← The Wolf Of All Streets
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- [00:01]
A
There's a battle brewing between JP Morgan and the Fed and central banks and Bitcoin, Michael Saylor and potentially the Treasury. Is this just a narrative or is it something that's actually happened? Well, we do have evidence that JP Morgan continues to debank crypto companies even as they dive in deeper into the industry. We're going to unpack this, everything else that's happening in the market and of course talk about the epic trades on Arch Public with Andrew and Tillman. Let's go, let's go.
- [00:44]
B
Let's go.
- [00:46]
A
Good morning everybody, and welcome to the show. I'm going to go ahead and bring on Andrea. Tillman disappeared.
- [00:54]
B
Oh, that's not good.
- [00:56]
A
We had an Andrew and Atoman and now we've just got an Andrew. But I'm assuming that Tillman will reappear. Unless, you know, I'm. I'm here in on remote Internet. My Internet's crap, so you never know what's going on here. My kids could run by at any given moment behind. But as I said, even though it's kind of the holidays here, you just want to show up when you can and talk about these things so you and I can start to dig in. Obviously, I mean, I think the biggest big story of the day, obviously is this whole JP Morgan controversy. I guess I can go ahead and bring up this one. We have JP Morgan faces heavy backlash from Grant Cardone, Jack Mahler's, Max Kaiser, other Bitcoin advocates. So Grant Cardone I think canceled his account was like 20 million. Took the bat out of JP Morgan. The bigger story though, with Jack Mers being debanked. Right. So Jack Mers has forcibly been removed from J.P. morgan. We don't know if that means just him or Strike, but I know he went on to say his dad was a private banking client for decades and here we are. So this has led to this endless controversy about whether JP Morgan is forcibly attacking Bitcoin, Certainly microstrategy. Andrew, you're my ear on the streets when it comes to controversy corner here, or shall we call it conspiracy corner?
- [02:13]
B
Right, yeah, there. There's a couple things to kind of walk through. The whole micro strategy versus JP Morgan thing is interesting for a couple reasons. JP Morgan is an absolute force when it comes to public markets. Not only do they swim in the deepest pools, but at the same time they, they carry a lot of weight when it comes to the market's kind of public opinion. Right. So when they weigh in to the likes of microstrategy associated with should they be listed Here, should they be listed here? Should they be delisted? That is a huge, huge, huge red flag and is problematic in the short term. And my best guess is, is that Michael Saylor and the strategy team, while there may be public comments about it, they're, they're scrambling privately to make sure that this particular move, wherever it's coming from and why at JP Morgan is, is being buttoned up and will go away at some point. Whatever you think about, you know, Bitcoin at large and then MicroStrategy's position as it relates to Bitcoin and Saylor's position as it relates to Bitcoin, you know, this type of activity associated with MicroStrategy because it's associated with Bitcoin is, is not, it's not a good thing. This type of fight is not a good thing. And so just philosophically, what we're dealing with here is a trad Fi versus Not trad Fi. Trad Fi versus Crypto fight. And the other thing that I'll add is that, you know, there's been a lot of commentary in the crypto Twitter space that OJP Morgan is short micro.
- [04:03]
A
That I'm not buying at all, by the way.
- [04:05]
B
No, no, that, that's, that's not a version of it. JP Morgan doesn't have this massive hedge fund down in the basement of their building that is, you know, short whatever versions of. It's just, it's just, it's just not the, the truth of it. So there is a, there's something structural that's, that's going on here that needs to be kept a very, very sharp eye on. But I do know that, you know, Michael Saylor and his team and the guys at Strategy are hammering away at this tooth and nail, finding a way to make this go away. Like these rumors should just stop.
- [04:41]
A
I don't know if you saw this one. Yeah, I don't know if you saw this one. Just to jump in. JP Morgan accused of manufacturing October 10th crash using 42 day old document. I hadn't even seen this until I was literally looking for more information while you were talking because on Yahoo Finance, of course it's syndicated from God knows where, but basically saying that, that MSCI delisting document that everyone's been talking about, right? Saying that if MicroStrategy gets delisted from MSCI, that would be 9 billion of selling pressure, by the way. Not even that much. And that kind of manufactured this crash. Well, apparently that document I just read in this article was like six had been public for 42 days and JP Morgan published it coincidentally on the day that we kind of saw the big, the big crash or right ahead of it. So the accusation that this is manufactured is once again, listen, I don't really pander and conspiracy. Show me the proof.
- [05:32]
C
But yes, but at the end of the day, this is not trad 5 versus crypto in my opinion. This is trad 5 versus tradfi. These are just pieces of paper and this is just the game that's been, that always has been played with everything. MicroStrategy just I think has some unique characteristics to it that pose specific opportunities and specific risks to specific markets. And it does not shock me at all that this is taking place. In fact, it's a welcome to the big leagues like this. This is a welcome party for us. This means that we're on the radar of JP Morgan and strategy has now catapulted themselves, you know, to the final boss, if you will. That to me is a great sign. But think about it. What, what can they, what, what does it have to do with Bitcoin? It has nothing to do with Bitcoin. Bitcoin doesn't know either of those companies exist, nor will they it ever know that those companies exist. And if we have a short term price crash based upon FUD that JP Morgan drums up from the bottom of the barrel, great. That's just a great buying opportunity for all of us who know what we own. And at the end of the day it doesn't change it. It only actually makes our, our average price go down.
