C (4:11)

Yeah.

A (4:14)

About what's going on.

B (4:15)

It's an awkward stance. I think I caught him at a, caught him at a weird time there.

A (4:20)

Right Now I'm super happy. But from sort of your tone in this tweet, it sounded like he's a bit frustrated that the White House is so involved. I mean, is that accurate? Because it kind of get out of the way and let us do our Congress thing, is what it sort of seemed like.

B (4:37)

Yeah, yeah, definitely. Definitely got that vibe. You kind of said, you know, Republicans need to figure out whether it's going to be a White House bill or whether it's going to be a congressional product. And, you know, to his point, you know, it is. It is a congressional product at this point. You know, we've got the Republicans and the Democrats staffers. You know what, I've been very interested in this whole process that I've been learning about, you know, how bills actually come to fruition. It's really the staffers that do a lot of this work behind the scenes, and then the members kind of come in at the end and they really sort of hash out, like, the most. The difficult parts of the bill, I would say. But it's been staffers on the phone, hours on end, days on end for the last couple of weeks, just really trying to hash out these really difficult parts. There is a member meeting today on Capitol Hill between Republicans and Democrats. Bernie Moraina will be there, Senator Lummis, Tim Scott, Senator Hagerty, Senator Gillibrand. So it is bipartisan, so there should be some progress today. Hopefully there'll be some news at the end of the day. But it's, It's. It's a pro. It's a work in progress. I don't know if that will be a stalled work in progress. We will see. But it's tough stuff. Everybody's wants and needs in there, right?

A (5:44)

Yeah. It shouldn't work that way, but it obviously does. But obviously we still have also bank CEOs involved. I mean, this is, you know, the biggest names in the world. Wells Fargo, Citigroup, bank of America also here talking about crypto market structure. We've had a lot of these guys about, you know, Brian Armstrong being there, Brad Garlinghouse being there. But this is the CEOs of the major banks. They're now meeting with senators about crypto market.

B (6:10)

Massive, massive stakeholders. And Mark Warner made the point yesterday that the Genius act, which passed in July, the banks weren't exactly. They were. They had some input, I think, on the, you know, early discussion drafts, but they weren't as involved with sort of these discussions with lawmakers as they are on market structure. And you're really seeing Them come in and have a say. And I think you're seeing that a lot more with the questions over stablecoin yield. Right. I mean, that is actually something that is a real thorn in the side of this bill. And Warner brought that up yesterday. You know, this notion of the rewards. Are we going to see something maybe language that not like repeals what's in the Genius act, because obviously that is law, that stablecoin yield is not allowed. But this notion of rewards and is there a way that, you know, language can be put into clarity that might, you know, amplify that or maybe like, pull that back a little bit? The banks are obviously very against this rewards notion because, you know, they're worried that it's going to pull capital from them. And so, you know, that's, I think that is probably what they're coming to the Hill to talk about on Thursday.

A (7:13)

Yeah, I love that. They're obviously concerned that they won't be able to give their 1% when they're getting 4%.

D (7:20)

1%. Where are you banking? I'm getting like 04%.

A (7:25)

I've got Jamie Dimon on speed dial for the.

C (7:29)

Yeah, well, I think we need to update the whole, yeah. The law, you know, the, the, the whole little, the cartoon about how a bill becomes a law.

A (7:37)

I'm just a bill.

C (7:40)

Yeah, that, that, that needs a reboot. Right. It's, it's not, not necessarily how it was like 45 years ago. So that needs an update. We need to have staffers in that little cartoon now. Right. The part that they play.

B (7:53)

Right. And there, there is a, you know, with the Senate, I'm sure you guys remember, with the Genius act, right. There is this whole notion of the 60 votes. Right. So it's not like the House where you can just pass it on a majority with the Senate. You know, what likely will happen, you know, if we have this markup next week, you can push it out of committee because there's more. Obviously there's a Republican majority in the Senate right now, so you can push it out of committee with, with the numbers. But when it comes to the whole Senate floor, you need those Democratic votes. You need some Democrats to come, come on to really push it through the whole Senate. So what you might see happens, if there is a markup next week, then, you know, some Democrats may vote yes in the interim and say, okay, we'll vote yes to get this out of committee, but we want revisions in the meantime. So over Christmas break, there may be some more work on it. And when it comes to the Senate floor in January, you may see some more changes there in order for Democrats to come and vote yes on the final vote, as it were.

A (8:54)

But you know, Tillman, Andrew, either of you, is this still the next catalyst that we're waiting for? You know, I still think that this is actually really important that we get this done.

D (9:03)

Yeah, I think it's really important. Sorry, I couldn't hear you, Andrew, last time, so I had to jump off and jump back on the. Of course it's important. Of course we've been waiting for this for, for a long time to finally be at the table, finally have clarity. I'm pretty pessimistic that we're going to get it on all the fronts that we need it on, quite frankly. But if you look at Coinbase and you look at some of the other leaders in the space, it doesn't really matter. The cat's out of the bag. I mean, they're, the banking services are already integrated. The, the threat has already arrived. So for them not to get something done, I, I just think that the proverbial cat's already out of the bag. I don't think you can put it back in.

D (9:50)

More delays are just going to hurt the markets, in my opinion. It's just people not getting out of their own way and letting free markets do all of the talking. And I think there's.

D (10:05)

Whether you're a Democrat or Republican, I think there is middle ground. To look at a Coinbase and say these are folks that have been operating at a very high level. They are now on the S&P 500. They've essentially written the standard best practices for the industry domestically. I mean, they've been the juggernaut for sure. Why are we relying on politicians to get anything done when honestly I don't think they understand that the six inches deep into our industry, much less like the nuance of Defi and defi. Let me tell you something of anything that I'm excited about in the space. Defi is up there at the top of the list because it's getting integrated at such a seamless level into exchanges that you can participate without even knowing you're participating. Right? It's just now push button. It's like, you know, lend, borrow. Those types of arbitrage opportunities in the banking world we've touched on this are just massive shifts in, in profit sharing potential with financial institutions and their shareholders or that is their customers. And, and I think just like Bitcoin rewrote the rules on instant settlement, rewrote the rules on democratization of access rewrote, the rules on all of the decentralization of, of the, of the financial networks. I think this is a continuation of those rules getting rewritten. And it's never. We can't go back. We've already seen the promised land. Like to think that our financial systems aren't going to be built on the back of blockchain going, I think is pretty, pretty naive and pretty, you know, archaic way to think about the markets. And especially if you look at, you know, forget Brian Armstrong and Coinbase for a second, you know, look at blackrock and Larry Fink. It's he. They are going to get excited. Yeah, I know. I saw, I did that just for Andrew. That's your lead in Andrew.

