← The Wolf Of All Streets
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- [00:02]
A
Bitcoin has crashed below 62,000American dollars for the first time since February as ETFs absolutely bleed out on a historic heater in the wrong direction. Now, if we want to talk about ETF flows, obviously we bring on Matt Hogan. But if we also want to talk about the prospect of bitcoin bottoming and stop being so damn depressed, we also bring on Matt Hogan. We're going to have a great conversation today. Let's go.
- [00:28]
B
Let.
- [00:43]
A
Good morning everybody and welcome to the Hellscape that is the crypto market. This is a modern day Pompeii. All we need is Michael Sailor and Peter Schiff running through the rubble and we would have the perfect background. Good morning, Matt.
- [00:58]
B
Good morning. Good to be here, Scott. Feels like that picture. It definitely does.
- [01:03]
A
We need the smoke to be moving. I'm going to be honest, I don't want to be too hypercritical, but I think it would look much more like I was actually in the Hellscape if that happened. Listen, as I said, you and I have a long history, I think, of optimism when things are going wrong. So probably the perfect conversation for today. I mean, maybe just broad strokes. Obviously, you know, we dropped points below 62 earlier today. Still a little bit higher than that February low. But you know, I see a lot of bottoming signals. I kind of made a full case for it. But I assume that you believe we could be at least approaching something like a bottom in the not too distant future.
- [01:41]
B
Yeah, I think that's right. I mean, I thought your case for it was good. If you've been around crypto for a while, this feeling feels very familiar. This feels a lot to me like early 2019 era crypto winter where you sort of have this period where you go sideways and then a little period down. People get angry, people rage, quit fear and greed spikes towards zero. It's not comforting to say that this feels familiar and maybe that's a little bit too glib. But it is worth noting that effectively all of the negative news that I can imagine is already well known in the market. Microstrategy is well known in the market. The Clarity act is well known in the market. The substitution effect is well known in the market. So I do think we're in the process of bottoming. Doesn't mean we pinpoint here and go back higher. I think it's totally possible we trade into the 50s. But what I was telling some folks at a advisor conference I was at yesterday is this an interesting moment to sort of twap into bitcoin and your high conviction bets and know that in a year from now you'll be happy. And if in a month from now you might be wishing you had waited, but in a year from now, I think you'll be pretty happy.
- [02:57]
A
Yeah. I also am aware that in a month from now you might be pissed off that you didn't buy now. Right. So I can't tell the future. So I think either. It's like I bought bitcoin today. I bought bitcoin very publicly at 70. Pretty happy with both of those. I'm really happy buying Bitcoin not at 125.
- [03:12]
B
Again, that, that's, that's exactly what I mean. I, I was thinking back to that 2018, 2019 bear market and you could have bought Bitcoin at 5,000 or you could have bought it at 3, 500. Was it better to buy it at 3,500? Of course. But were you happy that you bought it at 5,000 when it raced up into the 60s? Yes, you were. And I think it's that sort of situation. Look, the institutional bid, I know we'll talk about ETF flows, but the institutional bid is still coming into the market over time. You're still seeing the large wirehouse platforms open up, we're still seeing institutional adoption coming. That's still going to put a bit into crypto over the long term. So I think you'll be happy in the long term. But of course, bottoms are painful and uncomfortable and awkward. We're transitioning from a momentum asset to a contrarian asset. That's a brutal transition, but that's where we are.
- [04:08]
A
I, I think, okay, so I think people have a recency bias when we talk about how bad it is. So I, it's bad. I'm not gonna, I think also we've matured, so it doesn't feel as bad if you've been here before. So I think that's an element of it. But it's not as bad as like FTX and those things collapsing. When we really felt like we had an existential crisis and everything might go to zero. Even the worst case scenarios now that you kind of alluded to, like, I don't think Saylor's going to blow up. But even if Saylor blew up, I think everybody realizes bitcoin would go on and eventually go up after that was flushed out of the market.
- [04:42]
B
Right.
- [04:43]
A
So we don't have the existential going to zero, our industry will never exist in the United States again feeling that we had in the past. I think Maybe the one thing that's different this time is the FOMO of everything else. You sat in Bitcoin while Nvidia and Sandisk and all of these things, you know, pulled old school altcoin type moves.
