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The Wolf Of All Streets
Bitcoin Hits 108k, MicroStrategy drops 5% | Crypto Town Hall
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Bitcoin Hits 108k, MicroStrategy drops 5% | Crypto Town Hall
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- [00:01]
Scott
Steve, I know that this is a really, really exciting day for you. I texted you about it yesterday. You and I have railed against Carolyn Crenshaw at the SEC for ages. And it seemed like maybe she was going to get reconfirmed and put back on the sec, but yesterday, not so much. They decided not to even try to reconfirm Carolyn Crenshaw. Reminds me of the wizard of Oz, you know, Ding dong, the witch is dead. Witch, oh, witch, the wicked witch Ding dong, the wicked witch is dead.
- [00:31]
Dave
I like fre take. He said I had a secret crush on her. I mean, look, putting somebody in a job that is literally the job description is supposed to be neutral to all investments to facilitate capital formation and protect investors. It is almost impossible to conceive of someone less qualified for that job than Ms. Crenshaw. It really is. Because every time she writes or decides it has. There's an agenda which is literally not supposed to exist. So, you know, yeah, of course I'm happy that they're doing this. There are, this also is, you know, there's a game that, that we used to play a card game called Bullshit. And you know, where, you know, people would, you could do it with liars, poker or other sort of games. The, the. Now all of those people, all of the. The crypto for Harris folk Democrats who insist that the Democrats are not anti crypto, quite literally have the opportunity to prove that they're not full of shit. And I so hope that they do mean so.
- [01:48]
Scott
In other words. In other words, getting a pro crypto Democrat on the sec, let's not call.
- [01:52]
Dave
It pro crypto, let's call it pro innovation and someone who is open to technologies that are going to potentially help capital formation and protect investors. And yes, some of those are crypto, but to be blunt, the SEC should be oriented towards attacking fraud in crypto and bad disclosures in crypto. And there's quite a bit of that. I mean, it just.
- [02:17]
Scott
There is.
- [02:18]
Dave
I mean, there are articles that we all have to do it. We have to ask questions like, you know, why, you know, what is the investment thesis behind a token? And when the investment thesis behind a token is because I thought it would be funny. Okay, well, at least you know that. But if somebody buys into a token, I don't want to name names, but they want to buy into a token because they think it's going to be the backbone for real world assets, but they're buying a governance token that gives no economic benefit whatsoever to the holder, then people need to know that. And most People in the crypto sphere don't. And if people are allowed to manipulate markets, then that, that decreases confidence in markets, etc. So you know, having an SEC or any regulator, whichever it is, SEC, CFT, doesn't matter. That allows for rational markets, better disclosure, holding people to the feet, to the fire. That makes sense. Think about what Crenshaw and Gensler did. They did the exact opposite. They effectively forced all tokens to provide no economic benefit. And they specifically forced good actors to defend themselves with hundreds of millions of dollars. I mean the estimate is like 400 million. And that's just in the defense. That doesn't count the chilling effect on business. And at the same time allowed scams overseas to target US citizens and cost and basically allowed everything from Voyager to ftx. They did.
- [03:45]
Scott
I was just going to say, Dave. Yeah, I was just going to say you and I used to sound maybe a little bit crazy when we would kind of hint that the US regulatory regime was partially or more than partially at fault for what happened with fcx. Paul Atkins, the incoming SEC chairman, said that exact thing in an interview last week. He said the United States is responsible for ftx.
- [04:08]
Dave
Damn skippy. I mean Paul's smart dude. I mean, you know, Paul is a very smart dude and you know, I've talked to him multiple times over the years. It's been a while, but I can't imagine that he would think anything other than that. And so yeah, I mean having an actual regulator who is pro innovation could be a good thing both from encouraging the industry and from protect for putting in real protections as opposed to the opposite. I see Brian's on stage. I mean Brian, get, get, get, get cracking. Get some, some of your, your compatriots in the Democratic Party to put some real pro innovation candidates up for that spot. Because the thing about it is, and the reason why this should never even been a fight is Crenshaw spot will be a Democrat. And people who are listening to this probably don't know this, but throughout history, I mean recent history, the last 30 years, almost every major decision, with a couple of notable exceptions, they have tried very hard to get majorities, you know, 4, 150 decisions meaning nonpartisan. The SEC shouldn't be partisan. It would be much better if it wasn't. And so maybe we can get back to that. So let's, let's have this as hope.
- [05:22]
Brian
Yeah, you know, like I actually have a call later today with some people that, you know, they want to try and push Democrats in a more pro crypto, you know, towards pro crypto crypto rhetoric. I think that there's obviously, the SEC is needed in some respects to, you know, there's scams everywhere, especially in crypto. Crypto is a breeding ground for scams. But at the same time, I think what the Biden administration did was they overregulated. They wanted to, you know, please the Elizabeth Warrens and push things towards that direction. And it wasn't until, you know, like the last couple of months when you started to hear, oh, Harris is actually pro crypto. And I don't think she would have been terrible for crypto. Would she have been a Donald Trump? No, definitely not. But I think Democrats moved way too slow. And typically Democrats are pro innovation and should be for crypto. Crypto is a tool that Democrats should be utilizing for all the right reasons. But instead, I think it's become this tribalistic thing where, oh, Trump is pro crypto. We gotta go against it because he's raising so much money from the crypto crowd and he's using this as a huge part of his platform.
- [06:42]
Scott
Brian, I think you could really quickly. I think you could actually say that the opposite way. I think Trump became pro crypto and saw the opportunity because of how anti crypto the Democrats had become in the last administration.
