← The Wolf Of All Streets
The Wolf Of All Streets
BTC Drops After FOMC! Healthy Correction or More Pain? | Crypto Town Hall
01:12:14
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- [00:01]
Dave
Well, good morning everyone. It's Friday and bitcoin going into the open was soft again, lots to talk about. I'm glad to see Matt Hogan is here because, you know, it's nice to have someone who shares my, my long term view. And so given that, I'd rather let. Let him talk. But the most important thing I think people need to think about is something. There was a tweet this morning that I actually responded to from a fairly popular and actually pretty balanced crypto influencer talking about, you know, bitcoin becoming boring. And I think that's a large part of what's going on as bitcoin's in a range with the people in the crypto world saying, well, it's not going anywhere, so let's look for something else. And of course, and they look everywhere else and there it looks like some post apocalyptic hellscape on the charts. And. But bitcoin's in a range and doesn't look all that bad. So I think that dichotomy is worth delving into. Matt, I'm assuming you're back from Blockworks and probably have a lot to tell us, so why don't you tell us a bit about what the mood was like and how you see things now?
- [01:07]
Matt Hogan
Yeah, absolutely. Great to be here. And I think you described it really well. I do think bitcoin is in a range. I think it's in a pretty healthy range. I think it's sort of waiting for the next catalyst, whatever that is. Maybe the US government actually acquiring some bitcoin. I'm not sure what it is that will shake us out of the rang, but I feel strong that there's more bias eventually to the upside than the downside. Das was great. Das was sold out. 2,500 people, had a huge number of really high profile speakers, even down to the president. And the vibe was honestly pretty good. I think das, so the overarching theme, and this is something we've talked about a lot, is there's this bipolar dichotomy in the crypto market where institutions are bullish and retail is in despair and DAS was more institutional than not. So I walked away from DAs pretty bullish long term.
- [02:11]
Dave
I mean, it's interesting to compare DAs from what I'm hearing. And I stayed down in Miami. I'm still sorting out the ends of my vacation and getting ready to jump back into the world. But compare that to Masari last fall before the election, which felt, I mean, I mean, look, I think Eric is an awesome dude and I Think they tried pretty hard, but it was half empty, if not more. And people were like, you know, I don't know what the hell's going to happen. Hopefully things will go well. But you know, it was very, very different.
- [02:42]
Matt Hogan
So totally right. I mean we were so beaten down. I think people were talking about canceling conferences. Remember consensus moved out of the United States as a signal of where we were from a despair perspective. I'll add a couple other points. Before DAS, I was at two TradFi conferences. I was at Future Proof, which was in Miami, which was a sort of financial advisor and alts conference. And then I was at The Barron's top RIA summit. The top 100 plus RIAs in the world. People with billion dollar plus books. And I would say those were extraordinarily bullish on Bitcoin specifically, but even, even starting to be bullish on Ethereum at. At Future Proof, the most attended talk was Michael Sailor. And at Barron's I gave the keynote address and the response was pretty overwhelming in terms of the number of people allocating. A lot of people told me they allocated during the speech. Our follow up by our sales team has been off the charts compared to previous years. So, you know, from my perspective, sitting purely in that sort of institutional advisor lane through Barron's, Future Proof and das, it was, yeah, it's almost like the bear market doesn't exist. It's really a strange, a strange world.
- [04:05]
Dave
Yeah, I mean next time you're in Miami, you should definitely give me a yell. But 100%. That said, you know, it really is fascinating when you look at this because crypto, everyone starts like, I'm going to two tradfi conferences the first week of April. One is Security Traders association in New York. We have, we've been in crypto, I've been on the board for a while and marching my way up the board actually. And pretty much everybody on the board level believes that the entirety of the financial industry is going to start moving into crypto as soon as the starter's flag or the starter's pistol goes off. Which I think has to obviously wait until after Paul Atkins and Brian Contents and maybe Gould at the occ. But those two for sure are in their seats and rulemaking starts because these firms will not, will not. They don't want to get faked out. But you're probably seeing similar things. And that is, to me, that's the catalyst. But unfortunately people in crypto don't want to hear that because that puts the catalyst into the summer or fall yeah, that's exactly right.
- [05:15]
Matt Hogan
I mean, yeah. The reality is tradfi moves slowly and that's true. And we forget good news. I'd forgotten about contends who's like the most passionate advocate for defi in the world. But it's starting to happen. I mean, I think you can even start to see it in flows. Flows have stabilized into the Bitcoin ETFs. We've had five straight days of positive flows, you know, a couple hundred million dollars in three of the last five days. So it's happening, but it is slower than many people want.
- [05:51]
Dave
Right.
- [05:51]
Matt Hogan
We're in this sort of transition period from retail to institutional and institutional just moves slowly, but I think, I think the train is moving.