D (12:09)

You've been, you've been activated.

C (12:12)

Go ahead.

C (12:14)

No, there's, there's, there's so many angles here. And it's great that we have Eleanor here because she covers them all so well. There's so many angles here. 18 months ago, we were in a spot with most of crypto where there were two potential outcomes. Either your business, we're going to put your business out of business from a regulatory and legal standpoint, and we may possibly put the founders in jail if we feel like it. Right? So now we've moved to a spot where, okay, the politicians are on board because a, a certain section of those politicians got their teeth kicked by the crypto lobby and then crypto voters in the last election. So now we got to get involved. And then, you know, now you've got, now they're going to say, okay, we're, we're pro crypto, but we may put some things in here that aren't going to be all that helpful for the crypto movement at large. So, you know, I'm of the opinion that, you know, no matter what government does or what side of the government does it, whenever government gets involved, nothing really gets better. It generally gets a little bit or much worse. So like Tillman, I'd rather them just not be involved. That being said, I, I think it's great that we have the likes of Coinbase as part of the movement here, given their scale. Right. Without a voice like Coinbase or the scale of Coinbase, we'd have a real hard time with a lot of this stuff and, and I'd be very, I'd be much more concerned about what comes out of a bill like this. Still not thrilled that, you know, given the scale of Coinbase, certainly it's within their interest to put their thumb on the scale a little bit and get probably what they want out of some of this stuff. It's also compelling, you know, that, that the likes of BlackRock and, and, you know, JP Morgan are saying blockchain is here to stay. And it's, it's, you know, we've got to embrace it. That's, you know, again, that's compelling and meaningful. But what do we get in the end? You know, it would almost be better if this, if both sides keep fighting, nobody's happy about it, and it gets pushed off and gets pushed off a little bit further because then the, you.

A (14:24)

Know, the market only true if the people in power are interested in actually passing it when the time comes. And this might be a Goldilocks moment where actually there's a chance of getting this legislation done. I mean, it's not just legislation, though. And Eleanor, I just want to keep focusing on the things you've been tweeting about, obviously. And this is a huge story. New CFTC Acting Chair Carolyn Pham just announced the launch of a pilot program that will allow Bitcoin, Ethan, USDC used as collateral, and US Derivatives markets. Right. I mean, this is yet another absolutely huge one. Here's the article on CoinDesk, but as usual, you broke it first. I mean, it's not just the Senate we're talking about. We're talking about the cft, we're talking about the sec literally every day. I mean, there's some news about this.

B (15:08)

Yeah, right, exactly. And I think the industry is encouraged by that because we are seeing so much activity out of the CFTC and the sec. Atkins and Pham are coordinating. It seems the agencies are actually finally speaking to each other and working together. Fam, I think, is. Well, she'll be leaving soon, right? Mike's. Mike Selig is going to be confirmed, I think, relatively soon as well. There was supposed to be a vote for him last week, and that had to get pushed off for some procedural reasons. But the point is that he'll be confirmed soon, so we'll have a permanent chair of the cftc. So you can probably expect to see more of this kind of stuff. But, but to your point about having, you know, industry advocacy on the Hill like Coinbase, you know, for. And, and you made a good point, Andrew. Like, coinbase is big. They've got, you know, a lot of people on the Hill advocating for what they want. But at the end of the day, coinbase is a centralized exchange. Right. There's a lot more. There's a lot of other crypto outfits out there who are not Coinbase, who, you know, the defi component of crypto. Right. You've got the Defi education fund who's out there advocating for, you know, decentralized wallets for software developers who, you know, are just as big of a part of the crypto community as, you know, centralized, like the, the coinbases and the Ripples and the Kraken. So all that to say is like, you know, you can have all the advocacy on the Hill that you want, but at the end of the day, codifying this stuff into law is really what's going to be that gets this stuff, you know, done. Because the CFTC and the SEC can, you know, put down guidance, they can do rulemaking, but that stuff can be repealed. And another administration, right, we can have another Gary Gensler, we can have another Biden administration come in in a couple of years time. It is much harder to repeal a law, right. That's passed by Congress than it is to repeal rulemaking by a federal agency.

A (16:58)

Yeah, we've seen that over and over again. I mean, executive orders are only as good as the president who's sitting, and regulatory guidance is only as good as the party power or whoever's regulating in their general opinion on the market. So I still think that clarity is really important. But this specific news, right, the CFTC allowing these things as collateral comes on the back of JP Morgan recently saying they'll accept Bitcoin Ethereum as collateral. I mean, I'm just going to show this really quickly a clip, but here's Jamie Dimon literally, like talking about tokenization. This guy was the ultimate grinch for crypto.

D (17:27)

Always been using technology to do a better job for the client. And we're going to do the same thing in tokenization. So tokenization blockchain is real. It's been around for quite a while, but now it's becoming more effective, more efficient because people are finding ways to do it faster and cheaper, permission or not permission. And it is also important for you and the people to understand that we need some kind of guardrails around it because when we do a lot of things, you know, we have to.

A (17:54)

I can only look at him so much.

D (17:57)

I'm just glad that we've gotten blockchain to the point where it's fast and cheap. That's what we've been waiting for. AML kyc.

A (18:05)

Of course, yeah. I mean, listen, he would probably, if they gave him the chance at the end, he would go, but bitcoin is still a scam Right. I mean, this is clearly the blockchain and tokenization, and that's the new narrative. I mean, I had a long conversation with Joanna Brat from Robinhood yesterday that'll come out on Sunday. And all we talked about was Robinhood's plans for tokenization, everything being on rails. I mean, we can literally. You could bring up.

