and to explain what I just meant with the other comment, their ability to do converts is probably somewhat limited right now. Just given the, the state of bitcoin, I don't think it's the state of microstrategy. Okay. I think if Bitcoin hits 110,000 again, we're going to forget what we were talking about last week, because that's the nature of crypto social media. We have the memory of a net. So when the memory of a gnat starts to focus on Bitcoin at 110,000, he's going to be able to borrow all he wants. And my guess is he'll be more than 11% levered. But no one will be complaining because the prices are going down and we're all looking for somebody to blame when the price is going down because we don't know what else to do with ourselves. And, and, and so that's, you know, I, I think 11, you know, it can't depend. And your tweet on that was excellent. But I'll use the phrase to pay because I don't know how else to describe it, and you know, it gets below the target price of 100 at an 11 and a half percent yield. I'll take that deal.
- [16:32]
A
Yeah.
- [16:33]
B
If I'm using equities as a strategy to generate yield, I'll take that deal.
- [16:37]
A
I bought STRC at 92 bucks on Friday. Like, I was like, either strategy goes to zero or I get 8% and I earn the yield that I want anyways. Like, whatever yelled at me and said, you should have bought bitcoin, I'm like, I did that too. So shut the up.
- [16:52]
B
There's some defi protocols that we use for USDAF that actually capture some of that, some of that yield. And, and you know, they basically depeg temporarily as well. And, and that was a great buy for us. So, so again, it's, Yeah, I don't know.
- [17:10]
C
So again, DPEG is a crypto term. No, no, no, I, I, no, I, I, I'm, I'm agreeing with you, Bill, but like, DPEG has nothing to do with strc. It's a preferred security. Like, what are we, what are we talking about? This? Yeah, yeah. This is the stupidity of crypto Twitter. And I literally mean that the stupidity of crypto, oftentimes they don't know what they're talking about, but they talk about it with conviction.
- [17:38]
A
Right?
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B
Sure. Now wait a minute, let me steel man this for a second. Right. So, because I have good friends that are on the other side of this, right. Like, and some of them, you know,
- [17:45]
C
steel man or straw man, which one are you picking?
- [17:47]
B
Well, I'm gonna try to basically. Well, I won't do a good job of representing their side because they're, they're just wrong. So it's very hard to make an argument when you know the other side is completely, completely wrong. But you know, their, their perspective is, is that he's created a house of cards which has to collapse on itself. Okay, and, and, and that is mathematically incorrect, right? It's just absolutely incorrect. And these are smart traders that I know, I mean, you know, and, and like I said, you've had them on so that you know who I'm talking about. And, and I don't, I don't know why they refuse to dig in on the math on this because it took me 10 minutes to figure out that his balance sheet is like 12 maybe, tops. 12, I think it's closer to 10 levered, which again in, in, you know, prime brokerage world is nothing. So, so I don't, I don't really get it. But that's the, the perspective of, I'm not going to call them haters because I do think they're generally convinced that, that he could bring the whole house down. And I, it just, it's just wrong.
- [18:51]
D
I think he's created unfortunately a very short fuse in, by paying a dividend monthly. And now I think you got approved now twice a month everyone's counting the reserve pool against the dividends that need to be paid. And when it gets to a level that's concerning and you know, concerning being the, the, you know, subjective word here, people start to freak out. I think that, you know, I saw most of the, the backlash when it got down to four months of dividend payouts. You know, he could solve that problem very easily by just having a raise that he doesn't spend on bitcoin and segregate it for dividend payouts. And then none of this. You know, no one can really cast any blame on him at that point because they can see the Runway that the plane has to land on. It's just a fear driven mechanism based upon the fact that they're unsophistic compared to what he is and he's paving New way. And, and I completely agree. The fact that he's, you know, 10% leverage, you know, that's just nothing. I mean he, he literally has 40 to go just to get the industry standard. And so the sky.
- [20:04]
B
I think, Yeah, I think the second half of that argument and, and I'm just trying to, I'm trying to think it through from their perspective is, is okay, yes, he's 11% levered, but if he has to start selling to meet those liquidity requirements you're talking about, then that puts more downward pressure on the price, which creates a spiral. That's true to a point, but it also presupposes that there's. That he's the only one interested in bitcoin on the planet.
