B (2:39)

We got Mike, we're talking about the Fed. Let's use him. Mike, unpack it for us. Is it as forgettable as I described?

C (2:47)

Yeah, I, the way you described it and certainly appreciate your comments and Dave's comments about silver and precious metals. The key thing about the Fed is it's so much in your face you can di it, deliberately ignore it. And that's all you need to know because you just hear it about it everywhere. The bottom line for me is what's happening in expectations for Fed funds. So when they first cut rates in September, we went to that September 26fed funds and it was running expecting futures. We're running expecting Fed funds next year this time or September a year from then to be around 3%. Actually it was running below 3%. Now there is no place on the curve in Fed funds. You get below 3%. So you just look out September next year it's at 323. You go a year from now, December 312. So it's basically the Fed's market's taking Fed easing out of the picture, maybe a couple more. They said they might price for more two next year. The market's priced for two more cuts next year. And those are 25 basis points. And it's just about what's going to take for the Fed to cut more. Obviously we get a new chairman, but we have a pretty, you know, he's got to deal with a board that, you know, not going to be happy about cutting rates aggressively. And to me it's what's going to take to go for a Fed to cut more. And this is why I think we've reached a bit of that end game. And it was remembered that on the day that Bitcoin reached $80.

C (4:10)

And that morning, Feds wasn't even priced for a cut at the meeting that we had yesterday. And then once bitcoin dropped and the stock market dropped up automatically, we figured out, oh, we might be cutting 25 basis points. You see what's driving here. I think this is part of what's happening now is I think now at this stage, the only reason that really make the Fed to cut is if unemployment goes up a lot, inflation drops, which is not going to happen. But this, you know, it's just, you know, inflation is sticky. Or number one reason make the Fed cut, which is historically the case is risk assets go down and cryptos and bitcoins at the tip of the iceberg of risk assets. But to me, that's the key thing that Dave pointed out that's happening this year. And I'm starting to get inklings of what I saw in cryptos last year. You're getting a bit of that in precious metals. You get that pile on factor. You get very stretched extremes. Everybody jumps on board, and those have been bullish and long forever. Realize, yeah, okay, it's not the price to lighten up. It is the place to lighten up. It's not the place to double down. And that's what I think people are doing in things like silver and gold. And silver is known as the devil's metal for a reason. It trades two times the volatility of gold. I didn't think it'd get this high this year. And you know, full disclosure, I'm long a lot of precious metals. I have been for a long time. And we're, we overlaid those out of cryptos last year. But to me, the inklings in precious metals and gold are very similar to what I sensed in cryptos last year. You get the pile on, prudent traders realize, great, it's towards the end of the bull market and then you're supposed to lighten up and be careful. And that's what I'm really concerned about for next year. That when the bottom line, I like to say when gold grabs alpha, which like it did this year, I get cautious, I get worried. And it's absolutely grabbed alpha and silver too. But the history of silver and Dave can dig into this a lot is when it gets this stretched, a 50% correction is nothing. It can actually still go up two or three times, but it'll rip your face off. That silver's the devil metal for a reason. I used to have hair before I started trading.

A (6:02)

So wait, Mike, are you saying that you don't think silver bugs who may have been holding for years now are kind of deleveraging at this point?

C (6:10)

I do. I think they're lightening up. That's my point. The smart ones and the ones who've been lucky enough to be long at forever, including myself, because you just know how these things work. You just hang on to, you hang on to and all of a sudden you get two to three X's and a heartbeat. You're supposed to be lightening up on that. It's just the history of when you get this stretch versus any type of mean. And gold and silver for new longs at these levels is very poor. And that's why I say, to me, it's looking to me very similar to like bitcoin looked like last year. Yeah, it went up another from these levels last year, went up another 30%, and now we're down. That's what I think is happening in precious metals. And the bottom line for me, I think now is the number one thing is what you're seen today, even like for bitcoin, is the crypto market. Bitcoin is so completely dependent on that stock market going up. And yesterday it proved it just cannot close above that 94 level. And that, to me, I'm surprised it's not down more this morning, which is great. It isn't, but it overall, the macro big picture is you're supposed to be selling when they're yelling. And as Dave and I love to use that comment, and there's a lot of yelling in silver at these levels.

D (7:13)

Yeah. I think that, you know, you and I aren't all that far apart. I mean, you said 30. I say 75. I think that, you know, look, I have some silver sitting in a box here where, you know, I noticed something that I've never seen before. You know, how you see in your local stores, you know, Cash for Gold. I actually saw in our. In. In our local jewelry store, Cash for Silver, which I hadn't seen before. So that you. We know we're getting close to that level if we're not already there. The. The only thing that I reason, I think it can go farther is because, look, you know, markets could be irrational longer than you could be solvent. It makes sense to kind of ride the wave a little bit, especially when you understand the geopolitics involved. I mean, you know, silver going up is. Is not a good thing for, you know, we're not happy about it. You people in the US don't, don't like this. And, and China actually does. So there is some geopolitical stuff. But I do think you're right, Mike. I think we, you know, silver has. Is very volatile. There's going to be a lot of money going in and out. I just don't think that the trend has. There's any reason for the trend to reverse before January. But if it gets to 75 or so I'm out. I'm not going to lie. I've been, I have some silver I've held since $4. So you know, it's, it is what it is, but it's, it is important to understand though, if we get to a clear we're out kind of moment in silver, I think that hot money starts looking elsewhere.