A (18:28)

And so then that tokenized security is a security. I mean, he's literally saying, I'm going to skip that too. But he said in two years that everything will be on blockchain rails. I mean, how insane is that, like, for us to be hearing. Here you go. SEC Chair Paul Atkins says all US Markets will be on chain within two years. Okay, that's. By the way. But still, I love the. I love the spirit.

B (18:51)

That's. Yeah, that's an accelerated timeline. Did you see my scoop yesterday about Ando's investigation was closed? I don't any. Nobody really knew about that. That was a very confidential investigation.

A (19:03)

Yeah, My, my thought on that was Ando was under investigation.

B (19:06)

Yeah. Yeah, mine was, too. I didn't know it until, until I was told, but yes.

C (19:10)

Yeah, everybody was under investigation.

B (19:12)

I think everybody was.

C (19:14)

I mean, you should just assume you're under investigation. You know, the tokenization stuff, it's starting to feel like, especially out of the mouths of, of Jamie Dimon, it sounds, it's just a talking point. Right. Like, you know, tokenization, once it finalizes and we have 247 trading and all that stuff, it's just a. How can I. It's not necessarily this giant leap forward in terms of innovation. Right.

B (19:43)

It's.

C (19:44)

It, it, it really, it really isn't. It just simply means that the markets will be open 247 and then you'll be able to move stuff. Instead of T plus 3 or T plus 2 or T plus 1, it's just. Okay, T, then you move stuff. Right. It's, it's not, it's not going to. We're not going to have an explosion of asset prices because of tokenization. It's probably the difference between cash and writing checks. Well, now we have these plastic things that you put in a deal and that's how you pay for stuff now. Like, there wasn't an explosion of things in the moment when, when that happened. So it sounds like a talking point so that you, you know, you don't sound like a boomer anymore. Like, you know what's going on. You have an idea of what's next. It's as if Larry Fink, you know, kind of started this Conversation. And Jamie's like, hey, what do you, what am I supposed to say on this thing again?

B (20:39)

He called him before and he's like, tell me what organization is, what are.

C (20:43)

We, what are we talking about again? Oh, tokenization. All right, I'll say that a few times. And we, you know, we're.

D (20:47)

Then some intern in the back is laughing. Tell him to say it's gotten faster and cheaper.

B (20:53)

Yeah, right, right.

A (20:55)

Tell them to say it's real, it's no longer fake, guys.

B (20:58)

But the, using the CFTC's pilot program, using tokenized assets as collateral I think is a step forward in the right direction. Because when that actually is like integrated and allowed and we get like full time 247 trading, that will be huge.

D (21:13)

I think this is a poke in the eye to Ripple, to be honest with you, because XRP not being on that list, that's the obvious reason why. I mean that's the missing component for Ripple to make Hidden Road a real contender in the space is like if they, if you look at the pieces that they have to play on the board, they've set themselves up to have a lot of collateral on their exchange with xrp. And if the CFTC or, or the SEC approve XRP in that, that form, that function, they're up and running and, and they have, you know, they, you talk about somebody, a company who's not afraid of the regulators. I mean they've literally been locked horns with them for the last five years. So I'm excited. These types of headlines are like you guys said, they're not something to be ignored. They're major things. And coming right before Christmas, right after Thanksgiving. I mean this seems like a pretty good setup for a nice little holiday run here. But time will tell.

C (22:21)

Well, under the guise of my, you know, don't, don't fade the think, you know, thing that I like to say often as a reminder, Larry talked about this is now maybe six months ago, he talked about the fact that bitcoin could at some point rival what the mortgage markets look like. And you know, everybody's like, whoa, what? But these are now the little seeds of that. So bitcoin as collateral is meaningful. It's liquidity. And sure it's a pilot program and sure it's the beginning, but not a whole lot of pilot programs at the CFTC actually get canned after six.

C (23:02)

Months. They keep going. Right. So we're at the beginning of, you know, again, the collateral movement. And what's the king of the collateral movement? It's, it's the Mortgage market. So, you know, follow, follow the leader, as they say, you know, and, and talk about price over time. If we begin to, to get this base layer of collateralized stuff associated with Bitcoin, price will follow. And it's the reason why Larry's comfortable saying bitcoin goes to 5 to 700k at some point if we're at 1 or 2% or 3% of, of portfolio value. And when you have all of these moving parts that somehow are connected to Bitcoin, like options and then IBIT and then collateral and, and everything in between. Now you have Bitwise coming out with their, you know, top 10 crypto fund that's gonna, gonna, gonna start up. A ton of Bitcoin is going to be in that. Right? So a bunch of different.

C (24:04)

Connective, you know, connective tissue associated with Bitcoin. That's how you get to 500 to 600 to 700k over the next two, three, four, five years.

A (24:14)

Yeah, this is exciting for Bitwise. Eleanor, you put it on my radar that it's just cleared today and that Bitwise had tweeted about it, because this is the one that got magically stalled for no reason. And nobody knew it was sitting in limbo. They celebrated it like Al Gore celebrated his presidency before the hanging Chad. And then all of a sudden it wasn't there anymore and was no longer theirs. And then Grayscale got an index product later, and we still had Bitwise sitting in limbo wondering what was going to happen. So maybe, I know you got to leave in a few minutes, but maybe this is like just another signal that everything's moving in this direction and things are just going to keep getting approved. And right now, kind of the governor is off.

B (24:55)

Yeah. Yeah, I think so. This was one of the major index funds to get actively approved by the sec, because if you remember, during the shutdown, we were seeing those approvals that weren't actually SEC approvals. They were just sort of going on a rolling basis because of that clock laws that everybody was putting into their S1s that was going on. It was like post. You know, you would file the amended S1, and then 20 days onwards, then you could go effective. The SEC actually actively greenlit this one. And if you look in the fund, it's 10, and I forget we can probably pull it up, Scott. But it's like 10 different cryptos. And so you have to believe that all of those 10 different cryptos in there are now sort of blessed, as it were, by the sec. And so it's not just like the top five. Right. You know, you've got five other ones in there, and I believe like, SUI is in there and like Avalanche and I think maybe like Cardano. So, you know, if you look at that, you can maybe have some sort of guess as to what other, like, single asset products might be coming down the pipe as well. See that? You got Cardano, Chain Link, Litecoin, Sui, Avalanche, and Polkadot, too. Yeah. So those look to be sort of okay under the SEC standards for generic listing standards. So might be some kind of indication as to, you know, what other products we might be seeing coming down the. Coming down the line in the next couple months or so.

