Bitcoiners Holding Breath Ahead of Trump Speech #CryptoTownHall

Summary

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The Wolf Of All Streets – April 1, 2026

Episode: Bitcoiners Holding Breath Ahead of Trump Speech #CryptoTownHall
Host: Scott Melker (absent during interview segment; Dave moderating)
Theme: Navigating Macro Uncertainty, Energy Markets, Regulatory Clarity, AI Mania, and the Institutionalization of Bitcoin

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Episode Overview

This episode of "The Wolf Of All Streets," hosted by Scott Melker (with Dave moderating the latter half), dives deep into the uncertainty roiling global markets ahead of an anticipated Trump speech. The discussion centers on the intricate relationships between current geopolitical conflicts, the state of energy markets, Bitcoin’s evolving narrative (including quantum risks), the risks and hype in the AI sector, and major developments in crypto regulation and institutional finance. The second segment features Mauricio from Leden, spotlighting the institutionalization of Bitcoin as collateral, new developments in Bitcoin-backed lending, and regulatory impacts.

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1. Market Uncertainty and Geopolitical Angst

[00:00 – 09:11]

Key Insights:

• April Fools’ Jokes vs. Real FUD:
  The panel wryly notes that the current market chaos renders April Fool’s unnecessary:

  • “Why celebrate April Fool’s Day when we just had March Fool’s Month?” ([00:24], A)

• Oil Market Dislocations:

  • Oil futures hover near $98, with unusual proximity between Brent and West Texas prices—a sign of major supply/demand flux.
  • Discussion around the impact of ongoing Middle East conflicts and Russia/Ukraine, with shut-ins in Asia and the possibility of even more extreme supply disruptions.
  • “The world is going to have to look like Q2 of 2020, because at the end of the day you can’t print oil.” ([03:00], C)

• Overarching Optimism in Markets:

  • Despite clear risks, prices reflect expectations for de-escalation, especially visible in the oil forward curve and equity markets.
  • “There’s a tremendous amount of optimism being priced in… I think that in my opinion is misplaced.” ([05:20], C)

• Implications for Policy:

  • Governments are largely powerless when it comes to instant demand destruction in the face of scarcity, especially as gasoline prices near $10/gal in California.
  • The “trial run” from Covid in 2020 is cited as evidence that supply chains and markets can recover—but not painlessly.

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2. Bitcoin’s Supposed “Quantum Threat” and Institutional Adoption

[09:11 – 12:59]

Key Insights:

• Quantum Computing FUD:

  • Persistent rumors over quantum risk to Bitcoin are mostly dismissed as “absurd,” fueling unnecessary FUD and missed opportunities.
  • “The narrative of Quantum as a reason to hate bitcoin is absurd.” ([11:10], A)
  • The real risk lies in waiting on the sidelines and missing the ongoing innovation that’s making BTC ever more quantum-resistant.

• Resolving Old Wallets = Bullish:

  • Hot take: resolving “old wallets and frozen coins” is viewed by some as “massively bullish” for Bitcoin, counter to most maximalist narratives.
  • “When you look at it through the lens of the people who matter—the traditional financial money that's driving adoption—I think it is massively bullish.” ([11:48], A)

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3. Regulatory Stalemate and the Case for Clarity

[12:59 – 20:14]

Key Insights:

• Crypto Regulation: Not Top Priority:

  • “Clarity” for crypto remains far down D.C.’s agenda, given the current macro/geopolitical chaos.
  • “This is probably item number 62 on the list of most senators.” ([12:59], G)

• Fundamental Uncertainty:

  • Markets and policymakers are “hurry up and wait,” unable to formulate new frameworks until crises subside.
  • “Are we not living in the most uncertainty we've had since COVID right now?” ([14:02], G)

• Bitcoin’s Regulatory Advantage:

  • There’s no practical regulatory risk now for trading/custodying Bitcoin, but clarity remains crucial for permissionless DeFi and economic token models.
  • “The importance of clarity compared to what people think it is—there's just a massive differential there.” ([15:38], A)

• Criminal Enforcement Ramping Up:

  • DOJ is pursuing more crypto wash-trading cases, with definitions around “abusive trading” likely to be the next regulatory focus.
  • “The DOJ just charged like 10ish people with various trading related offenses in the crypto market today.” ([16:51], G)

• Structural Legacy Issues:

  • Crypto’s existence highlights how outdated the public markets (e.g., Sarbanes-Oxley) have become, inhibiting innovation, liquidity, and easier public fundraising for smaller projects.

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4. The AI Bubble Parallel: Valuations, Hype, and Market Rotation

[20:19 – 38:52]

Key Insights:

• AI Overtakes Crypto as Venture Magnet:

  • “Any startup that I see pitched, they throw AI into it. It used to be they threw blockchain into it.” ([20:35], H)
  • The moment has echoes of altcoin mania; VCs are “racing” to AI despite uncertainty on real value capture.

• Skepticism on AI Valuations:

  • OpenAI’s rumored $858B valuation is roundly mocked as “ludicrous,” with panelists struggling to see a path to payback.
  • “How can Open AI be worth $858 billion? It hasn't made a penny.” ([21:51], E)

• Productivity, Moats, and Commoditization:

  • AI tools are noted for their accelerating ability to replace existing SaaS products at lightning speed and near-zero cost.
  • “It took one prompt and like 32 cents to replace that software on my computer.” ([30:28], B)

• Hardware/Resource Constraints:

  • The conversation pivots to Nvidia and the coming resource crunch (helium, natural gas, uranium) required for oncoming AI workloads.
  • “As we have a helium problem and an energy problem, both of which [Nvidia] need and they have no business without either of those.” ([25:11], E)

• Market Timing, Wealth Effects, Innovation:

  • Bubble parallels drawn to the dot-com era—timing shorts is perilous, but excesses eventually find a reckoning.
  • “I can remember people shorting all the Internet shit in late 99 and 2000 and getting carried out, saying this is, this is crazy… six months later they were right.” ([27:03], A)
  • Wealth concentration at AI companies (e.g., Nvidia) could erode motivation and long-term innovation—mirrored in crypto where early token riches bred founder complacency.

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5. AI Ecosystems, Integration, and The Crypto Connection

[32:01 – 41:34]

Key Insights:

• Apple’s Late Entry, Ecosystem Play:

  • Apple appears poised to capture AI value simply by controlling devices and users, not by investing in model R&D.
  • “Is it going to turn out that Tim Cook by doing nothing and having all the customers was the winner here?” ([33:31], G)

• Walled Gardens and Value Capture:

  • Concern: As in crypto, platform companies may capture value while open innovation (and token buyers) get left holding the bag.

• AI Agents: The Next Economic Disruptor:

  • Explosion of autonomous agents (e.g., OpenClaw, Hermes) cited as coming “calm before the storm,” already replacing tech jobs:
    • “I personally took one of these agents and put it onto a web server, and now it's taken the place of a $180,000 a year DevOps engineer.” ([39:15], H)

• Massive Enterprise Spend:

  • Companies are already spending tens of thousands per week on tokens and API calls for these super-powered agents.

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6. Institutionalization of Bitcoin: Leden’s Breakthroughs

[43:12 – 69:33]
Guest: Mauricio (Leden)

Key Topics:

• Bitcoin-Backed Bonds and Institutional Collateralization:

  • Leden’s Bitcoin ABS bond received investment-grade rating from S&P—the first of its kind; New Hampshire issues a Moody’s-rated municipal Bitcoin bond.
  • “Bitcoin has arrived as institutional collateral for these types of, you know, the highest [credit products].” ([45:54], A)

• Fannie Mae’s Bitcoin Mortgage Milestone:

  • Fannie Mae will now accept down payments financed by Bitcoin-backed loans—a structural breakthrough.
  • “I believe this is the first time that Fannie Mae has okayed a down payment that was financed with another loan… and they used bitcoin to be that first test.” ([46:40], D)

• Implications for Bitcoin Price and Supply:

  • As more loans use BTC as collateral rather than force-selling, supply pressure on spot markets reduces, boosting long-term price potential.
  • “The last thing you ax out is your house… I think Bitcoin is going to slowly become the cornerstone of most people’s portfolios, their highest and best asset.” ([49:45], D)

• Leden’s Competitive Edge:

  • Longevity, regulatory-friendly approach, and transparency separate Leden from newer entrants.
  • “We are the largest consumer bitcoin backed lenders in the world, and we have the longest track record.” ([50:55], D)

• Transparency and Proof of Reserves:

  • Leden’s assets and liabilities are matched and CPA-verified monthly; transparency about loan book and bond facility is paramount.