C (8:45)

I like how you described too the end of the year, we're at that psychological stage now to shift the sentiment, which we all know is completely shift to de risking and cryptos and completely bullish. In precious metals, you typically need some kind of least demarcation line. Oftentimes the beginning or end of the year will do it. So right now, that's why looking at towards the end of this year, this is such a significant couple weeks we have left and this is where I keep pointing out is the stock market absolutely has to go up because if it goes down the iterations of it going down from here, let's say this s P drops 5%. It looked very similar to 2007. It would follow cryptos, it would follow things like gold warning us and crude oil going the other way. So the sentiment shift now is unlikely. And that's why I put everything so narrow now that, you know, just to show a little bit of recovery in any type of risk assets, Bitcoin's got to close above 94,000 and that's purchased up on the, I think that you.

D (9:39)

Know, know you're focusing on price levels though. You know, it's, you know, I, I.

C (9:43)

I, I don't, I'm not, I'm looking for signals. My bias is the same. I think the whole thing is tipping over. I think the whole bitcoin is going to 50,000. I think we're due for a def, a down year in the stock market next year. Next year. And then I put my trader's hat. What are the inflection points? What are the signals? And that's why I'm just looking for the signals.

D (10:02)

Yeah, it's, it's funny. I mean you and I obviously disagreed dramatically on bitcoin, but I actually think the single most bullish scenario for bitcoin would be the stock market getting crunched. Bitcoin will go down with it when that happens, although I don't think nearly with the beta that you think, but I think that forces the hand in terms of bent and whoever and whoever is the next Fed chair. Because you're right when you say can't go down. What you mean to say is budget deficit blows out crazily. Huge problems in the economy, huge problems going into the midterms. Just a massive economic problem that I think gets met by the same sort of bazooka of liquidity that we saw, you know, that we've seen before. And to me, that's, that's the most bullish scenario for bitcoin in the longer term. But, you know, when I say longer, I mean months. I'm not talking years here, but yeah, I mean, you know, it could happen. I just don't think it's going to happen. I mean, I, I think that, you know, we're still seeing the trend of weak labor, strong corporate profit. And, and that trend is, has confounded because the corporate profits have moved up as a percentage of GDP so much. It's confounded a lot of the, the people who talk about bubbles and seeing what's going on. I mean, you know, make my mistake. I mean, Powell wasn't wrong yesterday when he said that he thinks the labor market is weaker than the data has basically been showing and he expects that to be persistent. Then we saw, you know, more jobless claims this morning. I mean, the Fed's trying to navigate, he's trying to navigate.

D (11:38)

Kind of a tightrope and his successor is going to basically be pushed into run it hot. I think that's what's going on here. I've been talking a lot. I mean, I'd be curious what other people think.

C (11:50)

Well, just to follow up on that, I think what you're seeing happening is, is the lessons of Jeff Booth and the price tomorrow, tomorrow kicking in the significant deflationary forces of rapidly advancing technology. I mean, we see youth unemployment or young person out of college unemployment now is some near the highest ever, around 10% being replaced by AI. Some of us have seen this in different cycles in the past. And then also there's the fear if anybody in any business doesn't have a fear of, you know, losing out a little bit to AI or not adopting it. We all know you got to be careful. But to me, that's what's happening. That's what kicking in. Unemployment should continue to go up. We all know it's historically it's always gone up to 6% after it bottom like it did in 2023. Now it hasn't done that yet, but it's heading that way. And cutting 25 base points is not going to make a difference to me. Now we're at the point where the only thing that matters, that all that stuff is just on a scale 1 to 10 they're like 2 to 3. The number one thing is the valuation of this US stock market just a few days ago is almost 2.4 times GDP. That's all that matters. And bitcoin is the best leading indicator for that. And that's why I think the next year will be the third down year for the stock market since 2000 and since 2008. And that's just signals that are very profound from things like what's happening. We just never had moves like this in gold with crude oil going down. And you know that all these ratios I watch are just breaking down. Like the one I really like the most is the, the stock market S&P 500 divided by gold. Right now it's 1.62 ounces of gold. The high was 2.6. The historical average is 1. It's breaking down. And the number one, my favorite ratio is Bitcoin to gold cross at 21. It's basically at its mean median mode right now. Exactly since, since 2020. And it's got a hole there. But to me, I just, you know, I'm just anticipating it's going to break below that level.

