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- [00:00]
A
Bitcoin sentiment continues to dump as lack of clarity around the Clarity act continues to emerge. It seems that the bipartisan support that we were looking for is no longer there and that the bill itself may be entirely collapsing. We've talked about that endlessly. We're going to get into a bit of that, but have a much deeper conversation on the state of the market and the industry with one of my favorite guests who've been way too long since I've had him. We've got John Woo, the president of AVA Labs here to join us now. Let's go, let's go.
- [00:49]
B
Let's do.
- [00:50]
A
Good morning everybody. John, you're already on. Usually I do an in a thing and then you just appeared.
- [00:55]
B
Listen, it's great to be back on. You're right. It's been way too long out of a very volatile sector. The one thing that's consistent is your.
- [01:02]
A
Show is always great and one thing is consistent. Thank you. Is that you guys continue to build and somebody's got to do it right because there's, there's a lot going on. I think we can dive in. Just sort of start with, with the market here. I mean obviously I know you don't talk about prices and you're not concerned with them because your head's down building and you have a long term focus. But man, with all the good things that have been happening, I think a lot of people just look at this in disbelief and we're getting signs that people are giving up time based capitulation, need to see the number go up. It's a very, very strange market.
- [01:40]
B
It is kind of strange in a way. In 2025, now we're in January 26th, I think 26 going to be a lot different. But I don't want to recant everything. But there is a good reason why 2025 wasn't as spectacular as everyone has wished and hoped for. First of all, there was a lot of buy the new, sell the rumor just to start with that. Okay. We had obviously a huge issue on 1010 that took a lot of leverage and people out of the system. But I think people forget that there were many substitutes for the asset class. Whether that be prediction markets for people who love the thrill of that or AI stocks. A lot of substitutes for people who liked it from an asset class perspective or a speculative perspective. And plus I think what people don't appreciate appreciate enough is that although the ETFs and the DATs in theory are great, but the DATs especially there was a lot of Call it pay in kind or contribute in kind, I should say. And that is trap capital. And the SEC having taken, you know, because of the shutdown, is so backlogged behind. So a lot of these DATs haven't actually really started coming out to the market yet. There are big ones are out there, but reality is there's a lot of trapped capital. And that capital is the same capital that used to go into the on chain world and they also got hurt on 10 10. So you have to absorb a lot of that. But then once it's absorbed, the space is going to be good. I think as an asset class in.
- [03:09]
A
26, some point it feels like some of that has been absorbed. Even just looking at the market, it felt like certainly on Bitcoin, that every day the stock market would open at 9:30 and you just start to see this like systemic selling. So somebod was obviously either blown up or was a forced seller or something. At least that feels like it's gone. The same pattern isn't there? But I do think that every time I talk to someone with knowledge of the industry, they bring up 10 10. Right now I just think that that was a massive event and there's still kind of bodies floating to the surface.
- [03:40]
B
Yes, there are. And no one knows exactly which bodies or no one's willing to say the names. But when you're operating in the space and you talk to people, it's hard to explain, but it's, you know, I don't have data, but it's empirical. You feel like there's still pain left over and it's getting much better. I can say that, yeah.
- [03:56]
A
So obviously there is a lot of optimism with the new administration coming in. Whether you believe they were pro crypto or not. I think it's very clear that the last administration was anti crypto. And, you know, just getting a reset from all of the nonsense before. I mean, having been, you know, in the United States and building through that entire thing, have you seen a major shift in the way that you can operate through 2025, regardless of what price has? I mean, is it easier to build? Do you have higher confidence that you'll be able to stick around, that everything you're doing is compliant? Because we're going to get into the clarity act in a second. But you're on the front lines of this thing every day.
- [04:30]
B
That's right, yes. And as you know, Avalanche was always a technology built for business from day one. We obviously were very big in defi. And those are the primitives that were created to help adoption from traditional financial companies as well as enterprises like Avalanche has been very focused, you know, and not just in gaming that we're very well known, but obviously the real world assets that we're very well known for. And also by the way a new category that we since last we spoke has been huge for us which is loyalty and royalty for real brands. And we can go into that later. That's why we're excited about this next phase of crypto. I mean you were just eloquent in breaking the assets away from call it the operating environment. The evolution of the space has gone from literally like blockchain's gone from crypto assets to now think of it as really enterprise technology. There is adoption on all fronts. Some big tech as well as Tri, JP Morgan, JP Morgan, Coin. New York Stock Exchange announced the other day that they are working on tokenized security settlements. Apollo has been their early guy on the asset side that we've worked with many time. So they're here like everyone keeps. You know, I think the previous years everyone talked about institutional adoption. Institutional adoption vault. I have news for everyone.