- [06:55]
Dave
The key thing. I just want to ask one question. I mean, there are, as I said, it really shouldn't be pro crypto. I mean, yes, it will work out to be that, but it's really pro innovation, and that matters, right? So people like in Congress, Richie Torres, or in the Senate, Kirsten Gillibrand. There are multiple Democrats with significant followings who believe innovation is the lifeblood of the American economy. That should not be a minority position. Now, of course, there's Elizabeth Warren who believes that, you know, that unless you are supporting her, you should use stone knives and bear skins. And if you are supporting her, you know, you're part of the party, et cetera. I mean, there's just. And yes, that was a veiled Pocahontas kind of pun. I get that we could debate who's good or who's bad, but you can debate is innovation and the importance to it. And when you have people like Brad Sherman, who's still in the Congress, saying things that are demonstrably false, every time he opens his mouth and talks about the subject, it's a problem. So you need to have somebody who disagrees with him and will stand up to him. Right. Just like there are crazies on the other side of the aisle. I don't want to go into a political thing. You and I would agree about some people who are crazy on the other side of the aisle as well. I think that it needs to be called out. And that's the point. The point is you can believe in customer protection. In fact, customer protection will be best served. The thing about the Biden administration is it actually sacrificed customer protection on the altar of appeasing Elizabeth Warren. It goes way beyond what you just said. And the election's over. There's no point in arguing it anymore. This has been litigated in one and now we move forward. So what we want and what the industry wants, it doesn't matter who you listen to. Whether it's the Winklevi, whether it's Brian Armstrong, whether it's Jesse Powell, you know, whether it's Brad Garlinghouse, everybody all want to have a rational, level playing field that is understood, where they don't need an army of lawyers to digest every single little thing. And American citizens don't want to worry about being punished for buying things or investing in things that they understand better than people who quite frankly, are my age or older.
- [09:17]
Scott
Yeah. Really quickly, Brian. There's just a few things to briefly unpack there. First, I made the mistake of once calling Hester Purse, who's the sec, obviously SEC commissioner. I told her in our first interview years ago, we've done many that I said, everybody calls you crypto mom. And she said, I'm not crypto mom. I'm not pro crypto. I'm exactly what Dave just said. I'm pro innovation and pro fairness. I am not pro crypto.
- [09:42]
Dave
Right.
- [09:42]
Scott
She's viewed as sort of this, this pro crypt SEC commissioner. That's not the case. She wants exactly what Dave wants. We do need an sec. And with the deregulation that's coming, I think we can honestly say there's going to be more fraud. Right. So the SEC will need to play a role in identifying what the frauds are as we deregulate. Dave, you can. I see you disagreeing, but I think there's going to be people trying to take opportunities there and you can towards this today.
- [10:11]
Dave
I think that it's, in fact, it's hard to imagine, I mean, we had hawked to a girl, you know what, last week or the week before. I mean, come on, we're getting, we get rug pulls every week to actually say that deregulation is going to increase fraud. I mean, I know. I, I mean, I don't. We haven't had Bruce on here for a While I'm not going to go on a Bruce Fenton rant about it, but I will say that I don't believe this was. Is going to increase fraud.
- [10:35]
Scott
Right.
- [10:37]
Dave
Increase it.
- [10:38]
Scott
Right. Okay. I think that's a fair take.
- [10:42]
Brian
So I was just gonna say, like, I. I think that, like, you know, the Hawk TUA thing that was out in the open, that was probably. She didn't even know what she was getting herself into. But I do think that it could, like Scott said, I think it could give people more balls to, you know, do things that they might not have risked, venture into gray areas where they might not have. With that said, like, I having a startup in the crypto space myself, I never talk about. I'm not going to talk about here, but one of the issues we've had is I'm afraid. Like, I'm at this point and in. During the Biden administration, I've been afraid to do things because I don't know the legalities. You can talk to a million lawyers and you get a million different answers, and, you know, you could go forward, and then all of a sudden, you had the SEC knocking at your door. I think with Trump, and I don't like Trump, but I think in this case, I do. I think I'm going to know. I'm going to know what I can do here. I think we'll have actually a regulatory framework and clarity that a lot of entrepreneurs really want to see.
- [11:46]
Scott
I interviewed Raoul Pal yesterday, which will be my Sunday podcast, but he made a point about this election and framed it in a way that I hadn't really thought of it. He said it wasn't really necessarily a right or left. He said technologists swung and won this election, that it'll be the most pivotal election history. I basically pointed out the fact that the crypto industry, but even if you dig in deeper, Brian Armstrong specifically, and others, they really are the ones who took over, made sure that Trump won. And now Trump is obviously listening to them and appointing billionaires, technologists and innovators and entrepreneurs into every cabinet position he can find and everywhere. And I think that regardless of your political leanings, you have to like the fact that now we have smart people who have actually built things in positions of power or at least advising in the government. But crypto, to a very large degree, if you look behind the curtain, won this election for Trump. You know, and I think that Brian, you know, as you were saying, maybe there was pushback. The Democrats were saying, oh, well, you know, Trump is pro crypto. We have to be anti. I really do think it's the opposite. I think that them being so anti crypto allowed him the opportunity to take the mindshare and money of this industry and win, you know, win the election.
- [13:10]
Brian
Well, yeah, I think it's probably a little bit of both. Right, so Trump read the room, right? And he knew, he knew what people were asking for. He, he wasn't afraid to change his stance. If you go back to his first term, he wasn't, he wasn't exactly pro crypto, but he saw that people wanted to, wanted him to be pro crypto. He saw that there was an opportunity there. He is a populace, and he took that and ran with it. And good for him, it worked out for him. As much as I don't like it. And then Democrats saw him running with it and instead of also embracing it, I think they stepped back and they're like, let's just see where this goes.
- [13:45]
Scott
Yeah, they kind of were like, he won this part, but it doesn't matter. That's what the sentiment was to me. I don't think they realized the gravity of losing that audience.
