← The Wolf Of All Streets
The Wolf Of All Streets
Bitcoin Makes A New All Time High. What Happens Next? | Crypto Town Hall
00:58:19
Loading summary
Transcript152 lines
- [00:00]
Scott
The all time high day to all who celebrate. Bitcoin currently trading at 111,000American dollars, almost hitting a hundred and twelve thousand dollars already today. Beautiful breakout for a new all time high yesterday basically and today it keeps making them really getting more firmly above that level today on nice increasing volume through that all time high. Things looking exceptionally good for bitcoin at the moment. Perhaps the bigger story is how exceptionally good things are looking for bitcoin at the moment. While exceptionally rocky things are looking basically everywhere else. Obviously the 30 year yield, the long bond of the United States made a high of 5.15% today. Still trading at 5.1%. That's usually a screaming signal from the bond market that there's a lack of trust in the United States economy and in what's happening in general. And yesterday in particular as bitcoin pushed to new all time highs. We had oil down, dollar down, stocks down, bitcoin way up. Now if you've listened to me harp on this for years, I've always said that bitcoin is an uncorrelated asset. I've never really changed from that. I've argued the point a million times yesterday. A beautiful example at least of how that can be the case at certain moments. And really worth diving into why that is happening. Dave. It's unbelievable the buying pressure right now. You and I kind of were joking on X. I kept saying, listen, there's these technical signals. We're going to get a draw down. Yeah. We get them for like 20 minutes.
- [01:43]
Dave
Yeah, I, I mean I. People didn't realize I was joking with the Batman stuff. I know, you know I was joking, but it's not that surprising. I mean you say it's surprising, but it isn't. I mean we know the buyers and it is really important to understand the nature of buying is different when buying is coming from speculative forces. And by the way, funding rates in the perpetuals are still rock bottom. So that's not what's going on when buying is coming from these sources. It's just the way that buying algorithms work is they're more patient, they're willing to buy more on dips, they're going to sit on bids, but they're not going to ratchet up. They're going to wait for participation. And when a lot of volume prints at a price, it will follow that volume. And so your notation about volume matters. And that's why we're seeing the sawtooth a little bit more extreme today. Yesterday the individual 1 minute candles were really small. Today they're much bigger. Why? Because more volume is trading and so algorithmic buying will in fact participate more. And so that's what you're seeing now. Why am I stressing this? Well, because it's more of that rotation from, I hate to say it, either dumb or frustrated money to smart money. And it's not dumb or frustrated. Really, that's not fair because there's a lot of Bitcoin OGs out there that are, to use your term, Scott, paying for their life because they have life changing money. So change their life. Okay, I understand that, but it feels like that that supply is, is petering off and as a result we'll end up at some level of price discovery. Now that said, you know what has been the dominant theme on on X over the last two days? Don't be afraid to take profits. Okay, that's cool. If you're trading, that's fine. But the most important thing about profit taking is you have to have a plan. When you enter into a trade, if you enter into a trade and you expect to be making a short term scalp, then by all means take profits. If you enter into a trade expecting longer term value, then that profit taking you're paying taxes on, then when you want to try to buy back in later, you're going to buy back in at a higher price. And so it really, really depends on what you're buying for and that that matters. And so looking at this market, I mean it feels to me like, you know, we're still, you know, just slightly over the top of the range. Basing out, I think going into price discovery is reasonable. Frankly I'd be a lot more bullish of the bitcoin conference or next week because it always seems to me that. That high. Yeah, exactly. So, you know, do I think that that's going to happen? Am I trading that? No. Well, do I think it probably. Am I trading it? No, for exactly that reason. I mean I, I, I. All I have to say is I'm looking forward to Monday morning when we can have our little conversation. Because if at this point we haven't seen positive divergence from Bitcoin vis a vis macro, I don't know what is. One last point on the bond market. Yes, the 30 year bond market in the US is a bit concerning. Yes, the 10 year yield being over 4.5 is a bit concerning, but it's still well within operating parameters. The one that's really concerning is Japan and that is a non trivial problem. There is a huge debt to GDP there. They have really, really low short rates there. We talk about what could happen if, if things really kind of blow up there. My guess is Japan will go into quantitative easing and that could be a big spark for assets, including bitcoin. I think that's the one to watch because what's happening in the U.S. you know, look, the news cycles and the financial media is so ridiculously biased depending on which side of the aisle they're on. It's kind of crazy, but I'm kind of with the people who say the doomsayers ultimately will regret it. I don't know if the Senate is going to pass the big beautiful bill and they'll get it through reconciliation, but it feels like the answer is yes. And if the answer is yes, then effectively all the people whining about, about tariffs and all that stuff, you have to understand, no tax on tips and overtime is a very politically popular thing. And so, yeah, you could spin it however you want to spin it. But what does this mean? Well, it means that any thought, and every time that whether it was Mike or others who talked about austerity ain't happening. But what is happening is making the tax code permanent and doing things to help the working class is going to give political air cover for the things they will do down the road. But it seems really clear that Congress is not in a mood to cut anything. And so deficits as far as the eye can see, printing QE here and in Japan, that seems to be the base case now.
- [06:36]
Scott
Dan.
- [06:38]
Dan
Yeah, morning, fellas. Just want to rewind a little bit to raise a point. I wanted to raise because they've covered quite a lot there with regards to buying and selling bitcoin.
- [06:49]
Dave
It's.
- [06:50]
Dan
At first I was like, I bought the ETF Prox or whatever because I was always complaining, saying, you know, it's quite hard to buy bitcoin. It's like really hard. Like, what are you going to do? Where you going to store it? These days, buying bitcoin is not my problem. Turns out selling bitcoin is a lot harder than buying bitcoin. It's very easy to do it technical wise. You can just click some buttons. But like, when to sell it? Because I don't think I'll ever sell all my bitcoin. You know, a buddy of mine, one of my best friends, he sent me a bunch of. Well, he had me help him sell a bunch of Bitcoin about two weeks ago when it was at 102 and he sold quite a substantial amount again to fund his lifestyle. He Bought a house in Abu Dhabi, but he's the worst trader in the world. So once he had me help him sell, that's when I kind of realized that the bitcoin bull's got legs to run yet.