- [05:52]
A
I laughed. Yeah because I just remember when like BAKKT was first announced in 2019 or 2020 and we're like there ice. Ice is here, the New York Stock Exchange and just a whimper for like five years now. It's every institution on the planet is here massively. I just laugh at you know, how bought in I was to the same narratives five years too early.
- [06:13]
B
Yeah, I mean here, here's the thing though. And this may also explain some of the dislocation the assets of the space. They're here, but they're may not be here in the full vision of what crypto people have always envisioned. They always vision, you know, primitives that are P2P permissionless. But we realized called the genius act, the stablecoin act first. Okay. Before you even get to clarity. That gave a lot of clarity, for lack of a better word for institutions and the willingness to participate. So once that was set, you've seen a wave of adoption. But a lot of them are doing it in closed networks. You know the great thing about Avalanche is you can create your own L1 in a private or permission way. And we've been working with these institutions. So the number of the amount of activity because of just the Stable COIN Act Genius act has increased tremendously. Now you're not going to see that necessarily in all the asset prices because that's the world for the permissionless side. And this is the big Disconnect, because the adoption is coming. But maybe it hasn't come in the way that we all dreamed of. It's become an enterprise technology in many ways.
- [07:30]
A
I remember from our conversations probably five years ago when Avalanche, I won't say was in its infancy, but the original premise was exactly what you just described. I remember our conversations and L1s were new, and you were saying, we will be able to develop private L1 blockchains that are all interoperable with the main chain, but there'll be permission and they're purpose built for institutions. And here we are. All the institutions are here. Is that structurally still the superior way to do this, or have you guys pivoted in any way to kind of accommodate the new world of institutional adoption?
- [08:07]
B
Yeah, so I think there's a couple of things going on. When they want to adopt, they want to definitely start in more of a closed environment and closed network. They care about control, they have to be compliant, so they have to have. And they care about security, so they love the fact that they can start in the space building on top of a permissioned environment. And what they love about Avalanche is the architecture allows it to open to the permissionless world in an EVM compatible way. So they love the optionality. And that's why Avalanche has been able to do a lot of stuff with these institutions.
- [08:45]
A
So clearly the environment has changed as we discussed. But Genius act passed, I think, which was a huge watershed moment, as you mentioned. But I think that there was an expectation that right behind that would be the Clarity Act. I certainly keep going on record saying I think I was wrong that it was going to be so easy because I thought it was somewhat of a foregone conclusion with all of the tailwinds. And now it seems that things are getting a bit more difficult. Bipartisan Senate crypto alliance just imploded. Hell of a headline. Leaving these high stakes software developer protections in limbo. Basically saying that right now CFTC not necessarily necessarily in line with their markup. And you know, we have the setup market markup coming from agriculture. We also have the one coming from the Senate Finance Committee. And not as bipartisan as anticipated. Crypto regulation slows as Senate shifts focus, but momentum isn't gone. Kind of funny that we live in this echo chamber where we think this is the only thing that the Senate is looking at, but they know they have other jobs.
- [09:44]
B
I was about to say, like, did we really expect it to be that smooth? And one just comes right after the other.
- [09:51]
A
Besides the fact that, Steve, I was Dumb, not smooth. But I thought that I would get it done by now. Yeah, I have my doubts.
- [09:59]
B
I mean, besides the fact that it's never smooth, in these instances, stablecoin is a lot easier. It's like really one subject matter with wrinkles. Now you have so many different issues with many wrinkles behind it. And I think specifically where we are at is the Clarity act version or the market structure bill version of the House has passed between the Finance and the Ag committees. So both SEC and CFT's oversight, the Senate released the one just from the Finance Committee, which is like close to 300 pages. And then you have another one from the Ag Committee for the commodities that has to be added to the Senate Finance Committee. So that's another 300 pages. We're talking about 600 pages that have to be co. Mingled together. Figure it out.
- [10:45]
A
Out.