• Rate Reductions and Market Impact:

  • Leden cuts loan rates across tiers—now as low as 9.99% for $1M+ loans—facilitating a new wave of collateral-backed lending.
  • “Loans up to 250k are 11.49% APR… over a million dollars are now at single digits at 9.99% APR.” ([54:03], D)

• Quantum Risk and Custody:

  • Leden provides ring-fenced, monitored custody addresses and monthly third-party verification, sidestepping public address disclosure.

• Regulatory Outlook:

  • Basel III capital rules and US interpretations are the “big one”; lowered requirements could unleash banks into Bitcoin lending.
    • “Right now it is not prohibited, but it’s functionally prohibitive to do any Bitcoin product as a bank because of the capital requirements.” ([67:01], D)
  • The “Clarity Act” also looms, especially regarding DeFi and lending models.

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7. Notable Quotes & Moments

On Market Froth and FUD:

• “The world is going to have to look like Q2 of 2020, because at the end of the day you can’t print oil.” – C ([03:00])
• “Why celebrate April Fool’s Day when we just had March Fool’s Month?” – A ([00:24])

On Bitcoin’s Resiliency and Narrative:

• “The narrative of Quantum as a reason to hate bitcoin is absurd.” – A ([11:10])
• “Resolving what's going on with the old wallets and the frozen coins is massively bullish for bitcoin in the long run.” – A ([11:48])

On AI Mania:

• “Any startup that I see pitched, they throw AI into it. It used to be they threw blockchain into it.” – H ([20:35])
• “How can Open AI be worth $858 billion? It hasn't made a penny.” – E ([21:51])
• “It took one prompt and like 32 cents to replace that software on my computer.” – B ([30:28])

On Institutionalizing Bitcoin:

• “Bitcoin has arrived as institutional collateral for these types of… the highest [credit products].” – A ([45:54])
• “Our offering was more than two times oversubscribed as a first time issuer. So the demand is there.” – D ([46:40])
• “Every dollar that we issue in a loan is backed by $2 worth of Bitcoin.” – D ([56:36])
• “[Leden was] able to get to the ABS market before anyone else because S&P… can look at an eight year history and say, okay, Leden's operated perfectly.” – D ([50:55])

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8. Episode in a Nutshell

This episode offers a lightning tour through a period of acute global instability, with the panel unpacking the paradox of bullish market optimism in the face of real supply shocks and war risks. While the oil/AI/crypto markets each present distinct opportunities and dangers, the clear throughline is that institutional legitimacy—whether in digital assets or emergent technologies—depends as much on regulatory and operational clarity as on breakthrough innovation. As the regulatory environment limps to catch up, the adoption of Bitcoin-backed bonds and mortgage instruments signals a slow-motion tectonic shift: Bitcoin is maturing into an accepted pillar of the global financial system, even as FUD around quantum computing and AI hype clouds the way forward.

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Transcript

[A]

So let's get started. You go ahead, you jumped in. Go ahead and go ahead and start us off. I mean, I think, you know, we're all just wondering what. Yeah, well, it's going to say. And I, all I have to say is when I see posts today, I'm not sure that the level of bullshit will be any higher than, than will be any higher than usual. So, you know, we, we got that going for us. Yeah, that was my comment this morning

[B]

was like, why celebrate April Fool's Day

[A]

when we just had March Fool's Month? Yeah, I mean, you know, it's, it is what it is. You know, we'll, we'll see what they say, you know, at various and sundry addresses this afternoon. I mean, the markets basically seem to think that things are going to get better. I mean oil prices are sitting. Where are we? Yeah. Oh wow. It's down under 99. It's 98 on the Brent there. And more importantly, Brent is only like $3, actually not even three full dollars higher than West Texas, which is, that's unique. I haven't seen that before. So. And that actually matters, I think in terms of what the world is thinking. So I guess the markets believe there's de escalation happening at the same time Bitcoin's been in the same range. The bitcoin is definitely turning into both good and bad. The honey badger of bitcoin of assets here. I think that the talk on bitcoin should be about Quantum. There was actually a pretty good space last night. Jamie was hosting. I don't see him up here. But the bitcoin tonight with core devs from bitcoin talking about Quantum in a very specific and rational tone. I think that, I mean, I know you were talking to a very conflicted person on your show this morning. Not saying they're wrong, but when someone forms a company to basically protect Bitcoin from Quantum, I'm not sure that I want how I listen to that. I think that I actually look at Nick Carter and what he's doing, which he's invested in the person that you had on your show. And I see it as someone putting his money where his mouth is. But yes, that makes them somewhat conflicted, yada, yada. I think the bottom line is that there's enough innovation going on and bitcoin will become quantum resistant and there's a lot of fud that goes on. People who treat this as an existential risk and are not investing because of it are going to end up being sorry is the short answer, I think, and I think that's kind of what we probably want to talk about that and what the hell's going on geopolitically. I see we have Robert up here. I mean Robert, you've been calling for the, you know, 200 some odd dollar oil and disaster if all this happens. I'm not saying you would be wrong if it stayed this way. I mean, what do you think this morning? You think this is an opportunity to reload on, on oil longs and other shorts or what do you think?

[C]

Yeah, I want to trade oil. I mainly trade options and VIX is really high still. So yeah, I'm not trading it. Also, you know, you, you could have the potential for intervent, all that kind of thing. And if you go back to 2020, that was kind of the last time that we really had an imbalance between supply and demand of this scale. And remember, oil went negative, but that happened. Oil went from like 20 to negative 40 and then back to 15 by the open the next day. It all happened in a day. And, and so, you know, trying to catch is there's, I think a number of reasons, you know, not to try to trade oil. But at the end of the day, either there's going to be much higher prices causing a significant amount of demand destruction or there's going to be shortages. It's really that simple. Maybe we don't get $200 oil, but we get shortages like we're seeing all over Asia right now. So yeah, look like by my math it's 18 million barrels per day once you include the Russian refineries as well as that Valero one in, in Texas. So that, that you know, you have to go back to Q2 of 2020 to, to, to you know, find a point in time where we had that much demand destruction, that much reduction on the demand side. The world is going to have to look like that because at the end of the day you can't print oil. So the world is going to have to look like that so long as the disruption to supply is, you know, 17, 18 million barrels per day. And you know, with Yanbu that you know, could take it up to 25 million barrels with you know, one drone probably would do it, you know, if you get the pipeline. So it's really. Yeah, it's not good, you know, like oil's gonna move around.

[A]

So why do you think oil is kind of sitting here? Do you think it's been you claiming manipulation? No, I hear you, I just, I just look at the actual Prices and to quote my friend Mike McGlone, I mean, where's the beef? I mean, you know, oil is, seems to be pretty stubborn right here.