- [06:48]
B
These typ point though, as it relates to what J.P. morgan may or may not be doing and, and being the bad guy in this situation. So JP Morgan is feeling pressure as a banking organization from a couple of different sides, right? So J.P. morgan is feeling pressure from the fact that Coinbase can do everything that J.P. morgan does and they do it faster and more efficient and with more customers. They also are feeling pressure from the fact that they realize because there are smart people at JP Morgan, that microstrategy at some point probably wants to be a bank and their base layer is Bitcoin. Right? So there's pressure from both sides from a competition standpoint. Well, how do you deal with competition? Well, in the world of business, it's pretty nasty, right? You're going to do whatever you can to protect your position as the supreme being in the, in the banking world, which by the way, J.P. morgan is. So all of this is a version of let's poke here, let's Poke here, let's poke here, let's poke here. Because if MicroStrategy wants to become a bitcoin bank, that's pretty difficult to do if they're delisted from a bunch of different spots where you have to be kind of listed if you're going to be taken seriously. You know what I mean?
- [08:05]
A
And then obviously this is the.
- [08:07]
C
Yeah, but I mean, even if, even if, even if that is the reason why, Andrew, I mean, think about it. Why wouldn't they be attacking Coinbase? Coinbase is a much bigger threat to.
- [08:19]
B
Because they can.
- [08:20]
A
I just want to say that right now, Sailors at his most successful, like his products are absolutely crushing it, as you can see here. Like the, you could talk all you want about shorts and whatever, but bitcoin, bad credit, weekly volume is absolutely skyrocketing. The, the thirst for these products and, you know, anyone can go back five weeks and listen to my conversation with him where he kind of broke these down for, you know, really eloquently for a tradfi audience when we were at Money 2020. But this is what he's selling. He's not selling bitcoin anymore. He's selling banking services or products. Right. Products that would normally be created by a bank or something that maybe has become a bigger threat to JP Morgan as they see that he's safely offering a 10% yield.
- [09:02]
C
Yeah, I think he's also just the bell of the ball and they don't like that. They've been the bell of the ball. Goldman's been the bell of the, you know, there isn't anybody that wants to talk to them anymore. Everybody's inviting Sailor to every event. Everybody's treating him like Jamie Dimon used to get treated. You know, I, I, I think that, you know, it's some, some just jealousy and legacy kind of digging their heels in the ground. I, I, I, but it's not about bit, to me, it's not about bitcoin because there's much more effective ways to attack bitcoin. If JP Morgan wanted to attack bitcoin, they, there are ways they could attack Bitcoin and Coinbase would be the first one, especially with what's going on over there. I mean, I know that we talked about this Andrew, yesterday and how excited I was about this Monad deal, but you talk about a direct competitor. Coinbase just launched the first ICO that's been launched since 2007. 17. And it's gone up on a real platform.
- [10:00]
A
Yeah, I mean, yeah.
- [10:01]
C
And on the real platform with real Distribution rules attached to it with real rewards that if you hold it longer periods, you get greater allocation in future projects, like all of these checks and balances and all this maturity has come to the ICO market through Coinbase, and they launched it very successfully. And I don't know what the exact percentage is, but when I checked this morning, I think it's up like 35% or 60%. Massive movements. And so I think, you know, if you talk about something that's disruptive to J.V. morgan, something that's disruptive to Goldman, even if you weren't a crypto company, let's just say I manufactured matches and I needed to raise money. Would it be better to go through the hassle and the paperwork and the filings and everything to go launch an ipo, or would it better be better to call Coinbase up and go, hey, guys, we, we need to raise a hundred million. Can you launch an ICO for me? Yeah, we'll do it next week and we'll launch it exclusively to our 100 plus million customers. And we have track records of data that show you average hold period, average investment size, average number of participants. Like they're going to be able to literally walk somebody through this with such absolute certainty. You will never go, my prediction, ICOs are here and IPOs are out today. This marks it.
- [11:32]
A
Yeah. I mean, I think it depends on what you're launching, but for anything crypto related, I think that that's true. And I think to your point, there's also just additional transparency here that never existed on ICO.
- [11:44]
C
Exactly.
- [11:45]
A
Not even through the 2020 and 2021 round of launch pads. And like, we've seen thousands of these launched. I want to be clear, this is the first time that you're seeing it institutionally launched, where you can see who the market makers are, how much allocation they're getting, how long they'll be market making for. So you know the mechanics of how price is being somewhat managed. I think. I don't want to be misquoted, but I think that this was at 0.025 for the launch, so 0.04, a very reasonable move to the upside, but not a ridiculous hundred or thousand x on day one, which is what 2020 or 2021 will be before it massively dumped. Right. So this is in line with an ipo.
- [12:22]
C
This feels real.
- [12:23]
A
This is actually less like. Right. I mean, some of those were doing bullish and those were doing four or five X's on the first day. Right. So this is actually a More measured so far launch than most of those. And there was that fear that this was not successful, but it ended up oversubscribed slowly. So actually it just seems like right now there's an appropriate appetite for these instead of like a full hype and FOMO cycle that maybe even two months ago, if that's a lot, yet I.
- [12:48]
C
Got 58 of what I asked for. That's how oversubscribed it was.
- [12:53]
B
So to close the loop on the JP Morgan stuff connected with Coinbase, you know, Tillman asked the question, why? Why wouldn't, you know, JP Morgan attack or be more concerned with Coinbase? It's because they can't. Coinbase is functionally, from a customer standpoint, is bigger than JP Morgan, so by more than double.
- [13:13]
A
Right? Yeah.