- [10:45]
B
And a lot of really the issue is a lot of things are going like this. They're offsetting each other. So it has to be reconciled first before even goes and gets reconciled with the House version. So I think like anything else in D.C. it's gonna probably be a little bit longer and more complicated. And, and the ideal scenario is like no one's really happy. The banks aren't happy and the people in crypto aren't happy. And reality is like now that it's a lot different from pre election where there was a common bond of moving forward as a whole industry, now we're getting more specific. So different constituents in the call it crypto blockchain world have different interests and they're not necessarily always on the same page.
- [11:36]
A
How much should we care at this point? So obviously you guys have got to be watching this. The institutions that you're working with, I would imagine want some version of this pass so that they know that they can operate here for the next decade, 20, 50, 100 years, and that we won't have the pendulum swing and they'll all be operating in Singapore and Dubai in three years. Right. So does, does this still matter massively to you that this bill gets done? Do you think that that is still a sticking point for the companies you're working with?
- [12:06]
B
Well, I think every American should care because this will bring clarity so that innovators and capital moves to the US and back onshore. Okay, it's already happening, but it'll be even better. Avalanche and avalabs really care because we are servicing a lot of people that are still on hold or working with companies that are still on hold until they get this stuff really Figured out, just like stablecoin was a big unlock, this is maybe even a bigger unlock going forward.
- [12:34]
A
Yeah. So it really still continues to matter. And as you read these articles, it seems like this definitely could get kicked way further down the road.
- [12:43]
B
Yes.
- [12:45]
A
I think we all know that something passes eventually because this industry is just going to continue to grow and they will have to at some point set rules of the road. I guess it just matters who's in power when that happens. So.
- [12:59]
B
Well, you know, as much as you can put in statue, the better because if you leave it to the rulemaking at the agencies, it can change with the wind if new people take over at various agencies and a different political regime. So it's important that we get something done while there is will to do it. I think there definitely is still an urgency. Even President Trump mentioned it in Davos. Yes. In the World Economic Forum. But I think he's got a lot of other things he's got to worry about. And like you said, we live in this echo chamber where we think we're the most important people in the world.
- [13:37]
A
Yeah. There's a few other things on the docket right now beyond crypto clarity. So I think that it's actually a huge signal that he's still mentioning that in speeches when there are so many things happening in the world. I mean, there's obviously an urgency from the White House to get this done. It's just hard to believe that both parties will come together as it seems we're sort of seeing a little groundswell of the anti crypto army rhetoric coming back, you know. So from your perspective then, obviously taking price aside, because we know that's been muted behind the scenes, what are you excited about that's currently being built specifically by you industry as a whole? I mean, you know, I think a lot of people are disillusioned and they aren't seeing the plumbing and what's happening behind the curtain.
- [14:21]
B
Well, well, that's interesting you say that because. Well, I'll. Yeah, I'll tell you what, I'm interested. But first, I think adoption in this space is like, I think. Who puts it. I think it's coinbase or put this out. Basically there's 70 million US, you know, people who are in the space mostly as owners as opposed to users of the space. I think that's going to double this year just simply from stablecoin usage in the background that they don't even realize. I mean, Visa is already processing a lot of this through their partnerships with basically the cards. You know, there's a lot of cards that are on ramps that allow them to provide, you know, processing effectively in, in, you know, fiat onto crypto. So a lot of it's already happening. People are not realizing they're touching it without touching it or it's abstracted away from them. So I think that's going to continue to happen more and more. So, you know, there's a couple of things that I'm really excited about. One is FIFA we talked about earlier, overlooked is all the stuff we've worked on with teams, with brands. So the FIFA is building a loyalty program on top of avalanche, their own L1 blockchain ahead of the World cup in this year. And basically it's got cool functionality. And what these brands have realized is that when you have direct access to your user, you have two major benefits. First is you don't have to reacquire them through marketing the consumer via Google search or Facebook feeds or TikTok or TV ads. The other. So that saves you in the sales and marketing line item for these companies. And then the second thing is that direct engagement has actually increased, literally engagement and usage and dollars. So in the FIFA example you can get your effective think of as an nft, but it's a smart NFT that gets you access to certain things. But first you get a card that's of your favorite team, of your favorite player. And then you know, based on activity, you have a first right to actually buy tickets when the, when your team gets to a certain place. And that's like a functionality based on engagement that they have direct access to. We've done this with Cleveland Cavaliers as a technology in the background, Detroit Pistons and lsu, the football team. And in the Cavaliers situation, they've actually realized they've created millions of dollars of revenue that they would not have had if they didn't run their, you know, loyalty program themselves in a very more convenient automated way. Plus their goal in the long term is a stablecoin concept where the same fan who goes to a game can actually pay for it in a, in the, at the merch for merch or at the concession stand and not have to absorb someone, you know, the merch or merchant or the person indirectly won't have to absorb the 2% credit card fee. So there's a lot of benefits and things that we're working on with brands. It's loyalty programs are actually a they on a blockchain. These brands have realized it a great CRM tool.