- [07:41]
Scott
B.C.
- [07:43]
Douglas
Yeah, no, just, just made me chuckle on that one actually. I think. Good point from Dan. I think, you know, Dave always brings a lot of good points to this as well. I think, look, I think people are really focused on the bond markets. I think there's a lot of noise around it, right? But a lot of crypto Twitter noise. People that really don't understand it. Like Dave said, in terms of the 30 year, yeah, there's concerns kind of raising their head, but the US have kind of known about that for a while. If you look at capital flows, exposure to risk markets at the moment, I, in my mind, I really don't think that there's a question whether this can run. I think it can, it can really run. I also think that a lot of the things we're seeing coming through really haven't washed through yet from the things like the tariffs. There's still a lot of noise that's decanting. I think, you know, S P500, the NASDAQ looks very strong as well. Going back to Dave's point about Japan, I think that could be a massive stimulus for this, right? Obviously with the US as well, I think there's a little bit of confusion at the moment. There's the bond buybacks that are going on, right? So the US probably are going to have to go through some kind of quantity easing, right? There's going to be some kind of fiscal stimulus. And you know, if you see that, you see that aligned with Japan, I mean this thing could really, really rock it. I think the bigger question comes into how long this can last, right? Because if you look down the line a little bit, obviously all of this prosperity comes at a cost. And that is rising inflation, how that's measured, you know, truflation, if you look at it, I mean, there's basically different ways to look at inflation. I won't kind of bore everybody with that. But realistically, when you look at how inflation is certainly measured by the major banks and funds, central banks, et cetera, I think the issue comes with that kind of raising its head. I think it's higher than it's being projected typically. So I think really there's almost an argument that is kind of building into this bubble esque scenario. I don't think it is at the moment. I think we're Seeing bitcoin run hot, I think we've got a good several months ahead of us for risk assets. And I think any major stimulus that comes into that is going to obviously play a big role. But I think the ticking time bomb in here is inflation really kind of really starting to creep up again. And that I think is going to put a little bit of a cap on that, but very hard to say when that will be.
- [10:00]
Scott
Douglas?
- [10:02]
Gary
I think one of the things that people aren't realizing maybe this week is that the genius act and the fact that it continues to move forward is going to be very, very important. People expect that this could drive the Stablecoin market to 2 to 4 trillion dollars within the next couple of years. Well, that means essentially $2 trillion of demand for US Treasuries because obviously it's backed one to one with Treasuries. But this sort of puts a cap on US yields. It also puts a heck of a lot of dollars into the economy and it should drive bitcoin much, much higher. I think that the genius act sort of moving forward is really the bigger news this week in terms of why is bitcoin now forward? Because the US has realized that, you know what, there is going to be demand for Treasuries and we don't care if Japan gets out of our Treasuries or China because the demand for treasuries by stablecoin holders, and remember, Tether right now is already the seventh largest holder of US Treasuries is going to explode in the next couple of years.
- [11:06]
Scott
Anyone thoughts on that?
- [11:09]
Dave
I think that when you look at stablecoins, people, and it's tiresome that it happens, but so many people are looking at the first move in the game of chess, are really just playing checkers. They're saying, well, you know, stablecoins can't pay yield, so no big deal. What will stable coins do? Stablecoins will speed up the financial system. Stablecoins will become ubiquitous, meaning that if you are a broker, if you are coin, you know, you know, you're on coinbase all of a sudden. Coinbase is interoperable with every bank. Operation Chokepoint won't be over at that point. Operation Choke Point will be. It won't matter because that interoperability matters. The ability for service providers, whether that are NEO banks, fintech firms that aren't banks, you know, crypto exchanges, people kind of morphing, these business lines will start to blur. What does it mean? It means that people who are saving money will be able to Use just in time. Checking just in time. Stablecoin. So we move things into stablecoins from a tokenized asset instantly and pay your bills. That means that the amount of money that's to sit dormant, not being used, is going to go down precipitously. Keep in mind there are $6 trillion in money in savings that pay no interest and checking that pay interest less than half a percent a year. All of that money will become unlocked. Not only that, because the profit, because the interest on that money will flow into the real economy, even if it's just into yield bearing, which eventually it will go, that's $20 billion into the real economy. And so some of that money is going to end up finding its way into what people in the bitcoin space. And I don't like the aphorism, but I kind of understand the point that Bitcoin is the apex predator, okay, Call it whatever it is, some of that money is going to end up in bitcoin investments and crypto investments and more risk investment is just going to end up, as you say, in US Treasuries. Either way, it's a wall of money that right now is sitting, that's relatively unproductive being used by community banks to make risky loans. And of those loans, less than 20% of it are for mortgages and whatnot because that's being served and repackaged in financial markets. So it's a big unlock and it's non trivial. And the other thing we know about economics is when you make things faster, you get more of it. You make it faster and cheaper to do, you get more of it. And so all of that is a very big deal. I do agree that it's a big deal, but it's not a big deal for today. It's just another one of the big tailwinds that we have.
- [13:49]
Matt
Can you hear me, Scott? I think I'm in the glitch today.
- [13:52]
Scott
No, you're good.
- [13:53]
Matt
All right, cool.
- [13:54]
Scott
I hear you and see you. Which is like seeing a unicorn on the moon.