- [13:13]
B
Yeah. So J.P. morgan has, has made the decision, we're not going to fight Coinbase. That's a bad idea. We're gonna just strategically connect a few lines and levers and pulleys to Coinbase.
- [13:26]
C
Well, the Coinbase is the queen on the board or the king on the board. I mean, Michael Saylor at this point and all his stuff, like I said, that's more tradifying. What is that, a rook? I mean, I don't even know how far down it goes, but it's not high in the rankings of Bitcoin, in my opinion.
- [13:41]
B
Yeah, so. So Coinbase is. Let's do a little bit of a history lesson. Right. So IPOs for 40 years have looked like this. You hire three or four big investment banks, or maybe even seven. But the top three get listed in all the paperwork. Goldman Sachs, JP Morgan and Morgan Stanley. Those are the three gold standards. Right. So they get heavily involved in the process, the paperwork, the S4, all that stuff. And then you need to choose an exchange that you're going to list with that will handle all of the architecture associated with getting your shares out there. So you're a company, you decide how much money you have. To work with an investment bank, you have to work with an exchange. There's like four or five different entities right there that are now got their hands in the quote unquote piece.
- [14:35]
C
Well, they have a reason to promote because they're getting allocation. Right.
- [14:39]
B
I mean, they literally. Whereas with Coinbase, and again, this goes to the structural differences with exchanges in the crypto space, they're the exchange, they're the quote unquote investment bank. They do all the architecture. So it's just wildly similar. Simpler than doing an IPO. An IPO can take anywhere from nine to 12 months, sometimes 18 months to fully bake and then get out there. Right. Whereas this one. Who knows how long that took? I don't know. I have no idea. But it certainly isn't nine to 18 months.
- [15:16]
C
No.
- [15:17]
B
And again, the structure associated with it is very ipo like with significant democratization across the board, like, well within, with.
- [15:28]
C
A, with an emphasis on keeping democratization at the forefront of the distribution. Right. That's what their primary goal is, is to not have concentration in the participants. That's, that's incredible. I mean that really, like you said, that's game changing from an access perspective. Nobody here on this call got invited to the Tesla ipo. I, I'm confident in that.
- [15:53]
A
Yeah.
- [15:54]
C
But we got invited to the, the Monad IPO through Coinbase. It's just that simple. It's like access versus not access. It's fair distribution or, you know, at least equal access based upon, you know, who you are at Coinbase and whether you're paying their subscription fee. But it's just a model. I think that if, if we don't take note of, it's gonna, like, I think this is gonna happen all at once. I, I don't see the, and, and Scott, to the point earlier about if you're a crypto company, you should do this. I would make the argument that we're so close to the tokenization of real world assets like The S&P 500 is going to be tokenized, the NASDAQ is going to be tokenized, you're going to be able to trade tokenized representations of these equities anyways. Why wouldn't you launch an ICO even if you had nothing to do with the crypto market as a means to raise money, raise capital? I mean, I just, I see that merging very quickly is the point.
- [16:54]
A
You can't tell me that companies out there that are non crypto related, don't look back at some of the 2017 ICOs like EOS and such and say, I can raise as much money as I want and I don't even have to build anything. Maybe I will, maybe I will. I mean, think about how reverse like crypto IPOs or ICOs have been in the past. You can literally become a billionaire as a founder. Your company can become worth billions before it does anything. And then you can take that money and build stuff if you feel like it. Or you can just be block one and have 160,000 Bitcoin from the EOS, raise, buy bullish and hang out.
- [17:32]
C
I mean, but I think what we're all hoping, and I, I'm sure hoping is that Coinbase did a lot of due diligence on the tech of Monad, right? I don't know if they did or not. I honestly don't even. Yeah, I don't even know what Mona does, honestly.
- [17:45]
A
Oh, no, it's been very, very. It's been like the bell of the ball, as you said before, long before even the Coinbase part, like whether it will be. There were a few. There was Barachain, Mega Eth, which I think did quite well. I'm not sure actually, Monad, a lot of these, these are more Ethereum killer narrative. They are one, you know, faster, cheaper. We haven't. We have too many of them.
- [18:06]
B
But Mega Eth sounds like an awesome name. Mega Eth, yeah.
- [18:10]
A
I think that was actually one of the dinosaurs that went.
- [18:13]
B
That sounds like a Don Holloway special right there.
- [18:16]
C
That sounds like it's going extinct is what it sounds like. That sounds like the Megalodon.
- [18:21]
A
That's right. That's why it says, like diet, very dinosaur.
- [18:25]
B
But again, the structural changes here, think, think about the, you know, tens of millions of dollars that's saved on just legal fees, right? The tens of millions of dollars that's saved on investment banking fees, right? Again, those companies get involved with the likes of a Gemini IPO or a Facebook IPO or a. Whatever. Ipo, because they're going to make millions of dollars associated with the work of taking that company public. Right? And so we're just talking about, again, massive disruption in the financial space. And let me make a point. I think that's very, very important. Has anybody taken a minute to step back and look at the huge difference? Because there is another, you know, sort of elephant in the room associated with scale in crypto. But it's different in terms of reputation and execution. Look at the difference over the past five years with Coinbase and Binance, right? Oh, yeah, Massive, massive diversion in overall reputation. Right, so Binance has 250 million customers, right? Coinbase 125. Right. But who did everybody trust? Who did Blackrock and Bitwise and Fidelity and everybody trust associated with the custody of the Bitcoin, associated with Bitcoin ETFs, their biggest products, right? Coinbase, right? Binance was not invited to the party. Who cares?