D (13:43)

Well, I mean we can anticipate a lot of things and we'll talk about it in detail on Monday. So I'd like to let other people talk. But the one thing that, that you said that I just always confounds me. I understand it on Saturday and Sunday, but why would anybody think, and why, why is, is the notion that bitcoin leading, you know, a two trillion dollar asset leading a $70 trillion global stock market? I don't understand it when markets are open. I, I, it just doesn't make sense to me. I think that that's just kind of a historical thing. You know, it happens on weekends, but during the week. Why would bitcoin be a leading indicator? I think bitcoin is trading based on a series of factors in a trading range. Like there's distribution overhead in the hundreds from OGs, and there's an entire crypto, you know, general buying force, you know, whatever you want to call the crypto community believing the four year cycle means it needs to drop almost as far as you're saying it needs to, needs to drop. So at the same time we have new buyers. So it seems like we're in this range and you know, when we're in the, we're at between 90 and 94. It's like probably going to fail here until there's a catalyst. Although one never knows when that'll happen. When we get down toward 80, it's probably going to bounce here because, you know, there aren't any more sellers. The sellers are exhausted. And so you, you go back and forth and back and forth and how we consider that leading the stock market, I don't understand. I just don't.

C (15:11)

Well, I don't want to. Like you said, you want other people to speak. I, you know, we, we can agree to disagree on it. I just always looking for indicators, like I said, that the ancient store value versus this hot and heavy speculative digital asset with a lot of, you know, the present involved is, to me, it's just a great indicator. And it's been, that's what I, it's been working. I do love the pushback on it. But, you know, we, we can let other people speak too.

B (15:33)

Anybody, thoughts? Go ahead. Dave?

D (15:36)

Yeah, no, no, I was gonna say, and you know, the other thing when you just said that I don't know what people think. I mean, I know, Adam, you and I agree on this one. I think that, that, that Trump Meme Coin and Melania Meme Coin set back the industry a lot. And, and actually, and the reason I say that, and I've been saying that for a while, but I think that we're seeing it come to fruition. Eleanor Terrett reporting on the market structure Bill. The fact that, that Democrats are insisting on making crypto more constrained from family member trading than stocks is one of those things. I mean, it's an obvious starter. It'll never get signed, but it basically could. It's threatening to derail the entire notion of regulatory clarity, which, you know, will, will turn it into an issue in the midterms for sure. But, you know, and unfortunately, Republicans aren't stupid and they kind of know that if they can make it an issue in the midterms, it might help them in the midterms. And so unfortunately, the political calculus could well get to the point where we get nothing on the legislative side. I mean, that risk is very, very real right now.

B (16:45)

I mean, there's a real chance that we get another government shutdown in a month.

D (16:50)

Yeah, shut down, probably. I think that, that Mike Lawler, you know, just introduced something which has a bunch of Republicans that are for it, which would take the wind out of the sails of that. You know, we'll see how it goes. I mean, the problem is that, that politicians care about getting reelected far more than they care about doing their job. And so.

B (17:15)

That is their job.

D (17:16)

Well.

D (17:19)

Is, is how they make issues sound, not what do they actually do and, and that, that is a, a incredibly cynical but sadly, I think very realistic view of why our politics is so dysfunctional and all of that. Unfortunately, from a crypto point of view, that matters. Now what does that mean functionally? What it means is the large, it gives huge benefits to the incumbent large crypto firms who already have some, who already have the, the, the, the chops to resist a future SEC that goes after them and they'll have a lot of case law on their part, you know, when they get, have exemptive relief from this sec. So, but smaller firms can't really take those risks. And so what does it mean? It means that smaller firms will have a much more difficult time competing with Coinbase and Robinhood and Kraken and Ripple labs and Gemini, etc. And that's not very good. But that is where we're at. It doesn't mean that the crypto industry is going to go back into its shell and do nothing, nothing of the sort. But it does mean that we, we do have a competitive problem.

B (18:28)

I still see Adam as Paul, is there anybody else on stage? But I would love your guys thoughts on this as we kind of keep going. Go ahead.

E (18:36)

Yeah, you know, I'm not really a macro guy and understanding a lot of the different markets that you guys have great expertise on, but Mike said one interesting thing. It's this, it's this newfangled digital money versus old school store of value. And I'm assuming Mike, you're referring to Gold as the old school store of value versus Bitcoin. And people keep giving bitcoin the narrative of store of value but you know, looking at Gold realized that it had a utility well before it was considered just raw store of value. And I think if you look at the crypto markets, this is where, where we're struggling to really get past the level that we've had for the past five years. I mean bitcoin is kind of the name, the, the main asset and it only has store of value. If you look at it as a company.