A (26:19)

But the generic listing standards were loosely based on, I guess, what Coinbase had listed for futures. Right. And cme. So I wonder how much crossover there is on this list. I don't see Shiba Inu on this one, which I know is.

C (26:30)

Are we paying attention to the percentages?

A (26:35)

I mean, I don't have my contacts in, but that looks like a 0.14%.

B (26:38)

Yeah. It's very small underground. Under Solana.

A (26:42)

There's a chance. Yeah.

C (26:44)

It's you. So. So 90 of the fund essentially is in Bitcoin Ethereum, which makes sense. Right. You certainly don't want, you know, 30 of the fund to be in Litecoin. You know, discussion for a different day.

A (26:59)

Litecoin's just catching strays here.

B (27:01)

Like, Litecoin did well, though I believe Canaries Litecoin ETF actually did on its debut. It outperformed, I think, expectations anyway.

A (27:11)

So, yeah, I mean, the Doge one flopped and. But Litecoin was decent. But XRP and Solana were spectacular.

B (27:17)

Yeah.

A (27:18)

And have plowed through inflows even as we've seen massive outflows from Bitcoin Ethereum. Eleanor, before I let you go, anything else we might have missed on your radar?

B (27:25)

Just want to. Just want to tell you in the beginning when I said that there were two names for the bill. So there's the Clarity act, that's the House's act, and the Senate one is the Responsible Financial Innovation Act. So the RFIA can't remember the name in the beginning, so just wanted to follow up with that.

D (27:41)

But, yeah, your brain didn't just go straight to responsible. That wasn't like a correlated value there.

B (27:48)

It's too early, but, yeah. Keep an eye on my Twitter feed. Hopefully we'll get some semblance of what we might see in the coming days after today's member meeting. And there might be a markup next Thursday, so we'll keep an eye.

A (28:00)

Awesome. Thank you so much, Eleanor. And hopefully we'll see you on the channels a lot more in the near future.

B (28:04)

Sounds great, guys. Have a great day, everybody.

A (28:06)

Check out her and check out Crypto America. It's awesome. So thank you, Quick club. All right, guys.

A (28:13)

So before we talk about other things, there's a couple more stories.

C (28:17)

You can't hear me, so can we quickly. You know, Responsible Financial Innovation of America.

C (28:27)

That could possibly be the dumbest name of anything ever. It just, it goes to the reality of, of, of just how lame, you know, politics actually is. I mean, seriously, you mean that the.

A (28:41)

Inflation Reduction act did not.

C (28:43)

Yeah.

A (28:45)

Are you saying that there's misdirection in the naming of legislation in the United.

C (28:49)

States so we should just assume it's, it's the like not even close to responsible Financial innovation act like it's the opposite somehow.

A (28:58)

It's just financially innovating responsibility in.

C (29:04)

It'S, it's just the level of stupidity. And again you, you go back to the reality that anything the government touches, especially as it's, as it's gaining steam in the free markets is just, they're just going to make it much worse.

D (29:19)

If irrelevant arguments frustrate you, then you couldn't be in that room because there's probably more irrelevant statements being made about blockchain. And the fact that we are talking about the tokenization of real world assets like it's anything more than just the tokenization of securities at this point is. It's a joke. And I honestly think it's a harvesting tool. I think that, I think Wall street has seen.

D (29:53)

A new type of investor, let's call it that. I think that, you know, the crypto investors are, are maniacs to some degree. And I put our, ourselves in that group and I think that there used to where the stock markets carried that level of panache and that level of engagement. And I think quite frankly, if you look at the volume of some of the major markets CMEs specifically IT, it's very small. It's not, it's not very overwhelming as it pertains to the market participants and, and really how excited they are about participating. And then you look at that very same thing on the crypto front. And I want to ask you guys both the question over the last 10 years, go back as far as you can remember, do you remember how big of a pain it was to do anything in the space like, like literally just sending any crypto to anybody was.

A (30:52)

That transaction took like 16 hours or something.

D (30:55)

That's what I mean. And I remember finding myself at times going yeah man, this is really awesome. The tech itself, but the lack of communication between systems and the lack of interoperability across the board was just so frustrating and so fraught with danger. I would ask myself like, man, I must be nuts because I really like doing this. Even though it's kind of harder than the real world in a lot of ways. Well, we've gotten to a place where it's not anymore. It's easy and there's just no putting that cat back in the bag. And I think the entire inclusion of real world assets in the conversation are only because Wall street sees dollar signs attached to their products becoming relevant again. Basically like yeah.

A (31:41)

And you, nobody wants to be like Kodak and Blockbuster and Sears Roebuck either, right? If it's better and faster, they're certainly not going to let somebody else co opt at the better and faster before they find their way to do it. That's hilarious by the way.

C (31:57)

Going to Congress. That's why the banking execs are going there to talk about crypto because they, they have to. The, the, the, the numbers tell them that they have to because they're looking at everybody under 50 years old now using all this technology that's much easier to use now. And they're like well wait a minute, what do I, what do I, it's.

D (32:19)

But it's really about their margins, Andrew. I mean I want to, I want you guys to think about this. In order for you to get four and a quarter percent in the, in the old days of finance you had to be a JP Morgan high ultra high net worth 20 million dollar balance deposit at their private net worth bank. That's how you get big interest rates given to you on money market accounts. And everybody else didn't get to participate in that. And now Coinbase and many others have just removed that gate. And now anybody, whether you have a dollar deposited or whether you have the 20 million required for JP MOR and you get the same rates four and a quarter percent. So I, I do think the banks are, I don't think that, I think to say that they're behind the eight ball in this one is understatement of the century. I think they're late to the party.