- [19:56]
A
Literally when that was happening, Binance was, you know, being charged.
- [20:00]
B
Of course, that's my, that's my point. So.
- [20:03]
A
But also. Yeah, go ahead.
- [20:05]
B
It goes to. It goes to leadership, it goes to strategy, it goes to vision. So even though in the crypto space. And you know, probably a third of the people listening to this hate Coinbase for some reason or another. But you can't really argue with the results and the execution over time. You just, you can't. And that particular example of the dichotomy of pathway and reputation between those two organizations is it's, it's real, right? It's very real. So, yeah, no, I like that.
- [20:44]
A
You can go. Anyway, I was going to say, interestingly, I had asked CZ about Binance, their humongous customer base, years ago before he went to jail, and he actually said most of these people are not traders. They're using Binance as a wallet to send stablecoins around Africa or whatever jurisdiction that they're in. So I would even argue that even though they have a much larger base of customers, Coinbase may have more pure, like bitcoin enthusiasts or people that are actually buying crypto as investments than people using it as a wallet.
- [21:20]
C
Well, they're, they're definitely looking for, I think they want what each other has, honestly. I think it's one of those classic examples of, like Andrew said, they both built for different initiatives and they would love to carve out some of that market share for themselves. I mean, I, I don't see Coinbase being used in that manner for, you know, small micro pay in Africa. I do see Binance being used for that. But I also see Coinbase wanting deposits to stay more sticky on their platform. All of their incentives, or most of their incentives are geared towards, hey, put money here and leave it here and we'll pay you to leave it here. But it's, it's a long period of time. I mean, like, it's a pretty weak incentive in my opinion from an APR perspective. But I think they're offering you 3% cash back if you hold the balance up to a million dollars for 24 months. Well, that's an extra point and a half a year. It's good, but it's not like groundbreaking really. The, the things that I think that are turning people's heads on the platform is the fact that you can lend your deposits at a 6 point something percent return. You can lend it to Coinbase as USDC for 4.25 and you can bo off the platform. So you're looking at these banking services that do make it very appealing to keep money on Coinbase because there's, there's too much opportunity that lies there. That doesn't lie at your bank is, I guess, the point. So if you look at the structural components of being a bank and then you look at the structural components of being a brokerage house. They've done a brilliant job of covering the entire map and you can go there as kind of a one stop shop to get everything done.
- [23:06]
B
Well, you've had to do if, if you're a banking organization and certainly the banking lobby in the United States, you had to do a dramatic shift over the last 18 months because the banking lobby previously was probably the quietest slash loudest voice in the hallways of regulators trying to kill exchanges because they knew that they were going to be serious competition. So when you realized, oops, this isn't going to work, we're not going to offshore all of these companies and they're, they won't compete with us here in the United States, the biggest market, of course on the planet. Now we've got to figure it out. So we've got to scramble. So if you look at it through that particular lens, that makes a little bit more sense. So now we're scrambling. So how do we scramble? Well, let's do some little partnerships and let's do a wallet thing and let's see if that works and let's do a token thing and see if we can, you know, play footsies with the exchanges and something will, maybe something will come of that and it'll be okay. So huge, again, huge shift in the mindset of let's just call it legacy trad five things and, and what they, you know how they have to look at crypto.
- [24:23]
C
Do you both think Rip Ripple has the same goal with Hidden Road and why is it taking so long? Because to me the like Coinbase number one by a long shot right now I'd say Robinhood's in second position but pretty, pretty small compared to Coinbase. So you kind of wonder like who's going to step up to the plate and challenge Coinbase's supremacy with the.
- [24:52]
A
I do think Robin has a league in Tradfi. They do. I think Coinbase from the crypto side is obviously destroying Robinhood. But Robinhood has a more full suite of services obviously right now because crypto was their second business. Right. One of those things like everyone else, where you buy some Bitcoin as 5% of your portfolio, then all of a sudden you wake up one day and it's 75% and you can't figure out what to do with it. That's kind of Robinhood's crypto business.
- [25:15]
C
Yeah, well, it's just interesting to me to see the landscape the way that it sits now and what's going to happen a year from now? I think there probably is going to be a lot of imitators that come after this business alongside Coinbase and I would have to think that has that. Well, KRAKEN Absolutely.
- [25:35]
A
A 20 billion dollar. Yeah, he's got a 20 billion dollar val ahead of their.
- [25:40]
C
Yeah.
- [25:40]
B
And they're gonna IPO in the, in Q1 of next year. Right. That, that's going to happen. And again so they're, we're just. I've said it a bunch of times on this show. Two years from now the conversations are going to be very, very different associated with where the crypto space is, what the crypto space is doing and how much like you know, banking from a decade ago and, and how much of that have they grabbed in terms of market share that, that look, you know, again Robin Hood's entire thesis is let's grab as much market share by offering a better version of what banks have said that they would do for customers. We're just going to do it. Right. So same thing with Coinbase. Your point, Tillman, on, on, on Ripple and, and Hidden Road. There's just a difficulty there associated with reputational stuff. They're, they're, they have a huge customer base because of you know, the XRP army and all that stuff and they can draft off of the scale of that particular customer base.
- [26:42]
C
But that's kind of what I mean. Do they have enough critical mass to get the flywheel spinning?
- [26:47]
B
Yeah, I mean they can, but it's just to grow it in any meaningful way, very, very difficult on their end. They become a bank. Sure. But you know, to what scale and what size again, reputational stuff is going to put a cap on that.