E (19:19)

And what its revenue generation is, it's far below its market cap. Just looking at the different chains and what they generate in revenue, we've got hyper look at $128 million in fees ranked number one for Q3 and Bitcoin only at 40 million. And so it's a very inverted kind of ranking that we have in the crypto market where the utility doesn't have the market cap of the store of value. And unlike Gold, which for a thousand of years had Utility before turning the store of value, we kind of missed that boat and hence we're fragmented. And if you talk to anyone it's like, well, where can I use bitcoin? How can I use bitcoin? They don't quite see and they don't see that store value narrative because A, they don't have enough money to be storing. Everyone's kind of struggling right now and then B, gold is kind of taking that within this cycle. So fundamentally I feel like what the industry really needs is either A, taking one of the utility chains and using that as a store of value, which I'm sure everyone here on this panel will say, no, no way in hell that can happen because everyone here is a bitcoin maxi in that sense, or B, we need to drive utility to bitcoin and stop talking about all of the advantages of. Great, it got listed for this etf. Oh, great. You know, we have regulation that lets all these centralized companies advance. And Dave, you're just mentioning how, you know, we are making it difficult for the smaller companies to compete against Coinbase, Kraken and all the established players. Well, from at least what I've recalled in a lot of the regulation, so long as the small players are dealing in true self custody and utility and not just, hell, let's hold this thing, put it in a treasury, then you can compete. And that's actually the true utility of crypto no one ever seems to be talking about, especially not here on this, on this panel. And that's what we need to get to if we want to achieve what gold was able to achieve for the past thousand years.

D (21:14)

Well, I'd push back on a couple of things there. Most importantly, you know, gold's utility is for thousands of years was jewelry.

C (21:23)

That's it.

D (21:25)

You know, there's some other. Today we have, there's some electronics. I mean, silver has dramatically more utility.

E (21:30)

Silver definitely. It definitely does. Although gold had its utility from a viewpoint of simply commerce means of exchange. And we've never had that for bitcoin. Unit of account, mainly unit of account. That's one of the biggest things. We actually measured things in units of gold for almost.

D (21:46)

Well, the reason, the reason you don't have. Yeah, but you know, there's a tail wagging the dog and this fee thing is kind of silly because if you put block rewards in bitcoin's fees are dramatically larger than that. But I don't want to get. Because it's just the way it is. But you know, Lockharts go down over time. Understand that right now, with taxes being what they are, using Bitcoin as a means of exchange, when you believe it's undervalued, it's fighting two very important things it's fighting. People believe it's undervalued because of gold's monetary value versus its utility value. And monetary value is at least 80%. You could make an argument that it's higher, I suppose you could get down a little bit lower, but not much based upon gold versus platinum, etc. Etc. But you know, it's, the thing is, is the tax rules are non trivial, right? If you, you know, if you have Bitcoin and you've had it for a while and you spend it, you're paying capital gains taxes on it. You know, forget a de minimis exemption because if you spend it, you pay capital gains. Well, people don't tend to use things.

E (22:55)

This space was downloaded via spaces down.com visit to download your space that with.

D (23:01)

Capital gains and you know, being charged. Now, theoretically gold would have it too. But people don't use gold as a medium of exchange anymore. They used to. But when it was true as a medium of exchange, remember there was no such thing as capital gains taxes because gold was at a fixed rate for almost no taxes. So you know, comparing the two, it's just there's massive friction for using Bitcoin and only if that changed, would that happen. Now look, if Bitcoin gets to a certain static price, that seems reasonable. I mean I, I personally don't have any belief that Bitcoin will go well beyond digital gold. I think gold will continue to go up, so there's some upside. But this notion that could go up perpetually I think is insane.

E (23:45)

With that Bitcoin can go up perpetually.

D (23:48)

Well versus depreciating fiat, sure. But in real terms, there is a terminal price in real terms for Bitcoin in the global economy. And obviously if they're still in a fiat standard, then, you know, whatever, but it's infinite.

D (24:05)

But the point is that if it gets to a terminal price and the fiat standard starts to fall apart, then its use becomes absolutely possible. Right? If tax policies change, then its use becomes possible.

E (24:17)

Well, tax. So the complication of tax and usage is an algebraic problem. This is literally like seventh grade algebra, something that software can trivially solve. So it's difficult, especially in the early days when we didn't have any software that can handle this. And you're dealing with, gosh, where the hell was my transaction? What was the basis when I, when I Received it versus when I spent it. And while tools have gotten pretty far, you're right, they're not there yet. And it is quite difficult. But this is a simple, like I said, simple algebraic formula to figure out, okay, boom, I spent everything in Bitcoin. And if I did, at the end of the year, push one button here, that that's what I owe. Simple as that, right?

A (24:56)

Yeah, but Dave, today's point. People don't want to do that, Paul.

E (24:58)

Right?

A (24:58)

I mean, people just don't want to do that with that asset.

D (25:01)

Yeah. And, and by the way, unless, look, they can make a simple rule. They could make a simple change. They could say they could change. They could say you can. Anytime you spend Bitcoin or spend an asset, you can use, you know, LIFO accounting or MO or, or tax lot accounting. Aut meaning that if you buy Bitcoin and sell bitcoin, there's no taxes because you're buying it at the new, higher level. But if you own some from $10,000 and Bitcoin is at $200,000, you're going to be paying capital gains taxes on $190,000 of gains. Right? That's what you spend. As long as that is the case, it will never be used by it just.

E (25:44)

It just won't now until. Until the first of next year, to my understanding. So you can choose to spend the most recently acquired Bitcoin. So if you earn it and then.

D (25:52)

Spend it, you're doing that without spending a lot on software and dealing with your tax accountants. It's very hard.