- [17:32]
A
This is what I'm talking about because I Haven't had any of these conversations in like four years. This is, everybody wants to talk about is Trump and politics and price and Bitcoin and you know, now we're talking about smart NFTs, which is, I mean.
- [17:47]
B
That function as, you know, CRMs, you know, the customer relationship management tools and function as loyalty programs.
- [17:54]
A
How come nobody's talking about this?
- [17:56]
B
You are, because I think, you know.
- [17:58]
A
Just because we need price to be up for people to care about the actual fundamentals. Is this one of those things when in a year when everything's up, you know, 3x and everybody scratch their head. But we should have been paying attention to this.
- [18:09]
B
I mean there's a real reason why you don't see it though. It's because these are sometimes on private chains so the explorers can't easily capture it. There's no easy way because they again, the enterprises, the enterprise technology, the enterprises and definitely on Wall street, the traditional finance, they need to have certain amount of privacy for their users. But in other cases they need to make sure the networks with participant partners that they approve of and other the security of it. And also basically they need to know that their users have a good experience and it's in a private chain. They're not just going to give up their users until they know that this thing is 100% vetted and it's great.
- [18:51]
A
So it's adoption of the technology and most people don't see it because it's not necessarily directly investable for them right now.
- [19:00]
B
Correct.
- [19:01]
A
I mean that's kind of the truth. Right. And I think this speaks to a lot of the, I guess issues that we're having in the market right now. Non specific to you guys at all is that we're seeing this emergence of utility. But I think there's still big question marks on how retail will benefit from that. We obviously see how they'll benefit from it on a technological perspective. Right. Because they'll be able to participate, own that nft, get the tickets, all those things. But we're sort of washing out the people who only wanted to see stories like that because they thought it meant they would make money somehow.
- [19:32]
B
That's right. I mean the use cases are here and coming. Unfortunately it may not correlate directly with the asset prices.
- [19:41]
A
Yeah, I think that that's a fair assessment, but it's also a signal, I think that the fifas of the world don't care about the regulatory or legislative environment. They're just, you guys are just building with them.
- [19:52]
B
Yeah, I mean the stablecoin thing frankly was a great unlock and they're willing to do a lot more than they would have if it weren't for that. To be fair.
- [20:02]
A
You mentioned before gaming, since I have you and we can actually have a Web3 conversation for the first time here in a very long time. You know, you guys became sort of known as a gaming chain. Not exclusively, but it seemed like all the gaming partners were choosing Avalanche over others. And that wasn't necessarily the case at the very beginning. Godzilla was really exciting. I know that was effectively has been effectively a triple A game. Is that still a major focus for you? I mean I know that you have. I know this isn't a huge piece of news, but we do have the, you know, million dollar builder competition for building games. So that seems to still be a focus.
- [20:38]
B
Yeah, no, it's still there obviously. I mean, you know, we've built primitives for the space that can be now used by others and we have a strong business development team that has made relationships. One that we should talk about is actually maplestory. Maplestory is actually a publicly traded. It's owned by Nexon, which is a publicly traded company. The publisher in Japan. MapleStory has been around for 20, 25 years. It's got basically 200 million plus users and they're building a version of that game on a blockchain, Avalanche blockchain. And they have so many addresses and uses being ported over from the traditional game into call it their own private blockchain L1 on Avalanche. And the benefits that they're looking for, first of all, they're great innovators. They've for 20 a game only lasts for 20, 25 years because they keep innovating in some way. Now what they want ultimately here is not just a marketplace. That was really the first product market fit in game assets trading in a marketplace. And obviously a blockchain could be very good for that. And then all of a sudden you can aggregate other games by one publisher so they can trade games from assets from one game to another in the same call it Marketplace but with stablecoins it makes that even easier to do. And ultimately, you know, a Maple story wants their players or users to actually be part of creating new experiences in the game. That's the next level a lot of gaming think of Roblox, you know, Roblox is not a blockchain business, but it's got a lot of blockchain ethos. There's a Robux, there's also in game creation from users so you can Be someone who creates a creator as well as a player in that, in their game. And then, you know, frankly, there are, there were, or at least there are kids who made a lot of money creating stuff inside Roblox that's a. And because it's composable tech in blockchain and crypto, it makes it easier. It's the next level for creators inside of a game. And that's what Maplestory ultimately wants. And that's been a huge success. And people don't realize that as well, partially because it's a public company traded elsewhere, and also because it's still in a private L1.