- [05:59]
Dave
Yeah. It's also interesting how people completely misunderstand flows. Right. You know, I was pointing out for months that there was a substantial amount of buying in the ETFs by what I would call kind of less efficient arbitrageurs because the futures in the CME were trading at crazy premiums. And so you could buy the ETFs and sell the futures and mint profit, especially if you could do that and leverage using portfolio margining. If you're a hedge fund now, the futures premiums, they haven't collapsed, they're just normal now where you can't really make any additional money over the risk free rate. And so therefore we saw a massive dump out of all of that arbitrage last month. And so that was a huge amount of outflows. It's not terribly surprising that we have stability now. We're in a range. People aren't panic selling, but more importantly, that entire supply is probably gone. I don't think there's any arbitrage left, do you?
- [06:56]
Matt Hogan
No, no, that's exactly right. I mean, that was the driver of those outflows. We can see it at Bitwise because we know our core audience, which is financial advisors and family offices. There's been no outflows there. Right. The consistent inflows that we see through our sales team. But from the outside perspective, that can get covered over by those arbitrage flows, which, you know, those. Maybe they'll come back in the future, I don't know. Right. That can, that can come and it can go. But I think the long only bid is persistent.
- [07:28]
Dave
And that's really the point that I wanted to make. And so I constantly make this on Macro Monday when I'm arguing with Mike McGlone over this. I don't want to argue with him when I'm not Here. So we'll postpone that one to Monday. But this dichotomy is interesting. So, Gary, I'm glad you joined. You sit as an institutional investor and are talking to other institutional investors, have had conferences with them. I assume you're seeing the same thing. Is your speaker working? Gary, you're not muted, so. Paging Mr. Cardone. Okay, well, we'll go on. Anybody else want to chime in on this topic? Fred? Yeah.
- [08:11]
Gary
Good morning, everyone. Can you guys hear me?
- [08:14]
Dave
Yes.
- [08:17]
Gary
I was just going to echo what you and Matt were talking about with the delay on the institutional side.
- [08:25]
Fred
You know, why?
- [08:26]
Gary
These things take a while. I mean, it goes back. It's the same thing with the legal side of it. So after we've had Trump in and now we get more and more talk. I've had a lot of potential clients coming up saying, hey, we want to get into crypto. We have this idea or that idea, or we want to think about moving from, you know, an outside jurisdiction back to the US And I say, that's great. Everything's, you know, on track. This is going to be a great idea. Let me get it going. But we still don't. We have a friendly climate, but we still don't actually have the rules in place where you can be 100% certain and totally confident of making your move and that nothing's going to radically change. And some clients and potential clients, like, great, let's start it anyway. Other ones are like, well, just do some of the groundwork. We're not going to do it yet. We're going to wait till the rules are in place. And, you know, that's just the name of the game.
- [09:21]
Dave
Yeah, I mean, unfortunately, you know, I use my cartoon here. One of these days, I'll go back to a regular headshot and so everyone can see my gray beard. I mean, trust me, I can't tell you how many times I sat in meetings over the course of my career, because I started in program trading, which was seen as cannibalistic. That was the word they always used to use to their existing businesses. And how many times I was told, we're not going to be on the bleeding edge. We're not even sure we want to be on the leading edge. You want to make sure that other people are doing it first. You hear that all the time. The only exception to that was when the Internet came in and they realized how bad things were. Just as an anecdote for the audience. In around 1999, I was working at Solomon Smith Barney at the Time, which was one of the largest NASDAQ market makers from the previous decade. Except they looked down at their market share and realized that they had ignored the Internet and ignored online trading. And this company called Knight securities, which nobody had ever heard of in the management team, was sitting around 20% market share in NASDAQ and was dwarfing what Solomon Smith Barney was doing. And they realized, wait a minute, this technology was eating our lunch. But they literally waited. I mean, it's not like this was. They were hiding. And, you know, it's the sort of thing that does happen now. They've tended to be faster. What they'll do first is they'll start acquiring companies in the space that, that you, you can take that one to the bank. So all the tech companies that are providing services, you're going to see a feeding frenzy among that, but you're going to see offering of services one way or another. It's just, they're not going to do a damn thing until they, their, their compliance department says it's all clear anyway. Okay. As far as that goes. Gary, before I move on, did you fix your speaker? Nope. Okay, so let me get Simon up here. Okay, let's see. Says Simon, can you hear us? It says, connecting, this being. God, I hate, I hate spaces sometimes. I know, I'm starting to sound like Scott. We're in the glitch. It looks like, it looks like Fred got dropped, too. Who was that? I'm sorry, I couldn't tell. Simon.