C (33:13)

Well start to connect the dots. Right. So in the collateral story it was Bitcoin, Ethereum and usdc. Right? That, that, that, that's in there. Right.

A (33:22)

So I saw it.

C (33:23)

Yeah.

D (33:24)

If they skipped number three.

C (33:26)

Yeah. So if you're holding. If you're holding USDC and getting four and a half or whatever the percentage is at Coinbase and you can also use that as collateral.

D (33:36)

Collateral.

C (33:39)

What do I have?

D (33:39)

Well, that's what I'm saying. It's like if you look at that bill, it's like a poke in the eye to Ripple and everybody beyond. But Coinbase, I mean with USDC is their kind of cohort on this. That, that you're, you're spot on. That's. It makes. It gives them again the competitive advantage to, in the lending space against the collateral needed to become a bank. Like at the highest level. Like they, it, it wouldn't surprise me if they started popping up kiosk brick and mortar locations. I mean that's how bankish they are right now in, in kind of their approach to markets.

C (34:16)

Yeah, you don't, you don't get a seat next to Larry Fink at DealBook, Brian Armstrong and Coinbase and, and there not be a lot going on behind the scenes. You also don't snap a little selfie with your arm around Larry Fink after the talk and you know, get approval to put it all out there if there's not a lot going on behind the scenes.

D (34:38)

But to your point, did you watch those interactions? It almost was like Brian was the lead character in the conversation. I mean, all the questions were centered to Brian, like, hey Brian, what? Why are you? And it was like he was including Larry in the conversation versus Larry kind of being the king that he is. There was a real balance of power in those talks. That kind of it, it tells you a lot more than even the words tell you as it pertains to who's. Who's in what spot.

C (35:09)

Also a reminder that in 2022, the most interesting interview that they did for that summit was with Sam Bankman freed when he was under indictment. So in other words, DealBook and TradFi were mocking crypto three years ago. Like, look, this is your guy. He's a fraud.

A (35:31)

Right?

C (35:31)

This is what crypto is. Spin it. Three years and now Larry and Brian are best buddies. That's, that's, I mean, that's something.

A (35:43)

Before we move around a bit, there's two things I want to ping because you're talking about bank adoption. This story just cracked me up. So I got to bring it up, which is that the ECB wrote a blog post about their central bank digital currency. Remember, you guys may remember that they talked about, people talked about stablecoins, destabilizing central banks and destroying the world they would just like, you know, the digital euro is fine and will not affect banks in any way, including commercial banks. Don't worry about any of these things because it's ours, so you're safe. Right, which, which is good to know. But then we have to talk about this final story before we move on.

D (36:16)

Well, it's faster and cheaper, Scott. They figured out how to make crypto faster and cheaper.

A (36:20)

How about Litecoin catching strays? I didn't want Eleanor to have to catch any strays. If I brought up XRP and Ripple today. This story, man, is a real head scratcher and I just want to bring it up because it's worth discussing Wall street hedge, big crypto bet and 500 million ripple deal. So obviously this was the darling of the news cycle not so long ago that ripple had raised $500 million at a $40 billion valuation from Big names like Citadel and Fortress. And obviously and rightfully they paraded this around as we have a very high valuation from the most reputable investors possible in the world to. Well, the deals, the details of the deal came out.

A (36:59)

And first of all, many of these people said that 90% of the value of Ripple as a company is their stack of XRP tokens that they went ahead and said they effectively created for themselves. So they're aware of it and not their actual business. But also this deal was a guaranteed 10% yearly investment, minimum floor with 25% upside with certain conditions and all of the benefits of being first to exit in either bankruptcy or any sort of public offering. So the worst downside for these companies was effectively a 10% annual bond for three years with unfavorable terms to Ripple that, that had to be 25% if they wanted to take any of this back.

C (37:45)

Yeah, it really wasn't investment.

A (37:48)

Against Ripple or XRP anything because you have have to say that even though they're going to still get mad. But this was basically like a great PR move for Ripple and a great deal for the others, but doesn't really help Ripple tremendously because, well, it actually cost Ripple.

D (38:07)

Right, It's. And that this is the same book, different page. Go look at the MoneyGram deal. You know, I don't care that was a seven years ago or whatever it was, but.

A (38:19)

And Solana did the same thing with Western Union, Right. There was some huge salon at Western Union deal and it was like Solana paid Western Union, right?

D (38:25)

Yeah, yeah. So, I mean, it's, it's like buying an F1 team. It's. You just get your logo on the car and drive it around the track fast and act like there's something there, but there's, you know, just like anything, a lot of it's for show. And that the MoneyGram deal, when the lawsuit and all of the filings came out and you realized that that's why MoneyGram stock went way up and the price of XRP went way down after that announcement, because there was no lockup. There was free money being given to companies in exchange for marketing efforts, basically. And so, you know, why, why would this be any different? It's just, again, marketing efforts.

D (39:10)

Something that's a little bit.

C (39:11)

It's not necessarily sad, it just is, you know, it's crypto. Twitter. Right. So right after this was announced, there was a couple, you know, smart people in the space that asked some questions about the, you know, the monetary values associated with this deal.

D (39:25)

Laura, like the details.

C (39:27)

Yeah. Like, look like Laura was one of them. She's like, wait a minute, this doesn't make sense. Like, how is this, you know, 40 billion, billion, but this is 50. Like, what am I missing here? And the XRP army, literally like piranhas eating flesh.

A (39:42)

Right.

C (39:43)

And now we find out what, we find out. Right. And so, you know, capitalism is capitalism along with this, that Ripple is well within their rights to offer effectively a structured product to these companies with, you know, basically no downside. And they get, they get the capital. Right.

D (40:01)

Well, let's call a spade a spade. They want their name next to Citadel.

C (40:06)

Yeah, right.

A (40:06)

I think it's just interesting because the narrative beyond Ripple obviously was for the crypto industry was that. Look like Citadel and Fortress are extremely interested in investing. Investing in crypto. This could have been called Ripple, cripple, dripple, tipple. I don't know what you call it. They didn't care that this was crypto. They didn't care where the valuation came from because they knew that if there was a downside event that with these terms, Ripple would have to just liquidate their XRP and pay them back with favor.