- [20:31]
A
Yeah.
- [20:32]
B
Which is obviously so, so sorry, I don't, I should tell you,
- [20:44]
A
Set a precedent here by calling himself Mick Re. Retard like three months ago. So now we, we say retarded.
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B
Who said that?
- [20:50]
A
Who said that himself?
- [20:52]
C
Mike McGlone. Yeah,
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A
people are calling him MC.
- [21:02]
C
Yeah. So listen, all those guys that are, you know, quote unquote, done the work on MicroStrategy, they're just, they're just jonesing to be the neck. The Michael Berry of, of, of, of crypto. Right. They want to be right. You know, it'd be legendary if they're right and they'd be known as the guy that called microstrategies blow up really, really early. And I was right. That's really what's behind it all. Again, it would take, I have no idea what it would take for a blow up to actually happen.
- [21:36]
B
The thing that people don't understand, I think, I think the thing that people don't understand about Burry's perspective is he's got this kind of Nicholas Talib perspective on. Sure. If you're going to make micro bets on things blowing up, relatively speaking, you don't have to be right all the time. Yeah, sure. I mean his funds. Yeah, Talib's funds are killing it because they don't have to be right except for 1% of the time and it doubles the funds. So if you're just betting on bitcoin to blow up, then that's a stupid myopic view of how you should invest.
- [22:13]
A
Yeah, I was going to say, here's the one. I keep saying it, but I think that what people are not articulating isn't actually the fear that he's going to blow up. I think the underlying fear is that if the machine stops for a while, he can't Buy the bigger fear is what you said before is the idea that he's the only buyer in the market and what if it stops? I think that's the reality fear that is not being articulated.
- [22:36]
B
I, I have friends who believe that he is generally the reason, the only reason that bitcoin is up and to the right. And I'm just like, hey, look, he's not buying those ETFs. He wasn't the one perpetuating Warren's attacks on bitcoin. That was holding the price down that caused it to double when, when Trump was elected. And so, you know, again, it's this kind of myopic, you know, easy social media headline view of what's really going on as opposed to digging in. It's not hard to dig in. You just have to do the work.
- [23:07]
C
Yeah. The ETFs for all intents and purposes have a much, much, much bigger role in the price of Bitcoin than anything else. And you've seen that in the beginning of the year, February, March, you saw three plus billion go in and April, May, up to now you've seen more than 3 billion go out. And so what is the price? What did the price do then? A little bit up. And when the price do then significantly down, it's, it's, they're, they're tethered together. Tether. They're tethered together.
- [23:41]
D
Yeah.
- [23:42]
B
There's another part to that though, where, where the financial engineering narrative is, is one that we don't like. We in, in, in, hey, we're in this, we're maxis. We're in this because, right. You know, these new products, whether it's, you know, grayscale five years ago or you know, you know, now ETFs, they lend themselves beautifully to myriad financial engineering products that do affect the price. But we don't really like to talk about those things much because they don't really fit our, our narrative of you should just, you should buy bitcoin and hold because the government's going to print money forever. And that's not, that has nothing to do with the financial engineering narrative. That's sure, that's often driving a lot of the liquidity in these markets. Just like it did when, you know, Genesis and grayscale had their perpetual motion machine a few years ago, which blew up. Right. So, yeah, so, so, so that, you know, we have to be fair and say like that is a big part of, of what's driving market interest in the ETF products.
- [24:43]
C
Yeah, I would say that BlackRock's ETF plus their options is what's meaningfully driving the market. Like Exactly. That's why I, yeah, I bet options have become an absolute behem. Very, very few people in crypto retail Twitter talk about very few.
- [25:02]
B
They don't understand it.
- [25:03]
C
Right, exactly. Thus your point about you know, retard and my point about them, them not having a, a grasp of what's going on so well.