- [13:53]
Brian
You know, I myself didn't realize how important it was either. I was one of the people saying, yeah, but I mean, the crypto space, you know, it's not, it's not as big as you think. At least the people that have their, you know, like a huge reason to vote based on crypto, there aren't that many people. But I think the fact that he embraced it also kind of attracted a younger crowd because it's the younger crowd that the younger voter who really understands crypto and understands what it's about. So maybe it wasn't people voting for their pocketbook so much as voting for somebody that was going to embrace a technology that they like.
- [14:33]
Scott
Right. And I mean, that speaks to kind of what Raul was saying to me yesterday, you know, that maybe a lot of it wasn't right left. It was what Dave described as this just push for the ability to do business in the United States, to innovate, to be an entrepreneur. And that maybe is the bigger story of the election, you know, like, and now all of these technologists are in power, you know, and they're going to sway the way that I think, think the, the country is steered for, for the years to come. Go ahead, Dan.
- [15:05]
Dan
Yeah, I think at its heart, bitcoin and crypto are more of a kind of. They lend themselves more to conservative ideals of self sovereignty, self dependence, that kind of stuff, mistrust of government, etc, and The Democrats or the liberals in the uk, whatever you want to call it, would be more of the more predisposed to not be pro crypto. So I think that's probably where the genesis of the Democrats being anti crypto came from. If you look at Ted Cruz, Ted Cruz pro bitcoin for quite a while already, based on the ideas of, yeah, we won't let the government stop you from custody and your own money, we won't interfere with government. You know, you're about your right to stack, stack sats and hold that kind of stuff. So I think the issue of this election is that the Democrats took things too far, which they always do. They took things too far. They were so anti crypto that, you know, they made it so, so easy for Trump to sweep in and be, be pro crypto that that's what led to this. But I think the genesis of being pro anti crypto, I think conservative views typically tend to skew more pro crypto and that's probably where the Democrats mistrust or hatred came from.
- [16:18]
Brian
Do you think that, do you, do you think that it, what do you think played more into the result that we got? Was it that Democrats were anti crypto or Trump was obsessively pro crypto?
- [16:31]
Dan
100% Democrats being anti crypto. People would have voted for anybody other than what was in power.
- [16:38]
Scott
That.
- [16:39]
Dan
Do we, do we care who replaces Gary Gensler as fcc? No. Roll the dice and get whoever you know in their place. This call sat today. I don't know the person in particular, but the, the person that was very anti crypto that just lost her seat. Right. It was her being so anti that that galvanized people. People galvanize around hatred a lot more than they galvanize around love. So I think, yeah, to answer your question, that's my opinion.
- [17:04]
Brian
Yeah. No, I, I truly do.
- [17:06]
Scott
I don't know if people saw the comments yesterday from the next Senate was going to be the Senate Banking chair. Wasn't that Elizabeth Warren's job before? But Tim Scott, he called yesterday in a public statement, crypto, the next wonder of the world. And you have French Hill taking over for Patrick McHenry on the house side, promising that we're going to get legislation. I mean, the outright bullishness surrounding crypto and the need to get something done in both houses is unbelievable.
- [17:39]
Dave
Yeah, it is. It is worth saying something about what Dan said because it's not actually true. I mean it is true. People react more to hate than. There's no doubt that's easier. But what is not understood in this space is just how unpopular Crenshaw and Gensler were with even with the innovators in traditional finance we don't often have people like Doug Sifu who's a CEO of Virtu or Ken Griffin from Citadel or whatever, but those companies, and in fact throughout the traditional financial markets were so unhappy with the regulatory regime which was microscopic overregulation over engineering, putting climate policy into, into markets not because they're anti climate policy, but because they don't belong in markets. You know, making being a public company like, you know, a baton death march for legal and compliance people. You know, all of that is true and there's a lot of pressure to go back to a data driven financial regulatory approach that is based on cost benefit. You know, not to mention, you know, Doge and everything there. But I mean just even it's not just, as I said, it is not just crypto, it will certainly help crypto, but it's not just that.
- [19:00]
Scott
Yeah, there's definitely levels to how bullish it is to have an SEC chairman that's not outright against crypto and who is pro crypto.
- [19:10]
Dave
Can we talk about MicroStrategy now?
- [19:12]
Scott
Yeah, I can go back to the topic. The original topic before we went to will the next sec be pro innovation was bitcoin all time high. But microstrategy down 5% or something to that.
- [19:24]
Dave
Take a. So you, you may all may remember for those who were listening last week when, when it was getting added to the, the, the nasdaq, I made the point because I used to, I started in program trading and I've been in index reconstitution trading and all that stuff for a very long time that the typical pattern that you see is a run up that's small, a push on the day of an index inclusion to a high price. And the people that trade this professionally buy in advance, set the price and short at the index inclusion price because there's a hangover effect because a lot of buying has been done and that is quite literally exactly what has happened with MicroStrategy. So it dropping whether it was going to be 5%, 2%, whatever the number was going to be. Barring an explosive update for Bitcoin that would have taken us to where it would be. Rationally I'm tired of every thousand dollars making a new all time high thing. But unless bitcoin got to 120 or something, MicroStrategy was always going to be soft. Bitcoin hanging out around its all time high microstrategy was going to drop just based on the supply demand that happens in every index reconstitution event. If you were listening to me, I told you that was going to happen. It's not surprising and it doesn't mean nearly what people think it needs.
- [20:53]
Scott
Dan?
- [20:54]
Dave
Yeah, one point.
- [20:57]
Dan
I don't think they've been included in the index.
- [20:59]
Scott
Right.