C (40:30)

Yeah, they cared about liquidation, literally any.

A (40:33)

My point is, like, it's sad for all of us.

A (40:36)

This wasn't a vote of confidence in anything crypto related from Fortress or Citadel. This was a, a really good free money deal for them.

D (40:44)

Well, I will, I will, I will disagree with that in a little bit. In a little way. It was a vote of confidence as it pertains to the collateral that XRP is.

A (40:54)

Because that's ultimately what the default haircut, though. So this was $500 million and I think at their current valuation they hold 80 something billion dollars in XRP and that was over 120 when this deal I think was done in July. I don't want to misquote the numbers, but those are the ballpark parts.

D (41:09)

Yeah, well basically it's a, it's a payday loan with your house as collateral.

A (41:14)

Like that's, they're staying at a 1600x premium. They will give the haircut that their $500 million will get paid back. Yeah, very valuable collateral.

C (41:23)

It's, it's again Ripple has, has, you know they, they've grown and they've scaled based on, you know, these types of deals and it's, it's, you know, it's, it's how the game is played and they've played the game, they've continued, they've, they've fought real battles. Right.

A (41:44)

They've been here from the very beginning. They've fought every battle. They're still one of the biggest, the only one that can say that, you know, from that perspective it's absolutely incredible. I think it's just always important to wait till the details of things come out before we I guess dig in too deeply. We got about 15 minutes left and Andrew, it was originally going to be the three of us, so, so let's talk.

C (42:07)

Well, let's dive in. I mean, you know we arch public, we've been asked so many times based on our products, you know, hey you guys, products are so awesome. You know, why don't you start a fund? Well we've started a fund and over the last two weeks the fund is open and we've been taking interest and deposits. I'll let Tillman begin to tell the story.

A (42:29)

So yeah, we've talked about it actually before.

D (42:31)

Yeah, we've talked about it before. It's officially live now. So we're pretty excited, excited about the response.

A (42:39)

I can't find it because I'm on a different computer but telegram it to me. Yeah, go ahead.

C (42:42)

Yeah, yeah, yeah, I'll shoot it to you. I'll shoot.

D (42:44)

Yeah. Super excited about showcasing in our opinion a better way to create a treasury type of structure. You know, all of the treasury structures that you see today are predicated on debt and buying bitcoin on the back of debt and you know, even the most.

D (43:03)

Sterling of the bitcoin funds or treasury companies are starting to talk about when we're going to sell some bitcoin. And so they've put themselves in a position where they have to do that. It's a foregone conclusion that if you're buying bitcoin on the back of debt, that you have to continue to raise money, debt, capital, and the lower the price goes, the harder that becomes. And so you, you have this self fulfilling prophecy of, of essentially not being able to keep up with the, the demand because the capital dries up. And we're already seeing that. I mean if you look at the treasury companies, they're all down or not all, but Most are down 90 plus percent. So you go, okay, well why is Bitcoin even being talked about as a safe haven, store of value, best savings mechanism if we're not kind of learning from the past as it pertains to buying it with debt? And so the fund that we're, that we're focused on right now is changing that dynamic. It's all about buying businesses that are generating a lot of cash flow for every dollar that's placed so those that cash flow can be appropriated into Bitcoin. So we've coined a new phrase called the Bitcoin accumulation company. And instead of it just being about storing it in a treasury, it's more indicative of how you're getting to store it in the treasury, how you're buying it and buying it on the back profits and buying it incrementally on the back of profits. It takes the volatility risk out because you're naturally dollar cost averaging cash flow in and you're never a forced seller because you're never being forced to liquidate to cover some structure that you've created. It's all about really accumulating as many bitcoin as the fund can get based upon not only the initial investment of 20% of all the capital going into Bitcoin's treasury, but then also the accumulation of the cash flow that's flowing into the fund over the fund's life. So we're excited. Go ahead.

A (45:12)

I'm just laughing because I was the most outspoken leverage and treasury company and just buy it and hold it and do nothing was the dumbest structure that was going to collapse. I mean I was saying that when it was a very unpopular opinion that you should just have a business and buy bitcoin with the cash instead of holding onto the cash. And what you've created here is a already cash flowing business that is going to buy Bitcoin with the cash flow, but also gives insane tax benefits through the real estate side so that basically you don't have to pay the taxes on it. I mean this is like the most perfect popular structure. Oh and by the way, I don't know if anyone listened to my podcast with David Bailey from Nakamoto this weekend, but it was awesome. Opponent of the other side was like, we're looking at buying cash flowing businesses to be able to buy bitcoin with that cash flow. So.

D (46:04)

Yeah, well, yeah, well, I don't think there's a better way to rebuild the middle class in America. Specifically. If you talk about the entrepreneurial spirit and you talk about every business that is of significance.

A (46:18)

Right?

D (46:18)

It started as a small business. It started with, with a vision of an entrepreneur saying I'm going to change the world and here's how I'm going to change it. And if you take all of those great businesses and the stored potential that they all had, if they had just put some of those net profits into bitcoin, I mean just think about the malls and the real estate plays on Macy's, Dillard, Sears, like all of these massive American brands. If they just done 10% of their net profits in bitcoin, they would not be in the spot spot that they're in. They would be reinventing themselves. And I think that's kind of indicative of the reinventing ourselves as a nation at a entrepreneurial level. If every business just said, okay, I have to, I'm going to make profits, that's the nature of business. That's what my job is as a business owner is to make profits for the shareholders or for the owners. And of that profit, what, where is my, where am I saving? Where am I trying to preserve my purchasing power as it's being eroded from you, you. Some businesses have such small margins that this bitcoin accelerated return or asymmetric return can be the difference maker between being profitable and not being profitable. Or having the year that puts you under versus having the bitcoin savings account, if you will, or emergency fund that keeps you from going under in those lean times. So I just, I think it's just a fundamental case for savings and why people have lost their hope in savings and bitcoin can revive that hope. Bitcoin can really show the power of compounding over time. And.