- [05:07]
B
I think that's exactly it. If you hadn't had gold ripping, if you hadn't had Micron becoming a trillion dollar company, you know, investing in AI has been like shooting fish in a barrel or the queue's up 40% over the last year. I do think that is what makes this feel particularly bad. The thing other people point to is that there's no future shelling point to like hope for in the future in 2022. Maybe. We were hoping for an ETF down the road, but actually at the depths of the bear, there was no real reason to be that optimistic about it. So I think you're exactly right. I think it's the substitution bias, it's this envy. But bitcoin's still going to be fine. The US is still printing more debt. The world is still getting more digital. Young people are still getting older. I think people will rotate into Bitcoin over time. There are even these small signs of green shoots in the market with interesting new protocols that are doing well. Hyper liquid and near. I know off today on Arthur Hayes dumping out of the market, but generally speaking, showing that there is future life in crypto. Look, I think this is a classic crypto winter and crypto winners are painful and they feel very dark at the end. But as long as nothing fundamental has changed about the crypto market, and I think nothing fundamental has changed except for the better they end and you get into spring and things will look, look good down the road.
- [06:40]
A
So, yeah, there's the tweet from Hayes that you mentioned. He sold hype and he sold near. I love this because three weeks ago he was on the show on a Wednesday and he was pumping hype and I was like, man, you know, I've been looking at it for a long time, but I feel if I buy it, it's going to be the top. He's like, you could buy it right now. It was in the 30s, so I missed that 2x and I kind of alluded to him, I'll be your exit liquidity. So, yeah, I was early, but I'm glad to see that now he's capitulated because I feel better. I don't know if you saw this, but Charles Hoskins also says he's taking a break. I'm not mocking either of these people by the way. But this is the classic, like, yeah, if you're taking a beating sometimes just go away for a little while.
- [07:18]
B
Yeah, yeah, I guess that's, I, I guess that's. I guess that's right. I, I think he may be wrong on hyper liquid specifically. I do think an element of what's happening here, a small degree, is that people are rotating out of the crypto majors. Some of that money is going into AI, but some is chasing a new crypto specific trade. And that the new trades that people are chasing are so small in market cap relative to the quantum of money that's coming out of the crypto majors that I think there may be a sustained bid for the things that have been working, the smaller protocols, the hype, the lighters, the nears, the zcash. I still think that trade may be broadly intact over the handful of the next few months. But who am I to question Arthur Hayes? He's been right on a number of
- [08:05]
A
things and wrong on a number of things like the rest of us. Listen, I can show you something. I don't use bitcoin dominance chart as an indication of what's going to happen, but you can see what's happening in the market by looking at it. Take a look at bitcoin dominance. I've been here a long time, I can't remember. So I've seen bitcoin go down and bitcoin dominance go down. It's kind of like seeing a unicorn, but I've seen that. But over the last few days, bitcoin, over the last few weeks, actually bitcoin dominance has dumped quite a bit. And this is the first time I can ever remember that happening with Ethereum doing worse than bitcoin. Because usually if bitcoin's going down and dominance is going down, because Ethereum is such a behemoth in the bitcoin dominance or the large caps are, you know, you call it Ethereum. You would see maybe this happen, but this is happening because of the hyper liquids in the nears, which are much further down the chart. And I don't know, I could be wrong tomorrow, but it feels like a signal that there is not only the decoupling of crypto from everything else, but there is for the first time I can remember a decoupling within crypto where there are things that are small enough to make a really big impact that are trading differently.
- [09:11]
B
Yeah, look, I think that's right. I've said it before. I think there's a whole new generation of crypto tokens coming Some of you, some of which are here right now, like Hyper Liquid and near. But I would suspect more of these exciting post Gensler style protocols to gain traction in the future. You know, just because the majors have lost a bid doesn't mean what's happening on Hyper Liquid is not exciting. It's almost detached from the crypto economy. Right. Half their volume is not even crypto. They're probably going to increase over time. So I suspect that could continue to happen. That's a, that's a healthy signal to me actually. And reminds maybe a little bit of Defi Summer where a new exciting thing was part of what pulled us out of the doltrums. You can start to see a new exciting thing in crypto in these tokens that accrue real value or a link to new themes, whether it's privacy or AI, et cetera. I think that could be part of what pulls us into the next cycle and part of what defines that next cycle as we get to it.