- [11:47]
Simon
No, no, no. While you're fixing it, I can. Okay. Yeah. I think the, the other thing to really consider here is there is a big reality of the major, major benefits of tax neutrality. And so if you're tether and you're sat in El Salvador and you're able to receive all of your yield and purchase all of it in Bitcoin, and you don't have to consider the immense complexities around being in a tax jurisdiction. You know, fifo, lifo, all that type of stuff then. And you can, you know, hire globally anyway because everyone's working virtually. There is just a major reality of the world that we live in today. That jurisdiction becomes not just about regulatory clarity because we've now got multiple regular, regular, you know, but when, when you have a very clear regulatory environment in like, Abu Dhabi, uae, and then you're comparing that with El Salvador, that obviously has a low level of trust, but has, you know, a bitcoin vision. But then you're worried about, well, what happens when, when, you know, Buketti leaves or you're comparing it to like Singapore or something. I think you've got a hot mic, Dave. Or someone has.
- [13:22]
Dave
It was me. Sorry, Simon.
- [13:24]
Simon
Oh, okay, no worries. And then you're comparing that with, okay, we've now got regulatory clarity in EU with mica, but the regulations could be a lot better in the US and so it's really important for us to get that regulations better than everywhere else in order to get this right. Because you're essentially saying exit a tax neutral environment because our regulations are so significantly better. And I'm not sure what it would ever take to persuade a company like Tether to be able to make that decision because it's such a radical difference in your reserve requirements, your stability, all of those requirements. And I think that that is a consideration when most of these companies are kind of used to being fully global, hiring globally and just going to the jurisdiction at which they feel most at home and they're able to really consider the immense complexities of the tax as well as the regulatory side.
- [14:35]
Jonathan
If I was Tether, I'd be more worried about what the stablecoin legislation rules requirements are going to be in the US as opposed to where, where I've parked my flag. Because Tethers always had a little bit of an issue with their accounting. People always question it. And if you can bet your butt that there's going to be some pretty stringent requirements of reporting that stablecoin issuers are going to have to have in here in the U.S.
- [15:05]
Dave
I mean, that's true, but as someone reported this morning, tether holds more U.S. treasuries than Canada. I think there's seventh largest, seventh largest, which basically means they're going to work it out. Now imagine, if you will, from the crypto world what happens when Tether FUD can't even be recycled when it's done in a way that nobody could say that there's an issue anymore. Now look, most of us who have been in the space for a long time understand there was a time when a lot of that, what I'm calling tether foot, was probably true. And whether it's you call it luck or happenstance or, or, you know, prescience, they grew themselves out of it. But I don't think very many people believes that it's true. Now I do think, however, there are quite a few non investors in crypto who believe it and have stayed in the sidelines because of it. Curious if anyone has thoughts about that.
- [16:04]
Zillion
Yeah, I think we're bored of listening to those fuds now. It was always a measure of creating a market dump, you know, that would cause a perfect crash for probably tether itself or associated parties to swipe up the floor. And then within two weeks something tether would publish their audit reports and everything would be fine and they'd be outperforming and whatever and the market would take up. So that used to be funny times. I think the market has built an immunity to that. It's not working anymore.
- [16:42]
Simon
Well, I do think that there's an important part there because obviously one of the attack vectors of Tether was that they have a network of tether issuers. And one of those issuers was ftx. And FTX was built on top of Silvergate and Signature and their, you know, blockchain fiat currency system. And then it turned out that FTX had a paper contract with Alameda. And then when they're one of the issuers, you need to understand everything about the balance sheet of the issuing partner. So there is like a major piece of work to, you know, tether could get everything right on their side. But if you're having other people issue tethers, then I think there is a whole regulatory piece to just get the consumer protections there, which is the difference between the attestation versus the audit and then how long have you been doing it properly for when you're deciding how long to do the historical audit. And I think all those things will be resolved and solved at this time, which is why you're probably seeing a movement towards being able to actually post an audit at this stage relative to when it was just attestations before.
- [18:02]
Zillion
But then again, it's very clear to all of us that FTX was like of course publicly very regulated, very clear and clean. And that's how we've got the Temasex and the Sequoias investing into it. And of course I don't mean it literally. I'm just saying if houses like that can be defrauded, it could be just an edge case that occurred once in a while. That has happened in finance many times over the last century. Might happen in crypto, why not? But if you look at the paper contracts and the structure and the audits of these issuers and partners, they're not meant to cheat the system. In fact, I'm assuming not that I'm an advocate of Tether, by the way, so. But I'm just saying in favor of them probably they've taken their lessons from FTX and have built even more robust system to maybe cut through the cheat sheet of FTX as well. Yeah, for me it's only more dependable.
- [19:11]
Simon
The FTX issue, which was the same with the Binance issue, is that you have a network of global licenses and then you meet all of your audit requirements and demonstrate solvency and auditability within that jurisdiction. But when a user signs up to Binance, they just think, I'm on binance.com and then they'll say, but am I currently protected by Binance France regime or is it Binance Nigeria regime? And have they segregated assets amongst each other? And so therefore each regulator is growing satisfied that you're meeting the local requirements, but who's actually ordering auditing? The global requirement as well. And you know, that's the level of detail that needs to be achieved. And that was the issue with Binance. Binance us. It turned out that the tether was being transferred between the two entities. And therefore when it went, you know, when ftx, for example, went into bankruptcy, it was like, is the US solvent and the non US not solvent? And so these are regulatory things that are the challenges of like the banks, they solve that by having local branches and various other things. So it's amazing. Challenge.