- [25:13]
D
I think it's doing bitcoin is doing exactly what bitcoin is designed to do and what it's done every other cycle. It's had volatility and each cycle it's less and less volatile because the asset is more and more mature. There's more liquidity involved and we've seen that exact same thing now the driver of the cycle has completely changed to Yalls point. I think the driver is now Wall street driven which is, you know, it's, it's a lot different than a four year cycle. It's almost selling may going way type mentality and you're, you know, bitcoin's going to be right there with everything else in that basket unfortunately. And we've seen I think 3 billion plus of outflows in the ETF side of things in the last month. So it's obvious what's driving the against
- [26:00]
A
a net 50 something in inflows. Right. And this is the same, it's the same problem that humans have with the recent bias and panic. Because Michael Saylor diluted stock on MicroStrategy for one week, it's over. Or because we have outflows for a month, it's over. But you zoom out like anyone else. I mean here you're kind of talking about the dampened volatility bitcoin bear market correction drawdowns. Of course this is easy to say before we're convinced that the bear market bottom is in. But I think we all know that to your point, the upside and downside of these cycles, if we believe the cycles continue, will continue to be less. We don't expect 17x upside on one move in Bitcoin over a year anymore. Maybe we get it, I have no idea. But you also can't really make the case for 85% drawdown being normal. Right?
- [26:55]
C
Yeah. If you begin to connect sort of traditional financial market data to bitcoin, which we probably should do at this point given the fact that it's interwoven into the likes of ETFs, BlackRock and Options and all those things. Think about broader markets over the past three to five Years, right? So everybody on TV wants to talk about the next recession, the next downturn. This is the catalyst. This is going to happen. And yet the S and P is effectively up about 20% year over year for the last five years. And we go from we're at 4,000 and all these bad things are going to happen. The next thing you look up, we're at 7,500 and every time there's a dip, at Most it's a 5% dip. But everybody just shovels money into whatever has dipped. So if we get 23 to 27% upside annualized over the next three to five years on Bitcoin, everybody that has been in bitcoin up until this point will hate it. They will hate it. But people that don't hate it and just decide to sit in it are gonna make out huge, right? That's a plus 100 return.
- [28:11]
B
Like, you know, the volatility is just common sense, right? So we went from a world where, you know, when bitcoin was worth a billion dollars, you had bitmex perps that you could buy up to 100x that would move the market 40% a week because, you know, you would basically wind the rubber band up so tight on what was, was obviously a very small asset class. I've had dinner with family offices that are holding more than the entire market was worth back in those days, right? So, so obviously those oscillators would unwind, they would cause, you know, price drop. It would get to the point where, you know, they were too far unwound the other way, and they would rebound again. And that was offset by the fact that there was just growing demand. And, and that oscillator of, you know, 100x leverage would become less and less important as the demand got higher to do, to make the market cap higher, right? So basically you, you end up like this as you're, as you're going up. And, but when you get to a trillion dollars, those oscillators can have the same impact, right, on the entire asset class. It's not possible anymore. And what does that mean in English? It means lower volatility. And, and, and so it's just common sense, right? If the, if it, look, if for some reason, you know, it breaks and it does go to a billion again, you know, so, so, so be it. But it can only happen because you've got 50 million people who stop believing at the same time, basically.
- [29:55]
D
Well, I just think you, you just beautifully explained to me the engineering beauty of bitcoin itself because that rubber band is the strongest rubber band man's ever created in terms of managing volatility. And that is the intrin value is then that's why people who understand the, the asset of volatility realize that to your point, I mean, to be able to play an asset up at a 45 degree angle with inflation and for it to be able to provide you tremendous range in that volatility, I mean that's, that's a dream come true. Especially when you can put as many dollars into that asset as you can possibly imagine with, without incremental overhead expansion costs, without any burden of ownership, without any cost to carry. I mean, it's just, it's a tremendous vehicle. Unbelievable.
- [30:53]
A
Bill, anything else on your mind before I let you go? I mean, we kind of talked about Saylor in the general, but I mean, you guys have been building out incredible things. I loved your point about Defi exploding because the public perception has been that Defi is failing. So retail is getting washed by Defi, but institutions are adopting it at a historic rate. It's kind of a really interesting kind of bipolarity there, maybe because a lot
- [31:16]
B
of it's happening outside the U.S. i'm not sure. But my Twitter feed is just ballooned with all kinds of daily announcements on card products and Neo banks and new yield products and new vaults. You know, so I'm, I'm in Dallas for the yearly RIA crypto event. It's the sixth year I'm doing it, I think, or fifth year or something. And, and most of my talk today is going to be about Defi and, and it went from what's Bitcoin and why should I care five years ago to, you know, literally talking to wealth managers about, about Defi now and how Abra can, can basically help them, you know, navigate the space. It's, it's remarkable and, and it's real. I mean, these are amazing product innovations that I'm just seeing non stop. And obviously the morpho announcement is probably the biggest one of, of the day, raising 175 million, which is, which is, you know, a function of the, the product uptake they've had. I think they're managing 11 billion or 12 billion in collateral now, and that's at depressed prices. Right? So, so, you know, I wouldn't be surprised if they're at 20 billion by the end of the year just on price increases. Right? So, so, so, you know, in that regard, it's, it's, it's, it's very exciting
- [32:31]
D
to me how much of the conversation is centered around RWA's and, and DeFi and the expansion into that.