- [20:59]
Dan
They get included on the index on the 23rd. They've not been included yet. But I think what we're seeing is Michael Sailor is aggressively selling shares, you know, selling them. He's hitting the ATM as we call. He's aggressively selling shares, getting money in. I read somewhere that in January they're in a blackout period where they can't sell any shares whatsoever. That's why he's hitting it very hard. But all we're seeing is that they're selling shares so aggressively that that premium is collapsing. Remember, we've seen MicroStrategy at highs of over $500 per share back long before Bitcoin was over 100k. So I think it's not a bad thing if it's true that they're not going to be able to sell any in January. I think what he's doing is he's just hitting very aggressively, selling shares to get money and to buy more bitcoin. Now I'm not worried. I'm long Microstrategy and Bitcoin, but I think that's what we're seeing. I think he's just very, very, very aggressively selling shares and that's what's bringing it down.
- [21:58]
Scott
Rather than we saw MicroStrategy at $530 and $370 on the same day. Yeah, exactly. So, yeah, while I think it was. Yeah, it was. Yeah. The day that they obviously hit the all time high. I'm trying to look for the date. I think it was November 21st or something like that. But as long as bitcoin goes up.
- [22:22]
Dan
And to the right. Yeah, as long as bitcoin continues.
- [22:25]
Scott
But to your point that the blackout, the blackout period that's coming, obviously potentially they can't sell shares. A lot of people talk about that being throughout January. But the other flip side of that is that probably means they also can't buy bitcoin.
- [22:40]
Dan
Potentially. Yeah, I suppose.
- [22:42]
Scott
Yeah, so. So. So a lot of people wondering, there were, there were some articles, conjecture, pretty bad takes today. But, but if it's meaningful when all of a sudden you don't see 1.5 to $2.5 billion announced of Bitcoin. Being bought every single Monday. Does that affect the market? Does it spook the market in any way? Is it affect demand? I think that's a drop. I mean Dave, you look at the obviously liquidity and the numbers every day, but that's not a huge portion of weekly trading volume on bitcoin. Right.
- [23:11]
Dan
Well look, did you see how much BlackRock bought yesterday? BlackRock alone bought 3/4 of a billion dollars worth of bitcoin yesterday. The last few days have been, I think for the last week at least it's been half a billion dollars of buying pressure from the ETFs alone almost consistently every single day.
- [23:27]
Scott
Yeah, the interest is astounding in the ETFs and you know, and it's been regardless of price action to some degree. It's up, the flows are good on updates and down days. That didn't used to be the case in the beginning. Right?
- [23:44]
Dan
Yeah, absolutely.
- [23:46]
Scott
Sorry, my mic, my mic glitch there as I was talking.
- [23:51]
Dan
The, the inflows are so high they're eclipsing. They're typically 10 times the amount of New Delhi issuance. Now I know people have said for a while the amount of New Delhi issuance doesn't matter, blah, blah, but mathematically it has to. It has to. You can't continue buying 10 times the newly day issued forever without a massive explosion up in price. So it has to have an impact. All we kind of, I asked my friends of the day, like I'm looking at these numbers, am I going crazy? Because this just logically cannot continue forever.
- [24:24]
Scott
Sorry, I'm having some mic glitching. But what blows my mind about that is that there's always someone out there, every cycle, every time, with enough bitcoin to sell to, to meet all that demand, you know, regardless of issuance. So it should show you how big some of the whales that are out there in this market.
- [24:43]
Dan
Are we hitting like new all time lows on the amount of bitcoin on exchanges? Like I think it's like 2.25 million. Like it's the lowest it's been, I can't remember maybe since like 2013, something like that. It's like we are starting to see this buy, but who knows? Yeah, you're right. A lot of retail are unloading their coins kind of willy nilly. Who knows man? But the numbers just seem to point in one direction.
- [25:05]
Scott
Yeah, and that's without even taking into account the massive catalysts we could have. Even if they're not majority chance it will but like a strategic reserve or you know, more companies now, DAP accounting rules have changed, buying or otherwise. Dwayne Panos, Matt, none of you guys have had an opportunity to really ring in. Would love to hear your thoughts on the conversation in. In general. So maybe Dwayne first.
- [25:32]
Dwayne
Thanks. Good morning. Just. Well, just to, I guess highlight the, well, the political side of the talks here. I think a lot of the problems that happened with the Democratic Party had to do with the old guard. And yes, they were looking at crypto and these sorts of investments as more being representative of the libertarian front. So that made them shy away from these sorts of things, and they were looking more to focus on the consumer and offer the consumer protections in regards to these sorts of investments. And we've seen throughout the last few years here that they've really focused on corruption and money laundering and just monopolization of certain markets and supply chains. So I think that went hand in hand with the overall theme of the administration in regards to microstrategy. It isn't something that I think that investors should really panic about. We see, if you look at the charting, so to speak, that because of the momentum that we've seen over the last few months here, then we can definitely expect a pullback. But it's nothing to, you know, panic about. If you have an overall investment thesis on microstrategy that they're going to continue to, you know, basically buy Bitcoin and, you know, present you with a leveraged asset that you can either hold on to for a long time despite the volatility, or if it's something that you want to trade in and out of. You know, we have a lot of our friends here who are swing traders as well. So if it's something that you want to trade in and out of with the momentum as well, I don't think it's something that anyone should really put too much credence to in the interim.
- [27:21]
Grant
Yeah.
- [27:21]
Panos
Good morning. Good morning. Good morning. Yeah, just to go back to the whole political side of it, maybe I'm.
- [27:28]
Scott
Not the only one whose mic isn't working. Go ahead, Panos.
- [27:31]
Dave
Yet.
- [27:31]
Panos
Can you hear me? Okay, cool.
- [27:34]
Scott
I can't hear him. Can you guys? I'm sorry. We get these glitches. Just thumbs up or thumbs down if you can hear, Panos. No. Oh, half of you can, half of you can't. Great. Okay, go ahead. I'll bring myself down and up.