- [20:29]
Zillion
Yeah, but, yeah, but this was not even solved for HSBC. And you go back to MD5, so, you know, even Goldman Sachs. So I think, I think there'll always.
- [20:41]
Dave
Be holes like, like if, yeah, we're kind of losing.
- [20:47]
Zillion
Humans can definitely.
- [20:48]
Simon
The way HSBC solved it, they lobbied to change the law that made it legal for them to not have client money. And then they, they managed to combine their investment banking with retail banking and say, hey, we'll get the government to bail out our investment bank because we can reclassify ourselves as a, as a retail bank. And just so you know, the person that implemented those changes, the Glass Steagall act, is in the Trump administration in this deregulation environment that is looking to do a stimulus by deregulating the banking sector.
- [21:23]
Dave
Well, we could go down that rabbit hole.
- [21:28]
Zillion
Yeah, I'm just saying, if you can hear me, even MD5, the Goldman Sachs story with Russia and Malaysia. I'm just saying, humans are super good with finding holes.
- [21:38]
Dave
Oh, there's no doubt.
- [21:39]
Bruce
You mean lawyers.
- [21:41]
Dave
Well, but it's not just that, Gaurav. I mean, look, we know, I mean, look at coin routes. We had multiple clients, several of which went under because of it. Tell us. For months. I mean, a year. Yeah, we know there's something funny going on with Alameda and ftx. We know we're probably not making as much money as we could, we know it's, it's, it's sleazy, but there's enough liquidity and we're making money, so we'll, we'll, we'll, we'll just put up with it. And that went on for a very long time. It was, this was not exact, this was not a secret, that there was, that there were secret relationships there. I mean people knew it. But the biggest difference, and Simon's point is excellent, the biggest difference is look at the difference in FTX US and FTX Japan. FTX Japan, no one lost a thing. Why? Because it was actually regulated. FTX US wasn't. And, yeah, and, and that was a very, very big difference.
- [22:29]
Bruce
And Dave, the Japanese regulator enforces regulation. You, I mean the, it's draconian how much the Japanese regulator actually looks at what's going on inside these exchanges. When, when, when I've had several. At a certain point, the Japanese regulator was requiring exchanges to source compliant liquidity. You know what that means? That means that they need to source liquidity from a counterparty that was registered and regulated under a jurisdiction for which the Japanese regulator has had comfort with.
- [23:10]
Dave
So they go to like, I'm not suggesting that, that we have to go that far, but all I would say is that, you know, there is a level of confidence, you know, 21 million. You had your hand up before zilion. I mean, I'm not, not trying to cut you off but, but you were up there. You still want, it's gone now, but are you still there?
- [23:29]
I
Yes, sir. Sorry man. I'm actually at work. A couple things I'm going to comment on. Number one, so I run a bank, not exactly the entire bank, right. But I'm a branch manager and to me, one of the biggest things I saw from last year compared to this year were the amount of people coming in and making transfers, number one, to crypto exchanges. And I feel like it's kind of died down now when it comes to the retail side of like talking about bitcoin. But we're still sitting at right between the 80,000 to 90 something thousand range. So for me, number one, it's a lot harder to go from 100 to 150 than it was back in the day of like 20 to 40 or even 5 to 15. Right. There's a lot more money that has to be involved. Number one, when it comes to the FTX situation, I think as much as it hurt everybody's like pockets, right, or their portfolios, it also brought on a lot of, I Think security. Because if you saw crypto.com for one, like made a point to kind of show, hey, this is what we have, this is what we're holding and that's where we kind of get also the security. Like I said, when it comes to people like either launching ETFs working more on a centralized side especially, you know, I know here in the United States, a lot of people want to, if they're going to invest, whether it's a 401k or just buy something in general, you know, they don't really like the defi side and they want to make sure, hey, is this going to be something where the black swan event where if I put, you know, my life savings in there, let's just say even a portion of 10, 15,000, we'll have to work hard for it, like it's just going to just vanish, you know. So I think a lot of the uncertainties with crypto are kind of being erased that people didn't know prior. Also, if I put money into this, will it be gone? You know, we see how much money is in Bitcoin has about a 2 trillion dollar give or take market cap. So I think that we're headed towards the right way. And another thing is that there's usually three retraces during a bull run of 33% in Bitcoin. So we went from 108,000 to about 76. You know, I think 33% will leave you at around 73. So this is to me just normal. Right? We're kind of going a little up and down in this area, but a lot of people are stacking satoshis, as you should, or whichever crypto it is. The fact that not only in this space but you're seeing on the news, Donald Trump has been talking about the President United States regularly, number one, as you can see the phone in the back line. But another thing is just how important, like I said, you talked about El Salvador. I think Russia and India and China have been also using crypto for payments. To me this is something that's bigger than just the retail investor. When countries start using it for trade, that's what makes a bigger difference and that's what's going to also be the huge increase. What I've been looking forward to is the next country that's going to accept it as a legal tender. Right? We already see what El Salvador did. Now he also, I think Bukulele, right, if I'm mispronouncing his name, he obviously, you know, arrested a Lot of people put a lot of people in jail, but they turned the country around completely. And there's going to be a lot of other smaller countries in the world where their diaspora is in the Western world, sending money out. And I know myself, right, I'm Albanian, we send a lot of money, whether it be through Rio, Western Union. And it is so much easier. And especially, you know, I got to live, thankfully for this account 21 and Kosov for a few months. For a couple of years. For a couple of years. And one of the biggest things I noticed there was the amount of crypto exchanges. So I can go on like any corner and you can literally go into a store, sell crypto, buy crypto with cash, exchange, like I said right there. And this is, I think, something that's going to start coming to other places in the world because it is so, so easy. You don't have to, you know, ask anybody, can you send your money? And as the more people get into centralization, we're going to figure out sooner or later why decentralization is so important to us.