[C]

Yeah, I think, I think there's a tremendous amount of optimism being priced in, not just the equity market but, but oil, if you look at the forward curve, you know, like we're at what, 99 here front month, but if you go to December, it's down at, you know, 75ish. So at least last I checked. So yeah, there's, there's, you know, the market is indicating that it believes that the conflict is going to be over. You know, I would just point to the fact that over 8 million barrels per day are shut in, probably, you know, much closer to 10, 11 million barrels. So even if the Strait of Hormuz open today fully and completely, which I think is extremely unlikely, even if you remove that 20 million barrel per day disruption, even if you were to do that, there's still, you know, in the GCC, there's still between 8 and 11 million barrels shut in. They'll take months to get back. And there's, you know, a huge escalation going on with Russia and Ukraine and Russian refineries that, that not many folks are paying attention to. So, you know, I think that, I think we're, you know, if you open the Strait of Hormuz today fully and completely, if that's, you know, what you believe is going to happen, then yeah, maybe oil goes to 85, but it's not going back to 55. I think that much is, is for sure. At least not again either you get much higher price. Oil is very, very inelastic, so you need a very, very high price to destroy demand or you get shortages. And you know, with oil at called 100, we're already seeing shortages in Asia. So, you know, there's definitely the possibility that even without intervention, like I'm generally not one to go down that road and claim, oh, you know, the market's not doing what I think. So it's manipulation. You know, I don't really do that now they have. Both Japan and the US have talked about intervening. Right. And I think that it is a card that trump may play, but I would be surprised if they've done it yet. I just think, I just think it's more an optimism story. I mean, you can look at, you know, the equity market and see kind of a similar picture, which is there is a lot of optimism. I think that in my opinion is misplaced. But you know, I'm also not A geopolitical military expert, you know, so, you know, maybe it's really not that bad, but I'm following very closely, you know, every day and it's not looking very good on either side. Right.

[A]

So it sounds to me like, like, like you think buying a straddle is there, like, you know.

[C]

Yeah.

[A]

You're basically saying that that oil option volatility and arguably volatility across the curve is priced too low. And it's either for up or down, depending on whether you're talking about oil or what, or inverse. I mean the correlation, the inverse correlation between oil and silver is actually one of my favorite ones. Now, I don't know if you notice that, but silver is a proxy for the new digital economy. And every single time oil dips, silver goes higher and vice versa with high volatility. So I'm sure there are a lot of people playing that.

[C]

Yeah, well, it's gonna, it's, you know, higher oil is gonna trickle down into everything. We focus on oil. You know that, that's kind of what everyone is, is talking about. But man, this is going to be like it literally the world is going to look like Q2 of 2020. Like, I don't think people understand that is what must happen. You cannot print oil

[A]

if in fact the war does not end.

[D]

Correct?

[C]

Correct.

[A]

Correct. Yep. Yeah.

[C]

If it's all over, then yeah, maybe everything's fine. I, I tend to think that's not true.

[A]

Yep. Well, you know, we got a bunch of people up here. I mean, you know, Gary, what do you make of, of, of, of the, the optimism and the way things are. Are people crazy?

[E]

Well, like I said earlier today, I don't really understand this market at all.

[A]

It's bizarre.

[E]

The amount of money these AI companies are or raising.

[F]

I,

[E]

to me, that's the chart to put on is short. The AI companies don't mess with crude. Look, you got, I think you got, you've run out of gasoline diesel in, in France. There's going to be lines everywhere. LPG shortages are going to start to happen. So, but you're going to have demand destruction. I mean it's happening right now. I think trading this thing right now.

[A]

And what do you think the governments do when demand destruction starts to accelerate?

[E]

What can you do? You know, you can't, you can't force somebody to buy $10 gasoline in California. I think we're going to probably get close to $10 gasoline. That's, that kills California. And they have, they have severe issues. Okay. You can't just get, get Gasoline and unleaded to California. It has to go through a refining process. It's highly limited, so we'll have issues, you know, but we'll work through it. Man, the oil companies are really good at getting back online. And. And I just want to remind everyone, Covid. Covid in 2020 really, really taught the

[A]

world how to

[E]

respond, you know, and so we've had. We've had a trial run on at least getting things back online. And I suspect we'll do. We'll do an okay job of getting things back online, but most certainly this is gonna. I don't know how this helps GDP, if that's the key metric, GDP. GDP's gotta follow here.

[A]

Yep. Not clean. Seems very clear. I mean, to me, I don't see the government doing anything other than putting on getting. The political ability to stimulate the economy, both fiscally and monetarily. Seems incredibly obvious once, you know, so if the war ends and people have to deal with the aftermath, I mean, it depends on what and how. But that, to me, seems obvious. And that's where we get back to bitcoin. It's like, where are we here? And can you get more bullish than I am in terms of where it is? And the answer is no. I mean, the narrative of Quantum as a reason to hate bitcoin is absurd. Scott, I think you and I are going to do a long form and talking about that from the market's point of view in the next couple days. I know your guys reached out to me, so we'll talk about that. So I'll leave that just the teaser is that the math says. And here is a hot take. I actually think that whether or not the old wallets are resolved, however it's resolved, resolving what's going on with the old wallets and the frozen coins is massively bullish for bitcoin in the long run. And I know that that is exactly the opposite of the way most bitcoiners look at it, but I think that when you understand it, when you look at it through the lens of the people who matter, which is the new money, the traditional financial money that's going into bitcoin that is driving the adoption that it needs to, I think it is massively bullish. And that take, I think, is important, but I'll leave that for a longer form to go through. Why, Austin, you haven't been up here in a while. What's on your mind between all of this? Or should we be talking about ethics, provisions and clarity and whether we're going to actually get any regulation that makes sense.

[G]

I mean. So an interesting detail on the clarity point, Dave, is, and this is one thing that I think a lot of people forget in crypto. This is probably item number 62 on the list of most senators. I am skeptical on anything getting done until the Iran thing is resolved because as we look at what they care about, I don't think clarity is at the top of the list. I don't even know that we have a deal on the banking stuff, much less being able to get this to a vote. But to me, like, you know, and I know you guys were already bringing up many of these points, so I'm not going to retread all of that ground. But the core issue is until major geopolitical and macro things are resolved, I think it's hard for markets to figure out what they want to do. It's hard for legislation around those markets to pass. It's hard for material progress to be made because it's the simple problem of you're trying to make a decision in the face of truly tremendous uncertainty. Like, to be honest, Dave, I'll throw this back to you. Are we not living in the most uncertainty we've had since COVID right now?

[A]

Oh, 100%. In fact, the data says that very specifically. I mean, Scott put up the chart yesterday. Ever.

[G]

Yeah, right. And so as I look at that, the natural human instinct on all of these things is like, punt, punt, punt, punt, punt. So, you know, this sounds weird to say, but since presumably most people on this call are not directly involved with this, we're kind of in a hurry up and wait situation.

[A]

Well, yeah, I mean, look, but here's the thing. Bitcoin specifically at this point, there is no regulatory risk for brokers realize there's no regulatory risk in trading. Bitcoin, custodying Bitcoin, the models are developing. We just saw Chris Perkins going over to Franklin Templeton. I saw it this morning, I don't know when it was actually noticed this. And I'm going to be. I'll be moderating a panel at Security Traders of New York on digitalization from. We're doing two panels. We're doing one from the perspective of legacy finance and how tokenization is impacting them. And then we're doing one from the perspective of the crypto markets of how legacy finance is impacting them and the market structure, et cetera. And then there's a fireside at the same conference between the New York Stock Exchange and you know, on tokenization and it is understanding that this is, this is not theoretical anymore, that clarity is not necessary for that. The real thing that clarity is necessary for is for real innovation in defi, in various other verticals is for understanding of how economic models can use tokens. And even there, you know, it's almost like we're going to get, we're going to get a bill after the regulation and the basic. Basically everything is kind of set and moving from the CFTC and sec. I mean I'm not saying it's unimportant, but the importance of clarity compared to what people think it is, there's just a massive differential there.

[G]

Yeah, I mean look, first of all, if you look at bitcoin prices, it kind of bears out what you've been saying. That's performed relatively better compared to many of the other assets. But two, if you look at the arc of like us call it legal actions and what's going on. The most important parts of clarity, which to be totally honest, if they have to could probably be stripped out and passed on their own, are defining what abusive trading is in the crypto space and what obligations people have. I don't know if people saw, but the DOJ just charged like 10ish off the top of my head. People with various trading related offenses in the crypto market today.

[B]

Primarily Wash trading.

[A]

Right.

[B]

I didn't, I just saw the headline

[A]

primarily Wash trading and they were all foreign. Right. So they were, they were actually extraditing people from Singapore or something.