- [27:01]
A
So really quickly you kind of just want to circle back on a point you made before, which is that even if J.P. morgan and the banks are fundamentally opposed to microstrategy or any of these things, we see where the ball is headed and that's this tokenization narrative. So you have breaking trillion dollar giants. BlackRock, JP Morgan, SBC say tokenized assets have more potential than stable coins. They see yield bearing real world assets as the next evolution of global finance. Standard Carter sees tokenized real world assets exploding to 2 trillion by 2028, up from 35 billion today. So maybe this is more of a narrative shift than an attack to some degree or just that they. I've seen a lot of people, I've seen think pieces now about how bitcoin is boring and it's no Longer useful because it's done its job, because now we're moving on to stablecoins and tokenized assets and blah, blah, blah. But this is where the banks are going to make a lot of money. Not by shorting MicroStrategy.
- [27:56]
B
It's another race. It's just another race on a different track. So now those banks are trying to get to the tokenization of real world assets because that market is so infinitely bigger than the crypto markets that if they get there before a coinbase or a grouping of exchanges get there and offer it and grab even more of their customers, then they win that particular race.
- [28:22]
C
And let me tell you something, they.
- [28:24]
B
Think it's a bigger race, right?
- [28:26]
C
It is fraught with troubles and problems. I've been looking at real world assets literally since 2017. Built an NFT company to hold the licenses or the, the representations of that ownership. And I can tell you right now there's still a massive chasm to be bridged that I, I haven't found, I haven't heard anybody talk about the solution to it, which is how do you authenticate something? Sure, you can authenticate it on chain, but how does the real world asset get authenticated still against the certificate? And where, where do we start with this whole real world asset enterprise? For example, I sell you a piece of. This is one of the easiest ways to understand kind of the complexity, but it gets way more complicated on other, you know, in other markets. I want to sell you a piece of real estate. I tokenize it. I sell you the token. Well, who's going down to the courthouse and filing the papers that show that there's no lien on the properties and I actually own it? Like who, who's doing the real world things and how do I just. Because I own the token token that says that I own the piece of real estate. How do I know that the, the real world things have actually been done to, to confirm that that token means anything to anyone outside of quote, the Internet or the, the blockchain? I, I think there's, you know, there's a lot of complexity. If I do a real world asset token against a piece of merchandise, a purse, how do I authenticate that one of the people in the chain of custody and didn't take the real one and sell it and buy 50 fake ones and applied one of those tokens to the 50 fake ones? There's just a ton of problems that have to be solved before real world assets become like mainstream. In my opinion, somebody may have already solved all those Problems, But I'd love to know how because, like, short of weaving into the fabric of clothing a specific electronic device that, you know, something that, like a pass that you use at a toll road, there's no way that you can authenticate that piece of clothing going forward without a pure chain of custody being attached. And there never is a pure chain of custody attached. That's the whole point.
- [30:46]
B
I think. I think the, the moniker Real World Assets is not used properly when it comes to what they're talking about. When it comes to tokenization. I think we're just talking about the tokenization quote unquote of getting to 247 trading of equities. Correct.
- [31:04]
C
Yeah, well, that's the only way it could happen. Yeah, but, but I want you to. Let's appropriate that to the same problem set. Okay? You, you. I'm buying tokenized representations of the S P 500. You know, they're going to have to kill the legacy system of the old paper shares.
- [31:24]
B
That's just called an ETF now though, that's just called an ETF. You're buying a version of the S P500 inside of an S P500 ETF and it just represents the performance of the S P500. So for all intents and purposes, the, you know, tokenization of that is just a share of an etf, Right? It's the representation of that. Again, tokenization to me is just the ability to run 24. 7 trading and 247 everything. And they, they want to call it something cool. So it's.
- [31:56]
C
Yeah, but it comes back, it comes back. It comes back to counterparty risk and redemption value. Like if the, if I, if I own S P shares, I actually own the shares and the redemption value is the shares. Like that is my collateral. When I go to the brokerage house and I want to sell them, they know I'm the owner. If, if there's a lot of price discrepancy in the real shares and I own tokens and I go to submit those tokens to my exchange to sell them and they don't have the money to pay me, there is no other collateral pool, that's going to save my bacon. I'm relying on the bro. The, on my exchange, I'm taking a counter trade to the exchange essentially, even if it's not a leveraged trade, that is a bad. That's a flawed, that is very flawed.
- [32:47]
B
So, so I'll, I'll, I'll use my, my vast movie knowledge here and I'll reference us back to the conversation between Matthew McConaughey. Hey. And Leo DiCaprio at lunch for Wolf of Wall Street.
- [33:02]
C
Can I be Matthew? I don't really.
- [33:04]
B
Yeah, yeah, yeah, you could be Matthew. So, you know, it's. The reality is there used to be rules associated with P +3. There used to be rules associated with the issuance of stock certificates. None of that, all of that stuff is basically gone because the markets move so fast. So what you're talking about is, well, who really owns this? And it's, it's all just on paper.
- [33:30]
C
No, I'm saying, like, you can say that there's enough stability in like, certain markets where price fluctuations aren't big enough to, to cause counterparty risk to be an issue. But if, if you tokenize everything, there are many. I mean, every, all the other assets are so volatile that if you have a crash in one and you hold the token, the counterparty risk of the issuer of that token is far greater than the counterparty risk of the underlying asset. You're accepting a lot of risk for the convenience of trading.