- [27:18]
Dave
Jonathan?
- [27:20]
Jonathan
Yeah, this is a slight pivot, but looking at the quarterly performance of the total market cap right now, if it closes where it's at today, this is the worst quarter since Q4 of 2022. For the altcoin market, it's the worst quarter since Q2 of 2022. And but what's really interesting to me is if you use Trading view, they, they have three total market cap charts. There's total one, which is a total market cap, total two, which is the altcoin. And then total three is altcoin, excluding Ethereum, total three is outperforming everyone right now by 1%. So total three is down 14% this quarter, but the total market cap is down 15%. But the altcoin market with Ethereum is down 22.22%. And so when people are feeling like this doesn't feel good, it's. Well, because it doesn't. And when you look at the on chain metrics too, there's tons of things, at least for bitcoin that are extremely bullish. I mean, the, the supply on the exchanges is just.
- [28:34]
Dave
Just me or is everyone. Can anyone else hear it? Seems like Jonathan cut out.
- [28:38]
Bruce
No, we can't hear.
- [28:39]
Dave
Okay, well, I mean, Jonathan's main point, which is, is, is that same dichotomy. It, it feels like that, that, you know, this is a pretty severe correction in the crypto world, but the bitcoin world is different because in fact, Joe Carlos, or I'm not sure how he pronounced his last, this back and forth this morning about is Bitcoin crypto, yes or no? I mean, look, it's undeniable when bitcoin rallies, people feel they have money in their pocket, they take it and they buy alt with it. Looking to. Sorry, I got a call. Did people hear the point that Bitcoin effectively makes all coins into synthetic leverage for people who want to trade? Yeah. Okay, cool.
- [29:24]
Zillion
No, we don't.
- [29:25]
Simon
No, you cut out when you were saying that people buy crypto with their bitcoin on a rally.
- [29:30]
Dave
Right. And so we have this thing that people call it the lead sled dog for a reason. But when bitcoin stalls out at the same time as the NASDAQ is falling and all speculative investments are going down, correlations increase. And that's exactly what we've seen. Right. Let's call it what it is. I mean this is whether it's the proximate cause. Is April 2 being some sort of going to be some sort of tariff disaster or whatever? We've had a pretty reasonable correction in risk assets and bitcoin is trades like a risk asset, but ultimately won't be one. Whereas most of crypto are risk assets. They really are people betting on what will be the potential. With Bitcoin, it's a little bit different because of the store of value idea. So we do see that different. I mean, Matt, I'm assuming that you have those conversations when people are asking you about the difference in Bitcoin and Ethereum and other stuff, right?
- [30:29]
Matt Hogan
Absolutely have those conversations all the time. I think, I think crypto is sort of waking up to the reality that it's not entitled to this sort of cascade of correlated returns where we go from, from bitcoin to ETH and then on down the, the chain. I think we're moving into an era where asset returns are driven more by fundamentals than speculation. And the reason we've historically had these altcoin cyc. The market was driven by more by speculation and industry specific drivers than individual fundamental metrics. I actually think traditional investors sort of get that. They get that bitcoin and ETH are different. They're probably not surprised by the differential returns you have. To vastly oversimplify. Gold hitting all new time highs and tech stocks dumping. You have the same thing in crypto. You have bitcoin doing pretty well and tech driven assets dumping. I think we're going to see lower correlations between different assets in the future as we move into this fundamental era. But I think Tradfi sort of gets that idea.
- [31:39]
Dave
Simon.