- [13:58]
Matt
Well, that was my nickname in high school, so. But yeah, everyone should call their local TikTok Hawk astrologer. We hit 111. It's a big moment. But yeah, I think that everything here is just spot on. I think the thing that is also a big looming question for a lot of people when it comes to capital deployment is the value abstraction and extraction as a result of AI. There was a great meme that was posted yesterday in my team Slack that was saying when your startup is just a bullet point in Google's presentation. I mean, and the same goes with, with ChatGPT. So it's like this is just going to continue to happen. We've got big AI sort of just continually innovating. If anyone saw the flurry of content of Google's video product that is now like almost indistinguishable from anything else in real life, it's just getting really, really crazy. So when I think you look at this and when I look at Bitcoin, I look at like a kind of an oh shit moment for technology where it goes, okay, I don't actually know where to put this capital. Everything is so risky, everything's innovating so quickly that Bitcoin is a safe, reliable place to do it. Which I think is a positive signal for bitcoin, but a looming signal for, for kind of how we address this innovators dilemma that we're currently in.
- [15:29]
Scott
Dan, hey.
- [15:32]
Dan
Yeah, coming back to stablecoins point, I remember I spoke to you guys a while ago, a couple weeks ago maybe how I live my life on Stable coins and I consult the companies, they pay me in Stable coins, I put them straight onto this platform that I use, can spend it immediately on my card. So I'm already living all that stablecoin life. But just by means of update, they've recently added the functionality where you can wire in US dollars in and out like using ACH or Fedwire and it's automatically converted into Stable coins so you can get your salary paid. If you're working in the US you get your salary paid in there or, or you can pay your bills out from there. So I think that's the next evolution moving away from banks. I don't use my bank anymore. As I said before, when I lived in Bali during COVID I didn't use a bank for two months, for two years, just lived a complete stablecoin life. So that Neo bank stuff that's kind of joining in between the banking system and the crypto system, I would choose that of my bank any day. So yeah, the ability now to receive US dollars in and pay US dollars out from a bank account in your name as well, which is important for some places. They don't accept you paying money and if the wire is not in your name. This is the future. I think this has changed everything.
- [16:49]
Dave
So Dan, now imagine the entire US economy being able to make the choices that you've made without any of the frictional cost.
- [16:59]
Scott
Yeah.
- [17:00]
Dan
As I say, I think this is the future.
- [17:01]
Dave
It's a very big deal. I mean, it really is. I mean, I remember trying to use Zelle and anyone who uses Dell or any of these things, you can't send more than $5,000. Some TD bank.
- [17:11]
Scott
So lame.
- [17:12]
Dave
Even more. It's so lame.
- [17:14]
Scott
I think it's a thousand bucks a day on TD bank or something.
- [17:17]
Dave
1200 exact. Yeah, it's something stupid.
- [17:20]
Scott
People are like, pay me on Zelle. I'm like, do you have a week?
- [17:22]
Dave
And considering we're going to have to do this every day, that gets worse and worse. Now all of a sudden you open it up and you also don't have to have hold all your money in your checking out, your auto pays all the things that you're doing, everything that people do. It's, it's. I hate this expression, but you're not bullish enough. You know, if, you know, if we get there and the opportunities for businesses and even for businesses that spend bitcoin are large. So there's a lot here.
- [17:57]
Scott
Douglas.
- [17:59]
Gary
Well, I think everyone's sort of concentrating on what US Demand for stablecoins is going to be as opposed to the international demand for stablecoins. I think that as you look through emerging markets, there already is a demand for a US product. They don't really care about yield in emerging markets. They just want to get out of whatever currency they're in so they can have the dollar, which they see as less stable compared. Sorry, more stable compared to their currency. The demand I think that's going to come from all of these countries globally is going to be astounding. And that's the demand. It's absolutely new demand that's going to increase M2 significantly, which obviously is going to decrease the value of the dollar and is going to be great for bitcoin.
- [18:41]
Dave
Well, I don't see how it decreases the value of the dollar if the rest of the world, it becomes easier to dollarize for it.
- [18:48]
Gary
Well, debasement of the dollar doesn't help the dollar on a purchasing power basis.
- [18:54]
Dave
Oh no, no, that part is right. But I think for our audience, people should understand the difference between what you're saying, which I completely agree with, which is assets go up because denominator goes down and the dollar relative to other currencies. They're two different things. But yes, I think we're on the same page.
- [19:16]
Gary
Yeah, there's going to be tremendous demand for a U.S. stablecoin. But you know, if Japan wants to fix, how do we get more Japanese people or more people to start buying Japanese long end JGBs well, they're going to have to do a stablecoin as well. It's sort of like this whole brand new demand for stablecoins is going to be brand new and it's not really shifting. Someone that's right now in their US deposits and they switch out of their bank account now into a, into a stablecoin. This is going to be an international movement where people start on their phones grabbing stablecoins and keeping their savings in stablecoins rather than their local currencies. And I think that it's going to be very good for the United States. It's going to keep the US obviously as the dominant reserve currency. And it's going to be tremendous for Bitcoin because it's going to see a huge growth in M2.
- [20:06]
Scott
Now. It's pivoting slightly. I know. Carlo, I asked you to come on because one of the bigger stories today is sui. I'm not going to call it a hack or an exploit or a bug because I have no idea. But it's worth discussing that there's something strange afoot at the Circle K for SUI at the moment.
- [20:24]
Carlo
Good morning, Scott.
- [20:26]
Scott
Good morning, Carla.
- [20:27]
Carlo
So here's what we know so far. Cetus is a protocol, it's a dex and a liquidity provider for the Sui blockchain. And it was reported early this morning on Cointelegraph that there was some kind of an exploit. Initial estimates were 11 million and SUI was drained via USDC liquidity pool. That's escalating. Now according to Decrypt, we're talking about potentially over 200 million and 60 million of that being funneled through USDC on chain to Ethereum. The theory is that this might be an Oracle exploit. Oracles provide external data price feeds on smart contracts and what they think may have happened here is that false data on some spoof tokens was fed through an Oracle which misrepresented asset prices on a bunch of SUI meme coins, which triggered a huge liquidity drain on those meme coins. Both Cetus and Sui have announced that they're looking into the exploit. I think an important caveat to say off the top is while this is certainly concerning for the Sui ecosystem, I think that an Oracle exploit like this can happen to any L1. Any L1 that does liquidity and defi is is subject to these potential exploits. The the thing here is that we have a newer L1 which has not been as battle tested as others like Ethereum. However, if handled correctly and if they get to the bottom of this, I think they can recover from this. We just need more facts. We don't know the extent of the exploit and we don't know how they, how they pulled off this exploit, but it certainly is dominating the timeline and impacting sui's price.