E (26:00)

That is very simple software. Right. And the amount that you spend in software is only because there's not many options out there and they're milking the few people that are actually using it in mass. This is a very trivial problem to solve. This is.

D (26:13)

It would be. It would be. But you still. Yeah, so. But look, you know the problem that this whole notion of utility drives me berserk because when you do financial assets, you have to think about it. I get into arguments. I poke the XRP army again today because people keep saying, well, you need XRP as a liquidity layer. And I'm like, well, why? You need it as a liquidity layer until all FX is tokenized. Once all FX is tokenized, why would you need. If you're going from, for example, dollars to pesos right now, you can do dollars to pesos of your institutional bank and you want to do a trade, you can do it easily if you're a retail person. It is painful. There's no good way to do it. So Ripple Labs created a way and they said, okay, well we'll use XRP as an intermediate asset. You can sell your dollars for XRP and then buy your pesos for xrp and it'll be cheaper than Western Union charges because you can drive, you know. But the truth is, is once you have tokenized pesos, tokenized pesos, trading as tokenized dollars will be a much easier market for market makers. And there's no need for an intermediary, you know, layer. So people who talk about utility, you have to understand utility has to be, to use the aphorism, you know, if you like hockey, skate to where the puck is going. Right. You know, within a tokenized world, you won't need that. Now, the layer ones that are going to be used for it will be valuable, correct? Sure. But how much and how much goes to the underlying tech versus the companies that are trading or utilizing in the market. And people in crypto have to figure this stuff out. There's all sorts of verticals where there's all sorts of enabling technologies that become very, very valuable. Look how valuable stripe is, for example. Right. You know, and, and so there's a lot of valuation conversations that can happen and many things will be valuable and many things will not be. Old models are going to have to break. And I think a large part of what this cycle is doing without a. There was no alt Horn cycle. Why? Because people started to realize, well, wait a minute, what the hell is going to be the value here? You know, where are people? Where's money gonna come from? And so, you know, it's like, other than buying what, what's a cool cartoon character, you know, what is it? I think that Trump and Melania, if nothing else exploded meme coins, you know, in this cycle doesn't mean memes won't come back because hell, you know, what's the size of that, that, that new toy? You know, I, I don't even know because my kids are older, so I'm not following it. But you know, the new toy with the surprise boxes and stuff, I mean, that's a 42 billion dollar market. I mean, people push for all sorts of crap.

B (28:45)

We're talking about the Boo Boos now. Is this the Boo Boo town?

D (28:48)

Yeah, there you go. I couldn't remember the name of it. Yeah, I mean, you know, when you look at that in the real world, obviously there's going to be plenty of that stuff's going to happen. So I'm not against memes but what I am against is people who believe that, well, because something is worth something now, it obviously has to increase. When the market increases, it's like, no, only if it captures value.

E (29:09)

Oh, you're actually speaking my language there. And so I'm not a big believer in meme coins myself. But you just mentioned, like the value of stripe. Well, stripe is an intermediary, intermediary that then facilitates a transfer of value. That's what every L1 is in a way. It is the intermediary that facilitates the transfer of value. And like you said, well, where does XRP sit? Why would XRP go up in value if people are just sending a Philippine peso stablecoin? Well, it is the intermediary that facilitates the transfer of value. And it does require a fee. Just like Stripe goes and charges a fee, Bitcoin charges a fee. Ethereum charges a fee to transfer value. Now what are people using? Are people using Stripe? Are they using some other intermediary? So that, that begs the question, within all the chains and rankings, who's collecting the fees?

B (29:52)

Who.

E (29:53)

Who are we paying the fees to be an intermediary? And right now the ranking is very lopsided from the viewpoint of market cap. Shouldn't stripe have a high market cap because it is collecting a lot of fees to be the intermediary? Yes, well, in crypto it's not that way. Bitcoin is barely collecting any fees and you can't consider the block rewards because the block rewards are only going down. You just mentioned Skate to where the puck is going. Well, in bitcoin, the puck is going where that is going down and down and down. However, other chains, the puck is going where they are collecting fees. That's where it's headed to some degree.

B (30:21)

To some degree that's true, Paul, but the problem is that they're probably based on that metric, so already overvalued based on speculation that the fair price, even if they're gaining more adoption, is probably below where they are.

E (30:34)

Oh yeah, they're all overpriced because price.

B (30:36)

Only got to where it is based on speculation now, not based on those metrics. So what's the fair value even of one of those chains at full capacity if you're only valuing it on that metric, probably lower than what it's priced at.

E (30:50)

Now realize that all of them, though, all of them have the capacity and ability to also be a store of value as soon as that simply is a mentality switch. The utility is the one that the technology actually can inhibit or enable the store of value piece is the one that is just a mentality switch. And just say, you know, I'd rather store eth, I'd rather hold that. I like the financial model of eth, even if it is infinitely inflationary, it's small enough and can be deflationary at times. And so that I think is the challenge is this fragmentation of utility versus store of value. And we keep talking about bitcoin, we keep talking about bitcoin and it in that sense it's overvalued from the viewpoint. It has no, you, it has so little of the utility of the other chains and that's what we need to fix.