- [31:42]
Simon
I think one thing that people, because particularly in the bitcoin circles is they underestimate how impactful stablecoins will be. At the moment. You kind of, you get a stablecoin and the only thing you can do with it is, you know, send it to crypto native people, which is awesome. And you know, you can do, defi. Whatever, whatever it is you want to do with your StableCoin. But there's two major leaps that are still to be factored into the market. One is if traditional finance and we do get disruption at the point of sale payment level, where, you know, the next, you know, people start using rather than having these point of sale terminals because you've now got a stable coin and you've taken away the volatility, people then start accepting in shop stable coins and you can actually just pay, you know, photophone. And if they start adopting those in shops, then more people will start adopting it. And you really do create this system of people being able to transact peer to peer, obviously a centralized environment because it's a stable coin. But that is kind of solving the median of exchange challenge that we set out to solve. But volatility and Gresham's law and the fact that bitcoin became the highest performing asset took away because no one wanted to use their bitcoin unless they had to. So stablecoins really solves that. And there is another major point with stablecoins though. At the moment a stablecoin is.
- [33:22]
I
You.
- [33:22]
Simon
Get more and more dollars into the tether or circle system and then they get to invest it in treasuries and then they use those treasuries in order to get a special subsidy by providing dollars on a blockchain. But I think that gets competed away and we're already starting to see more and more issuers issuing stablecoins where they actually pay real time daily yield. And rather than keeping all the yield themselves, they're paying it with the stablecoin holder, that opens up a wave of structural changes that I think are very impactful, which is why the stablecoin part is really important next. Because if you're being paid on chain, your stablecoin, you know, relative to Treasuries, you're earning yields in dollars outside the banking system and that can auto convert to Bitcoin. And if you auto convert your daily yield to Bitcoin that you're receiving from Treasuries on a stablecoin, all of your fiat currency if you're able to use it, you would then transfer into a stablecoin. And you use your fiat currency as a mechanism for getting riskless Bitcoin without the upside potential. And that's kind of why we're seeing like ETFs of like MicroStrategy converts and stuff like that, because you're trying to manage a upside downside risk for median of exchange, but also maximize your investment. And I think this is something that stablecoins will do that the traditional legacy financial system would never be able to do. I think that brings in a lot of fiat currency to our sector. Once people have actually manifested in their head what that implies.
- [35:15]
Dave
I mean, it also explains why the banks, why the American Banker association is so terrified, because anyone who has a checking account today knows the kind of yield you get is nothing. And it's pretty damn obvious with more risk, if you really think about it. Although the federal government, without the federal government subsidy, effective subsidy by having the fdic, banks couldn't compete. But, you know, given the yield differential between what stable coins are going to be able to offer and what, what checking accounts do, I think it'll be a big deal anyway. Zach, I know you're having trouble trying to get back up and down, but you have your hand up and then zillion. Yeah.
- [35:55]
J
So a little bit of a different topic. I was curious if you guys had discussed the OFAC news from today.
- [36:00]
Dave
Okay, I'll bite. What OFAC news from today? Sorry.
- [36:04]
J
OFAC is a part of the U.S. treasury Department that deals with sanctions. So sanctions of foreign rogue nations, sanctions of terrorist organizations, sanctions of criminal enterprises. And there was a lot of controversy, I think, in 2023, when OFAC has the authority to sanction the property of foreign nationals. And they took the position that the smart contracts, the code living on the blockchain on Tornado Cash that allowed the Tornado Cash privacy tool to work was the property of a foreign national. And they made it a crime for any US persons to interact with that code, regardless of whether or not you had criminal intent. This was, you know, definitely had somewhat of a chilling effect on the industry. There were people who protested that by dusting celebrities wallets with Ethereum or stablecoins that went through the Tornado Cash smart contracts to show this was sort of an absurd thing. And then there were a pair of lawsuits where plaintiffs argued that immutable smart contracts, because they can't be controlled by the person who coded them up, aren't property and aren't subject to OFAC sanctions authority. And there was some sort of movement on that case today. The OFAC just withdrew the smart contracts from their sanctions list and basically conceded this point, which is a pretty incredible step I think in the right direction.
- [37:18]
Dave
Yeah, that is actually very good news. One would think that would help, you know, the, the altcoin market. But you know, then again people are slow to react anything these days and there's still, you know, a lot of moroseness out there. Zillion.
- [37:35]
Bruce
People of the altcoin market are on in the trenches. They're waiting for the next meme coin. No, just to add into Simon's point, which is extremely good, people are really underestimating the, the effect of stable coins that the, that stablecoins will have. And again, especially current like emerging currency denominated stable coins. I think these are going to have very good use case when it comes to remittance and also access to the financial, to, to financial products in general. Because in certain cases, certain jurisdictions, the literally holders of those locally denominated coins can leapfrog into defi collateral lending, all type of of stuff. And you will see markets organized around that, in forex markets completely migrating to that. I think there is a, there is a huge opportunity there obviously for builders, but also for people to benefit from what have been built in the defi rails and finally have access to a little bit more sophisticated financialization.