- [34:10]
B
Here's what I will say. You know way more. Tillman Holloway knows way more about tokenomics and actual tokenomics than Standard Charted and Standard Chartered and the banks talking about the token tokenization of real world assets. No, I'm dead serious.
- [34:28]
A
Like, someone's also really good at football.
- [34:30]
B
You've done so much work on this over the past seven years, both with the real estate work that you did and then our work with NFTs. Again, you, you know, way more than what they're just talking about in these news stories about the tokenization of real world assets. So your questions about this stuff are completely real and legit.
- [34:51]
C
It just feels like another fake narrative to pump. Like it, it just feels like real world assets. Real world assets. Well, I mean, show me one that's actually going to be a improvement to what currently we have, other than the convenience of trading it 24 7. Because if it's the convenience. You see what I'm saying? Like that. That's not a story to me.
- [35:10]
B
That's. That's what they're. Again, financial markets. And, and the folks in financial markets don't make revolutionary changes to their business just because it's all very, very, very iterative. Yeah. This iteration is another opportunity to. Okay, if we make this iteration in the work we put into it, what's. What, what happens? Well, we get to trade 247 and we get to charge more prices for probably the spread associated with the tokenized stuff that we do in the first 24 to 48 months. That's what they're looking at. Yeah.
- [35:49]
C
If it's just for equities, you could do it. I just think it's the death of the old system by definition, because they're going to have to, like, if I have the choice to buy a token that's been created on the back of a traditional security that has all of these other rule sets attached to ownership that I don't get the benefit of, or I get to buy Monad through Coinbase. And I know all the rules and I am, they are the issuer and I trust the issuer. I know they have collateral against it. There's no. If Monad goes to, you know, whatever Monad does, it's not going to affect Coinbase at all. Like all of those things. I, I, I, you know, it's just, I, it's very interesting to me to see how these brokerage houses are going to look a year from now, like you said, because I really do. I don't see anything that they can't do that the other ones can.
- [36:43]
B
Here is a, here is a sober reality associated with a name like Morgan Stanley. Okay? So the people know Morgan. If I say Morgan Stanley, 99% of people watching the show and just basically anywhere are going to know the name. Morgan Stanley is a huge financial institution, institution. Before they bought E Trade, okay, they bought E Trade a couple years ago, you know how many customers they had across the globe? 3.2 million. That's it.
- [37:12]
C
So you just had all the richest guys?
- [37:14]
B
Yeah, that, that, those are all the customers that they had. So.
- [37:17]
C
Yeah, but the wealth is just, you.
- [37:20]
B
Know, scale, you know, it's just, it's, it's not, in a lot of ways it's not what you think it is. Right. Same could be said of Goldman Sachs. Why have these organizations gone out and tried to, you know, greatly balloon in scale? Same thing with Robinhood, by the way, their wealth management operations. Right. Because there's a lot of customers in that particular business. Right. Filled with customers. So let's go out and buy a big ria. Let's go out and buy a big platform that's, it's got, so, you know, E Trade, I don't know, 17 million customers. I, I haven't looked it up, but it, but it, it basically quadrupled the amount of customers they had underneath the Morgan Stanley umbrella. That's why they did it. I had a Morgan Stanley guy flat out tell me that that's why we did it. More customers because before that we only have 3 million, right? So it's, it's the world of traditional financial legacy companies. And crypto is moving in the same direction for, for just two simple reasons. Trad5 companies don't have enough customers and all of them are old and dying. And then crypto companies want to make more money because banks make a lot of money on stuff that they want to add to their portfolio. It's that simple.
- [38:41]
A
So one other just funny thing that I wanted to bring up, but now I can't fight it. Just in case you guys didn't see this on the macro end, canceled jobs report, inflation report, and now they canceled the GDP report. I'm sure all a coincidence and everything is fine. Last time I checked, the government was no longer shut down. But now we're just gonna not do data.
- [39:02]
C
The dog ate my homework.
- [39:05]
A
Okay, speaking of data, let's talk about arch public. First of all, we got a pretty amazing case study here that I want to talk about. But I want to give an update on my portfolio because the dip has. So we started at the deadest all time high of crypto of bitcoin, which is absurd timing but so now I've upped all of my buys and everything as price has gone down because I obviously want to buy more in the 80s than I did in the 120s. The account is now $400,000 and only down 10.4%.
- [39:39]
C
I wasn't even aware that you continue.
- [39:41]
A
To ramp up the market. The market was down over 30% and I'm only down 10 and have accumulated well a lot of bitcoin and Solana and eth about double the bitcoin as Solana and Eve combined. There haven't been many like big pumps on individual candles on the yield side for a little while. There actually just hasn't been much action since we went down to 80 because we kind of bought the lows well.
- [40:06]
C
The longer the price stays here, the lower your loss percentage will be. Right? Your cost is coming down with time. That is the point of the software is to not try to pick points, but to let the average time and the cost on that timeline be your average price. By having small incremental purchases on the dips that are strategically taking advantage of that volatility. It doesn't mean it's the final dip. You don't know when the final dip is. Scott, do you remember the day you started? You were going there's no, it's guys, we just broke all time highs. We're going to 135.
- [40:43]
A
We.
- [40:44]
C
I need to load the boat now. I don't have any. I need to get the, you know, this account really low.
- [40:49]
A
We were like, man, we missed the move from 114 to 120.