- [22:19]
Scott
Yeah, but I'm looking at the price, it's down 0.51% in 24 hours. I mean I'm looking at the candle, it's a Darth Maul. So it went up, it went down and came right back to where it started.
- [22:30]
Carlo
The, I mean this could be just like those salon.
- [22:32]
Scott
That doesn't indicate how bullish the crypto market is. Like there's nothing that makes people want to sell right now.
- [22:39]
Carlo
This, this makes me think of those times where we had those Solana blockchain shutdowns. Solana is down. Everybody would freak out, price would plummet and then immediately recover. And yeah, you got to realize too when it comes to the SUI chart, it was on a massive run up before this announcement.
- [23:01]
Matt
Yeah, a great summary there. Really thorough. The one thing I'd add is as a result of the liquidity pools, excuse me, being pulled, it was the liquidity pools that were powering a lot of the meme coins on SUI. So the meme coins on SUI, while SUI itself hasn't moved that much, are down 70 to 90%. And the liquidity just keeps getting drained out. There is assets that are now being.
- [23:27]
Carlo
Proven on chain to be bridged into eth.
- [23:30]
Matt
So I think the initial kind of shock response was this is an Oracle issue, we're looking into it. And then once the assets started to bridge and move and purchase eth, it started to get real that this is something probably a lot more malicious and is being reported as such and it actually keeps continuing. So as a result of that, the USDC on sui, as a result of these liquidity pools completely depegged and went to zero. Just because everything is being pulled and drained. It's, it's actually pretty significant and pretty crazy. So quite, quite a story that's developing.
- [24:10]
Scott
You guys just said a lot. And what I heard, and I am not a maxi, was buy bitcoin and crypto's garbage. That's what I heard. That was the summary of what you just said.
- [24:19]
Carlo
Well, you just sent them like you.
- [24:20]
Scott
Just said, the signal on the planet wants to deal with this stupidity. I'm sorry, it pisses me off every time. I'm not trying to get like whatever. I like altcoins, I believe they're speculative VC investments, but I do not know how you can reasonably risk manage or even assess the risk of something like this given the token's not even going down. So who cares? But like, you know, you can be as passionate about one of these projects as possible and then all of a sudden North Korea comes in and just completely screws you over it. It's just mind boggling. Like I really, I trade all coins. I have a deep investments. I believe a lot of these projects are the future, but you should not be overexposed to any. I'm sorry, it's on. It's unbelievable. Is my summary correct? Like how can you, how can you, like if you're a SUI believer developer, any of those things, how can you properly risk manage liquidity pools getting hacked or whatever happened?
- [25:19]
Matt
I think that assumes that you believe these people understand what risk management is and deploy those kinds of strategies when they're in the casino. You don't go to crap. That's right.
- [25:28]
Scott
So how do you. But you're not supposed to be in a casino when you're building fundamentally important things on a new protocol.
- [25:35]
Dave
Understand something, Scott. It's not the SUI token holders money. Right. You know, that's. Yeah, I mean, and nor was it the salon, nor did the Solana holder care that, you know, it went through a period of time over a couple years where the network literally shut down four times. I mean, if you're buying layer ones, you're buying them, you're placing your bets on the tokens, the ecosystems you think will ultimately mature and be the basis for significant total addressable markets of value transfers.
- [26:09]
Scott
By the way, Dave, that is my, that's my entire premise to investing in altcoins. So I agree with you. So I'm being hyperbolic, but man, no.
- [26:17]
Dave
No, I understand that. But there's a difference between investing in the layer ones or investing in infrastructure picks and shovels and investing in the stuff that people trade on them. Right there, there is a big difference. And I think it's pretty well understood that there's huge risks investing in a lot of these decks, you know, relative, you know, to everything else. And that's different. And I'm just trying to be a little less hyperbolic than you. I mean, look, we all know I'm not a maxi. I'm a 90%, you know, okay, you know, whatever.
- [26:47]
Scott
Yeah, I'm like 75%, whatever the number is.
- [26:51]
Dave
It depends on the day, but it's somewhere between 80 and 90 in my case. But that's okay. It is, but it is worth understanding that you know that there, there's a different, there's different things like you know, you're going to have a sponsor in a little bit or a guest in a little bit and you're going to be talking about a protocol specifically that's underlying stablecoins and where that's going to grow. And those are things that, you know, you look at that addressable market and you evaluate it as such. Sui is one of, is something similar to that. You know, Hel Solana, you know, we say, well it's the best casino, but are you really buying it because of the casino? No, you're buying it because you think the casino is proving that when you're going to automate equities or this or that, that it might win. That that's what, that's, that's the investment thesis. So I do think different.
- [27:38]
Gary
Guys, I just wanted to bounce in here on this subject because I think the, the alt market is getting ready. Well, I think it's already been taken over by the stock market. I don't know if anybody's watching like Meta Planet. The spread between Meta Planet in the United States today and Germany was $2.50 at one point. Now it's come in hard. You have a 38% decline in meta Planet in Germany and you have a 41% decline from yesterday. Well, probably even this morning down to 908 on Meta Planet. So I don't know why anyone's going to trade Altcoins when every week we are going to have an announcement about some public company converting its strategy to a bitcoin play. The spreads between these companies, I mean I've never seen stuff like this when you have a $250 spread in a stock.
- [28:37]
Matt
Gary, can I comment on that?
- [28:39]
Gary
Yeah, yeah. That's 30% of the underlying. I mean it's fucking massive. So go ahead. Yeah, please.