D (48:02)

Think about it like BTC Hathaway. It's just taking cash flowing, boring businesses and rolling it into btc.

A (48:10)

I think about if any of those companies you mentioned, they would have the same problem that investors have for years. They bought bitcoin really early and held onto it and then had to deal with a massively overweight portfolio in bitcoin. Not a bad problem to have. They would be Bitcoin treasury companies by definition. And they would, since any company that's buying bitcoin cheaper than it's going to be in 10 years is going to have an overweighted bitcoin position and be a bitcoin treasury company.

D (48:37)

Well, and they would have the perfect cost curve. They wouldn't have concentration risk at any pricing bracket where the, if you're a bitcoin treasury company now, that's what you're seeing you a lot, a lot of them are weighted up in the 115, 125 range in terms of their average price. Well, you know, you don't have that if you're investing cash flow because every month you're putting incrementally something into that price exposure or that pricing bracket. So if prices are going way, way down, your cash is more potent against purchasing bitcoin, which means your acceleration rate is higher. And if bitcoin's going up, up, you're earning at a disproportionate rate, thus giving you an advantage against your competitors. And in the market, it's, it's a win win if you can balance your, your exposure and your cash flow.

A (49:23)

Like for an individual, it has to be the cash that you can invest and aren't going to need to puke and sell it. Like you're either buying a dip. It's dollar cost averaging. It's the same thing we talk about all the time. You're either buying a dip as it goes down cheaper with money that you don't immediately need, or you're getting a massive benefit from what you've already bought on those dips going up. Yeah.

D (49:42)

And so some of the secret sauce that we're really excited about is the fact that we're working with some of the fastest growing franchises in America.

D (49:52)

Swig is one of them. We're pretty excited about what they bring to the table in terms of expansion efforts. And so we get this question all the time. In the last couple weeks, specifically since the fund has launched, much is why is this better than a buy and hold strategy? Or I'm already in real estate and I already do this. I sell real estate and I buy bitcoin with the proceeds. Well, think about it like this. That's a one time purchasing event, whereas the purchase. The purpose of this fund is to create reoccurring purchasing events, cash flow.

A (50:23)

Right.

D (50:24)

And so to the degree that the fund has the ability to create cash flow versus an individual, I don't need to go through all the advantages that a fund has. But you know, economies of scale matter when you're talking about putting together structured deals. And a fund can put together a deal that has a higher yield attached to it than any individual can. So what does that higher yield translate into? Translate into? Into a compounding effect in the form of Bitcoin that over time this much change in the power of compounding can lead to massive deltas in change in appreciation value. So it's just one of those things that I think we're going to have a great run for five years. We're going to have a lot higher bitcoin price in five years. And the purpose of this fund is to prove that buying bitcoin incrementally on the back of net profits is the most prudent way to do it. And you talk about. David Bailey is a great leader of our industry. We have a lot of regard for him. Obviously bitcoin conference has been integral. He said something in your interview with him. He said every company will eventually own Bitcoin. Well, I would agree, but I would agree it's going to be in this way and not predicated on debt.

A (51:43)

Every company will be, every company will be a bitcoin treasury company. Right. I mean that's just, you won't have, have to say Bitcoin treasury company. It'll just be a company.

D (51:51)

Yeah, well, but it'll be just a form of savings, right? A diversified effort of savings. Right. No different than if I was buying property, plant, equipment or reinvesting in any asset into my business.

C (52:01)

And then again, the secret sauce here is that every bitcoin purchase that the fund is making, it's doing it in an intelligent algorithmic way. Right? So if you take a look at Arch Public's latest case study, that shows that, you know, Bitcoin is down 3 or 4% so far this year. But if you're using our intelligence algorithms, you're actually up almost 17 for the.

A (52:22)

Year I started buying at the all time high. And I'm only down 12% across my entire portfolio. While we were down like over 30. Right. I think maybe 11 today at 90,000. Right.

C (52:32)

So yeah, yeah, so, so it's, it's the, the, the beta variance, that's, you know, hedge fund language between, oh, the market's down, but are you not down or are you down significantly less? That's again additional value that you're getting in the fund that you're getting executions and then algorithmic programmatic type of purchases that are meaningful distinctions between quote, unquote, smash buy. Right. So beyond the tax advantage part, beyond the revenue flows into Bitcoin as a model, then also you put a layer on of intelligent algorithms accumulation that makes the fund, you know, absolutely something that people, accredited investors should give real consideration to.

D (53:20)

Yeah. Benjamin Graham is the DCA father. He created dollar cost averaging. And if you think about the potent, the stored potential, if you have a small business or if you are a company and you have revenue flowing through the that the potential that you have in stored energy is phenomenal because dollar cost averaging into Bitcoin, I don't care what period of time you pick, it is the most prudent way to manage the risk, the volatility risk of any market but Bitcoin specifically. So if you're a small business and you are doing it incrementally and you need to sell, if you're doing it for a long enough period of time, you should have a cost basis that makes sense to sell at any given point in time. Do you see what I'm saying? So those, those time periods overlap to where your exit liquidity doesn't have to be looked at as a bad event. It can just be looked at as a portion of the stored potential that you've stored up in, in your DCA averages. And so the way to look at that is from a business perspective. And some people, people who use our software are very aware of this is like as these dips are happening, right, let's take, let's take Sui for example. You know, so I think Sui was like at 350 or 330 in price and.

D (54:53)

I think it dipped to like 130. So you have, you know, this massive price movement. Well, if you talk about, okay, you then go into your, your cost history and you go, where's the last purch? Well, your last purchase is like at 150 or 140 or wherever it is, right? So you have a stored potential of profits in that trade at that pricing level. Well then you had another entry at 165 and you had another entry at 185 and you had one in at $202. And you have this pricing ladder that has this stored potential. So it's kind of like looking at a rubber band and you pull the rubber band down into the pricing brackets. Well, the ones that are more volatile have a wider standard deviation or wider swing from the mean, Sui being one of them. And so if you are able to consistently manage your cash against those buying opportunities, you're just creating future stored energy or future stored profits that eventually, if the asset doesn't fail, you will experience. Right. Because unless you think that sui's never going to go back back to an all time high and it's not a good project, then you essentially have a very blended cost curve that is an asset to you. Right. Those cost averages that you have is the asset of, of trading incrementally.