- [38:41]
Dave
Yeah, I look at it as leverage. Right. You know, anyone who studies engineering understands you have one lever. You know, you get a fair, you know a fair amount or you know, one, one joint you get a fair amount of power. But if you're a golfer, you know that when your wrists and the rest of your body move together and you get multiple points of leverage, it goes that much farther. It's asymptotic. Stablecoins are a major lever. Bitcoin being accepted as good collateral is a major lever. Now combine the two and understand what that could do for, for defi in terms of it breaking out just a pure crypto into the traditional financial world. Simon.
- [39:21]
Simon
Yeah, I also wanted to add how this relates to and how right the Trump administration is on this particular issue. The understanding and recognizing that the key to world reserve currency status is actually leveraging the fact that these stablecoins are backed by Treasuries, which is a more efficient process. But also the fact that if you create an authoritarian regime like European Union, where instead you're going for a digital euro issued by the European Central bank versus if you move to a regime of stablecoins where you have more of competing issuers in and they become less authoritarianism because we end up with a regime just like Zach covered that. Okay, the OFAC rules don't apply here, but then it's really important with the stablecoin regulations in terms of travel rules and various other things, because then that could take you down a route of on chain KYC and various other things. But my hope is the world reserve currency of the future is the one that puts the most amount of freedom into that technology. And so if you have a choice between a euro issued by the ecb, which is a central bank digital currency with all sorts of rules codified into it, and a dollar that is freely transferable around the world and backed by treasuries, and then another jurisdiction comes like El Salvador maybe says, well, we'll launch a stablecoin that is collateralized by bitcoin on lightning nodes and has inbuilt privacy. We could end up having a race where the world reserve currency, while they'll all be denominated in dollars, most likely, but the one that gets the most adoption will be the one that exerts the most amount of freedom. Obviously governments will have a very tempting capital control regime that they would like to implement, but this technology in this race can actually take us to a better, a better place just by opening up the competition. And I think the ones that people will adopt will be the one that exerts the most amount of freedom.
- [41:49]
Dave
Well, I hope so. I mean, you mentioned the European Union. I mean, it feels like they're committing, you know, economic, you know, Harry carry when it comes to competition. You know, they've kind of done that already into. If you look at the number of European companies that have grown out of the last 25 years, it's a tiny number, but you know, we could go there. One other question and Fred, you can actually answer this is, you know, we have this old law on the books of $10,000 being able to move it, you know, in your wallet and whatnot with the stable coins, you know, as stablecoins get more and more traction, I mean that's going to be completely unenforceable. And the question is, will they actually do something about that? Or just kind of say, ah, we don't really care anymore.
- [42:32]
Gary
Well, I think, I mean with any type of law like that and yeah, it'll be completely unenforceable. It's going to be a pick and choose. Who do you want to go after and for what purpose? I mean, we've kind of seen it play out. I Mean, not in the crypto world of how you can pick and choose who needs to be responsible for which laws and go after them. I think something like that will probably address in the stablecoin legislation. And I was just going to add to what Simon said, which, you know, is, I think a really beautiful analysis of how important stablecoin legislation is is because it seems so almost not that important to crypto because a stablecoin is just, you know, a representation of a dollar. I mean it could be any currency, but obviously it's usually the US dollar. And the point being is, is what he was talking about is the way it gets adopted and who are the players that win is immensely important for which layer ones are going to, you know, come out on top.
- [43:33]
Dave
Yeah. So I know there's one person who joined the panel who I know has no use for any of this government regulation stuff. I'm curious what you think about all this, Bruce.