- [28:45]
Matt
But it's because, so this is really important because Meta Planet is going to keep coming up and the reason that I'm a holder of the actual Japanese stock is because it's infinitely more liquid than the. What is being traded on the US Exchange is an adr. It's an American Depository receipt. It's a representation of the actual Japanese stock. So it's not the actual thing. So of course there's going to be a short squeeze because there's not any liquidity in this stuff. You can't trade options on it. It's very not liquid. And that's the reason you see this crazy pump and dub. So if you are interested in getting involved in Meta Planet and you have access to like Fidelity or Schwab, you can go into their institutional space and trade an international stock, which is what I recommend because the Stock is up 20% today. If you're building it in Japan.
- [29:34]
Gary
Matt, what's the symbol for the Japanese?
- [29:38]
Matt
3350 Colon JP. 3350 Colon JP. It's trading at $6 and 50 cents. Trades for about 75,000 yen a share. And it was up 20% yesterday. It's the most. It's the single most shorted.
- [29:54]
Gary
What's the trading right this second?
- [29:57]
Matt
Six dollars and fifty cents.
- [29:59]
Gary
And it was where yesterday?
- [30:01]
Matt
Five dollars and eighty cents.
- [30:03]
Pat
Yeah.
- [30:05]
Matt
So just for just a word of caution out there. It's not like when you see Meta Planet trading.
- [30:10]
Gary
Yeah, this was my point, Matt. Yeah, this was my point. I think people are going to chase some of these charts and they don't have a clue what they're buying.
- [30:19]
Matt
Absolutely. It's an adr. It's an American depository receipt. Probably the most boring thing that you could think of in finance. And people are going to try to squeeze in there and get wrecked. So please be careful.
- [30:31]
Scott
People in crypto are going to squeeze into something and get wrecked. Wow. Breaking news. It's what we do, guys. What we do. Unless you just simply buy bitcoin. Such a weird. I'm such a maxi. Non maxi. It's so weird.
- [30:45]
Dave
There is one point I want to make here because it's really important in the long term if you want to understand why all equities will be tokenized. This conversation is it in a nutshell. In other words, crypto. We're used to assets that, apart from the kimchi premium where we had artificial capital controls, we understand that you can trade Bitcoin in every currency and it's fully fungible. Whereas in equities you have to do these things called ADRs, which of course the banks make a spread on to the trading is a spread, et cetera. Imagine a world where corporations can list and effectively because they're tokenized, it can trade globally in every single currency. And these sorts of spreads won't be there right now. People don't understand. You're right. They have no fricking clue. And look, I grew up when Royal Dutch Shell in Amsterdam, the shell, the British one, had an arbitrage and God forbid trading the ADR in America, they were literal whole people. That's all they did was arbitrage Royal Dutch Shell among the three different trading vehicles because there was that much stupidity. That was during the 80s and early 90s when things were moving. But this is something crypto is going to fix and ultimately whatever the Rails are that do it will have some value as well.
- [32:07]
Matt
Just a quick note there, Dave. It's also going to work in the reverse too, because we're actually working to do depository receipts with Bitcoin and XRP so that you could have representations of your digital assets, assets on a brokerage, on an exchange and potentially do like treasury laddering, fixed income laddering. Imagine putting your Bitcoin holding your Bitcoin in custody with a secure qualified custodian and then having that represented at Schwab so that you could trade treasury ladders or trade fixed income ETFs and earn additional yield without putting it at risk by holding msti, for example.
- [32:42]
Scott
Yeah, Misty is also. I never even looked deeply into that and then all of a sudden saw it everywhere. Maybe you could break that down.
- [32:52]
Matt
So I mean, that's just a yieldmax product. Basically what they're doing is taking volatility from the microstrategy stock and then they're trading covered calls and a number of options and strategies on it. Dave talks about this a lot in a very eloquent way and they're able to generate income from it. But as we've seen, and Gary mentioned this earlier this morning on Dhanush's Face, the price doesn't move because every alpha that they get from this, they just pour back as a distribution as income, which is one strategy. But if you're in a taxable investment account, you're getting taxed as income. So this is probably not ideal. The only real rational strategy for holding MSTI is if you have a Roth IRA where you're paying attention. Thinking about this correctly, right? Tax free, you're getting those tax free. So that's probably the only real good use case for it. Otherwise it's a good way to compound msty, which could be its own, you know, shit show in the future. But yeah, that's basically it.
- [33:47]
Scott
We have a lot of compounding shit shows right now. It's the early innings of the compounding shit shows, but we have a lot of them, in my humble opinion.
- [33:55]
Gary
You know what, Scott? It is the early innings and I'm beginning to wonder. Too many of these strategy copycats all come in the market too fast. It concerns me a little bit, I got to say. There's so many of these guys, another group, they're going to buy a thousand bitcoins. I Mean, that's their entry position from China.
- [34:16]
Scott
Since. Since. Okay. So like I love. We all, I think, love Saylor. I think we understand that he's managing his risk relatively well. He's first to market, he's going to remain the biggest. I think he has a goal in mind. I was pretty excited about Cantor and Jack Mahler and Softbank. I think that was a big signal. Nakamoto. I think Bailey and those guys know what they're doing. We go beyond these three, like if they're going to be big, it starts to really worry me. I think that Bitcoin hits 120, 30, 50 and at that point we get 20, 30 of these copycats which are just, you know, bitcoin hedge funds larping as bitcoin treasury companies. And they're going to be a bunch of speculators who don't know how to manage their Treasuries. And the minute Bitcoin drops 15, 20%, which it always will, they're going to puke and cause a liquidation cascade. And it will be the next reason that we should have had a 20% drawdown or 25%. We get a 45 or 50% drawdown because they're late to the game and they fomo in. So I think that there's a proper amount, Gary, of these bitcoin treasury companies utilizing the strategy who understand it, but you can't have everybody raising convertible debt all the time, endlessly and just having their sole business be that without at some point that tax becoming due every time. I'm also worried about miners after talking to you, by the way. And now we have miners who are underwater doing the exact same thing. Great.