- [22:50]
A
Were we just way too early with these narratives a few years ago? I mean, is this the classic thing where human beings obviously think things are going to happen exceptionally fast and they don't handicap that timeline, but when it does happen, it goes hockey stick? And they also don't realize how fast it will be adopted once it starts. So like now, are we on the hockey stick part of the curve from adoption?
- [23:10]
B
Yes. I mean, I think you're seeing that also happening in AI. There's a lot of these AI companies that's, you know, in terms of stock price stagnated, but they're doing more stuff than ever. So this is you. I think you nailed it. It's. It's natural human psychology or personalities to be like that.
- [23:30]
A
Yeah. I think a lot of the interest from the market perspective has been captured by public markets. Obviously it's worth noting today that Bitco, Bitgo basically going public. Their first crypto IPO of 2026. We know there's some heavily hyped ones that will be coming, but last year, you know, we had Etoro and Bullish and Circle, and obviously a lot of people who maybe would have been buying or trading altcoins were trading these in digital asset treasury companies, right? Ye.
- [24:02]
B
Yeah. I mean, first of all, I've known Belshi forever. It's great. You know, good for him, I think. You know, I haven't dug through the S1, but, you know, it's. I think it's coming out of valuation that's relatively fair. It's not over hyped. You know, they have great momentum in terms of almost double in terms of revenue growth. They have their positive ebitda. It's still small, but it's growing. And I think the importance of this IPO for them at least is you've seen certain IPOs in this space where they represent that functionality. Circle represented stable coins, you know, Coinbase represented Marketplace. Way back then, even though figure was more of a HELOC play, it it represents the tokenized real world asset, if you will. And Big O is the first custodian with many other features, far more than just a custody play. Now that it's going to ipo. So it's going to capture that person who the incremental buyer of the space who wants access to that space. So I think it should do really well and very happy for Michael Belshi.
- [25:10]
A
Do you think that these publicly traded crypto stocks are competitive with the altcoin market in any way or do you think that this is different capital finding a home?
- [25:19]
B
No, I think they are competitive because the incremental capital is, I mean at some point in the adoption curve, even on the asset side, it's not the early adopters. It's starting to go to the steep part of the curve. And those are people who are crossover people. And let's be honest, a crossover person who's got a Schwab account still thinks a circle or a Bitgo today or Coinbase is a far easier construction and better UI UX than what exists on chain.
- [25:52]
A
So with that said, we have obviously all of these crypto IPOs, we have the digital asset, treasury companies. I would love to actually hear what you think the future of those is because it's just a hot topic of conversation with myself and every guest and I have a lot of opinions on it and then on top of that ETFs. So there's a lot of ways now.
- [26:11]
B
Okay, so where do you want to start? There's a lot of ways. It was back to what I said earlier. There's just too many competing ways to get access to the space and that's part of the malaise in the actual tokens. So I think the net effect is great for people who want choice and I think it also will force. There was also too many tokens. Tokens came out like crazy and basically it's going to narrow down basically which tokens will exist and which won't be basically the equivalent of like a dollar stock that's going to delist at some point, which actually is not necessarily a bad thing. It's like we are moving from one paradigm to another. The space is maturing and I think it's actually a good thing for definitely for the users and for the builders at some point it's a great thing for them too because they're going to have to focus.
- [27:02]
A
Yeah, I was trying to look up what percentage of penny stocks die as companies and it's like one in a thousand survive. So more than 99% of penny stocks die and that's in public markets. So I think that's a pretty good preview of what's likely to happen in the altcoin market. When you have even taken, I mean, pump fund, it was like 6 million tokens a month or something for a while there. But even taking those out, right, we don't need thousands of different things doing the same thing. So there's got to be a massive competition at the top that obviously you and others who are trying to win.