- [10:19]
A
Yeah, I agree with all of that. So we've got. Let's just go through, cook through the quick bad news. Right, so obviously we've got breaking crypto markets have officially erased 2 trillion in market cap. So basically down 48%, you know, from the top. Bitcoin briefly drops below 62,000, is 1.5 billion in crypto longs get wiped out. I think that since that's from yesterday, I think we have almost another billion since then, to be quite honest, from what I've seen, because I think that was only accounting for the drop. Oh, there you go. 62. So it's more than that over 48 hours. And then of course, you know, we'll talk about this one. The Bitcoin ETFs have seen withdrawals of roughly 4 billion over 12 consecutive days. The longest stretch of withdrawals in history. I think I saw from Baltunas and Safer Seyfer that basically now they're net negative on the year. Although on the year is such an arbitrary metric to me. Because if you're taking in 50, 60 billion, 5 billion in outflows is still a rounding error in my humble opinion. But it's bad, right? I mean there's a lot of things happening out here.
- [11:22]
B
Yeah, it's bad. Look, I mean, I think there's a massive substitution effect happening. I think people are selling out of bitcoin and rotating into AI stocks. I know that sounds too simple, but I think that's a lot of what's happening. Yeah, they're selling out of Hunter and rotating into Elon,
- [11:40]
A
that's the better take. But I was just going to say he pointed out here SpaceX's IPO valuation, literally, depending on where crypto is sitting when this happens in a week, they could be the same.
- [11:50]
B
Yes, that's exactly right. It's relatively small. I think there's some nuance in the ETF outflow data. For what it's worth, you're seeing, I would say, money flowing out of asset providers that are more casual money in them. Certainly blackrock has borne the brunt of a lot of the outflows at bitwise, serving primarily a financial advisor audience. I think we've only seen outflows in 2 out of the last 15 days or so from our Bitcoin ETF. Smaller on a percentage basis. I think that suggests there's different types of money in the market and you're getting the weaker hands shaking out of the the bitcoin ETF space. But make no doubt about it, right? The vibes are not great. I will share. I was speaking at this large national advisor conference yesterday. The vibes around crypto there are still relatively strong. People are still very excited about stablecoins and tokenization. They're still moving into the space. That space is really an oil tanker that is reoriented around crypto. Barring a massive FTX style blow up, I don't think that's going to change. So I, I do think that is still happening in the market. There's still part of the market that's very bullish, the institutional part of the market. But retail controls the bulk of the assets. I think that's what's pulling out of these ETFs right now. And you know, that's likely to continue until we hit some sort of cathartic bottom. Maybe we're close. I don't know if we're all the way there yet.
- [13:20]
A
I don't know if people are mentally saying, listen, I want to FOMO into Space X so I need to sell my bitcoin. I think that we'll see it from maybe bitcoin always leads on those things because it's so liquid and it's 24 7, 365. But if that narrative is correct, which we're seeing, we should see a lot of other things go down in the next couple of weeks too, right? Because I mean, bitcoin's around. How much bitcoin can be sold to fund IPO buying is a rounding error compared to how much would need to come out of other assets. I would Imagine we'll see big tech rotating. You told me what you heard about, tell what you heard about Jamie Dimon.
- [13:54]
B
Yeah. There's an article right now about Jamie Dimon getting on the phone with his wealthiest clients to p pitch them on SpaceX, which tells you that they have to go sourcing this capital pretty aggressively if he's making time in his calendar to one on one raise money for this ipo. I mean, and this is the first one of many. I, I do think you're going to see that broad rotation. Maybe you're already starting to see it. There you go. You know, it's nice to get Jamie Dimon to do the actual underlying pitch. It's a phenomenal.
- [14:26]
A
We've had Larry Fink doing it for us, to be fair.
- [14:29]
B
That is true. That is true. Look, look, you know, could this be the sort of catalytic peak maybe? Right. I do think everything is lining up for there to be a bottom. SpaceX being a nice sort of exclamation point. You're starting to see some worries about the AI trade today. Broadcom trading off. I think if that quiets down, it makes more space for people to come back into crypto.