D (31:34)

Yeah, I don't want to turn this into a debate on that topic. I would just say there are a lot of people who would make the argument that bitcoin as sound money is unique in the way it is structured, the way it is set up, the way it has been created, the lack of control, etc. Etc. And you could go through it. I mean ether as money is, is difficult. XRP is money with, with the control Ripple Labs have is laughable. And, and so when you start looking at things, I mean Justin Bonds will make the argument that Solana is better than all of them.

A (32:09)

Solana's money, Dave. That's what it really is. I, I actually think you guys are agreeing here. Just maybe Paul's vision is going to take more time to kind of play out. But I do agree with him that you know, try and there are obviously lots of teams trying to bring utility to bitcoin. I don't know, maybe, maybe the utility of bitcoin is just as a collateral vehicle. I don't know. I kind of think you guys are saying the same thing. Paul just maybe has a little bit longer term vision of where this is going to go.

D (32:37)

Well, I mean I think of it slightly differently but I don't care. I mean I don't think it really matters. What is interesting is that whenever we get, whenever you're in, if you want to understand mentality and what happens most of the building and most of the really interesting questions get asked in crypto winters, not when number is flying up every day when everyone is staring at what's going on. And so a lot of really interesting conversations, a lot of really interesting building is going on right now and I think that will continue. The real question is in this world where the governments kind of have no choice but to continue to pump liquidity in, will crypto be a leading vehicle for that liquidity or Not. And if the answer is not, okay, where is it? Right now, the leading vehicle in the world for where liquidity is going, where hot money is going, is Silver, you know, and you can't. That's just factual, you know, you know, whatever you want to say now, who knows where it will go? But I think that's a large part of what's going on.

E (33:39)

Silver definitely has the history and to a degree, the utility. And so I give it credit for that. And that's something that I would love to capture for Bitcoin. And we talk a lot about the, the regulatory framework, the environment. We advocate for regulatory clarity and usability, and I don't think we're advocating for the right thing is, is what I'd like to point out. And you'd mentioned, gosh, if we could just have a de minimis exemption and so that people don't have to worry about it, great. But there's no talk of that. No one's made application.

A (34:07)

Paul, when.

B (34:08)

Well, we do have talks like de minimis exemptions. Right.

E (34:12)

I think that's fairly new, Fairly new topic with respect to crypto regulation. I was.

E (34:19)

Chattering about it. There's some talks about it.

E (34:23)

To my understanding, it's bottom of the barrel compared to everything else.

B (34:27)

I would imagine that's true.

C (34:28)

Yeah.

B (34:29)

But, yeah, I just wanted to clarify because Lummis has been kind of pounding the table on that and even as recently as yesterday, and basically whether it's anywhere close to happening is that, to.

E (34:40)

Me would be one of the biggest buy signals, right? Not the, you know, this company now makes it a, you know, another store of value, sticks it in the Treasury. If we get a de minimis exemption and we see that we can actually start using it. That, to me, is the major, major signal.

B (34:59)

The thing is, Paul, though, like, that de minimis exemption is very US Focused, right? And we have plenty of jurisdictions where people don't have to pay taxes to use small amounts of bitcoin to buy things. And they're still not using small amounts of bitcoin to buy things.

E (35:14)

We're still obviously, like a huge, huge part of the economy globally. And so it sends a pretty massive signal.

B (35:19)

I'm just saying, I, I don't think even in, like, a vacuum, we've seen it proven that that's actually what people want to do with their bitcoin.

E (35:29)

Fair enough. As far as I can mass.

D (35:31)

Right.

E (35:31)

Although I think the, the usability of bitcoin, and I think that's what I'm arguing is bitcoin doesn't quite have its usability. The technology isn't there. And that's where we actually have the technology and other chains. So it needs to catch up in that regard.

A (35:47)

Yeah, well, I mean, Paul, if I could just ask Paul, like, what you think. I mean, obviously ordinals kicked off kind of, I don't know, 130 medical protocols, L2 sidechains, whatever. And realistically, none of them really got adopted. I mean, what's your feeling on that? Do you feel like it's just, well, they haven't had time to kind of really reach out or get adoption. But I haven't really seen anything.

B (36:09)

Nothing's going to get really adopted except for stable coins.

E (36:12)

I think the fragmentation is the challenge. And the stable coins have been well adopted. And guess what? Like none of them on Bitcoin.

B (36:17)

Right.

E (36:17)

And so maybe one of the L2s, when it finally, when things finally consolidate, get some stablecoin volume on it. That'll give Bitcoin some utility. Much like Strike has. I'm sorry, stripe has utility. So that can at least start off the narrative of, okay, well, I need to hold Bitcoin to pay fees, to be able to send dollars. That's the kickoff. And then from there we can go into, okay, actually using Bitcoin. But utility is a multifaceted term. One is to pay fees to do something else, and one is to actually use it as a medium of exchange, unit of account. And right now it has none of those. So it's purely just store of value. And it's a multifaceted approach. Both improve the technology, push for better regulation, such as de minimis exemption. But we need to get there. Otherwise I think Bitcoin is stagnant. I don't think it's a good investment, period, over the next 10 years unless we have some level of utility in one of these facets.