- [35:44]
Dave
Well, I mean, you need to look at the size of the markets, right? You know, when we had the top in 21, and I'm always pointing this out, the leverage in the system was immense. The volume traded in the open interest in perpetual swaps dwarfed the spot market volume. And the amount that was actually available for trade, that leverage was huge. And when that, because of Luna started cascading liquidations, it got forced down to 16,000. We all know what happened, but it was a massive deleveraging. Today we have none of that. Literally it's a fraction of, of what it was. So now we have some treasury companies. Add it all up. Outside of the three that you mentioned, it won't amount to a hill of beans. It's worrisome because no one likes pyramiding. If you think this is a short term top, if you think that it's going to revert to some rational valuation based upon the overall adoption and scaling. Well, then it won't matter. There's no question in my mind that I would far rather see a thousand companies saying, you know what, Bitcoin should be probably part of my treasury than. Than 10 saying, I want to, you know, raise more debt.
- [36:58]
Gary
I agree with that.
- [37:00]
Scott
We want everyone buying bitcoin.
- [37:02]
Gary
Yeah. It's just all at one time and they're all selling the same story, and I'm not sure they're prepared for it. To Scott's point, we just don't need.
- [37:10]
Scott
Financial engineering to buy bitcoin. That's what concerns me. Like, everybody wants the Tesla block strategy for every company, institution, sovereign individual in the world. Buy. Take 5% of what you have and buy bitcoin with your cash spot and hold it. That's not going to hurt anyone. Your mic is hot. Are you. Yeah, go ahead.
- [37:35]
Matt
Yeah.
- [37:35]
Pat
Do we, do we know if anybody's.
- [37:37]
Dave
Actually doing any innovation?
- [37:38]
Pat
I haven't really looked at it too.
- [37:39]
Dave
Deeply, but, you know, is Jack Mahler doing any innovation? And by the way, I mean, I.
- [37:43]
Matt
Think, if you think, where is the value added here?
- [37:46]
Scott
It's not at the value add is.
- [37:48]
Carlo
Anybody can buy bitcoin.
- [37:50]
Matt
You know.
- [37:53]
Scott
I don't know what you're doing there, buddy. You sound like you're underwater and you're, you're like, oh, my God. Sorry, Lou, we couldn't hear you, man. You sounded like you were diving a thousand feet deep and your iPhone was screaming that your headphones were connected at the same time. So if you could fix that, that would be awesome. Yeah. Sorry, Matteo, were you jumping up?
- [38:17]
Matt
Yeah, I was just going to say, I think Lou's asking, is anyone actually innovating or are they just financially engineering?
- [38:23]
Scott
And I think, I think financially engineering, what innovation can there be? Raised debt by bitcoin? Raised debt by bitcoin. Rinse, repeat.
- [38:30]
Matt
Right, that's right. And I think that that is the big concern because right now the whole story is accumulating in balance sheet, sheet optimization. There's no actual conversation on profit taking, managing the bottom line, how they'll continue to, you know, accrue and build. So, you know, I think it becomes increasingly problematic down the line. And just like anything else, it's so opportunistic that the more that do it, the less savvy that they'll be and the less sophisticated the actual financial engineering that will go into this. And that just means accrued risk in the system.
- [39:12]
Scott
Yeah, listen, it might be great I also don't think that it's going to be the thing that causes the top per se. Just to be clear. As I said, I think it's the thing that makes a bigger drawdown than you would have maybe naturally had. When the financial engineering unwinds and they're for sellers. That's what concerns me. I mean, you know, I don't think there's a, a big glaring contagion top signal yet of any sort.
- [39:47]
Matt
I think the top gets marked when no one's willing to pick up this debt.
- [39:50]
Carlo
Right.
- [39:51]
Matt
So I think when all of a sudden more and more companies are trying to do this and no one's actually willing to finance it, that's when the writing starts to get on the wall.
- [40:00]
Gary
Yeah, I think that's. I personally see this as an opportunity for people that are well schooled in bitcoin. This is going to continue the volatility. And to me that is awesome. It allows me to prepare. We know these guys are going to this up all right. Their PEs are going to get jacked up, they're going to make a mistake, somebody's going to get breached, the whole group will get sold off, Bitcoin will get sold off and we'll be able to buy cheaper. That's awesome. This is the, the. I've never seen an opportunity where the more people come in, the more opportunities the beginners have. It's truly fascinating. Hey, I just wanted to like. And I know some people picked up United Health Care and this is my point about all this volatility and I'm really like anybody picked up UnitedHealthcare at 250, they got $50 in the money. It's awesome. But a week ago you could have bought bitcoin at about a hundred grand too. So like I look at these two trades and I'm like, man, bitcoin could run here a long way without any risk to. Not much risk to the downside. And when I look at a UnitedHealthcare just it's so obvious how starkly different these investments are. I have no DOJ exposure whatsoever. No fraud, no human error. Three CEOs go missing. I mean it just the difference in this investment is I don't know how you can't be super concentrated on this because it's such a safe trade. I hate to be so bullish all the time, but it's, it's, it's really spectacular.
- [41:38]
Pat
I agree what Wal said. Gary, we do have a sponsor today. It's velo official. The, the account down there With a nice pink logo. I've also pinned up a post of theirs in the nest if anyone tuning in wants to click their profile. But before we get started, just a disclaimer. So, Mario's company has become one of the eighth largest social media platforms in the world. And his company, ibc, does marketing, incubation, and investing. Sponsors on the show are sponsors working directly with ibc, not necessarily crypto, town hall, myself, or Scott. But before we get started, Velo, why don't we do a mic check and try to do a bit of an elevator pitch here?
- [42:23]
Carlo
I'm sorry, I was offline for a second. Were you talking to me, Buzz, I apologize.
- [42:27]
Pat
No, I wasn't talking to you, Carlo. I was talking to our sponsor, Velo.
- [42:32]
Carlo
Okay, thank you.
- [42:32]
Pat
But I appreciate you filling the void here. I'm not sure if anyone else can hear him.