- [14:58]
A
Yeah, I love that everyone thinks that if this puts in a blow off top and then markets dump, that that means crypto's going to 30. But I would say that if crypto has been going down this badly, when everything's going up, you have to at least be open to the possibility that money could flow into Bitcoin when other things are going down. The beauty. You know, it's like you can either think we're correlated or you can think we're uncorrelated, but you can't have it both. Just when you conveniently like the narrative, right. If it's truly uncorrelated now, which it has been for a very long time, I think objectively you have to at least be open to the opportunity that bitcoin can do very well.
- [15:34]
B
I think that's right. And of course to say something very simple. What happens in these sort of cathartic bear market sell offs is that the level of conviction increases, increases, increases.
- [15:45]
A
Right.
- [15:45]
B
So the people who are holding Bitcoin today have a long term conviction on the asset. Right. They are not interested in selling. They know all these challenges, but they're not trying to time the market. And so that leads to the conditions where you get this rally on the upside. So, yeah, I think if AI becomes a little bit less of a black hole, sucking capital into the market and the level of Conviction in bitcoin amongst the holders is still relatively high. Those are the conditions on which we rally. It always feels terrible at the bottom. Always, always, always. It feels pretty terrible now, you know, that makes me excited, I guess.
- [16:27]
A
Yeah. I was gonna say, I don't know, like if I'm. If I'm my own indicator. I remember buying bitcoin and feel like feeling like I wanted to puke in the past. Right. Like it was. It was an actual bottom and I felt literally sick and had to force myself. I'm still pretty giddy here. I don't know if I'm my own counter indicator that, you know, or maybe I just get it now because I know you know. But I will say I'm probably gonna do some tax loss harvesting today. I did buy a lot of bitcoin on the way down that I can probably get a tax benefit from selling and buying back.
- [16:57]
B
Yeah, why not? That's the gift that the government gives you. You might as well do that. So I think that's reasonable. But it sounds like I need to bear pill you so we can get to our box.
- [17:07]
A
I know I need to feel more exhausted and pukey.
- [17:13]
B
Yes, well, there are plenty. I mean, there are plenty of risks to worry about still in the market. There are a lot of people waiting around for the next shoe to drop. Certainly a leverage blowout which, which is happening as we speak. Certainly you could see a deterioration in expectations for the Clarity Act. I don't think that is the primary driver of this market, but I would love to see expectations for the Clarity act fall off a cliff. That would feel more bottomy to me. But we're getting there. We're getting there.
- [17:46]
A
Yeah, we are getting there. I mean, you guys still have some optimism. This one went. Went around. Bitcoin has a $224,000 fair value. If global sovereign debt fears continue to deepen bitwise, that's. You guys. What's behind that?
- [18:01]
B
Well, I mean, I think. I think what we're talking about there is the look. The fundamentals of bitcoin still are exactly the same. That's the thing that I think people need to focus on. The story in the market right now is all AI robotics, AI infrastructure build out. But the underlying fundamentals that drove your interest in bitcoin originally are still there. We're still running up too much debt. Governments are still spending too much money. The ruler, to use your evocative phrase, is still stretching out every single day. People feel that in their pocketbooks, bitcoin still provides that net outside fixed ruler that people can rotate into. And that post from our European team was just pointing out that those things are still true. And so as that happens on a global basis, the expected value of the market that Bitcoin is going after is still really significant. And I think we can lose sight of the fact that those fundamentals are still there because it's not the focus of the market right now, but they're absolutely still there. It's still true that we're printing $2 trillion deficits, that our debt to GDP is going up, that the world is increasingly multipolar, making room for an apolitical currency, and that Bitcoin is the solution to those problems. That hasn't changed.
- [19:26]
A
So I want to ask you about maybe the biggest piece of news today that we haven't talked about that I think is the most predictable piece of news ever at the worst possible time. Good setup, right? New bit miner files to raise 300 million through preferred stock to fund additional ETH purchases, adopting the same capital markets approach strategy uses to accumulate Bitcoin. A lot of people have been saying it, but I've been saying for months, I'm shocked that Tom Lee hasn't pulled a full sailor and created his own strc. Well, that is what's happening here. It will pay lower yield than STRC, I think 9.5%. And of course, that's even a tighter gap when you consider they can stake and earn some of that yield. So maybe less risky. But of course, this gets announced as the market is in complete peak fear, and not when people are optimistic. But I mean, what do you think of this? Do you think this will be successful? A good idea.