[G]

Yeah, correct. And, and like I think there's going to be more of that as they set the rules. And then number two, and this one I think the crypto community has been up to speed on. I'll give a shout out to like Defi Education Fund and Coin center and some others. Is the developer protections, like having a clear line on where rules attach and where rules do not attach is going to be incredibly important.

[A]

Yeah, I think that's true. I think that the real question is there's is likely a wave of M and A and that wave of M and A is waiting to see, has been waiting on clarity for so long that at a certain point it seems like it's not going to care anymore. I mean, which is unfortunate because what really needs to be to happen is our security rules, and we'll call them commodity rules because they don't really exist. Derivative rules, whatever, are old, they're just old. And it's not quite as bad as the analogy that people used about using hot air balloon regulations to regulate airspace, which I saw in A tweet this morning. But the truth is they're old and they need modernization. We have lots of stuff in the system that makes it impossible for founders to get immediate liquidity without spending enormous amounts of money. I mean, the cost to go to IPO is insane. And there's no staged way of doing it. It's either national market system, which is what the IPO is really expensive, or bullshit OTC that, you know, that used to be the pink sheets, that it still has ridiculous rules involved with it, and time breaks that maybe it's not as expensive, but, you know, it's just. It's just not good. And so one of the things that crypto showed was you can raise money quickly, maybe too quickly in many cases, because there wasn't enough disclosure. But that needs to change. And I think everyone in the regulatory complex kind of understands that. I mean, I don't know what you think, but to me, that's the real

[G]

issue there in many ways. Right. Like, it's funny, but the existence of crypto is raising what are actually a lot of structural problems with fundamentally. Sarbaneta Oxley.

[H]

Right.

[G]

As a reminder for everybody, we had some large financial scandals in the very early 2000s in the United States. You've probably heard the names of, like, Enron and WorldCom, et cetera. That provoked a bill called Sarbanes Oxley. That basically makes it incredibly onerous from a reporting perspective to be a public company and thus only really large companies want to do it. Used to have a lot of IPOs of companies that quite frankly, are now remaining in private markets and doing like, Series C, Series D type funding. And crypto's existence and the ability to tokenize private shares or looking at private credit, I think is really sort of forcing that distinction, Dave. I don't know how well policymakers understand that yet. I don't know how equipped the current SEC is to grapple with that. But as you said, we have a lot of either antiquated or call it incorrectly parameterized rules that are all colliding at once.

[A]

Yeah, Ryan, I see your hand up before I go off on an answer.

[H]

So, funny enough, I had been working with a law firm on airspace using our hydrogen dirigibles. So that is pertinent to me, but probably not a whole lot of other people.

[G]

I love it.

[H]

Oh, 2.0, man. 2.0. Yeah. Floatair.com I'll be. Plug that all the time. Yeah. No, but, you know, crypto is. It just. It's problematic. It's inherently risky. Right now to people. And when you're looking at oil, you're looking at crypto. AI does seem like it's. It's the pretty girl at the ball, it's safe. Like people are going to throw money into that. And that's where all the money seems to be flowing right now. Is any startup that I see pitched, they throw AI into it. It used to be they threw blockchain into it. Now it's like, does it have a token? Is kind of an afterthought now it's. Does it have AI? I think there's going to be a point where AI does crescendo over the next year, where some of these private models just blow out everything public. And then all these startups and projects that have AI tacked into it are going to become risky again. And then I think the money will start shifting back into crypto. I think it's just a risk profile right now. And crypto is just inherently really risky.

[A]

I mean, you know, it's funny that you say that. I mean, like Gary talked about shorting AI. I mean, look, shorting hype is always a good idea.

[E]

David, though, how can Open AI be worth $858 billion? It hasn't made a penny.

[A]

Oh, I understand that. How do you short it, though? It's not public yet. Yeah, that, that's the problem. I mean, if you can short it on the private market, then cool. But I don't know how. I wouldn't know how I, I get it. The only thing that I think. And look, here's the reality. If you had shorted, if you had done intelligently shorted, like via put options so that you didn't take limited loss on a basket of Internet companies in the 90s, you made an absolute fortune. Even if you were shorting Google when it was public along with side, of course you'd have lost all your money on that particular trade. But the net totality of all of these things, there isn't going to be 5, 6 dominant AI companies that are monoliths out there. I mean, there'll be a few and then there's going to be a lot of private companies as we get more distributed data. Right. I think that's what you're saying, because it just doesn't make a whole lot of sense. But that's on the consumer side, right?

[H]

Because yeah, I think that just like we had a Cambrian explosion of altcoins, you know, and, and that cycle, the altcoin cycle, we kept expecting the altcoin cycle. We're in the equivalent of like the AI altcoin cycle right now where you have all these AI companies, all these AI startups to be to Gary's point, exactly. Like you have these massive centralized AI companies. I do think that they're going to ipo, they're going to explode. It's going to be this huge blow off the top. But I think they're going to become a overbought, very risky asset when they realize a lot of these altcoin AI companies essentially just aren't worth what people are throwing money in at them.

[B]

You could short the suppliers, right? Like what, what do they need to operate?

[A]

I just, that's done very well over the last few weeks. But I think without the war, that wouldn't be the case.

[B]

I think, I think with AI, it's still. Dave, it's still so unknown, right? Like we, we really only hit this moment with like Claude 4.5 in December, right? And now in the last, we'll call it, quarter, you've got people, you know that 95% of the time, you know, they were typing into their computer. Now 99.9, they're just talking into it. Like these are pretty big behavioral shifts in how we interact with computers that are happening now. I think there's going to be winners and losers.

[H]

I'm more appalled.

[E]

Still got to make money, dude.

[B]

No, I know. I'm more appalled with like the valuation of OpenAI just because it sucks compared to what else is out there, right? Like, I know a lot of people that literally just don't. Well, they don't even use ChatGPT anymore compared to some of the other tools out there. So like that to me is actually one of the more interesting things is, you know, people aren't even utilizing it, right? They're moving to other providers. I, I just, I think the, the opportunity is still so huge. I 100 agree. Like, I don't know if they fired, you know, 10,000 people, they become profitable and they can kind of build from there then what the use case is. But like people are using ChatGPT just as kind of like a search, a little bit of a better search or writing things with it, but they're using things like Claude and Anthropic to literally be a new operating system on the computer, right?

[E]

Most people are using it for, for. Hey, did Gary Cardone's. Is Gary Cardone's post correct? I mean, it's the dumbest use of energy on the planet. I just like, I see all these guys racing to this and I don't see where this ends. I mean, I could shorten a video. Dave, I think Nvidia, like if the AI world implodes, does Nvidia implode? And why hasn't Nvidia's price changed? As we have a helium problem and an energy problem, both of which they need and they have no business without either of those. None. Zero. It'd be like destroying 8 billion consumers and Gary can't get the energy input. How the can you do all this stuff?

[C]

They only have like 11 days of LNG totally Taiwan.

[E]

Like, like they were claiming three months ago they were going to use 80 gigawatts in 2027. 80 gigawatts. Somebody should go ask themselves, how much natural gas do you need for 80 gigawatts? Or nuclear? And how long will that take? France is talking about building 14 nuclear power stations. What are they going to do between now and four years?

[H]

Well, here's a fun time. You need to reach uranium power stations.

[E]

Yeah, exactly, dude. But once they reach all that new power, whether it's super green or nuclear, what's going to happen to the energy complex? It's going to get crushed. This is the most bizarre market I've ever been in in my life. I got to tell you.

[D]

It's.

[E]

I don't know what to do. And I've been here before, but this is like I could see putting a big short on Nvidia and getting clocked, but I know that's the right trade or a trade like it. This thing cannot. I mean, this is just so overcooked, guys. I don't get it. I'll be quiet. I'm looking for answers.

[C]

Really.