- [27:46]
Panos
Okay. Yeah. I was just going to say, when it comes to the, the Democratic Party, when we, when we was coming up to the election and Obviously Trump was going hard on, on pushing a positive view of cryptocurrency and bitcoin. Kamala Harris, I don't think she mentioned the word bitcoin or crypto once. She kept saying digital asset, which makes me believe that, that if she had won the election I think she would have been pushing for more regulations and probably to speed up the process of central bank digital currencies which would have been very, very bad for the crypto market. And of course Gary Gensler would have probably kept his job and the SEC would have just been a lot harsher than they already are. So I, I don't think, I think the Democratic Party or at least Kamala Harris and her administration were actually anti cryptocurrency and wanted to really, really push more, more regulation, more unfair regulations. Obviously the crypto market does need to be regulated in the right way, but I don't think that would have come from the Democratic Party. I think it would have been a lot worse and we would have seen the SEC continually go after, pick and choose who they go after. And as far as like having more regular, less regulations in the SEC.
- [29:18]
Grant
Would.
- [29:18]
Panos
Create more scams, I don't think that is true either. There's thousands of scams that launch every single day in, in the crypto space. I don't think having less regulation would, would stop that. I think the regulations need to be more fair. I mean you saw the SEC go after a bunch of crypto companies and people in the space. I think unfairly, where you see tons of people getting away with straight out scams just because it's not really in the best interest of the SEC to go after them. It's not profitable for them. It doesn't really benefit them to go after some of those guys, whereas it does benefit them to go after Czech Brian Armstrong, Richard Hart Garlinghouse and those guys. So I'm just happy that the SEC is being restructured and I think it's going to be very positive for crypto.
- [30:16]
Scott
Matt, did you have any thoughts?
- [30:19]
Matt
Yeah, thanks Scott. The, you know, just to take up the same kind of flow that panels did. The, the first issue with respect to the sec, I think it's not really well appreciated that they're not really the premier fraud agency in the United States. I mean we have this federal and state system where the states actually have a huge role to play. And I think personally they do a lot more in terms of fraud prevention than the sec. The SEC is on the SK salary scale, which is not often talked about, but they're among the most generously compensated federal employees out there. So they're, they're kind of a fat and happy agency. They really could use restructuring reformation in my opinion. They don't go to trial a lot. They don't do the things that we think of, you know, trial lawyers as doing very much. And I for one would love to see them kind of pivot into more consumer friendly, like fraud prevention type direction because as long as I've been in the space and doing securities law, that's not been who they are. I also think it's impossible to look at the political situation in the United States without kind of taking stock of this drama that's going on with, with Pelosi in this House Oversight Committee situation. So is with beyond doubt the old guard does not want to cede power. And I think this is kind of the, the microcosm of that dynamic in that Pelosi is in a hospital bed in Germany whipping up votes to get a 74 year old Virginia congressman placed at the, you know, head of House Oversight when AOC is the person on the other side who has already got support. And so you see this kind of inability of the 84 year old, you know, stalwart leader of her party really to kind of under any circumstances let a younger popular celebrity Democrat rise who by all, you know, any definition would probably be great in the role. They just, there's something about the boomer DNA right now in Congress. It doesn't allow these things to happen. Finally, microstrategy, what can you say? I mean, I've been watching from afar. Everybody who, myself, my friends, we all bought the stock in 2021 is fascinating to be sure. I think it's a, what we're experiencing is a blip in the road, but the obvious trend is still upward.
- [33:03]
Scott
Did anybody see Biden's comments on stock trading in Congress, which I think came, came kind of out of nowhere. Nobody in the Congress should be able to make money in the stock market while they're in the Congress. Biden said endorsing a ban on congressional stock trading. Nancy Pelosi is not going to like that very much.
- [33:24]
Brian
Do you think the interview, do you think he planned to say this or do you think it just kind of slipped out as he is?
- [33:29]
Scott
I, I didn't see it. Did you, did you actually watch it, Brian? I, I don't know.
- [33:33]
Brian
Yeah, I did. I mean he had a lot to say and, and it kind of made me think that maybe he, he told the interviewer, hey mention this, but But I'm not sure. I mean, it sucks that it's at the end of his term. It would have been nice if he said this four years ago, three and a half years ago.
- [33:51]
Grant
You mean 45 years ago.
- [33:54]
Brian
Well, yeah, that too, I guess. Right.
- [33:57]
Scott
I mean, Grant, what do you think about that? It's astounding how much money and advantage there's been. Obviously being in Congress with stock trading, but also obviously the revolving door to industry and speaking opportunity and such afterwards. It seems like public service has just become a path to exceptional wealth.
- [34:16]
Grant
Yeah, I mean, look, I, I think both sides agree, no matter what side you vote on, it shouldn't be allowed. You know, she's made like we, if you do the math on what her net worth is today and what she's been paid by the US government. But she would have had to been in office for like 3,000 years. I mean, I'm not even exaggerating. Like, I did the math on it. She, she would have had to been in Congress earning $179,000 a year presence for the great pyramids or something. But it shouldn't be allowed. I think both sides agree with that. Who holds that up are the guys that are benefiting from it. And the American people just have to stand up and say, look, this is not going to be tolerated. And maybe that's who you vote in in Congress and Senate. You know, you vote for people that don't want that, don't need that. I think we're seeing a, a new time, a new era where extremely wealthy, successful people are going to be in politics because they want to save the country and they don't need money. And, you know, there's no amount of money you can pay Elon or Vivek. I mean, I guess there is, I guess there's some number for everybody, but most of these guys are already extremely successful. And so, you know, do they want an inside track? Maybe. But I think what, what some of these people want more than anything is just to make a difference.
- [35:39]
Scott
I think the inside track narrative with this group is largely false. I think the in, I think it's funny because the inside track narrative makes sense for a bunch of career politicians who never intend to innovate. Right.