- [20:17]
B
Look, I think the thing about those perpetual preferreds is that they're fine at a certain size, right? If you need to raise capital, and this is the ability to raise capital at a 9% interest rate, maybe that ability wasn't open to tomorrow. He's saying that ETH is a good investment. If you can raise capital at that carry rate right now. And it's like any sort of debt and leverage. At a small enough size, it's fine. At a large enough size, it will kill you. This is a small enough sign right now that I think it's totally fine. Maybe it's not news that the market wants to hear, but Tom is bullish on eth. This is a way to raise capital and invest in ethics. I don't know. I think the market can get over. They sort of always run to infinity on these analyses of DATs and all of the DAT efforts fail if you run them to infinity. What you're trusting is that the management is smart enough not to run them to infinity, in which case they're basically just fine. And I think that's actually true of Microstrategy as well. And we've seen that in the past. Right. They haven't run things to infinity, they've pivoted to new parts of the capital stack. I wouldn't be surprised if they did that again. That doesn't mean there's no risk in the stock, but it does mean that they're relatively sophisticated operators there that understand the capital spectrum. The same thing is true for Tom Lee. So look, the market's going to hate it, but basically I think it's fine. He just shouldn't make it too big. And the bet you're making there is that ETH will work. If ETH doesn't work, it's a bad bet. But you knew that going in. Yeah.
- [21:57]
A
With anything bit miner related. Yeah. I mean you talk about running it to infinity. STRC is trading at 94.65. People are absolutely losing their minds. It's traded below here before and I think people just don't understand preferreds. There's a nuance. Right. So I think that these things can trade under par for years in the past we've seen them. Right. But the problem is not the risk of it going to 40 or 50, which I think is overblown and people are wrong about and calling it a luna. It's Michael Saylor has the bitcoin. It is not the same. Right, but. But if you're handicapping the risk that there's no buyer in the market because he can't raise the funds to get over 100 to actually buy billions in bitcoin, that I can actually see the argument for because we know that you can kind of, you know, set your clock to Michael Saylor buying billions of bitcoin every month. If you can't do that anymore. I could see that causing some fear, but I don't think thinking STRC is going to blow up tomorrow is a reasonable fear.
- [22:55]
B
It's not a reasonable fear. And of course the interest. People talk about them ratcheting up the interest rate, but the interest rate ratchets axiomatically as the price declines because the denominator shrinks. So you're getting a higher effective yield at 94 than you would at 100.
- [23:11]
A
I think, by the way, I saw like even if they were vwapping at 94.6 it would only be like 12% or something. It's like a very small increase.
- [23:20]
B
Exactly. The very small increase. But you are right that the market can be concerned that this tap is now closed, right? That the buying from Saylor, which people sort of wrote off for so long, but was a massive part of the supply demand imbalance. I mean, we really had a lot of traditional retail hands selling to Michael Saylor over the last 18 months. That's been a huge part of the market. And if he's no longer able to buy, that of course removes a big piece of demand. It's a little bit like when GBTC was no longer able to buy Bitcoin and that removed a significant source of demand that was worse in that it had to sort of, sort of work through that over time. But that's the same thing here. When you have these unique sinks of demand and they turn off, of course that's negative for the market. The good news is everyone knows this. I don't think anyone's surprised. I actually think the most likely marginal surprise here is that Saylor finds another way to buy bitcoin, which I actually suspect that he will. I don't think he's reached the end of capital markets innovation.
- [24:28]
A
I would be very surprised if he sold even that pittance of 32 this week just to inoculate the market. He said if he doesn't come back buying more than that this week, just some way, shape or form to calm the market. I mean, if he even buys 100, you know, it's like that's what he did in 2022. You know, he took a tax loss harvest at 17 grand. I think he bought back twice as much at 18 grand. Don't quote me on the numbers, but it was in that ballpark, right? Bought back a little more, slightly higher.