- [40:52]
C
Exactly. Well, but the point is, is that FOMO causes bad decisions. And you, you know, if you had lumped in all at 126, you'd, you'd have to wait to 126 to get, get back. Right now you got to wait to 90 something to get back. That is the benefit of dollar cost averaging strategically through volatile dips like that. That gives you. So it doesn't just, you know, if you talk about risk, right, the risk in the crypto market is the volatility and the placement of capital. So if you start to say, okay, how can I de risk this? The, the opportunity to de risk it only comes through managing your, your purchases, managing when you're buying and making sure that you have powder dry for those, you know, future dips. So it's really more of a psych.
- [41:42]
A
I'm psyched. You know, I've consistently been excited about the bigger dip because I do have money on the sidelines. I started as a test and I was like, this is awesome. And like probably most of your clients, I said, well, I'm going to need to add more because I want to do more of this. And to once again reiterate, like, I. My goal was not for it to go down into the 80s and then be up in dollar value. My goal was to get as much as I could as cheap as possible. And it's done that all the way down. You know, I constantly get the, why didn't you buy it all at 80? Because I didn't know it was going.
- [42:13]
C
To 80 when no one knows it could go to 60. You just, if you knew the market, you wouldn't.
- [42:20]
B
We started this journey with you, you know, with a little bit of a tagline, put a hedge fund in your pocket. And literally what you're describing. So I'm down 10.9%. The overall market's down 30ish percent.
- [42:31]
A
That's a hedge fund you're supposed to.
- [42:32]
B
Do better on the downside is supposed to do right. So there are not significant movements out of a hedge fund during up years. People don't even call their hedge funds that they're working with. They don't adjust allocations during up years. What they do is they evaluate in down markets and they say, are they just down as much or more as the averages or are they really good at what they do. And so there's a beta variance associated with the markets and delta, beta variance, that's what you're describing. Now if you look at this case study that we put together that finishes the data on Friday, just go to the, the, to the first data point which shows year to date, buy and hold Bitcoin versus our Oracle protocol, and what you'll see right there is a meaningful beta variance. So buy and hold Bitcoin from the beginning of this year is down 9%. Our Oracle protocol algorithm is plus 16.8.
- [43:37]
A
That's an absurd gap.
- [43:38]
B
Yeah, that is, that is a, you know, what is that? That's a 25 gap. Right. That is extremely meaningful. And so again, people that have the capital to be in our concierge program, they see that and they say, holy smokes, I want to be involved in this. Oh, and I don't have to fool with anything. I just get it set and it's just going to do stuff like that. Okay, cool. I'm going to start with a hundred and then like Scott Melker, oops, I love this product so much Now I have $400,000 in it. Right. That, that, that's what happened. If you go down a little bit further and then you look at variances associated with Solana and ethics, they are even significantly. No, keep going. That's, that's still bitcoin on a longer time frame. Keep going again.
- [44:24]
A
So there's the Ethereum. Holy.
- [44:26]
B
There's Ethereum. Right. So look at that variance with Ethereum. Nuts. Right, That's.
- [44:33]
C
Well, just if you're, if you're in the crypto markets and you've ever heard anyone say volatility is a feature, or I love the volatility, or you should harvest the volatility. You know, if, that, if you're not act. If you can't point to a strategy in your portfolio and say, this is how I'm harvesting the volatility. You're not harvesting the volatility. This harvests the volatility. This is waiting for disproportionate moves to the upside and you get to program in how much of the profits at that point you want to take. So if you think a big pump is 5% in a four hour candle, you can set up an instance that says, you know, sell 50% of what my last purchase was when it's in profit, when it's above its cost basis by X percent. And then when that trigger event takes place, it's going to either sell 50% in that instance. Or you could say sell all of it. You could have a cash one to one type of an arbitrage strategy where you're selling equal to what you're buying and you're just playing the volatility. When it pumps you, sell, I'll sell it. When it dips you buy when it pumps you. And it's just like sitting there with a line in the water waiting for the fish to bite. When it bites you fish on, it's time to, you know, collect the harvest. But it's very, very simple and it just requires you watching the market over time and waiting for those times, you know, to present themselves, waiting for the market to do what it does. And when it does, you're going to take advantage of it through these algos. If you don't have the algo set up, you're going to look back the next morning and call your buddies and go did you see that huge pump at 2am and nothing. You wouldn't have harvested any of that volatility. So that is what they're talking about when you're talking about the volatility is a feature. It actually is a of massive benefit to you if you know how to harvest it.
- [46:29]
B
So again, year to date, Solana xrp, Bitcoin, Bitcoin down, Ethereum slightly up. But again just using the stock Oracle protocol version of what we do, you have massive differences in performance based on how the algorithm is looking at opportunities to make purchases or adjustments in sales. When you're, when you're hitting tops. I mean the numbers just speak for themselves. It's, that's really all it is. And your ability by the way, to do this on your own is just, it's impossible.
- [47:07]
C
I mean, well, and our ability to show you and not tell you is even better. Go to our website archpublic.com click get started and you can try this for free. You don't even have to, it's not a time trial basis. You can download it and use the full unencumbered version of our software to do anything and everything in the markets that you would like to do. And as long as you aren't trading more than $10,000 a year, you can use it every year, forever for free. I mean it's, it's absolutely of no cost. We want you to see the power of automated trading. We want you to realize what yield harvesting looks like and do it for yourself. And, and we're not going to do it for you, we're going to teach you how to Use the tools to where you're actually doing it and you understand what you're doing. And then once you set it up, like Andrew said, it's, you know, it's out of sight, out of mind. It's just doing whatever you told it to do. When those market opportunities present themselves.
