A (3:26)

It's incredible to have a forward looking regulator on technology and especially on our beloved crypto technology. It's almost have to pinch yourself still. Yep.

B (3:36)

Yeah. No, and as we've talked about before on the show, there is, as we saw with Gensler, there's a lot of damage that these folks can do and there's a lot of really powerful things that don't require Congress that, that can happen with, with someone who's forward thinking like this. So it's nice to see, you know, hopefully we can, we continue to see sort of action that backs up the rhetoric.

A (3:59)

Yeah, you literally just brought up Gensler and I had to quickly grab this story because I saw it in passing yesterday, but. Coinbase seeks court order over SEC's alleged deletion of Gensler text. Apparently they have Gensler purposely deleting documents and texts.

B (4:14)

Oh my God, of course they do. Yeah, I missed that one.

A (4:18)

I totally. When you said his name, I thought there was news about this yesterday and I had to bring it up quickly. But we won't discuss that. Just show you how bad the Gary Gensler era really was. The next story here. Senate Democrats layout framework for crypto market structure. Bill, this is sort of the usual suspects on the left side of the aisle. Kirsten Gillibrand, of course, Cory Booker Gallego, Mark Warner. But laying out a substantive framework, as they call it, for what market structure should look like. I think a bit of surprise that it basically came from the Democrats rather than the Republicans. Is this meaningful? Is this just another small step in the process of getting to a market structure? Bill, how do you read this?

B (4:58)

It's a small step that is super meaningful. Is the short of it, so the place that we have been is that the Republicans have proposed. We kind of have two Republican versions of this bill. We have a House version and then we have a Senate version. We've had tons of comments from leading Republicans in the Senate around how they think those things will be reconciled. Right. Recently we had Senator Lummis saying that they were probably going to take a lot of what came through the House bill as the core version, given how much sort of bipartisan support it had had. And the thing they were waiting on was whether Democrats were even going to be willing to advance the conversation. Right. A couple weeks ago we had Tim Scott talking about how he was basically frenetically working behind the scenes to try to create some cloud cover where the Democrats who wanted sensible market structure legislation could actually go do it.

A (5:51)

Right.

B (5:51)

And they were really trying to deal with, you know, it seemed like the big political sticking point was the President and his families crypto activities. And so what's significant about this is two things. One, it is now a Democrat version of this legislation that can be debated, reconciled, compromised on, you know, negotiated around, which they didn't have before. Right. If you don't have two versions of the thing from two different sides, you can't negotiate to find something in the middle. And that was not a guarantee that we were even going to get that.

A (6:21)

Right.

B (6:21)

It could have just been obstinate and held it up. So that's very significant. Second, the all the read of basically everyone is that it's a fairly. There's not so much space that it looks like it's dead in the water.

A (6:32)

Right.

B (6:33)

Like there, there are absolutely things that are going to be debates and discussions, but it's workable to get to some legislation, at least the way that it looks. I think that there is probably a lot of behind the scenes work. I think there's a behind the scenes triumph that we're not even really getting to enable this set of Democrats to, to come out and move this forward. It really hasn't been that long. We're not that delayed actually. We're just back in session now. So there shows some serious intent also, you know, yes, there were some of the usual suspects, Cory Booker and Kirsten Gillibrand, but Mark Warner can go a lot of different ways on things. You know, these folks are not, you know, they're not Richie Torres, let's put it that way. And so I, I think that it's very promising. And you can tell that because all of the comments from their Republican colleagues are basically like, yes, this is the spirit of bipartisanship. Let's go. This is good. You know, it's, there's no quipping and you know, sniping. It's, it's all positive sentiment around this, which is, you know, obviously the opposite of basically every legislation we get. So, you know, it's, I think there's reason to be bullish and optimistic.

A (7:37)

Yeah. And speaking of positive sentiment, we have the two other stories here from the title. NASDAQ seeks SEC approval for tokenized trading. The exchange could start offering tokenization of securities, including exchange traded products and stocks next year. And of course you're going to see NASDAQ making an announcement like that. BlackRock seeks to tokenize ETFs after Bitcoin Fund breakthrough. So a lot of talk of tokenization here. BlackRock obviously wanting to tokenize their own ETFs. Especially if we believe in a future where everything is tokenized and there's going to be incumbents like the Nasdaq competing.

B (8:10)

Yeah, yeah. You know, it's, it's funny, the real world assets was the odds on favorite for big key theme, you know, a few years ago as we were speculating around what would be, what would be the next big thing. And it really feels like it's finally coming to fruition. It's coming from all sides. I don't think we have it on the list, but yet a bunch of Kraken X stocks news and that product is going super well for them in Europe. There's just, it's, it's, it is, it is clearly sort of the moment where this next phase of moving towards tokenization of real world assets is coming to fruition. And by the way, going back to Atkins speech, he basically said everything's going to move on chain. Like all this infrastructure is going to move on chain. And so you're hearing it just from all sides and you know, certainly the big financial institutions are lining up to get their, to get their piece of the pie.