- [24:53]
B
Completely agree. And I would go back and remind people that when they were only doing equity, no one thought of converts, and then when they added converts, no one thought of preferreds. And then when they added preferreds, no one thought of perpetual preferreds. And the funny thing to me is that people assume that, oh, well, this time they're at the end of the road of different ways to securitize their bitcoin or to do things with their bitcoin. And it just seems extraordinarily unlikely to me. I suspect that there is another part of that capital stack that they will unlock. And the fact that we're not saying what it is is the same as the fact that we weren't saying what it was on perpetual preferreds, preferreds, converts, et cetera. I really don't think it's the end of the microstrategy story.
- [25:38]
A
You're a really smart person. That's really great insight. Really? Yeah. I don't think people think of it that way. And it's funny because when things are good, I can remember back to the narratives that Michael Saylor needs to stack as much Bitcoin as humanly possible, no matter what, because eventually he'll have enough Bitcoin to offer financial services on Bitcoin or to offer these kind of things. Get what you ask for. That's what he's doing, you know?
- [26:03]
B
Yes, yes. Sometimes it's simple.
- [26:05]
A
Yeah. I'm not worried about STRC blowing up at all, but yeah, it could definitely run out of some steam, I guess. I mean, you guys obviously have. I don't think we've had the opportunity to discuss it. You've made a pretty big bet, I think, on Hyper Liquid, so maybe that's worth discussing. I know that you've had a very successful launch with your Hyper Liquid etf. I haven't checked, but I do know that during some of this historic outflows, that thing was still seeing inflows. Right as Bitcoin was going down, we kind of saw this rotation into these. That reflects the broader market. And you guys are putting it on your balance sheet.
- [26:41]
B
Yeah, absolutely right. I think we've had inflows every day since we launched. Look, the reality is hyperliquid is an incredible protocol and it's just a good business trading at a good valuation with good growth characteristics in an exciting part of the market. If it were a C Corp company and not a crypto token, more people would own it. I think people haven't caught up to the fact that these new versions of tokens look a lot more like companies from their capital return characteristics. And I'll add that I think it's really early in Hyper Liquid when I go to conferences and speak to traditional investors. No one has heard about it. I know the crypto community gets all excited that there's a Colossus profile.
- [27:25]
A
2 million total customers and like 75,000 active a week or month or. I mean, you know, we made 125 million or something.
- [27:34]
B
Zero people have heard of it. Effectively. It's only in this small little community and it's really good to know. Trying to think of an analogy where something was like maybe when chat first came out and people in the AI community were excited about ChatGPT, but that was like 100x from there to today. I think you're looking at the same thing in hyperliquid. The other thing I really love about hyperliquid, Scott, is that it sort of puts together all, all these ideas we had in crypto that didn't quite work in the past. And all it did was put them together in a new environment and they worked. It's not like we didn't have an idea of perpetual futures. Those have been around for a very long time. It's not like we didn't have the idea of a centralized order book that had been around for a very long time. It's not like we didn't have the idea of using tokens to incentivize the network to attract liquidity. That had been around for a very long time. But all of these ideas had been sort of like piecemeal and not ready for prime time. I think the unique thing that happened with Hyper liquid is in this new regulatory environment, in this new high bandwidth crypto blockchain environment where you can do 100,000 transactions per second, where you can accrue value. If you put all those together, you have 10 billion, $20 billion, $100 billion opportunity. I think we're going to see that over and over again. I actually suspect you're going to see some of the old ideas of crypto retread into the market and suddenly work that didn't work in the past. I think it's a paradigm of where we're going.
- [29:12]
A
Yeah, and we screamed for all these years about how altcoins have no utility. We can't value them, we don't understand how to do so. It's not true anymore.
- [29:22]
B
Not true anymore.
- [29:24]
A
In this case, like, I mean, you know, we talked about like it was hype and near that he dumped. I mean, near has been around forever and now is an AI blockchain. I don't think that qualifies in the same way that hype does here. Right. Some things move on narratives and news. Some things move because they actually should. I mean, hype should go up when hype does, when the platform does.
- [29:42]
B
Well, it's not, it's, it's, it's that simple. And you have to imagine that there are a thousand crypto entrepreneurs who are looking at the success of hype and copying, pasting it into a new domain. And again, I think when you're in these bear markets, you have to think about what pulls you into the bull market. Some of it is apathy and the OG story of things like Bitcoin coming back into the fore. I think that's totally true. But often you have this next net new thing that pulls you into the new cycle.