B (37:18)

I disagree, but I understand your point. I don't think that 99 of people buy any financial asset because they care what it does. Call me a cynic, but I also don't think most people are trading stocks on those metrics.

E (37:30)

I think Nvidia has, I think a good amount of Nvidia's, you know, market cap is because it has utility.

B (37:38)

I'm not saying stocks don't have value. I'm saying that your average retail investor doesn't buy them because of those metrics.

E (37:45)

And they buy it because someone else bought it and the price went up. Right?

B (37:47)

That's right.

E (37:48)

So you have the institutional investors that bought it because. Because they Realize, holy, this company is making money like they are collecting fees, right? And so they buy it. And then all the retail investors FOMO into it, following the trend, not knowing what the hell Nvidia is. They think, is that a graphics card gaming company? Well, it's going up, I'll buy it. And so yes, you're right, most retail doesn't, but the smart money does. And that's where the smart money is, leaving crypto, because we don't have a utility.

D (38:16)

Well, there's truth there. But understand what crypto is and what crypto could be and what bitcoin is, what bitcoin could be.

D (38:24)

They're very different. And I always say this because we have this world of bitcoin maxis and we have a world of ethereum maxis or crypto folks who only care about the technology. And there's a middle ground. And the middle ground is, look, gold, good old gold, you know, is, you know, platinum is 30 times rarer and for my most of my lifetime, before the last 10 years was dramatically more valuable and valued in jewelry than gold. And yet gold right now is two and a half times the price of platinum per ounce and probably going higher. Why? Because the monetary component of gold from central bank buying and hot money following the central banks, that has nothing to do with utility. Literally nothing. And don't. And whenever you start claiming it, it's crazy because if you really want to talk about what's utility, utility means it's useful and, and provides a service. Well, bitcoin stabilizing electric grids in a world of AI is dramatically more utility than gold looking nice on a pair of earrings. It just is. And so I, I have a really hard time with that now. As far as the rest of crypto is concerned, I agree with you completely. I think that, that, you know, there is a world where we are going digital and there will be value accrued to the networks that support that. And that will, and, and by the way, that's in so many different verticals. And I think a lot of them haven't even, don't, you know, haven't really been fully explored yet. And so there will be major winners. There's, they will be. I just think that we don't know what those winners are necessarily now. And everything we're doing is speculating. And so it's about what will happen. And that's kind of an interesting mental model. If there are analysts out there who will tell you that there are multiple, you know, crypto focused, you know, tokens that actually do have value and can be measured and are undervalued right now. And there are others will tell you that there are massively overvalued. And I don't know which is which. Well, I do, I have some sense.

E (40:22)

But let's bring those analysts on because Trump Token is talking about Bitcoin, Bitcoin, Bitcoin, Bitcoin, Fed, Fed, Fed, Fed Gold, Gold, Gold. Let's bring on animals that actually can analyze the different chains, which ones are undervalued, which ones aren't. I wish I was one of those people, but I like to just kind of build the tech personally. And so I'd love to understand some of that insight.

D (40:40)

Point is, is that it's not, it's sort of like in the winning tech is not the winning company.

E (40:46)

No, I get, I get to a.

D (40:47)

Very, very long time, you know, within. It's not just Betamax versus vhs. It's not, there are many examples. But in a, in an AI world, the winning chips will win, win and the winning chip makers will win because you know, the market's going to demand it. It's not a, it's not a commerce, it's not a, a, a retail good. So it's not like it never matters. Tech matters a lot, but it depends on what you're talking about mattering. And so the thing is, is that when you go under the car, there was an old expression that was so true for, for the, the at the end, you know, in the last upward impulse for the last year in the Internet bubble, that the death knell for an Internet company was to actually have revenue. And it's true. I mean, Mike probably remembers it. I don't know if that was before or after he had hair. But you know, when you have an Internet, these Internet companies, when they started showing revenue and the revenue was all of a sudden you had, it had.

B (41:41)

An E. So it's the best, it's the best clip ever from the show Silicon Valley. Everybody say that we've played at revenue on revenue. Then they start asking you about earnings. Yeah, come on.

A (41:52)

Revenue, pre revenue.

D (41:54)

But there's nothing worse than having a PE ratio on your, your screen, on your retail stock screen. Saying NA doesn't deter people. But a PE ratio of a thousand makes people go, oh my God. And so it happened time after time. So I understand what you're saying, Paul, but there are a lot of projects in crypto who really don't. They want to deflect from the fact that their financial, you know, that these ratios would make them look so incredibly overvalued that no one would want them. And that's why you're at this level that you're at.

A (42:28)

So then don't you want to just look, Dave, to network effects?

D (42:30)

Right?

A (42:30)

You just want to look to, well, who's got the network effects? It's Ethereum, it's Solana, it's Bitcoin. I mean, do you look beyond that right now?