- [48:05]
B
Yeah, results. How, how many times, Scott, in the past three months were there action or trades taken when you were dump. Doing something completely different? Just not watching?
- [48:17]
A
Almost every single one.
- [48:19]
B
Yeah, yeah.
- [48:20]
A
I mean I don't closely watch the market to time purchases. I would have been either just like dollar cost averaging at a certain date and time or I would have smash bought with the capital that we had, you know, so, so there are, I forget even how it's outperformed the market. It's outperformed what I know factually I would have done at that moment.
- [48:40]
B
So, so how many, how many uniquely successful crypto hedge funds ones actually exist out there? I don't know. A couple. Pantera is pretty good at it, right?
- [48:51]
A
They've been seeing. Yeah, yeah. Right.
- [48:54]
B
So.
- [48:54]
A
So none of them are pure anyways.
- [48:57]
B
Yeah. So my point is, is that automated execution of setups like this give you these results. And by the way, even if you wanted to get into Pantera, you can't unless you give them millions of dollars. Possibly. Right. So that's my point is that these results, these, the beta variants associated with a down market, a difficult year that everybody's bitching and moaning about on crypto Twitter, clients that are using our products are like, what are you guys talking about?
- [49:32]
A
Yeah, but they didn't make thousand X's. So like it's.
- [49:37]
B
Reasonable. People understand that that's not the, the, the reality.
- [49:41]
C
Yeah, people.
- [49:42]
A
And where are they?
- [49:45]
C
If both, if all three of us need to acquire new wardrobes and we're going to go spend top dollar on wardrobes and I have, we all have, you know, $10,000 to spend. And Scott goes out on day one and he spends $10,000 on four custom suits. And he comes home and he's got those four custom suits. Andrew, you know, buys a couple of suits, keeps 5k, waits a few months, buys a couple suits, new suits, I buy one suit over the next four months, well, the suit prices drop drastically. Who gets the best? Who gets more suits for less money? Me. And it wasn't because I was smarter, it was because I was less greedy and didn't go and buy four suits at once. And that's literally what Black Friday. Yeah, you waited till Black Friday. So I got sales I waited till Cyber Monday, I got another sale. Those things are what you should be looking at when you're accumulating your stack. Right? When you're stacking sats, you ask yourself. You should ask yourself the question. Yes, dollar cost averaging is an excellent way to remove a lot of the volatility risk of any market. But dollar cost averaging has some questions attached to it that you need to answer, which is when? So let's say I buy those four suits over four months. Well, what day of the month do I buy them? Do I just randomly go or do I wait for the sales from the retailers that I'm watching to buy the suit? Oh, the newspaper just told me there's a 20 sale at Neiman Marcus today and I'm heading out there to buy it. Well, guess what? That's exactly what we're talking about here. It's like you have to wait until the things are on sale before you go buy them. So are you going to sit around and wait for bitcoin to go on sale and two o' clock in the morning on Sunday night, or are you going to have a robot doing it for you?
- [51:46]
B
Wait for the newspaper to tell me when to buy bitcoin. And that's when I.
- [51:50]
C
Is that what you were laughing about? That aged me pretty good there in that interview.
- [51:54]
A
He said, by the time they tell you, it'll be 10 million a coin.
- [51:57]
C
I was just trying to. I was appeasing to the audience. You guys. I know still read the newspaper every day and you know, I do.
- [52:08]
A
My fingers all this guy. We're gonna have to go in a second because my, my.
- [52:13]
B
I would like to mention that there is something. There is an organization and a name that I have not mentioned on this show. And it may be a first for like the past six to 12 months or the most.
- [52:25]
C
Freemason, Blackrock and Larry Fink. Yeah, yeah. Also, I don't fade the fake. Don't fight the fake. What. What phrase are we going to use now?
- [52:33]
A
Level.
- [52:34]
B
Let's get Finky. I do want to say that I get uniquely annoyed on Twitter when I see people talking about just economics and say, well, black rock buys all the houses. Black rock doesn't buy any houses. It's black stone. Black rock.
- [52:54]
A
Stone geology.
- [52:58]
B
Oh my gosh, it drives me insane. All right, that's my rant for today. Okay.
- [53:03]
C
All right, well, everybody, you call Larry Fink the. The kink of finks or something. What was the.
- [53:09]
A
I believe he had a fake kink.
- [53:11]
C
A kink for.
- [53:13]
B
Me of having a fake kink, that's for sure.
- [53:17]
A
I've heard that rule, that. That rumor. All right, before this gets out of control, I have children sitting here, for God's sakes. All right, that's all we got for you today. I will be back tomorrow, and that's gonna be the last day for. Then we'll take it off Thursday and Friday for. For the holiday. But I'll be here tomorrow. Everybody check out Arch Public. Andrew, is there anywhere that people can see that case study like themselves?
- [53:38]
B
Yeah, just go to Arch Public. Underneath the support page on the left hand side, you'll see all of our case studies. There's, like, I don't know, 20 of them. That one's at the upper top. Yeah. So down there, go to case studies. Yep. Right there.
- [53:51]
A
Yeah. Enduring the drive.
- [53:55]
B
Yep.
- [53:56]
A
Awesome. All right, guys, gotta run. Thank you, everybody. We will see you tomorrow. Thanks, gentlemen. Have a great Thanksgiving.
- [54:03]
B
All right, see you, guys.
- [54:04]
C
Y' all, too. I'm thankful for you.
- [54:07]
A
Let's dope.