- [32:39]
B
Yeah, a lot of interest in, in tokenization right now is, is, is, is like that's part and parcel to the defi narrative. Meaning it's, it's not just borrowing against bitcoin anymore. It's, you know, I, I, I want to have tokenized equities, I want to have tokenized money market funds. I think the, the banks, you know, want to compete with each other. And, and so I think you're going to see a lot of tokenized money market funds make their way into RIAs. And that's going to be the beginning of all of these spaces. Converging, meaning banking, wealth management, private clients, institutional primes. They're all going to look like each other in five years because once everything is tokenized and everything's defi based, what's the difference? Right? And people are starting to get that. And this whole tokenization narrative is again largely blackrock driven, but kudos to them for getting it is definitely a topic of interest here. I would say defi and tokenization are the two big flavors of the month right now.
- [33:44]
A
Yeah, I definitely think that tokenization, RWA are definitely the biggest flavor of the month. And the people who get it know that that's a defi story. And the people who don't are soon to know that that's a defi story. Everybody talks about tokenizing it faster and cheaper and obviously as plumbing, they don't realize that defi is what's going to open the door to actually being able
- [34:06]
B
to put those things to work.
- [34:08]
A
Right.
- [34:08]
B
I mean, that's right. The most important tokenized real world asset right now is bitcoin. And wrapped bitcoin drives defi. And so it's a pain in the ass to deal with, but it showed us that, okay, these are the nuances and the complexities of dealing with wrapped anything, whether it's an equity or bitcoin or real estate or fund, it's all complex and we all get that now.
- [34:37]
A
I think Circle announced their own wrapped bitcoin today or yesterday, didn't they just kind of in passing in the news.
- [34:43]
B
I didn't pull it up, but there's like 10 of them now. And, and when, when Bitgo kind of got out of the space, it really opened the door. Coinbase has been trying to corner that market. Very unhappy with how they've done it. It's another show, but, but luckily there's a lot of competition now, or fortunately there's A lot of competition.
- [35:01]
A
Coinbase and Circle are partners, but Circle launching a competitive product, they're not partners.
- [35:06]
B
They did a deal that Circle would gladly unwind if they could. I mean, they have to give, like, what, 40% of their revenue. I wouldn't call that a partnership. I would, you know, but. Doesn't matter.
- [35:18]
A
Well, what'd you call it, Bill?
- [35:19]
C
I'm just kidding. Extortion.
- [35:25]
B
Sorry.
- [35:27]
A
It was willing extortion until then.
- [35:29]
B
Exactly.
- [35:32]
A
You can't be mad at somebody for striking a good deal.
- [35:35]
B
I'm from New York. I mean, you know, it's. Rico, Pick up this bag, and it better be out front, and we're gonna.
- [35:47]
A
You know, nobody wants fish wrapped in newspaper delivered to their door, right?
- [35:52]
C
So.
- [35:53]
A
All right, Bill, we always appreciate having you, man. I know totally where you are, and. And you got. Got other things to do. Everybody give Bill a follow. Got it. As always, man, and it's been great. Thank you so much.
- [36:05]
B
All right, Good to see you guys.
- [36:08]
A
All right, I want to talk to you two guys about bottom ticking the out of bitcoin. I woke up, I was like, oh, we bought under 60, right?
- [36:21]
C
Yeah. 59, 111.
- [36:25]
A
Yeah. Honestly, I'm kind of mad because I feel like if I had done manually, I would have gotten, like, 5970.