- [35:53]
Brian
Well, you know, like, like the whole Elon thing in Doge. I, I, I actually look forward to seeing how that plays out. I, I do think that the people saying, oh, he's going to deregulate and help cut back on spending, that will maybe help him. I think that's a fair thing you say now the question is, do you not want him to be helped? Do you want him to have an unfair advantage? Possibly some people will say yes, his, his, his work with regulations and what, how Doge may scale back regulations. I think there's no doubt that it's likely going to help his companies, but it should also help other companies as well.
- [36:43]
Scott
Yeah, it's a bit of a catch 22. Right. Because to help innovation, you obviously there's going to be self interest or it's going to serve him.
- [36:51]
Brian
I don't think it's unfair to ask for some sort of like ethics agreement where, you know, like, like any involvement, any regulation he decides should be cut. He should maybe step away from that and hand it to Vivek. But yeah, I mean, we'll see what happens.
- [37:07]
Scott
Dave?
- [37:09]
Dave
Yeah, I think when it comes to. Well, there's two points here. First, when it comes to regulation, regulation disproportionately helps larger companies at the expense and hurts smaller companies. And we're not talking a small disproportion, we're talking a massive one. So it is, barring some incredible scalpel like precision, it's almost impossible to imagine Tesla being helped more than startups that might compete against him. I mean, it's just literally an impossibility, but because the way the rules get written, they get written by lobbyists who are taking donations. And so, you know, it is a very important reason why cutting regulation matters. And it's in fact something Vivek has talked about rather significantly and understand he understands this to be true. The other thing that it's worth on this topic of Doge, it's really worth reading. Vivek had, it's not that long of a post yesterday where he basically described the omnibus spending bill as exactly the same thing that they are really trying to stop. And he views it as a test and we'll see. But I think he's right. The fact that you would effectively put 65 cents on the dollar for every new dollar of spending, an extra 65 cents of spending on top of it in order just to keep the government open through till February is, I mean, borderline insane. But, you know, at the end of the day, I think, I think I forgot who it was talking before, Dan. I think I can't remember the fact that we have so many people in Congress who only really care about maintaining the status quo and their power is literally what's on display here.
- [38:49]
Scott
Department of Government Efficiency, though I think they're going to obviously have potentially a huge Influence on, you know, who loses a job and where the money goes and cutting down on bloat. But I think the people being put in charge of the regulatory agencies are going to have a much bigger impact on deregulation than Elon Musk is. I mean, maybe I'm wrong, but it feels like you should be looking at, you know, Quintons or whoever ends up at the CFTC and, and Paul Atkins and you know, the heads of FDIC, Fed, etc. And how that's going to make a much bigger difference. And along those lines, the fact that Chevron was overturned.
- [39:30]
Dave
That's right, that's absolutely true. Which is why it's so important to get people that are aligned into these agencies. But there's some agencies where that's really difficult to do. And all this nonsense about, you know, this resolution that got turned down yesterday to try to make everything a political appointee so you can't fire them. I mean, all this, all this nonsense that's going on to block stuff. I mean, keep in mind, every congressperson has a staff that's equivalent, it's larger than. We wouldn't even call them startups anymore. You know, Smoke, we'll call them small thriving companies. They're 20 to 40 person staffs. The fact that they haven't been able to read the spending bill, I mean this, this is just, this is not that hard. I mean, you know, there's a lot of people in D.C. at the agencies and congressional staffs that could actually do work that are basically sitting there with their, to, to, to quote a phrase, with their thumbs up their ass, kind of doing whatever, you know, whatever it is to maintain the status quo. And that's what they're trying to get rid of. So it's, it's a very deeply suited, deeply entrenched problem. But you're right, having the right people at the key agencies to change the way and the methodology of what they're doing is important, but it's going to take more than just that.
- [40:50]
Scott
I mean, Brandt, you're obviously a huge fan of deregulation, you've railed against the IRS countless times. I mean, how much of a tidal shift do you think this is? Seeing these people in the positions of power and seeing people obviously in the circles that you run in that maybe some of us don't starting to have some real influence on how business is done in this country?
- [41:13]
Grant
Yeah, I think, I think everybody's gonna, it's underestimating what the plans are over there to usurp status quo. Donald Trump hates the irs. Elon Musk has paid, you know, paid more than any single human being in, in history to the IRS without any acknowledgment. And not that he should be or not, but I mean it's still a big contribution. You put $10 billion back in the freaking US coffers. I mean you should be acknowledged. Any other place you would be acknowledged for your contribution, but not in this country, unfortunately. So the SEC is also a group that I think is going to be looked at as not the protector of the little person, the little guy, as they pretend to be. But I, I just know personally when with the jobs act, the 200, the $200,000 minimum non accredited accredited formula is such discriminatory, borders on racism. It locks out little people. The little guy, the startup individual, the 19 or 29 year old that will never make 200 grand in their lifetime. They will always be non accredited. And the only way they can become accredited is not through their salary, but through their investments. So the fact that whoever set that number, it is, it's just so ridiculous. That means if you make $189,000 by the way, you don't qualify. But if you, if you make another 11,000 now, you're somehow sophisticated. So it just discriminates. It keeps all the money. 97% of Americans are non accredited and that means 97% of all the money in this country will be kept by Wall street and big banks.
- [43:08]
Scott
You know what those people can do, Grant? They can go to Vegas and they can play the lottery.
- [43:12]
Grant
Yeah, exactly. They go to Vegas, they can buy a lottery and they could save their money at the banks and basically be depreciated into a, to a lower middle class. So hopefully those guys are going to listen to those kind of things. I think they are. I think Trump actually is.
- [43:30]
Dave
Don't forget, Grant, it also turns retail into exit liquidity from all the VCs.
- [43:36]
Grant
Say that again.