- [27:36]
B
That's right, that's right. And you know, we talked about this I think a couple of years ago. It just seems like a turning ago. But we even, you know, the intelligent people knew that this day was coming and it's now here. It's just hard to go through it.
- [27:50]
A
Yeah, it's been brutal. And there was this expectation once again that 2025 was going to be the big year, I think, for altcoins. So knowing that we have all this adoption, you know, behind the curtain once again and that we have still, I think, massive tailwinds for the industry, what do you think gives the spark where we start to see the select, I guess altcoins and projects and platforms that have real utility and value start to separate themselves and actually become more performant. I mean, I always joke that the best advertising for an asset is high prices. If Bitcoin's at 130, this conversation is completely different. Right. But you still have to have some spark that, that pushes them to a level where you start to get that retail FOMO and interest and the media starts talking about it and it's on social media.
- [28:39]
B
Well, I think you just said it starts always a bitcoin. That's still the biggest one of all. That's the one that's absolutely clear. There's product market fit and I think at some point this year and it'll be the, probably the back half of this year or, you know, when we're closer to a clarity act possibility, that could be a spark or it could be literally these, you know, there are, you know, obviously the bitcoin dats are out there, but as some of these other dats consolidate and there are fewer choices, I think ultimately, you know, the evolution is that bitcoin does become again the store value and the reserve that people want. Obviously gold is very hot right now and that's also taking some of the luster out of time. But every year we pass by, you know, the younger generation, they're digitally focused and we're in this great wealth transfer right now from, you know, the boomers down to millennials and Gen Z. So those people don't think of gold, they think of bitcoin. So I, I think it's back half this year and it could be more clarity, it could be just the absorption of other avenues like that, you know, is finally worn out. But bitcoin leads the way still, ultimately.
- [29:54]
A
Yeah, I agree with that. I had Chris Perkins on yesterday from Coin Fund. It was just a brilliant guy, obviously.
- [30:01]
B
Great guy. I love him. Yeah.
- [30:02]
A
And his opinion was sort of a have and have nots version of the future where if you have an institutional stamp of adoption, a.k.a. maybe Futures, an ETF, a treasury company on your token, great. It's going to be investable. Everyone else, good luck.
- [30:21]
B
That's fair. I would say that stamp of approval is very important. Yeah.
- [30:27]
A
So I know there's, I remember, I don't actually remember the specifics on Avalanche, but I know that grayscale had filed and others. So do you assume that you'll eventually have all those things?
- [30:40]
B
I don't know if I can. I'm allowed to talk about specifics, but I think you. Will there be multiple and. Yes, and yes. And I think it's probably, if I were to guess sooner than later.
- [30:50]
A
How do you think the treasury company world shakes out? I mean, that was a pretty quick bubble, I think.
- [30:56]
B
Well, you're, you're going to see a couple of things. I think you're going to have the larger coins and sometimes there's like way too many treasury companies per token, if you will. And I think you'll see consolidation among amongst those and then the ones that have the ability to morph themselves into. It's the reverse of microstrategy. Whereas like they went and had an operating BI business intelligence business and used it to become a Treasury company. You're going to see, you're already seeing with Tom Lee and trying to like own a stake into Mr. Beast. You're going to see if some of these can actually morph themselves into larger operating companies. So the ones that survive after a consolidation, the ones that can provide more value than just quote, unquote, access to the tokens, especially if the tokens are going to be ETF and staking enabled, then it becomes more imperative for the DAT to actually be able to do more things, whether it's on chain to create better yield, provide functionality that you can't get in an etf.
- [32:03]
A
So you're saying you can't just buy a whole bunch of stuff and pray.
- [32:09]
B
No, I think you have to. As if I were an investor, I would look at from a that perspective. I would look at, you know, which ones are under, you know, M nav and figure out which ones will get consolidated by others. And I will look at it from that perspective. If I were just a passive, you know, investor, I would be very careful and go with the, the bigger ones that I think will survive over the long term.
- [32:35]
A
So your view is that there will be mergers and acquisitions and that the better capitalized players will likely consume the failures at a discount and add to their Treasuries and we won't need 100.