[A]

Isn't that what happens in markets though? I mean, you know, it's like I can remember people shorting all the Internet shit in late 99 and 2000 and getting carried out, saying this is, this is crazy. And then eventually within six months they were right, or eight months later they're right. You know, it's like things get, they get overblown. You know, trees don't grow to the sky. A single company is not going to dominate the only way of making chips. I mean, people may not have noticed Tesla's making their own chips now, right? You know, it's like Nvidia has certain competitive advantages, but at what point is that going to matter? I mean, honestly, the closest company to creating a vertically integrated stack is Elon's two private companies, right? I mean, by far isn't even close because the physics is. Data centers in space is by Far the most efficient way to do compute. It's just a question of getting it up there. And so that's where SpaceX is going to be. Massive.

[B]

Sounds like a long term problem though.

[A]

Yeah, no, no, it's hard to solve, absolutely. Of course markets don't care about that in the, in the short run. You're, you're right.

[B]

I'm with Gary though on Nvidia. It's like one of the signals here is, you know, I know it's like an older company a lot of times, you know, when things grow so fast like, like, you know, Chat GPT is not even that old of a company. To see it can be that big and you can build that big of a company in such a short time is probably a reason to be an entrepreneur in the first place. But one in three. I read that nearly half of the employees at Nvidia have a net worth of over $25 million. Now like one in three or something's over 20, like $20 million. Like I, it just seems like that's a, a staggering and outrageous number to have that many people. It's like that wealth concentration.

[E]

It is. And if you're running that company, try motivating someone that has made $20 million and they're 28 years old. Motivating these people, they're gonna like the trick. The trick with building companies is to keep everybody in debt, okay? So you keep your staff and you give them long dated options so they stay with the company. No, this like you don't want people making so much money. They're like, oh wow, I don't think I'm gonna come into the office today. It's, there's just no motivation. This is why

[D]

I'm trying to parry.

[E]

Even if Open AI was able to get rid of all of its overhead, how does it ever pay back $858 billion to the shareholders? I mean, run the math. How much am I going to pay OpenAI to use their shit? 20 bucks a month. 8 billion times 20 if they get the whole addressable market. It's, it's, it's crazy, man. And then that means everybody else dies.

[B]

I think people will start to pay,

[D]

have to pay more.

[B]

And they will pay more because it's starting to operate the companies like the transformation that it's created at like a small startup like ours has been unbelievable. But that being said, you know, I like, I'm trying to parry that with the idea that like, you know, a company like Whisper Flow, you know, that raised $80 million and it's a voice transcription software and A16Z and Andreessen's behind, behind them. You know, I. It took one prompt and like 32 cents to replace that software on my computer.

[F]

Right.

[B]

Like, why wouldn't like. And I canceled that SaaS product. Right. And it's like you're seeing some of the layoffs. So it's like I'm trying to kind of figure out what the productivity gain is, how

[E]

there's no, no way you're going to pay more tomorrow for AI than you're paying today. It'll drop in price like everything else.

[A]

Yep.

[E]

Unless it destroys all other businesses. Like if it can then replicate Netflix and HBC and all these entertainment centers, but then you don't have any other businesses on the planet. This is why this is a really crazy.

[B]

I think the gap in models is going to get bigger than people think. Like, again, I, like I can have something like anthropic, like an operating system. Like, it does not. That doesn't work with Chat GPT.

[D]

Right.

[B]

And people are using ChatGPT to like pretend to be their lawyer right now or to ask, you know, where does you know, how much Bitcoin does Gary have? Like, they're asking things like this. They're not, you know, saying like, hey, you know, work for the next 24 hours with these three other agents to create like a new brand identity for this company and then launch the website and find our first customer. Like, one can do one of those things, the other one can't. And so I think the gap, like the gap is there. So I think potentially people will end up having to pay more for certain models in certain, in certain periods. Now if Claude, if anthropic keeps shipping so fast that they like shipped accidentally ship their source code, like, that's faster shipping. I don't know if that continues.

[A]

Yeah, well, speaking as someone who's seen that happen before at other companies, you know, we all saw the source code Shipping is. That's not the first time I've ever seen that. We'll just leave it at that. But anyway, Tomer, you've been incredibly patient. You've had your hand up for a long time. You there? Still there, Tomer? I don't see the maybe glitching. You there? I see the little mute button going up and down. Okay, well, we can't hear you, so not really sure, but Austin.

[G]

So on the topic of AI, to me, one of the most fascinating companies in the space right now is Apple, who basically said, well, hold on, we've Got all the users and we've got all the devices. They spent rounding error on zero on all this stuff and you'll notice that they're now forcing all of the companies to compete to plug their AI into the Apple ecosystem. So to the previous point of this stuff is only going to get cheaper and like where the valuations are. My other question for the model companies is yeah, you're making cool stuff, but is that where the value capture is, right? Like if you're not really deeply integrated at the enterprise side, are you going to have any customer loyalty or stickiness or is it going to turn out that Tim Cook by doing nothing and having all the customers was the winner here?

[A]

It's a good question. The same question is, involves crypto as well, right? You know, like, you know, people building stuff that gets used and the people, the people slavishly buying the tokens because they think the network might get used could end up being cut out of the actual profits. But I've been making that point anyway. Tomer, are you back now?

[F]

I hope so.

[A]

Can you guys hear me this time?

[D]

Okay, great.

[F]

I missed part of what Austin was saying, but I think we're on parallel tracks, although not the exact same thing. It's like I'm not an expert in AI and so I'm, I'm asking a question and basing a lot of it on indirect hearsay because I don't have the direct experience. But a big part of what one of the things that I keep reading about and especially in the bitcoin circles and in the self sovereignty circles, is the quality of what you can run on your own for essentially free on your own hardware is seeing leaps and bounds improvements as well, which drives down the cost. And apparently Apple's chips, because they have the, because everything's unified on the single chip, so the memory is not separate from the GPUs or the neural network processors that are on there. People have been able to get tremendous results, especially on the beefier chips, which means people can do a lot more on their, on their own, which again only further drives down the price of what they're prepared to pay anything at all for. And it, and it makes it a lot more accessible everywhere without network connections, without loss of privacy. So there's, it's so dynamic and so competitive and you know, and these like ASIM is just saying Apple owns all the devices they've been putting. If you've got one of, one of their latest chips like from the last five years, you've got neural processing units on it, which, which if you have again the beefier chips, you're apparently able to do quite a lot on your own with them.

[D]

So

[F]

what like it just feels like it's something to be steering clear of if you're at all risk averse. Maybe my question is is there any validity to that or does that add to the validity of the concern that people are raising like Gary here about investing in AI and, and who the. And what Austin was raising, which is who's going to actually capture the value. If the software becomes open source and everybody can run it for free, it becomes as valuable as a spell checker despite how amazing it's just a really, really fancy spell checker.

[A]

Yeah, I think that's true and I think that whether you're talking about evaluating a token or you're evaluating a company, it's the same thing. It's like who gets the value right. And that's why vertical integration is so attractive to companies. That's why, you know, I made the point about you know, SpaceX XAI and Tesla being together. I mean anyone who's driven the new model, I just got a new model Y, I upgraded it because I wanted. I had made the mistake of spending a ton of money to buy the full self driving lifetime license and it was if I by yesterday you had to transfer it to a new one or it was going to expire and the new hardware is just so much better than the old hardware it just made sense to do. Is crazy how integration of Grok with a car with full self driving and all the optics, how it makes the experience, it is absolutely out of this world and that's the kind. And he's going to charge a subscription for all of that. And you can immediately see what happens when optimus robots have all that. I mean seriously, it's like you understand that sort of vertical integration and where that goes and yeah, you want to be part of the ecosystems. There will be competitors, et cetera and yeah, some of it and the AI agents are going to use crypto rails and they're going to want to save their cash in intelligent ways and we always talk about it from a bitcoin perspective. People ignore the fact that if the AI agents say I have this much cash flow, here's what I need, where am I going to put the rest of it? They're going to invest it rationally. And so there's all sorts of reasons to be bullish on crypto that have to do with AI but it's going to be A very bumpy road to get there.