- [30:18]
A
Eth.
- [30:19]
B
Was that out of maybe the first bear market? DeFi. Was that out of the second bear market? Maybe ETFs were that out of the most recent bear market. But I think this new sort of Gen 2 token design that Hyperliquid epitomizes is going to be that for this next new market. I think many of the top assets that are going to pull us forward probably don't even exist right now, but I suspect we'll launch in the next six to 12 months. Yeah.
- [30:48]
A
In the past, I remember always going on these CoinDesk and Cointelegraph interviews, especially when I was trading more aggressively. And they would always say, what's going to be the big mover of the next cycle? And my joke was always like something that hasn't been invented yet. It'll be some token you haven't heard of. Because every cycle I've been here we talk about which old token is going to move and then you have game to earn or defi Summer. I never saw any of that coming. And they were all new things. But it was my kind of quip at it'll be something new. I haven't thought of that. I'll move because it's new and doesn't have bag holders and people will be excited about it.
- [31:23]
B
Yeah, well, if you thought of it, you would have launched it and made $4 billion. I mean, that's the painful thing. What maybe you can spot is the conditions on which and sort of the patterns on which it will follow. But the people who know what it is are the people going off and building the next net new thing.
- [31:43]
A
What are your thoughts right now on clarity? I mean, obviously I think we're, you know, we, we reported yesterday that it hit the, you know, Scott, Scott Besant pushes clarity act this summer. Bitcoin reserve will grow delivered speed. Okay. You know, but it hit the Senate calendar so it can be voted on in this session effectively before July 4th. Seems like there's some agreement and some fights. I personally, I. People are saying 50, 50. I don't know where the poly market is. I'm at like 5% chance. Yeah,
- [32:15]
B
I'm actually aligned with you. I, I think write it to zero. The, the, the reason I'm skeptical is ultimately that there. Well, I've always been skeptical primarily because of the ethics concern. I've always thought that the interest thing didn't really matter. Although that's not good. You know, when, when Jamie Dimon is cursing out Brian Armstrong on live tv, that's not a sign that things are going great. But ultimately I thought the ethics thing would doom it. And then the added complication that we have now is you actually have infighting in the Republican party between the GOP and Trump. And you're seeing this about the $1.8 billion fund that they want to shut down. You're seeing this in concern about what happened in the Texas primary with Paxton and Cornine. And when you have that fighting within the gop, in addition to the Democrats, you know, always wanting to sink Trump on, on ethics concerns, I just think it makes it very hard to pass. The reason it's not a 0%, the reason you're at 5 and maybe I'm at 20, is you do have the Trump administration sort of latching on and pushing this. Right. You have the July 4th date, which is obviously symbolic. They picked all the legislation in the world. They put crypto to put on the nation's 250th birthday. That's worth noting. You have Scott Besant, he's a very good messenger. So they clearly want to get it done. But I think the poly market odds have always been too optimistic. I think they're too optimistic now. I would just add it doesn't matter to crypto at this point. What matters is we get past the uncertainty crypto can build without the clarity arc. It'll be just fine. We have a very pro crypto sec. We have a very pro crypto cftc. They'll put in place sandboxes and innovation that will allow us to move forward. We'll move forward enough that they won't be able to put crypto back in a box. No matter what happens in the 2028 election, you have Goldman Sachs and JP Morgan and BlackRock hiring hundreds of people in blockchain. It's going to be just fine. I actually think it's the uncertainty that kills us. So if we can write to zero and make it an upside surprise, if it happens to pass, I think that'll be better.
- [34:35]
A
Yeah. High hopes, low, low expectations. I guess that would be. I mean, which part of the simulation would it be? If we pass this on the 250th birthday of the state, like Thomas Jefferson, the Declaration of Independence will be rewritten. Like, we hold these truths to be self evident that all coins are created equal. You know, like, I mean, it would be unbelievable. We have to be in a simulation. If that happens.
- [35:00]
B
It is amazing. There's a chance, I think there should be a polymarket on it actually getting signed on July 4th. I think that would be an incredible thing to see.