D (42:38)

Personally, no. The only other one I like is Tao or, you know, that. And that's on the come. But, you know, who knows, I could be wrong, you know, I, you know, whatever. But that, that's what, that's exactly how I'm looking at it. It's really all about network effects. And you know, when you look at that, it really matters to where the world, which way the world is moving to. And everyone keeps talking about stablecoins as the killer app. Stable coins are the killer entry app. But understand that underneath, stable coins are still the same fiat. It just means you can now process it better. You know, companies out there, I mean, we saw the Western Union with Solana deal.

D (43:17)

The friction in our current financial system is going to get, is going to be changed by crypto. And that decreasing that friction is going to put a lot of money back into the real economy. And there will be value to be extracted from that, just less than the current banking cartel is extracting. Right. You know, these are the sorts of things that people think about because, you know, when you look at, like we were talking the other day about collateral and Bitcoin and blah, blah, blah, blah, blah. The one thing you have to understand about Defi and why and why this is being fought inside the back rooms in Washington is because if you're JP Morgan, if you're Citigroup, if you're, you know, what is it, UBS now you know, which is now both Swiss banks combined. You know, if you're a big prime broker, you're making a lot of money, a lot of money by holding on to effectively cartels in securities financing across a variety of businesses. And once that becomes completely open and transparent, those margins are going to collapse and of course, volumes will therefore explode because it'll become easier, but those margins will collapse in the collapsing of those margins. That doesn't mean that the overall wallet is going to decrease because the volumes could go up, but it does mean that their stranglehold on it will go away. And we've seen this in financial markets time and time again over the last 30 years. And so that's why this is being fought. And yes, as Paul says, the chains that ultimately end up being key to that transformation will have a lot of value. That is true. I just don't know which ones will be there or when it will happen.

E (44:57)

Well, you can definitely use what you'd mentioned with network effect being a large piece of that value and a big indicator as to which ones already have network effect and already have the value transfer and the fee collection. And that from the speculator's point of view is probably their best bet.

E (45:16)

And sure, I mean that thing could.

D (45:17)

Come up out of nowhere. You just, you just basically, you know, explained kind of in reverse Tom. Tom Lee's thesis, which, which I don't necessarily disagree with, you know, I think that he is wearing a little, a little bit too much of a cheerleader shirt because of his CEO role. But the truth is that that is the thesis. It's network effects and the need to go into that direction and trust and people in financial companies. You know, there used to be an expression you don't get fired by choosing at the time it was IBM, you know those mainframes you don't get fired choosing even though it was obvious that they didn't perform as well as many other tech platforms for. For a very long period of time. But so Ethereum has an enormous edge, there's no doubt. Now how will that work out? I don't know. I guess we'll see. But.

D (46:11)

The I can't say fact, the likelihood that we will have at some point in the next decade or so some version of a decentralized finance system that multiple players and new competitors can utilize to break the cartel and actually bring costs of financing down and transparency up is high. And when that happens, value will be created and taken away from existing players. That's. I just said basically digital. The same thing you could have said about Kodak versus Digital. The difference is is unlike Kodak, every one of the banks understands what I said is true. Therefore they're going to fight it from happening to delay it and try to co opt it when it happens. That's the difference.

E (47:03)

They're already actively trying to co opt it if not having a good amount of success. But very good point.

D (47:09)

Yeah. So anyway, that's my thoughts for today. Meanwhile, we managed to talk about stuff other than the Fed for a few minutes. So that's good.

B (47:16)

Nobody wants to talk about the Fed. I think we can wrap.

B (47:20)

Had enough of the Fed. I mean forgettable as Mike said the to deliberately ignore list high on it.

D (47:28)

Yeah, it's we, we, we, we got. What's going on? I think that Mike and I, weirdly, are in agreement that we're in this range. Whichever way it breaks is going to. To tell us a lot. I just think that the entire world thinks that the range is going to break. To the downside, I don't know, many people were willing to say they think it's. Other than Mike, Alfred, and me.

B (47:50)

I say up.

D (47:52)

Okay, well, maybe. Maybe there's too much up. I don't know. I mean, when we all agree on up, then it tends to go down. If we all agree on down, then it tends to go up. That tends to be what happens. But, you know, I guess. I guess we'll see, you know, 91, 000 forever.

B (48:05)

That's my prediction. 90, 000 forever. Just stay here.

B (48:10)

Good times.

E (48:12)

I'll actually agree on the up at least for, you know, 20, 26. I just think it's going to be pretty boring up in the sense that we're going to hit some ceilings that'll make bitcoin just not that interesting to. To a lot of people.

B (48:24)

Don't. I don't disagree with that. I definitely don't disagree with that. All right, guys. Well, thank you to Dave, Paul, Mike, Adam, and whoever else may have graced our stage for five seconds here and there. Can't see them. Anyways, we enjoyed it. And we'll be back tomorrow, of course, for another crypto. Town Hall, 10:15 Eastern Standard Time. Thank you very much, gentlemen.

D (48:43)

See you tomorrow.

B (48:44)

Bye.

E (49:06)

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