- [43:37]
Dave
Well, the IPO process is a great piece of. It's a great exit liquidity machine which allows unaccredited investors to become the exit liquidity from accredited investors. It's kind of a game as old as time and it's Right, right.
- [43:51]
Grant
Oh dude, that's that. Yeah, I get it. Yeah. Interesting.
- [43:55]
Scott
Yeah, they finally unlock after all their years and then they dump on retail when they finally get listed.
- [44:00]
Grant
The non accredited becomes the toilet. It becomes the flush.
- [44:04]
Dave
Yes, sir.
- [44:05]
Grant
Interesting.
- [44:07]
Scott
Do you think there will.
- [44:12]
Matt
There has been a movement to expand investor accreditation to encompass other factors, education or you know, other measures of sophistication and this is a step in the right direction they need to be doing.
- [44:26]
Scott
I mean like you pass a test to prove that you're sophisticated.
- [44:30]
Dave
Yeah, that did a lot for options, I mean, you know, we have zero day options which are nothing more than a gambling vehicle being the largest, most successful product launch in the options market. I mean it's a bunch of bullshit. I mean, let's just call it for what it is. The when you make a wealth test, it just looks and feels bad. So now they just want to expand it. When you throw regulatory roadblocks in front of people, it makes it hard. You know, anyone who's taken as many tests as I have, you know, all The FINRA tests, CFTC tests, etc. Will tell you that it just creates yet another bureaucratic bloat and it's going to be impossible to prove value to it. They may do it, but getting rid of that rule is the obvious thing to do. It just is. There's, there's literally no benefit to it. It's like a three quarter quote rule, right? We still have rules. You know, it's like the 30 day publishing rule for an IPO because it used to take that long to get prospectuses from the printer. Those are still rules on the books. So many of these are that way.
- [45:33]
Scott
Go ahead Panace.
- [45:36]
Panos
I'm not an American citizen, so I don't really know how this would work. But I mean, question to the panel. Would there be a way around this and this whole accredited side of things if we were able to tokenize these investments?
- [45:51]
Dave
The form doesn't matter, just to be specific. Tokenized is the technology. And the problem that people have with tokenization right now. The reason tokenization has been so slow is because it still has to go through the same analog rule sets. And that's why there's a whole bunch of reasons why Panos. Quite a few. We don't have enough time for all of them. But that's why crypto has stayed completely separate. Because, and that's why, by the way, we have these things called governance tokens which don't provide economic value because the instant you provide economic value, the SEC is going to scream it's a security. And then of course, the security has to be held by qualified custodian with transfer agents, etc. Etc. Etc. Etc. And it goes down that, that rabbit hole. So it's a better technology, but we also need better rules.
- [46:40]
Panos
Right, but if we, if we had more security exchanges, let's say, where the securities exchange is fully licensed to, they're a exempt market dealer. They can create security tokens and then they have a secondary market to allow retail to buy those tokens.
- [46:58]
Dave
Yeah, let me know.
- [47:00]
Scott
It won't.
- [47:00]
Dave
But. And the reason it won't is, is because to create a security for security to trade on, on there's two different types of exchanges. There' market system, New York Stock Exchange, Nasdaq, et cetera. In the ZOTC world securities either have to go through an IPO process which is incredibly rigorous, or a SPAC process, reverse takeover to list a national securities exchange. Significant fees involved in that, or they could go through one of these other vehicles. It could be, you know, reg A, there's, there's crowdfunding, it's a reg cf. All of which have limitations and difficulties. But, but any new company or new asset has to be what's called seasoned for a year before it can be listed and traded by retail based upon existing rules. So those rules are what need to be discussed. And one of the reasons why crypto is a big deal is because you can provide tokens, airdrop tokens or sell tokens or whatever to people who are not accredited investors and then they have immediate liquidity that does not exist in the world of securities. That's by the way, why the Trump brothers, Liberty World Financial failed. It's because they tried to follow securities laws.
- [48:12]
Scott
Yeah, you can't raise a bunch of money from token degens if they need to be accredited and go through kyc.
- [48:22]
Panos
Okay, understood.
- [48:24]
Scott
Quickly. I just happened to see this in the spirit of the conversation we're having. This is from Cointelegraph, so I haven't seen the full article, but breaking BlackRock ETF makes history by investing in the first municipal bonds issued on the blockchain, signaling a massive potential for RWAs. So as we're talking about obviously tokenization, these things are happening. It's just going to be very slow and very difficult until there's more clarity. But I mean tokenization is the future.
- [48:55]
Dave
I mean, Scott, you know, I've been saying this for six years. Real time on demand settlement, true multi currency, true global trading on much, much, much more efficient rails is going to eventually mean that every stock, basically every liquidly traded instrument will eventually be tokenized simply because the rails are more efficient. I mean you've talked to the guys from Franklin Templeton and just their, their money market fund, you know, they're the Benji and how much more efficient it is. It's just the gains are stupefying and that's why Larry Fink has been telling everybody the same thing. This is obvious. It's incredibly obvious. The issue is people in the traditional financial markets make a lot of money from inefficiency and so you got to break down those barriers. It will happen, but it's never without a fight.
- [49:45]
Scott
Yeah, I haven't checked it of late and I'm on my phone, so it's hard to see an art actually, but so it's got to be much built. But I think Tokenized Treasuries was, you know, 1.5 billion or something a few months ago, and the bulk of that was Franklin Templeton, as you said. But now I'm looking, It says total RWA on chain, 14 billion. I mean, that's a drop in the buff in the bucket of obviously potential global assets that can be tokenized. We're talking about tens of trillions of dollars. But it's meaningful. I mean, this is going to happen. I wonder if this is something that will in any way be affected by the new regime, whether we will finally see sort of death to the third parties that are in between all of these transactions. But there's gotta be some risk there too. But I mean, BlackRock, you can't have Larry Fink on a roadshow talking about tokenization every single day and not believe that this is happening in some way, shape or form. David, go ahead.