- [32:50]
B
You just don't need 100. And a lot of these will end up being statistics in your one in a thousand before.
- [32:55]
A
Yeah, I thought that the bit mine news that you alluded to with Mr. Beast was a pretty big signal in that space as well that you're not going to. Even Tom Lee says we're buying 5% of the supply of Ethereum. They're very close. Which means, by the way, if you get there too fast, you got to find something else to do. Right. But to basically see from the largest player in the Ethereum treasury space that you're going to need to have some sort of cash flowing business or investments or other aspects, I think put everybody else on notice. You're not just going to be able to buy the asset and wait.
- [33:31]
B
Correct? I agree 100%.
- [33:33]
A
Yeah. When I had David Bailey on from Nakamoto, obviously they've performed pretty poorly, but even he said, yeah, we might have been wrong in our initial strategy and we're going to need to find some cash flowing businesses which we're trying to do now to find ways to buy more Bitcoin. I mean, at the end of the day, I think with Bitcoin treasury companies you can't just buy bitcoin and wait. You need to use cash flow to buy it. I think with the digital asset Treasuries and Altcoins it's a little more interesting because of staking revenues and other ways where you can actually naturally beat the benchmark asset by using that asset.
- [34:07]
B
Correct.
- [34:08]
A
Do anything with Bitcoin, Right?
- [34:11]
B
No, you're absolutely right. I think like I said before, like, you know, the ones who actually show that there's more value than an etf, like because they are able to go on chain and do things and create better yield or different streams of revenue, those will also be okay.
- [34:25]
A
Anything else that I missed that you guys are building that you want to talk about that I didn't bring up.
- [34:31]
B
I think, you know, I'd be remiss not to mention the stuff we're still doing with traditional finance. Obviously we worked a ton of stuff with Apollo, but we just announced this week with Galaxy, you know, tokenizing Clos. That is a space where I think, you know, the, the call it the structure, product space. You know we also have a deal with you know, Fiscal Fidelity national which is a company that's been around for decades and 40 billion publicly traded market cap company with a company called Intain. Intain. Basically think of them as administrators for these structured products and mortgage backed securities and CMBS and Collar's loan obligation. They've streamlined a lot of that workflow using the blockchain and now they are partnering with the team or the company Fiscal that has access to 2000 different regional and community banks. And what they're going to do is now they've made the cost of basically issuing this Clos, distributing claims, interest, whatever, tranching all of the back end software that you need that was really messy in the past. Make it affordable so that regional banks and smaller community banks have the ability to actually access and securitize loans like the big boys can. So those are all like you know, real use cases where people are going to benefit from that. Why should a regional bank not get the same access to cheaper cost of capital? Because they don't want to. They can't, you know, basically afford to basically, you know, create these packages or securitize Clos and suddenly there's a whole industry now where mid market and smaller players can access this loan market.
- [36:22]
A
I just find it so wild talking to you. How many things are happening that are kind of hidden behind the scenes. I keep saying the same thing, but we need more people who get out in the press and show all these things that are actually being built and happening behind closed doors that are so much more important than what the president or the government is doing or you know, what prices are doing. Because prices will inevitably follow the adoption.
- [36:50]
B
That's right.
- [36:50]
A
For the few things that are justified in going up.
- [36:54]
B
That's right. I'm a big believer in that. You know, I was a tech investor as you know and I still remember the 8,000 e commerce companies and the 8,000 Internet search companies and no, Amazon was like a five dollar stock and look at it today. So it's going to be an up and down road, it's not going to be smooth and it's not just crypto. Look at the AI companies are going through some sort of growing pains in terms of asset prices right now as well.
- [37:22]
A
Absolutely. John, thank you so much for your time. It was great to catch up again. Hopefully I'll bump into you walking in front of a hotel again in the near future. I think that was our last in person was in Miami. I think it was at the one hotel I remember.
- [37:36]
B
Yeah, yeah, you're right. You're absolutely. That was fun. I'm sure it will happen again. It's always great to be on your show. It's an excellent one.
- [37:42]
A
Thank you so much man. Everybody give John follow Obviously check out everything that they're building at Aval Labs and at Avalanche because when you listen, it's just really inspiring to know that the builders are out there and that the promise of Web3 has not diminished just because people are frustrated by prices. John, thank you so much man. We'll see you soon.
- [38:00]
B
Great to be on. Take care.
- [38:01]
A
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