- [42:38]
Gary
Negative.
- [42:39]
Pat
Negative. Okay.
- [42:40]
Gary
I don't see him coming off mute either.
- [42:43]
Pat
No, neither do I. Just wasn't sure if it was a UI bug there. Carla, you can go ahead if you had any other point to what Gary just said, and we can maybe wait for Velo to come online here.
- [42:57]
Carlo
Yeah, look, I cannot argue with anything that Gary is saying. I think that we're going to see as this continues to evolve as a trading arbitrage, putting bitcoin on your balance sheet, putting Bitcoin on your stockholder balance sheet, These things are going to inevitably result in reckless behavior and people getting over their skis. And I have to. I have to agree, that's going to probably be long term bullish for Bitcoin, although it's going to be disruptive in the short term. And people who are quick to pull the trigger and panic trade on negative news about some of these stock liquidations could get burned. So you've got to be very mindful of the bigger target here, which is Bitcoin is the asset that outperforms everything. These stocks are transitory, and these stocks that are essentially leveraged on bitcoin are subject to volatility. And I agree with Dave. It's a little alarming to see a lot of companies trying to play the microstrategy approach. They were first in, they were in early, and they definitely have a mover advantage in this. Other people that are chasing that shiny object and don't get the big picture like Sailor does may get over their skis.
- [44:15]
Pat
Gary, question for you. Do you think that we're in for any sort of double top like we had last cycle? A lot of people are saying in my circles at Least that the macro is a little bit weak and they're, they're kind of nervous about a similar double top as last cycle. What would be your thoughts to that?
- [44:33]
Gary
You mean right here?
- [44:35]
Carlo
Right here?
- [44:35]
Pat
Yeah.
- [44:36]
Gary
Nah, no chance. We're in a double cycle here. Do the momentum on this thing is like robust. I've not seen momentum like this on bitcoin. Like this is different momentum than any time I've ever watched it. This is real money coming in here. So I, I don't see the double top here. Not, not even close.
- [44:57]
Dave
Grinding, hated, hated. Rally climbing a wall of worry. Bitcoiners all talking about taking profits all at the same time.
- [45:04]
Gary
This is happening well and just, and just to the point you made about the, the macro picture. This couldn't be better for, for bitcoin. This macro up complete cartoon show debt. So I, I don't see how we get to it. To me this should be the most robust bull cycle for bitcoin in its entire history. It's what could go wrong.
- [45:33]
Pat
Hi, sorry, I just joined again just now. Trouble with my microphone.
- [45:40]
Hey, no worries. Who do we have behind the mic with the Velo team?
- [45:44]
Yeah, so my name is Pat, I'm representing Velo for the crypto town hall. Thanks for having me again here.
- [45:51]
Yeah, no problem. Welcome. Welcome to the show Velo or Pat rather. For people who are tuning in. I did pin one of the Velo tweets up into the nest and of course their profile is up here if anyone wants to click on it and follow along their website throughout the ama. But why don't we start off with just an elevator pitch? I know Dave, you eloquently kind of set the tone for who our sponsor would be today, earlier in the space, but would love to hear it directly from the source.
- [46:18]
Yeah. So in short, Velo protocol is a blockchain powered PayFi network. We're actually building the infrastructure for the next generation of global finance. Our mission is to make financial services faster, more inclusive and more programmable, especially for users in emerging markets. So some of the service we're talking about here are instant cross border payments, return trading and liquidity on chain tokenized assets and lower cost remittance, all within a unified sort of one platform ecosystem. Our goal is to bridge the gap between Traditional Finance and Web3 Network Economy or infrastructure which include products like the NOVA for smart contract operations and WARF for interoperability. We're enabling financial superhighway that supposed to supercharge the movement of funds for both fiat and crypto. And they're backed by real world adoption partnerships with licensed institutions.
- [47:16]
Scott
So at the end of the day.
- [47:16]
Pat
We'Re not here to innovate. We're actually trying to build a rail or infrastructure for a new PayFi financial era.
- [47:25]
I had the pleasure of interviewing you guys the last time that you were on the show. And I remember from that show a lot of the excitement was, was really in those rails that you were talking about in the tech roadmap, if you will, of what you guys were going to be able to accomplish. Can you maybe touch on maybe in the last few months what you guys have done and where you are now?
- [47:44]
Yeah, there's been a few bigger milestones. We've advanced our RWA tokenization efforts. One of the standard project involves organizing gold reserve in Laos using the Solana blockchain. This is something that we are collaborating with our partners in Laos and the government involvement as well. We've also enhanced, as I mentioned, the NOVA infrastructure, which now supports more efficient and compliant smart contract deployment for PayFi applications. This sort of becomes a backbone for other builders to create remittance trading and geosolutions within our ecosystem. We've also deepened our presence across Southeast Asia, expanding different corridors, partnerships with local entities, onboarding new institutions and merchant partners to facilitate sort of our payment ecosystem.
- [48:36]
That's awesome. How did you guys pick Klaus to do that? The bitcoin deal there with the mining.
- [48:42]
So this is something that there was, I guess the introduction that we met somebody who were looking to work on Laos. As some of you may know, it's one of the largest gold deposits in the world. They also encountered certain issues with their currency being devalued so heavily. Fluctuation. So with all of this, I think some of the solutions we talked about could really well benefit Laos in terms.
- [49:11]
Matt
Of the users there.
- [49:12]
Pat
But also we benefit from access into real gold reserve that we can possibly tokenize and bring them on chain.
- [49:20]
Very cool. I love talking to projects that are actually doing things in the real world. It's certainly a breath of fresh air. But I know the big news of today and while you guys are on the show is you're working with Paxos. Can you maybe break the news there and what the nature of the, the relationship is with Paxos and what that means for you guys?