- [50:50]
David
No, real quickly. I really, I just wanted to say Dave Weisberger is just an incredible wealth of knowledge. I, I don't get to join the show every day, but it's just, I mean, you know, a lawyer, I'm a lawyer by training, practice, so on and so forth. But his just grip of all things securities related is really so valuable and I just, I thank him for being up here every time day.
- [51:20]
Scott
Dave, you've pretty much seen it all at this point, right? Yeah, the benefit of being old, see him play poker.
- [51:27]
Dave
I feel old sometimes when I hear that. It's just that I've run multiple broker dealers, David, and when you've done that, you, you have two choices. Trust your lawyers or become their friends by reading everything they read. I chose the latter.
- [51:44]
David
I know it well now, being on the client side. So yeah, I had the formal training and so, you know, it comes easily, more easily and naturally. But just. And the way you distill it certainly for the crypto assets is very, very helpful.
- [52:04]
Scott
David, worth discussing Ethereum here since we've got.
- [52:09]
David
Yeah, worth discussing Ethereum here. You know, we, we can discuss Ethereum broadly and then we can we discuss my project, you know, Ethereum broadly, I think, you know, important to stay above 4,000, which is, it is not. Seems to be retreating every time. It even gets, not just even a hair above it, you know, a good, a good amount above it. You know, I think that the conversation about its rivalry with Solana will continue. Avalanche obviously getting, you know, a good amount of investment recently. So that will go ahead and help their coffers and so we, we will see. In terms of how this horse race shakes out, I find that people are incredibly emotional about all this. I don't know why, but I'm not. At the end of the day, you know, there will be a winner, maybe there'll be multiple winners. It will take a lot of time before I think before we can crown a winner. Some people may not like that because maybe they only have one horse that they've been on in the race. I would not take that position. I'm betting on multiple horses in the race. And in terms of, you know, winning what, what I'm doing just to, you know, for the folks in the audience that, that don't know. I'm the CEO in addition to a bunch of other things that I do. I'm CEO of a publicly traded company. It's listed in Canada. It has a secondary listing on the OTC markets in the United States. The name of the company is Centaurus Energy currently and the company has a passive royalty stream from some oil assets that it has owned. And the company announced a couple of months ago that it would use Ether as its primary treasury asset. I went ahead and lent the company a million and a half dollars to start, start buying and staking eth. Very important in terms of US ETFs currently not being able to stake. And I immediately got called into the principal's office in Canada and I went through a five month process. Now my stock has been halted for five months. It has less to do with the crypto side of things and frankly more to do with changing the business from an oil and gas company to a digital asset or cryptocurrency company. That is something straight or unique. We don't have that in the United States that the exchange gets you, gets to call you in and talk to you about changing your business. I've been through a five month process, but we are on the cusp. Hopefully over the next day or two I can go ahead and say this, you know, since you can't trade my stock since it's halted for the last five months, we should get, we should get, you know, public permission to go ahead and move forward. And we have already petitioned for permission on Solana since there are other entities listed in Canada that do own Solana and stake Solana. And so therefore we'd be able to go ahead and add Solana potentially to our portfolio. And you know, the expectation is to go ahead and broaden it out from there. And so yes, we would be, you know, a proxy for an ETF stock primarily listed in Canada. So we're subject to Canadian regulatory regime. We're not, not subject to US Regulators because we just have a tracking stock effectively or a secondary listing here in the United States. So really can't get in the line of fire of US Regulators. Not to say that, you know, the regulatory regime is going to be hostile. I think it's going to be very accommodative, you know, under Trump. But nevertheless, you know, hopefully we'll be out ahead. And the idea is to go ahead and raise money and, and I hope to be able to, like Michael Saylor, issue 0% coupons, you know, on converts and go ahead and raise a ton of money to go ahead and plow into, into other layer ones other than Bitcoin. And that's really the idea. I think it's, it's just a vehicle at the end of the day. It's a vehicle that investors should have access to just like any other equity that could be in their portfolio, 401k, say whatever and off also offer the benefits of staking, which I think are very important. To go ahead and have an ETF without staking, you're missing a big, big piece of the pie of what, why this all makes sense in terms of ownership. So there you have it. That's what we're up to. Hopefully we'll be able to make this big public announcement sometime soon and you know, we're going to be rocking and rolling hopefully in terms of capital raising and putting money to work.
- [57:22]
Scott
Godspeed, my friend. Guys, we just ran up against time, 11:15. So we're going to go ahead and wrap and move on to tomorrow 10:15am Eastern Standard Time for the next crypto town hall. As I say at the end of every show, when I remember my ADHD doesn't kick in. Give everybody on stage a follow. These guys are exceptional voices and they're here for a reason. And so you should be.
- [57:47]
David
Scott, can I go ahead and promote? We have an FOMC, the Daily Finance show has an FOMC special show today at 1:30. We will have, you know, Powell's remarks, the comp, the, the press conference afterwards live. And we'll be discussing all the happenings regarding interest rates and inflation and unemployment. Unemployment, all things Fed related.
- [58:11]
Scott
I assume that's with Mario.
- [58:12]
Dave
Yeah, of course.
- [58:13]
Scott
Of course. He'll be the host.
- [58:14]
David
That is correct.
- [58:15]
Scott
So just so you know, this is, this is a big incestuous circle jerk of Twitter spaces about finance. Guys, we all work together just for everybody out there. So I will be tuning into that as well, David and love for you guys all to, to do that. So give everyone a follow. See you all, I guess, at 1:30 this afternoon to see if Jerome Powell sneezes in the wrong direction and rocks global markets. That's all we got for you guys. Talk later. Have see tomorrow by.