[F]

Yeah, maybe one. One last really quick point I could make. Execution becomes harder the more successful you become. And someone was mentioning that Nvidia employees, there's too many of them who have $20 million in value. You saw the same thing happen with Apple. Like Apple's innovation since the passing of Steve Jobs has. Despite the tremendous momentum and inertia that they have, the innovation just hasn't been there. And the quality of the product is getting worse and worse, especially on the software side. And it's because the company did so well that too many people who were essential to their success did too well and ultimately left. And so there's like, Elon needs to keep his enterprises as hungry and excited about innovation or they, or they too will slow down. But all these other companies that overnight made billionaires, it's hard, it's hard to sustain the innovation momentum when the innovators have checked off all their aspirations.

[A]

And we saw that in, in crypto, right, where founders got immediately wealthy before delivering a damn thing. And then what happened? Quite a few of them never delivered. Right. I mean, we've seen that, and that's a story that we've been following for a long time. Right. Ryan, was that an old hand or a new one?

[H]

New one.

[A]

Man,

[H]

I love this discussion. It's falling right inside my wheelhouse. We are literally at the calm before the storm, and it's rumbling. There is going to be an explosion of these AI agents. It's going to come so fast and so furious. The software development is going to be coming so fast and so furious. VCs are. They can't invest in software right now and they shouldn't be. They should be, like, waiting, because disposable software is going to be a thing in the next six months where no one has a static interface. But to answer Gary's point earlier, it's, you know, how is OpenAI going to make all this money on $20 a month subscriptions? Well, they. They make a different model or they make a product that requires more of what they produce, which is inference. That's. That's why they invested in openclaw. It's an agent that when you point it at a model, it will just automate and run and it will, you know, act on its own in a lot of ways. And it will keep spending API credits and tokens and it will rack up thousands and thousands of dollars a week, depending on how fast you want to move in your development. So I know development teams and companies that are spending tens of thousands of dollars a week on these API tokens, a lot of it through Anthropic right now because opus4.6 is so crazy powerful. But everyone I talk to that is running openclaw or noun, Space Hermes Agent, they've named it, they've given it a personality. They're spinning up more agents for their friends and family to show what it can do. I personally took one of these agents and put it onto a web server and now it's taken the place of $180,000 a year. DevOps engineer and it's adminning all my web servers, it's issuing all the SSLs, it's making sure everything's locked down, it's monitoring all the git repos and doing all the deploys. And that was just with one agent. The amount of tech jobs that we're going to replace just with this one open claw agent that they're iterating on right now is going to be insane.

[B]

And do you think Kimmy could do the same job?

[H]

To an extent. So a lot of these open source models are getting really, really good. So like GLM5 is really, really good compared to like Opus 4.6. It's not perfect and it's not like exact, but it's, it's pretty dang good for an open source model.

[B]

Would you hotswap though? Would you hot swap to Kimi right now on production level things that you have in place? No, yeah, that's. I just, I just want to. Yes, no, right now. But yeah, I, I agree that like they're, you know, they're going to get better, but they're just going to do maybe different jobs. Right. And like it might not be like even when you switch to a new instance of CLAUDE that doesn't have the same context in the same folder system, you're still kind of lost, right? So it's like you need the best models and then you need the best context to operate production level instances like you have.

[H]

And the goal is by any one of these, you know, whether it be X, AI or CLAUDE or GPT, the goal for their product is to create a walled garden where you started in our ecosystem and you have to stay in our ecosystem. Like Apple was a master at that. And all these companies right now are scrambling trying to figure out how to keep the users inside their walled garden and not going to open source systems.

[A]

Okay, so it's 11 and we have a sponsor today. Mauricio from Leden is here. Scott had to go for a family Emergency. So, Mauricio, you're stuck with me talking to you, so I apologize. Oh, good.

[D]

Dave, how are you?

[A]

MAN in advance. How are you today?

[D]

I'm doing great. I'm doing great. Lots has happened since I think last I was here, we were talking about Leden's bond that was rated by S and P. This morning we just got news from another second bitcoin rated bond from the state of New Hampshire. We could talk about that. And so that was interesting because that one was rated by Moody's. And then the other two things I think that have happened sort of major since, since I was here last was the we dropped our rate, which I could talk about. We did the biggest rate drop, I think in the history of Len's business. And, and we also saw, which I thought was super interesting is the Fannie Mae announcement around bitcoin mortgages. So, yeah, lots to talk about. Happy to take it anywhere you want.

[A]

Wasn't there a municipal. I saw a municipal bonded with as well this morning.

[D]

Yeah. So that was a Muni. That was New Hampshire. I'm actually going through it because it was really fresh and it has a bit of a. I think it has a bit of a unique structure. It reads, the press release reads, moody's Ratings assigns provisional ratings to bitcoin backed revenue bonds Waveros Finance project taxable services 2026 to be issued by the Business Finance Authority of the state of New Hampshire. So it is issued that appears by a state of New Hampshire body. But one of the things that. First of all, kudos to these teams for getting the rating. I mean, we just went through a similar process with S and P. And I can tell you it is a very detailed and I would say meticulous process. And it took Letin about a year to get through the ratings process with S and P. So I can only imagine how long they've been working on it. Interestingly, I think one of the things that I'd like to highlight is even this muni bond from the state of New Hampshire. Again, it's a different structure, they're different vehicles. But this rating for Moody's that I'm seeing here, preliminary rating is Ba2, which is equivalent to a double B at S and P, which is two levels down from Leden's rating. So Leaden was the first ever investment grade rating for a bitcoin bond. It was actually the first bitcoin ABS bond ever to be issued and it received an investment grade rating from S and P. This rating that we're seeing on The Muni to New Hampshire is BA2 which is actually mid junk for Moody's which is, which is interesting because Len's SPV or Len's Bond pass a, a quite superior rating to this Moody's Bond. And again they're different structures but I think what I can, what, what I like about this whole, this whole thing is bitcoin has arrived as institutional collateral for these, these types of, you know, the highest.

[A]

And that's obviously the key. That's the key, right? You know, it's like people need to understand. I mean, yes, I mean, you know, your company's doing well and offers services. We're going to talk through a lot of that. But the meta sense is bitcoin being accepted as institutional collateral is massively important for bitcoin holders and for showing where it's going. Which is why I keep finding the continued selling from crypto holders it to people who look more like me and I have my real picture up there. So you get it is kind of funny. So, so let's talk about Fannie Mae. Right? So the Fannie Mae validation is, you know, is a big deal. I mean you guys gone through a lot, you've been here a lot. I mean how does this, you know, help you and how does this cascade, you know, why should people care?

[D]

Well, I think the Fannie Mae and again, if you look at the recent developments, right, we have an investment grade rated, an investment grade rating from S and P global to an ABS that is funded with bitcoin back loans. Lens Bitcoin back loans. So that was like the first shot. Then you have Fannie Mae, which is a government sponsored entity saying that they will take loans that have been, they will take mortgages whose down payment has been financed with a bitcoin backed loan. That's a huge breakthrough because up until now I believe, and again if anyone here has more information, but based on what I know this, I believe this is the first time that Fannie Mae has okayed a down payment that was financed with another loan. And they use bitcoin to be that first test, that first test case which again you're seeing basically a government sponsored entity that is going to be buying off these mortgages saying I'm okay if the down payment is held with bitcoin and is held in a way that I can get comfortable with. And then the third one is now you have this municipal New Hampshire going out and saying we're going to issue bonds backed by bitcoin. The other thing that I can say, Dave, based on our offering is that our offering was more than two times oversubscribed as a first time issuer. So the demand is there. The demand from the institutions that want to participate and dip their toes in. Keep in mind there are a lot of groups that still want to participate in Bitcoin, but they haven't had the right instrument to do so. Even though MSCR is out there, even though SDRC exists, some entities, some investor groups can only invest in investment grade rated products and instruments. And you're starting to see the first iteration of these. Why do I think this is important? Because as the institutional market starts to understand these products better, they're going to bid down the price and they're going to price the risk of these instruments like it truly should be, which is much lower than where they are today. And I think what that translates to is much lower rates for financing that we can then pass through to our clients. And anyone here that's ever taken out a loan will tell you that I think very differently if I can borrow at 11 versus if I can borrow at 5 or 7. And I think as that rate goes down, the use cases for those products go up exponentially. And so this is why I think again, we're going to continue to see a Cambrian explosion of bitcoin financing instruments.