A (8:59)

Yeah, we knew it was going to come. Blackrock's been talking about the tokenization of equities and everything since before they even filed for the etf. But it seems like the competition is certainly heating up and we know that this is coming. I mean we've had countless stories about these real world assets being tokenized over the past few weeks. Some are small, but even, you know, galaxy tokenizing their own stock natively on Solana, not in a wrapped version, was a meaningful step.

B (9:25)

Yeah, this was always one of those things that was going to be it didn't exist until it existed and then it was insanely obvious. And people won't be able to imagine a time before it just from a sheer technology improvement. And all the things that you get to do when, when these things are, are tokenized, like there's just so much, so much obvious benefit. You know, again, we, I think we've talked about before the fact that that doesn't necessarily mean that value accrues to the base layer chains in the way that sort of our bag pumping desires have always wanted. But if you are just interested in crypto infrastructure infiltrating the wider world, this I think will be in retrospect incredibly inevitable.

A (10:01)

Yeah. Now we got to talk about IPOs, because it's a big day. The story we had pulled up was figure markets, figure stock pops after ipo, but Klarna Circle, Bullish crash, call for caution. But I think the bigger story obviously is that Gemini is going public today.

B (10:16)

Yep. Speaking of nasdaq, so Gemini is an interesting one. There's a few things going on. One is, broadly speaking, I think everyone is using the IPO windows to, or the IPOs to try to get a sense of where market enthusiasm, sl Mania is. Where on that spectrum from enthusiasm to mania, we are.

A (10:37)

Right.

B (10:37)

I, I, you know, for me, Bullish was the one that seemed to sort of indicate maybe more, more mania than some of the others. Circle was really instructive in the sense that it let us know how significant the stablecoin theme was to markets. Etoro was the one that sort of signaled that there was more excitement in the markets than we maybe had thought. And now we are kind of on the other side. That hump where it's like, is there still enthusiasm? You know, things have been a little bit more skeptical, cautious, you know, worried about bubbles, all that sort of stuff that's kind of been more of the dominant narrative in, in on Wall street over the past month. And so it's a really good bellwether to understand what the, what the state of play is now. It's a really mixed story right now. I mean the, the, the article that you just pulled up kind of tells that mixed story. These things had big pops, they went up for a while, they're down from that. But, but it's not like they're cratered or anything like that. They've moved back down to sort of reasonable valuations relative to where they started. I, I think by and large, if you kind of take them as, as a whole, figure had a big pop and, and now the The Gemini, I think, is, is a more interesting question for folks because of, there's a, there's a bunch of different ways to read it. You know, Gemini's financials were not exciting to people.

A (11:53)

Right.

B (11:53)

They actually had a loss in the first six months of the year. They were down from 2024 in terms of revenue. But NASDAQ just made a, or is in the process of making something like a $50 million in strategic investment into them. They're going to work with Gemini on, on custody and infrastructure. Nasdaq meanwhile, as we just saw, is also trying to get into the tokenization game and trying to sort of line up based on the guidance that we've had from the SEC and the CFTC recently about where different types of crypto assets could trade. And so Gemini has this counter narrative of, you know, potentially sort of big alliances and, and providing infrastructure for some other big players. So we'll see. You know, because if, if, let's put it this way, if Gemini pops, it's going to be some combination of an indication of continued enthusiasm for anything crypto, continued enthusiasm for anything innovative, continued enthusiasm for anything IPO right now, but also potentially excitement about this theme of, of sort of tokenization and, and collaborations with the financial system.

A (12:53)

Yeah, I think everybody anticipates that it will pop if Etoro and Bullish and Figure Markets. I had the CEO of Figure Markets on a week ago. They went public. I mean, this is incredible. But they raised 787 million for their IPO. Gemini is actually much smaller. I think they raised 425 million.

B (13:13)

Yes.

A (13:13)

You got to assume Gemini and the Winklevi twins have extreme name brand power regardless of numbers and earnings. We know that we are in a post data environment here for IPOs. Right. Because bullish would not have gone absolutely nuts. So I guess the key question is what that first article is asking is that is this just a cautionary tale? Are we now in the old ICO alt season of crypto public stocks where you get this first initial pump and then everything sort of diminishes back to zero? I mean, have you been looking at these treasury stocks? I mean, the minute they announced, when they don't own anything, they go up a few hundred percent and then all the way back in a matter of days. It really looks like the altcoin charts of like the late cycle in 2021.

B (13:58)

Yeah, they certainly, it certainly does. I mean, there's a lot of reasons. I, I think there's, they're fairly substantively different still than a lot of these things going public. Although Bullish is the weird exception where I think a lot of the justification for Bullish was their big fat stack of bitcoin that they still have, you know, as sort of a backstop. But, you know, who knows? It's, again, it is a bellwether for something. Exactly. What the signal will be is going to be hard to tell and it's probably going to take some number of weeks to really get a full, full sense of the picture. But I, I still do think that we'll, there will be a vibe around it that will give us a sense of, you know, whether, whether things are as enthusiastic as they were even a few weeks ago.