- [49:42]
Yeah, this certainly goes with some of the topics that were mentioned earlier in the session. So this collaboration with Paxos, really a step forward for us. At the heart of it is bringing regulated yield bearing stablecoin into our ecosystem. Paxos as some may or may not know, is an issuer of USDL or the LIFT dollar which is a stable coins as regulated under the FSRA and Abu Dhabi. By working with them, we're aligning on two major things basically which is access to regulated digital dollar and tokenizing real world assets that can be used within our financial ecosystem. So this is our chance to deliver stable trusted digital assets directly to our users within our ecosystem, whether that will be trading or remitting.
- [50:33]
If any other speakers are here, can you guys hear them? No thumbs down pat. We might have to get you to cycle back or maybe try muting or. Oh, I heard something there.
- [50:47]
Oh, sorry, sorry. What I was, I muted earlier.
- [50:51]
You cut out for maybe 15 or 20 seconds there.
- [50:54]
Ah, sorry. So in short, you know, I don't know when I was cut off. But essentially partnership with Paxos brings in a regulated stablecoin deregulated in Abu Dhabi. It allows us access to regulated digital dollar but also tokenized robot assets that can be used within our ecosystem. So this goes beyond just helps us bring in more trust from institutions and users.
- [51:23]
And I know Paxos is pretty well known for just its regulatory rigorous. And I also know that I think it was the SEC put out a report maybe a month or so ago talking about how yield bearing stablecoins might not fit in the American framework. Can you talk about talk about that and how important it is to be working with a company that takes regulation seriously like Paxos and what that means for you guys.
- [51:53]
So yeah, so regulations are still very important, especially for us which aim to create use cases that touch in the real world, especially in fiat. Paxos has different entities that are regulated by different authorities. So some of their entities are regulated by the New York Department of Financial Services, some that are more regulated by the MAS in Singapore and some that are regulated in Abu Dhabi. This sort of gives us different flexibility in terms of usage, but also in terms of how we cater or use some of their products incorporate into our service offering in different corridors or different countries. So as you know, if to comment on your question, which is if the US has an opinion that a yield bearing stable coin does not fit into them, perhaps we would have to exclude certain U.S. areas use case that touches U.S. soil in other jurisdiction which does not have this restrictions and we can offer the service.
- [52:59]
That's awesome. Congratulations on that partnership and in working with Paxos, how does that really fit into your long term goals? I know what you guys are really looking to build Is that global financial system with Velo, what does that mean for the long term goals with Velocity?
- [53:19]
Yeah. So you know somebody, I'm sorry, I didn't catch the name of the person who said it earlier, but it really Elephant is a, it's reiterating what he said.
- [53:27]
Dave
Right.
- [53:27]
Pat
Which is you're. We're accessing to USDL by Paxos allows us to be able to offer this a yield bearing stablecoin that is USD denominated to other users that may not have this access to. So our users within the developing and underbanked regions can have access to a USD denominated assets that can have access to passive income, a global settlements tool. These are countries, as I mentioned earlier in Laos, they have a very fluctuated currency and they would really benefit by holding on assets that are denominated in other currencies that are more stable.
- [54:09]
Well said. I mean it's. When you look at circle filing for ipo, I think it was a couple months ago and you look at their, their financial performance of what they're able to generate in terms of revenue from the, the yield on those, those stable coins, it's a, it really is a shame that none of that is being passed off to users right now. So I, I hope that you guys are able to offer that. It's certainly a product that has a clear market fit and a clear audience opportunity.
- [54:41]
Yeah, yes, definitely. So there are some specific use cases that we're looking to roll up with them. So again, USDL is backed by short term US Treasuries. That's why they can offer the yield bearing for holders. So that means our users and businesses or entities within our ecosystem can have access to hold this value that generates a daily yield. So we're actually rolling out different pilot programs within the Southeast Asian region where we'll be the gateway for USDL expansions within the region, leveraging our different network that we've built so far which includes merchants, banks and payment service providers and loyalty programs. So we're really enabling real time stablecoin settlements and deep on demand liquidity for various financial activities.
- [55:28]
So that's a good segue to my next question. With this new partnership with Paxos, what other new use cases or rollouts can your users and partners look forward to on the roadmap here?
- [55:42]
So we can use it in different ways. So the USDL is regulated, that means we can provide daily yields. So that will be for entities in terms of treasury management as well. What we're looking to help incorporate, for example within the remittance is there are certain corridors that or certain jurisdictions which have a more restrictions on financial movements or even just financial difficulties. Earlier I think somebody mentioned in the US the difficulty of transferring large amount of funds out of banking services. So we're looking to incorporate USDL into solving this sort of issue. So allowing more bigger fund movements to happen easier than what is currently in practice.
- [56:30]
Appreciate that. And as we're wrapping up here, any final thoughts or messages that you'd like to leave with the audience? We have about 4200 people in here who are listening today. Is there any call to action or anything that they can look forward to?
- [56:45]
Yeah. So first of all, thank you for having me. Thank you for everyone for turning in and hearing about us. Whether you're a longtime supporter or just discovering Velo Protocol or Paxos, I think we're at a very exciting point in web 3 where the conversation is shifting from speculation to how we can actually connect to the real world, having a real world utility. So this collaboration between us, Velo and Paxos is more just new features. It's about creating a lasting infrastructure to create a more open, inclusive and efficient financial system. So I think we're developing something very exciting here and the call to action is to follow our, our social media, our social network, whether on X or Telegram, to learn about exciting new things, different use cases that we're building.
- [57:37]
Appreciate it. And their account, the Velo account is up here in a speaker spot, so if you're tuning in, the username is Velo Protocol. You can also access it from the pin nest here. I've pinned up a post with their Paxos partnership and I really appreciate you for joining and it's a great day to do so with the Bitcoin all time high. So hope that everyone has a great day. Celebrates the Bitcoin all time high and I'm sure there's a lot of folks in here who are hoping for an alt season coming soon. So thanks for joining again, Pat.
- [58:09]
Thank you for having me.
- [58:11]
Take care everyone. Have a great day. We'll be back Tomorrow morning at 10:15am Eastern Time with another episode of Crypto Town Hall. So thanks everyone. Take care.