[A]

So what does that mean from the perspective of bitcoin demand? I mean, if nobody's selling and everyone's borrowing against it, then where's the supply going to come from?

[D]

Well, that's the thing, right. And so again, every time somebody comes to Leaden and takes half a million dollar loan to buy their house, instead of selling that half a million dollars worth of Bitcoin, every time they do that to start a business, to pay a bill, you're taking pressure off the order books, right? And that translates to typically over time, a higher price. And I think that that's what you're going to continue to see, right? Like when somebody is in trouble or financial trouble and you need something, you look across your portfolio, the last thing you ax out is your house, right? You will axe out a bunch of other assets that are lower quality and have less upside. I think Bitcoin is going to slowly become the cornerstone of most people's portfolios, their highest and best asset. And that's the one they're going to want to sell last. Right? And so this is why I think financing, obtaining financing with your Bitcoin will become as ubiquitous as saying, I'm going to go get a heloc.

[A]

Right, okay, cool. So let's let you brag a little bit. So given that it's going to become ubiquitous, how is Leden different from, you know, your main competitors?

[D]

Well, the, the thing, I mean there's, there's several things but I think for us, what I think is, is one of the major differentiators is listen, we've been doing bitcoin back loans since day one. We've been doing these since 2018. It's in our name. We've never pivoted, we've never changed, we've never chased shiny lights. We've been doing this as longer than I think anyone else in the market. Our thesis was always that bitcoin was going to be the apex collateral and we focused very hard on delivering the best bitcoin backed loan experience in the market. And today we are the largest consumer bitcoin backed lenders in the world and we have the longest track record. So let me tell you how this translates to how our clients win and how I think doing so LEDN will win. And that is because we've been doing this for longer than anyone else. We were able to get to the ABS market before anyone else because S and P, as they're evaluating the ratings they see how has this company operated across several market cycles. And with LEDDN they can look at an eight year history and say, okay, Leden's operated perfectly. We're going to give LED in an investment grade rating on their first issuance because we can get comfortable with this structure. The, the first time, the first time issuers have to pay a premium because you're a first time issuer, right? The market doesn't know you. The more you are around, the better the market prices you and the bet. And usually that means if you do a good job, you get lower cost of capital. So we already have a moat in our size, in our operating history and in our regulatory, like a regulatory posture. Leaden is I think one of the only firms that has a perfect track record with regulators. That puts us in a really, really good spot to continue growing our book and because of the scale it already has and our experience as a in the financing side of the house, it will allow us to access better capital. And also the way that a company can access capital is a huge input to the risk operations of that company. So for example, everybody can see our bond custody facility, it's Fidelity. Everybody can see the price of that bond, everybody can see the loans that are continuously vended in to that facility. It is the most transparent and scalable way to fund bitcoin backed loans. And to do this you need to have size, you need to have an operating history. And these are things that we already have today. Most of our competitors, a lot of the ones that are around right now, haven't been operating for longer than a couple years. And so it will be much harder for firms that don't have that track record to get that type of financing and to scale that type of financing and also just to highlight how that translates to improvements for our clients. Right. So we've been working really, really hard to reduce our cost of funding and to diversify our funding so that we can pass on basically lower rates to our clients.

[A]

Yeah, you mentioned that you want, you want to elaborate on the lower rate.

[D]

Yeah. So like, let me walk you through it. Right? Like up until a few days ago, up until last week that it had one rate, 11.99% for all of our loans. As of last week we announced a tiered rate, tiered rates structure, which means that now our headline rate, so loans up to 250k are 11.49% APR. So that dropped 50 bips for 250k to 500k, that's a 10, 99%. So that dropped a full basis point, or, sorry, 100 basis points between a half a million and a million dollars. It's 10.49% APR, so that's 1.5% from the previous headline. And loans over a million dollars are now at single digits at 9.99% APR, which again, I think is a really shaving off. 200 basis points off a loan can change the way you think about it and it may make a project that was potentially out of reach now within reach. And we're going to continue doing this until we can get to the best, always getting to the absolute best rate the market can get us.

[A]

Cool. I was going to ask something tongue in cheek. So why does Sailor not borrow from you instead of paying 11% on SBRC?

[D]

But that's a bit, it's a bit cheeky. You know, it's funny actually Saylor doesn't, but we do service several Bitcoin treasury companies, both public and private. And I can, you know, obviously I'm not sharing their names, but we, we do work with treasury companies already. And to your point, Dave, you know, presumably you could get, you could post Bitcoin or pledge Bitcoin as collateral and get lower cost of capital than strc. Again, different instruments, different risk profiles, but they're both using dollars to finance Bitcoin purchases or keeping bitcoin.

[A]

So let's talk about a couple of things. You've done this before and I've heard these answers, but a lot of people probably haven't. So from a, when you say fully collateralized, what do you mean by that? How do you handle crash situations? How do you handle basically what's the mechanism and what's the fear? And, and given the topic of the day being quantum, I'm also curious because we're going to run out of time at some point soon. I'm curious, what do you see there and how does that impact the way that you manage the assets that you're custodying?

[D]

Yeah. So first I'll touch on the liquidation part of it. So the way we manage risk is every loan that led in issues. Every dollar that we issue in a loan is backed by $2 worth of Bitcoin. So if you want to borrow $1,000 at Leadn, you have to pledge $2,000 worth of Bitcoin. As the bitcoin price rises and your loan becomes over collateralized, you can redeem excess Bitcoin from LEADN and take it back to self custody. The opposite when the price drops we at leadn, if the LTV or the loan to value ratio of your loan which starts at 50% if price drops such that it gets to 70, will start sending you notifications and tell you, hey Dave, you need to send more bitcoin if the ltv.

[A]

So for those of us old people, the maintenance margin is 70%. Well the, the initial is yeah, but

[D]

there is no maintenance margin at lead in. There's only a liquidation level. So the LTV can theoretically stay over 70% for a week and you won't get liquidated. The loan only gets liquidated when the LTV reaches 80%. So our system works a little bit different. I know some groups, if it triggers over 70, they give you a certain time to post and if not, they liquidate you. We don't do that. I'd let in the rule is if it gets to 80, it gets closed, but before that it doesn't get closed.

[A]

So do you publish any statistics over, you know, over time, like what percentage of your loans have ever been liquidated?

[D]

So we publish our book size every month so everybody can see how our book changes month over month. We're the only lender to my knowledge that does this. And so you can see the ratios and how that changes. There are within the liquidation scenarios or within liquidation episodes, there's always voluntary repayments as well as system Automated liquidations. And what I'll say is, in the bond facility, which this is public data, you can see it because it was actually getting updated as the bond was getting sold. And everything has to be transparent and open, and that's how we operate. So we had about 25% of that book got repaid, both between voluntary repayments and liquidations. And that coincidentally, we were pitching that bond during the crash, during the February 6th crash. And the questions a lot of these investors had was, how do you guys manage during high volatility episodes? How do you make sure your system will act as design? And we were popping up data in real time, showing them how that was performing. And that was actually a huge benefit, because I don't think we could have asked for a better opportunity to showcase how the system works in the worst of times. And it worked as designed. Of course, we don't like liquidations because our clients don't come to us because they don't want to sell their bitcoin. So the last thing we want to do is have to sell it. That.

[A]

Hence my question. That's exactly the reason.

[D]

No, and listen, like, of course we want. We try to work with. We send notifications and build tools like Auto Top up, which protected thousands of loans during this episode. About 4400 Bitcoin flowed through auto top up just in February 6th. And so we obviously do everything in our power to help our clients avoid a liquidation, but if needed, the system will do so, because if we don't, that basically risks the integrity of the entire operation for everyone else, of course. And so it is. You know, I remember back in the day, Celsius would rave about not liquidating people during episodes where they should have been liquidated. And everybody was saying, oh, thank you, Mashinsky. You're so kind. And, oh, man, I was screaming when I saw that. And you still see that today. There's firms during that episode that were, like, changing thresholds and things around margin calls. And I was saying to myself, oh, boy, you know, like, this is not what you want to see. Nobody likes this. Of course you want to protect your clients, but you can't just be, you know, making audible calls during these moments, because that's how you lose the whole thing.