A (14:38)

Yeah. The final sort of topic we have here, not necessarily a story in and of itself, but it's obviously the economic situation and the odds of Fed cuts and the odds of how large Fed cuts will be, which obviously wraps in an entire narrative of what data are they using, Is it lagging, are they looking forward and is the data even real? Right. Bad jobs report raises new alarms among Republicans over Trump's tariff policies. Okay. But those same bad jobs reports have the markets excited because we. Means we're going to get rate cuts. There's a whole conversation about AI and whether that's the reason for these job reports. And of course, we had PPI come in hot and CPI come in sort of hot. So.

B (15:23)

Yeah, yeah, I mean, so the, the, this is a classically difficult situation for, for the Fed, holding aside all of the intense political pressure surrounding them, this is sort of like the first, you know, nudging indicators towards stagflation in some ways.

A (15:44)

Right.

B (15:45)

Where you have inflation, that, that is, is thorny and persistent, or at least more thorny and persistent than you'd like. But also the labor market really weakening. And, you know, it's very difficult in those situations to obviously decide where you're gonna place your chips. And then you add to that the, all of the complication around, you know, not being real clear or sure of what the data is actually telling you, particularly on jobs, and also just the intense political pressure surrounding it. The market is still fair, is still totally convinced, though what they saw in the CPI was not enough to overcome what they saw in jobs reports, which is. Has been pretty universally bad. It's like, you know, we have one sort of, you know, a few mildly higher than we'd like CPI prints versus a whole set of stories of real weakness in, in the job market. It's very clear that the market believes that between the, the, the comparative intensity of those signals as well as political pressure that we are headed towards a rate cut. In fact, right now the market is pricing in a 0% chance of no cuts, 92 and a half percent chance of one cut and a 7.5% chance now of two cuts of a double cut at this meeting. So, you know, it's not impossible that they get it wrong, but to this far out, I mean, this is next week. To, to be this far off when all the kind of main data is in would be pretty abnormal.

A (17:09)

I guess the question then becomes, do they just give us the 25? He kind of remains hawkish. We're going to be data driven moving forward. We've made 100 decision based on what we have now. Yeah, I should probably go into future cuts. Yeah, it's going to be a hawkish cut.

B (17:25)

Yeah, I, I think that, I think that there is, I think that there is enough pointing in that direction that it gives Powell cloud cover. To succumb a little bit to political pressure is sort of the, is sort of the thing, you know, like it is a reasonable. In this, you there. I don't think that there is anyone who could screamingly argue based on what we're seeing, especially with jobs, that that a cut isn't justified at all.

A (17:49)

Right.

B (17:49)

Like there's. Reasonable people can disagree about this, but it's, it's not a, it's not a clear cut. You know, if he's doing it, he's just kowtowing to political pressure. And so, you know, at this stage, why not? You've, you've basically spent all year kind of bucking against that pressure and betting on slowness, you know, like, I don't think anyone's going to accuse him of moving too fast. If this ends up not being the right decision, you can always back up. And he's, you know, Powell always reserves the right to, to shift his, his shift as opposed to continue to get.

A (18:18)

What's crazy is so many people are saying it could be 50 points now, obviously because the job revisions and how weak it is. I think that would scare the crap out of the market, actually.

B (18:27)

Yeah. Powell would never do that.

A (18:29)

There's not did that. People would panic so bad. They would. Everything's broken. Sell everything.

B (18:33)

Yeah, yeah. There's, there's no way, there's no way if, to the extent that Powell wants to be. The way that Powell would give us the double cut is by indicating that they're, they're, they're likely to cut again, you know, that this is not a one time thing. Everything, look, everything with this one is going to be about what he says. You know, sometimes the press conference and the, you know, the commentary after is less significant than the decision. Sometimes it's more significant. I think that this is likely to be one of those times that it's more significant because everyone's assuming 25. I'm pretty sure we're going to get 25. What they'll be watching for and you will see wild volatility in, you know, while he's actually up there at the podium is what he says about what comes next, you know, and that's where the market's going to be trying to figure it out.

A (19:17)

Totally agree. Well, as Matt Hogan said, it seems that recessions and bear markets have become illegal. So I'm just going to default to that setting and ride the bullish wave of insane euphoria and FOMO while I can.

B (19:32)

Yep.

A (19:33)

Because why not? And bitcoin's going to a million dollars by October. You heard it here first. No, I'm just kidding. But, you know, we. We still have people saying things like that. All right. I think we actually discussed it all. Was there anything else we missed? Pretty much nailed it.

B (19:45)

Although if. Although if. If anyone ever wants to talk about why I think there's a strong counter narrative that people aren't bullish enough about the stock market, come over to my show because I'm talking about that.

A (19:56)

Go to his show, because I have no opinion on that right now. Dude, check out nlw. Check out the breakdown. And we will see you next week for the next Friday 5. Thank you, man. Later, guys. That's dope.