- [36:32]
C
Yeah, yeah. It's. You know, all the talk about tokenization, all the talk about defi. You know, at some point, you know, those buzzwords are great, but the reality is it just leads to 24. 7 trading. And if. If you don't. If you're not using tools like this, that do this, that. That. That's impossible. It's. It's literally impossible to do on your own. That. I mean, the narratives on Friday associated with bitcoin price. Nobody wanted to buy it at 59. Like, everybody and their. Their brother thought it was going down further. Everybody, literally the. The. The most ardent believers who had been in this space for a decade, it's going. It's going down further. And so the ability to, you know, algorithmically automated pull off a trade like that is just. I mean, it's. It's incredible. Well, absolutely incredible.
- [37:34]
D
Bitcoin has enough upside attached to it that you can de. Risk it and still be really happy. And so the de Risking is. Is the part that people really mess up most of the time. It's like when price moves asymmetrically one way or another, that creates. That volatility, creates opportunity. And it was just like what Bill was saying, the channeling and the. And the Breadth and the width of that volatility is how you harness energy and how you make trades, like the blue arrow at the very bottom of that giant red candle. And then you took a little profits at the purple arrow at the top of that green candle. And so, you know, what is that? Well, that's just being available when those opportunities present themselves and having a plan in place that can execute without you sitting in front of your computer. And that's what we do very well at Arch Public, is we can, we can put these recipes together, if you will, for whatever you want. Your will will be represented in the market. And when the conditions meet, your will, then you will take trades. So it's something that if you haven't experienced before, it's. It's exceptionally empowering and makes you really look at the market very differently. That's what the feedback over the last week has been in particular with. You know, we've had a kind of an influx of new customers and the common thread in their feedback has been, boy, I thought we were going higher when we were in the 80s and I was ready to load the boat. And I'm so glad that I wasn't able to because I, I was prudent about my. And measured about my approach because of the software. And so that's the intention is, is to not let the conditions of the market drive you into an emotional state that then leads you into a decision. Those decisions most of the time are bad ones, and if they're not, they can even be worse because there's an old age, you know, adage that my dad used to tell me and my granddad used to tell me, is that the worst trade is a trade that you make money on. That's a bad trade, because then you convince yourself that bad trades will make you money and you lose a lot of money going forward. So you got to have a strategy and you got to deploy it without emotion.
- [39:55]
C
Yeah. There is a, you know, the best way to say it about what we're doing at Arch Public right now is now imagine those types of trades on equities. Right. So we're in a position. Yeah, yeah, we're in a position where we're going to release some new products that innovate in the space of equity. So whether it's Tesla or Nvidia or MicroStrategy itself. Right. The ability to do what you just saw in those charts with equities is, is coming to Arch Public. And again, the scale and broadening, you know, both depth and breadth of what we do is about to move meaningfully up and to the right. And we're doing this in a lot of ways because our customers have been asking for it. Can we do this in other areas? We say, yeah, yeah, let's make it happen. And it's the right time too, because customers are hearing about agentic trading in other spaces, which is really just a version of hey, here's a sandbox and if you want to build your own Python, weird stuff, go ahead and do that. And nobody knows how to do that. So we give them tools tools and then walk them through with our customer service division and put them in a place where they can benefit from all this innovation, but then at the same time broadening into additional markets as those markets are on the cusp of going 24 7. Like Scott, you put out a tweet either today or earlier. Like, okay, imagine 24 7, 247 is coming to all of this stuff. And if you aren't comfortable with having tools do this for you, whether there's volume or not, overnight or on weekends, at some point there will be, at some point there will be movements. At some point there will be these opportunities and you have to be able to use tools to take advantage of them. And so we're preparing people, we're giving people the understanding and the opportunity to use tools the way that they want to use them to get the outcomes that they want. And so yeah, we're moving as fast as we can into other markets.
- [42:16]
A
I giggle because you said, you know, you have to have tools to do this for you. And in my era, we used to call people tools. And then it, I extrapolate that to everybody at Arch Public's a tool.
- [42:30]
C
The way the way your mind works is something to behold.
- [42:34]
A
Have a bunch of tools tools handling this for you guys.
- [42:40]
B
Yeah, it's.