A (56:12)

One of you give the 60 second breakdown of why this is so tax efficient and what it does for your taxes to participate.

D (56:19)

Yeah. So it's different for each person. We are not CPAs. We can't give specific tax advice.

A (56:25)

I am not, I did not say that on a public forum.

B (56:28)

I'm not.

A (56:28)

Not a cpa.

D (56:29)

No, he is not a cpa. But the reality is, is the big beautiful bill opened up some accelerated depreciation opportunities. But then also if you have 1031 exchange money, that also qualifies. And then also if you're a qualified real estate professional, then there's also some things to talk about with your CPA as it pertains to this fund. So very, very good entry benefits. But the exit benefit is what we're all focused on, which is the accumulation of as many bitcoin as we can accumulate over the next four to six years. So we, we think, you know, if, if, if, if even the low end of the range is realized.

D (57:14)

Again, Bitcoin being in a fund like this is going to do its own.

D (57:20)

Showcase. We are not going to have to do much. It's just going to do lifting. Yeah, the heavy lifting is done by Bitcoin. And honestly, this is how Michael Saylor started Take it. Before he started issuing paper, what he did with MicroStrategy was go, oh, I've got a failing business. I need to appropriate a lot of these returns that we've had over the years into something that's going to give me flexibility in the future. And you talk about flexibility, I mean, hey, we can't even figure out what it is because it has so much shape shifting potential and qualities to it. So I think, you know, that is something to be learned from. And I think if, if the sooner we as a country learn that, why are we all waiting for the US Government to start a treasury? You can do it at your house, you can do it individually, you can do it at your business, you can do it, you know, inside your public company, your private company, small bit, everything. Right. So I think it lends itself the same advantage. In fact, I would argue for a small plumbing company, for example, if you're not appropriating that cash flow into the Magnificent seven from an investment perspective or into your own business and you have a measured return higher than the mag 7. Bitcoin is this, keep it simple, stupid, safest, asymmetric upside opportunity that exists. And I don't say that lightly. Look at the numbers. I mean what other asset has had the appreciation curve that it has had over the last 16 years without being taxed? From a holding perspective, there's no, there's no barrier to, to hodling. It's not like property taxes that continue to road into your profits. This is like a new type of ass asset class. So we want to showcase it. We want to be the folks that bring the strongest character qualities of bitcoin to the forefront of the fund so that people can really see the strength of bitcoin instead of seeing it as just this highly speculative, you know, risk on asset that you know, kind of what they see it now, now as.

A (59:36)

So you guys want to give the details here? Future, I'm blocked.

D (59:40)

Yeah, go to Future Fund Art, you can just Google Food Fund Arch public or future fund.archpublic.com if you're an accredited invest investor we would love to talk to you about it. If you're not, I'm sorry. We wish that they would change those rules but we don't get to make the rules, we just have to follow them.

C (60:00)

So by the way, just as an aside before we leave. Yeah. Again, we love David Bailey Bitcoin conference, Bitcoin media and all that stuff. Stuff. Imagine if they'd have just, you know, taken one of their business lines and instead of doing all this financial engineering they just put you know, 50 of their profits into to bitcoin. Right. And they just did that over the past two years and then said well, we're going to take this company public because hey, we're doing some cool stuff. It'd be a completely different story. Right? Completely different story. You know, hindsight's 20 20. Right. But I don't think that still would.

D (60:37)

Have have been at scale what he was looking for. Like I, I still don't think it was big enough to go to the stage that they were looking to go to. I think that the public stage, you know, going right behind.

D (60:49)

Basically Meta and, and Sailor, like those are the two. Like I would put David's fun kind of in the third place there on the podium, you know.

C (61:00)

Yeah, no, I, I again you would think that that given the amount of people that, that pay for conference tickets in bitcoin and yada Yada, yada. Again, the scale of bitcoin that maybe they had available to them and too.

D (61:14)

Small still, I still think it was too small. Like the play for him was this play. It was like, go raise a bunch of money.

C (61:22)

You know, I, I get it. My point is, though, is that again, hindsight's 20 20, right? You had the opportunity to tell a different story. But you know, bankers with hundreds of millions of dollars can be, at times, you know, they, they can tell.

D (61:39)

Well, it's a classic example of bigger is not always big, better. You know, there. I, I, I think.

D (61:47)

My dad used to say something to me, and I don't think it's a hard and fast run. I don't think you can, I don't think you can appropriate it to every circumstance. But like, the best businesses work incrementally and at scale. Like an oak tree starts as an acorn, but it's still an oak tree that all that potential is there. You just have to let you give it the time to develop. And it takes time to develop. And the best companies take the longest time to develop. Why? Well, because it's like an oil and gas well that's been performing for 85 years. You don't really, you don't stress about the decline curve at all because it hadn't changed 5% in 40 years. So you're feeling pretty good.

A (62:30)

Dumb kid doesn't stomp on your acorn.

A (62:35)

AKA the CEO of the most publicly traded digital asset treasury companies. But that's neither here nor there. All right, guys, we're way over time.

A (62:44)

Eleanor, obviously being here, I appreciate that we made it through a stream. We got Future Fund one here. You guys should absolutely check it out. And as a quick aside, as I mentioned before for, we've still seen exceptional performance from the algorithms that we're always talking about. It's been just a pleasure for me to run them. The only thing that pisses me off is when we sit here at like 91,000 and nothing happens. So I can't wake up with my dopamine fake in the morning while I was sleeping, but trust me, buddy, your.

D (63:09)

Rubber band is tight. Just wait.

A (63:13)

All I do is add money, if that's.

A (63:17)

All right. Guys, check out the fund. Obviously, check out everything@archpublic.com and we will be back next Tuesday. And I'll be back, obviously, tomorrow. Thanks, guys. See you soon.

D (63:27)

Peace.

A (63:29)

Let's do.

A (63:43)

Let's do.