- [35:08]
A
Unbelievable. And to your point, I don't know how newsworthy it is now when Elizabeth Warren and Bernie Sanders write a letter, but we've had actually this big push for crypto to be included in 401ks and they're even fighting that. So they're fighting even the things that we thought were somewhat foregone conclusions. The anti crypto army is not afraid to show their faces right now.
- [35:32]
B
No, absolutely not. I mean that's what you see during these bare market events. And they never went away. Right. They're also, they have sort of like an autofill that says we need to stop. And then they just fill in the blank and they send that letter in on any topic they want to focus on. So yeah, let, let them, let them shield. Again, I would emphasize it'll be just fine if it fails. It'll be just fine. We still have Paul Atkins wanting to move all assets on chain. It's going to be just fine. It would be better if it passed, to be sure. But at this point, the uncertainty is worse than the known failure. And I think if we can get to that uncertainty, that actually might be part of what forms the bottom.
- [36:16]
A
What I don't get about Jamie Dimon right now, a, he lost his cool a bit, I would think, on national TV over this. Right? So that I don't think that's ever generally a good sign. I mean, he said Brian Armstrong's full of shit now multiple times on television. But you could see that even the anchor was like so taken aback by his comments and his aggressiveness. But what I don't understand is that for the banks, the clarity act actually gives them, even with a compromise, way better situation than being trapped with just the genius act. Because the genius act is allowing Coinbase to do all the things that the banks hate. So it feels like the banks actually need clarity more. So if they're blocking clarity, I don't really understand where they think that leaves them or what their plan is. Because Coinbase can offer as much yield or rewards as they want right now.
- [37:08]
B
I totally agree. I mean, you know, I think it's that Jamie Dimon doesn't want to lose to a young, rich, innovative entrepreneur. Yeah, it feels personal watching him talk about it. Crypto's been living in his head rent free for a decade and Brian Armstrong has a penthouse there. And I think that's really gotten into him at that level it's absurd to see because as you exactly said, they're worse off if it doesn't pass. They're stuck with the genius act, which is more wide open. It is a weird up is down sort of world. And I think it's, I think it comes down to personal animus.
- [37:46]
A
That's one of my favorite comments ever. And I said that to people. The penthouse in their head. Yeah, love that. I mean, listen, I know we're kind of running towards time. Is there anything else on your radar that we may have missed? I mean, I think there's so many fundamentally positive things happening with the plumbing and stablecoins and all of this. I think it's just frustrating to people that maybe it's not so investable. But I just do think it's important that even to notice that while bitcoin price is down and a lot of altcoins are down, there's so much adoption
- [38:18]
B
of this technology, so much adoption, so much interest. I think stablecoins and tokenization are fait accompli. Again. I've been traveling at these conferences. A big advisor conference before that, a big pension plan conference. There's huge interest in this space. It hasn't gone away. These giant institutions are oil tankers reorienting around crypto and blockchain. It's going to be fine in the long term. I really think the key point is, you know, this is a classic crypto winner. It's a classic four year cycle. It always feels bad.
- [38:54]
A
I was pretty aggressive that the four year cycle was dead. Maybe I'm wrong.
- [38:58]
B
I, I was pretty aggressive about that and I was definitely wrong. You know, I think we have to admit that this is, this is the pattern before us. But there's, we're in such a better situation than we were in the past. And as that Hunter Horsley tweet said, we're still a tiny little market. We're not even as big as one company that's coming ipo. And we're trying to reinvent how money and value works around the world and we're making progress on that direction. It just seems extraordinarily unlikely that if a significant portion of payments are on stablecoin, Rails and all assets are tokenized and bitcoin gets older and more secure, that will be worth two and a half trillion dollars. I think that number is north of 10. So we're going to get there.
- [39:46]
A
Yeah, man, totally agree. Well, Matt, thank you so much for your time. Always appreciate you waking up early for us.
- [39:51]
B
Thanks for having me.
- [39:52]
A
I know it's hard, man. And everybody else, you know, I've actually got. Gary Cardone's going to come in live for the Daily Wolf, something we haven't really done. So that'll be fun to day. And otherwise, I'll be back ranting and raving here tomorrow. Matt, thank you, man. I always appreciate the optimism and the. The measured, you know, honest evaluation of where we're at.
- [40:11]
B
Good to see you, Scott. Thanks for having me. That's dope. Let's go.