- [42:42]
C
Listen, being on the edge of, of innovation is not easy. It's difficult. You know, all, all credit to Tillman for the creation of these tools and the, the uptake of them in the pace and speed that it's actually happened. You know, we're above 25,000 users at this point. Our equities work will, will really explode. That to be fair, it that particular ocean of users and need is, you know, immeasurably larger than the pond that is crypto that, that we've been doing things in. So yeah, the, the scale is going to grow and again two years from now, this type of stuff is going to be ubiquitous everywhere. You know, we, we talk to a lot of firms, a lot of exchanges, a lot of brokerages, and they want this available for their customers, they really do. Because their customers want it and need it.
- [43:42]
D
Well, I mean if you just ask yourself, start the journey with a simple question. Everyone talks about Bitcoin as having this feature called volatility and they talk about yield farming and yield harvesting and all of these things. Ask yourself, what are you doing to take advantage? Are you deploying a strategy that takes advantage of the volatility of Bitcoin? And the only way to do that is to respond when the volatility takes place. And if you're not a professional trader and don't sit in front of your computer all day waiting for those events to take place, systematically engineering software to take advantage of them for you when you're not at the computer is going to be more and more important to Andrew's point going forward. When you have real world assets being traded 24,7 across DeFi markets, Central crypto exchanges and your connected brokerage of choice on the traditional side, that's a lot to manage. And technology is going to stand in the gap and really help you manage it and help you build a prudent strategy that then you can deploy and then oversee and it can be completely at your will and be user driven. So that's what we're kind of at the forefront of.
- [44:59]
C
Well, and the current movement is that there are a couple of brokerages that want to teach you agentic trading, but it's only on their platform. It's not platform agnostic. Right. So we're on a journey to be completely platform agnostic. We work a bunch of different crypto exchanges, some traditional changes, Robinhood and the like, and some more that are that, that we've got coming. There's real value in that, extreme value in that versus an individual exchange, like public, that says we've got some agentic tools now that you can use. Well, you know, stuff that is proprietary. Let's call it is not great, not awesome. You want something, something that's agnostic as it relates to the platforms that it, that it deals with. And that's what we do.
- [45:52]
A
Yeah, perfect. And there it is. Archpublic.com you guys can go check it out yourselves. I can't wait for equities. I need to get the tax loss harvesting, firing. Yeah, yeah, yeah, I gotta do that yesterday.
- [46:07]
C
Yeah, it's a, you know, we're gonna
- [46:09]
A
go right back up to 80 and I'll be like,
- [46:14]
C
we?
- [46:15]
D
That means we're going 50 guys.
- [46:18]
C
It is, you know, again, a Testament to Tillman and, and all of our dev guys, like the, the amount of product that we put out, like, we haven't even really talked on this, you know, podcast about our tax loss harvesting tool. That. That's an extraordinary tool that again, you know, meaningfully reduces slippage. Does the tax loss harvesting for you. Again, you've got to deal with your accountant and talk about your cost basis and all that stuff. That's super important. But then the actual execution of those trades are done algorithmically and agentically in a way that is again, way, way ahead of where we are as opposed to, well, I bought it at 82 and now it's at 63. I think I should to tax loss harvest. Click. Like, those thoughts are very, very difficult to walk through on your own and then take action on your own. Having tools that do it, that show you what it's going to look like before you do it. It's invaluable, right? It's invaluable. That's just another thing that we've released.
- [47:29]
A
You know, the tools that are going to show us what it looks like before we do it.
- [47:32]
C
Yeah, yeah, for sure, for sure. I mean, Josh is a principal tool. I watch the show.
- [47:37]
A
Remember when the calls used to be to like, you and Tillman be on the show and be like, if you call customer service,
- [47:46]
D
there's better people than us today. More people than us that are in.
- [47:51]
A
Yeah, we all know our strengths. All right, guys.
- [47:55]
B
Perfect.
- [47:56]
A
Public dot com. Yeah, I can't wait for equities and to tax loss harvesting, but the execution is just, just outstanding. I mean, just peeking over and seeing an alert go off that you bought Bitcoin under 60,000 is just absurd.
- [48:12]
C
100. Yeah.
- [48:13]
A
Any guys can do it for free. So stop. That's all we got for you. See you guys next Tuesday. Thank you, guys. Bye.
- [48:22]
B
That's dope. Let's do.