[A]

Well, I mean, yes, look, when you talk about it on. In derivative exchanges, et cetera, it's about socializing versus not socializing losses. Right. You know, when you're a lender, it's banking system integrity. And so many of the reason 2008 happened. And of course, those Banks all got bailed out. I mean, I worked for Citigroup at the time and I know for a fact that we were functionally more than bankrupt. We were actually negative enterprise value for a while before all the bailouts and giveaways and excess interest and everything else got, got pumped into the company so as to save it. But the company was gone. You know, obviously you don't have that luxury unless you have the all the people in the Senate Banking Committee on speed dial like they did. But you know, it's a big difference.

[D]

No, and listen, this is also, I think, a big thing or a big difference in Lenin's DNA, right? Like Lenin did not come out of the gate with an ICO. ICOs are actually very poisonous, I think, to a company's culture because you raise non dilutive money, you have no board, you don't have to answer questions to anybody, you just got rich, Literally you just got rich overnight.

[A]

You know, my opinion on this subject, I, I think that, that it was, there are some tokens that, that may very well end up having value, but the notion of non dilutive capital was the thing, the single most poison pill in the entire notion, in the entire crypto ecosystem. And I was building a company at this time when it was happening and we didn't do a token. And people are saying, well, you don't have a token, so why should we invest in you? And I'm like, well, because we're going to be worth a lot more money. And in fact, that's exactly what happened. But the truth is that, you know, it's about discipline. But anyway, we'll get off that topic. We can talk about that another time. I am curious though. You know, proof of reserves is very important to lend.

[D]

Yes.

[A]

You know, it'd be interesting to hear, you know, how you handle it, how you differentiate yourself. And then you have to answer the question because the reason Microstrategy claims they don't do it is because they don't want their public addresses being out there. You know, how do you handle that vis a vis Quantum and other risks? Or are you even thinking about that yet?

[D]

Great question. And I'm happy to walk you through how we do our proof of reserves and how we sort of bridge this issue. I wouldn't call it an issue, but what Michael highlighted, which is exposing the public addresses. So the way we do it at LEADN is we have a, so any lending relationship that we have, so whether it is the bond, whether it is our third party lending relationship with groups like Tether who's an investor in that. And we, we as a requirement must have the bitcoin we pledge sit in a dedicated address that we can, that we can basically monitor at all times. So in the bond, the custodian hospitality and depending on the relationship, you know, there's qualified custody and we have line of sight or 24,7 visibility into the address to which that bitcoin is posted. Also we, the bitcoin is held in trust for Lenin so that makes it ring fence protected from any unlikely event of any sort of partner issue or bankruptcy.

[A]

Right.

[D]

So because our system is so clean in that every relationship has a dedicated address, every month we have a certified public accountant, a US based CPA come to Leaden and basically guest. They get a, they get a list of all the lending agreements we have and where all that bitcoin is sitting and posted. They verify it, they check that the bitcoin is there, that it matches the agreements. They also see the assets we have on behalf of our clients. So basically what we owe our clients and they make sure that the bitcoin we have in our lending relationships, custodians, et cetera, matches and surpasses what we owe our clients. And that is very important because this is a proof of reserves exercise that captures both assets and liabilities and it's a complete snapshot of that of those assets. We don't publish the addresses where all the bitcoin sits today, but we validate it every month through a cpa. And so that's the report and anybody can go see it actually it's called the Open Book Report. It's available on our website side.

[A]

Got it.

[D]

And I think that's. And we continue to improve on that. We just started adding the size of our book month over month. That's new. That started a few months ago. And we're going to continue showing even more transparency because our clients are smart and you should know how a business operates if you're getting a rate that looks too good to be true and you don't know what the funding costs, you don't know how sustainable that load is. And so I think it's very important for clients to have a full view of the, of the integrity of the business.

[A]

Yep, that makes sense. So let's, let's talk, you know, because we're kind of drawing to the end here, you know, from a regulatory positioning perspective. I mean there's lots of talks about regulation. I don't know if you're impacted by, you know, how you see regulation going. Is it going to change anything. You know, what does it look like? You know, what is the next year to two years look like? You know, assuming that we stay status quo or if there's more regulation or if it gets more into the banking system, et cetera, et cetera.

[D]

Well, a few things that I'm watching are the BASIL 3 interpretation request for comment that came out from the, I think it was the Fed and that's, that's a really big one because if they manage to change or update the interpretation of those rules, it may make US banks able to start doing more bitcoin financial products. Like right now it's functionally prohibitive to do so because of the capital.

[A]

Just so people don't understand this, just to explain it, because Maurizio and I know this stuff. If you're basically long and short a billion dollars of Bitcoin backed swaps against each other, for example, that might be underlying some of these products. It doesn't matter. It could be a swap or reboot, whatever. You have to have $2 billion in reserve capital. And that's obviously insane because they're hedging each other. So you know, these rules are very antiquated. Anyway, sorry for the editorialization, but I think.

[D]

Thank you. It's important context. So basically right now it is not prohibited, but it's, it's functionally prohibitive to do any Bitcoin product as a bank because of the capital requirements. Right. And that comes from rules set at the bank of International Settlements and that interpretation. So the Fed is basically challenging or trying to revise how US Banks adapt to these guidance, to this guidance. And so if that changes, that's going to open the door for a lot more consumer products or institutional products, any type of Bitcoin product from banks, meaning they're likely going to want to participate in this market. Right. And that's going to mean potentially new funding partners for ledn, obviously also potentially new competitors. But I think that with that comes lower rates and driving this idea that Bitcoin is that asset that you don't sell. So from a regulatory perspective, I think that's one I'm watching. The other one obviously I'm watching is the Clarity Act. I think there's, there's a lot of people are talking about the stablecoin debate on the Clarity Act. I'm actually more interested in the defi guidance that that's going to come out of that because that may green light or that may actually cause several that might have an impact for some of these defi models. That are out there today, that are, you know, act today, sort of driving through what I would like to call a gray zone where they're lending to us consumers with no lending agreements. The money that's being lent to those people is not kyc. And so there's a lot of question marks around those DEFI models. And if that has an impact that might end up driving more people to cefi or may end up driving more CEFI lenders to explore DEFI funding. So a lot can change with whatever comes from clarity.

[A]

Right? So you have, obviously, as a manager of a business, you have to be on your toes.

[D]

Oh, yeah.

[A]

Bottom line here, right.

[D]

It's been a pretty active 20, 26. And listen, this thing has been. I love this business. I love what I do. I love bitcoin. And to me, one of the things I enjoy the most is like, my. My work doesn't feel like work. Like, I love coming here and chatting with you guys about loans and bitcoin and doing this for a living. I do this thing for fun.

[A]

Right?

[D]

Like, and so I'm always on my toes, but it's really. I just love what I do, frankly, and it makes it easy.

[A]

Okay, so we have a couple minutes left. Anything else that we didn't cover? I mean, you know, Scott gave me a huge outline and I think we got through most of it.

[D]

No, I think we covered most of it. I think we know. We spoke about the Muni Bond, the Fannie Mae announcement, our new rates. We do have quite a few more things coming, but I'll save those for next time. And yeah, I mean, I think obviously we didn't touch on the geopolitics. I was listening to the show before we got on, and you guys do a great job just chewing up the macro. So I think we've covered it.

[A]

Okay, well, how can people find you all of that, other than obviously you're up here, you know, as a speaker, you know, what's the way for them to get in touch or find out more about Leaden?

[D]

Just follow Leden Ottle with Leden. Like, it's right here on the title. So just click it and follow it. And that's where you get the updates From LEDEN, myself, Rytonomista, cryptonomist with an A at the end. LEDEN IO is our website. DMs are always open.

[A]

Cool. Well, thanks a lot, Maurizio, and for everybody, we will see you again on Friday morning.

[D]

Thanks, guys. Cheers.