- [43:43]
Fred
If you, if you. Yeah, I mean, yeah, we don't, we don't need, we're missing the forest for the trees on both the stablecoin thing and the regulations. I mean, first of all, we don't need any of these regulations. It's a bunch of nanny state, busy body Karens trying to put authoritarianism and have their thumb on the, you know, putting power on the people, you know, power over people. Totally illegitimate. It's not legitimate to use force and violence or, and all government regulations are backed by force and violence. So it's just not legitimate. The only legitimate rules, you know, regulations for government are those that protect life, liberty and property. That's it. Period. You know, all this nonsense about, oh, you got to fill out a form here and a form there. That's just totalitarian nanny state nonsense. It's not the way the world works. It's not the way it has worked. For centuries and centuries and centuries people have been able to trade and move freely. It's a very, very new and stupid idea that, you know, basically in the last 30 years or so, some, you know, busy body pinheaded tyrants in offices, you know, that they paid for with money they stole from people just decided that they're going to get up in everybody's business and start throwing people in cages if they don't fill out a bunch of stupid forms. Completely and totally illegitimate, totally wrong. Should be completely scrapped. Thrown in the dustbin of history. It's a stupid idea that never works. It's not the way that the world should work. We have to be free people that have the Right to speak and trade and do voluntary commerce with each other, you know, period. Same thing on the stable coins. You know, missing the boat. There's nothing cool about stable coins if they're backed by broken, phony fiat money that some. Again, more pinheaded tyrants sitting in offices that they paid for with money they stole from people. Print from thin air. It's the ultimate scam coin. You know, we would be completely roasting somebody if they came. Imagine if, imagine if I came in here and I'm like, I have an idea for a coin, the supply is unlimited and I can print it for whenever I want from thin air by pressing a button. And there's no proof of work or proof of stake. It's just me on a database and I can print it and give it to my friends. I'd get roasted alive, rightfully, because that would be a scam and we all know it's a scam. And what's backing these stablecoins is fiat, which is a scam. It's a big scam. So, you know, we got to keep our mind on the, on the ball. Like, you know, Simon said, we should be thinking about things like human freedom and privacy and you know, these are the things that matter. And we have to constantly reject this stuff because there's always going to be. The trickle down effect from the pinheaded tyrants is that it brainwashes otherwise good people to think like, you know, we need things like aml kyc, we need these regulations. And they get so used to being, you know, abused by the system and abused by these tyrants who threatened to throw you in jail if you don't do a bunch of stupid paperwork that they start to think that that's normal. And you have entire compliance departments and then they, and then they go and spend millions on law firms and the law firms tell them to do the same stuff. And it's, it just becomes a big, you know, a big mess where everybody is kind of forgetting the whole purpose of this, you know, this stuff should be rejected and fought continuously. It's total tyranny. It has no place in a civilized society. It's barbaric and absurd and crazy. And I look forward, I live to see the day that it's all gone.
- [47:08]
Dave
I mean, the funny part is, is, you know, and obviously a lot of us are putting up smiley faces and laughing. It's not that we disagree with you, because I don't. Right. You know, in an ideal world, that would be it. But practically speaking, the guys that are the Pinheaded tyrants have guns, drones and other methods of financial mass destruction in Europe. They're going so far as to lock it down with the cbdc, which is really scary. The real question is, you know, the fiat experiment. I mean, look, you and I have talked about this. We both agree, you know, the fiat experiment is 50 some odd years old. It's not. And yet almost every economist that you hear talking, you know, to people and people believe, people believe that 2% inflation is a good thing. They think that inflation is necessary, which is completely insane. Right. You know, we know the largest standard of living increase in the history of humanity occurred during a period of no inflation. Now, yeah, there were more business cycles. And you can argue about whether those cycles could be fixed, whether the Internet would make them less likely. Anyway, today there's all sorts of arguments. But the thing about the stablecoin idea, which is, yeah, it's propping up the fiat regime for even longer, the question is, what's the alternative? Because we have a situation where you say, well, dollars are terrible. The stablecoin regime, as Simon put it, and this is where Simon and I completely agree. I think it provides a transitional bridge for people able to accumulate hard currency while spending the softer currency. And that softer currency being the dollar. But that softer currency could become even more worldwide. I mean, a large percentage of the world is dollars already, right, Simon?
- [48:48]
Simon
Yeah, well, again, but the only reason that there was a contraction and a de dollarization movement was because the dollar got weaponized for political means. And that is where you start to lose your status as a world reserve currency unless you can cater for that. But I do want to point out there's kind of phases here. So bitcoin was like the apex predator in 2008. It gave us the ability to own our own money, spend our own money, and escape the debt slavery of the Federal Reserve by saving in bitcoin. And those people that saved had a transitional wealth transfer from those that were saving in other assets. And that's the base layer of the system. The next phase is how do you. And I think that as a opt out of central banking phase, the next phase. And now we've got 800 exahashes backing the network where no central bank or government can take it down. They lost that battle. And so now all they can do is persuade you to store your Bitcoin with BlackRock instead so that you don't get the freedom you should have. But the next phase is the stablecoin side because that is essentially taking away for the asset class fractional reserve banking. But it's backed by war and violence, as we know, because fiat currency is fundamentally backed by war and violence. And so it's important to understand that when you are looking for how to regulate these things, the anti money laundering laws, in the end, when you look at the actual data, not what they want you to think, it actually just gives the government a monopoly on money laundering and the crony capitalists that are able to use their lobby power to bribe governments, the monopoly on money laundering, which is why the banks that are the shareholders of the central banks are the ones that don't go to prison, despite how much money laundering they're committing, because they're able to do the crime and pay the fine. So all it ends up doing, as Bruce correctly has figured out, is that everyone that's not money laundering ends up giving all of their data to this honeypot that puts you at risk and means that governments can do really bad things with that. And that's kind of where I think this whole transition to phase three is that we've proven that we can put money on 800 exahashes of hash power and then the governments have to adjust. But what if you can put social media on 800exahashes and you can own your own data? What if you can do that with identity and what if you can do that most importantly with artificial intelligence? Because there is a competition and this kind of goes to what we still need to build and why there is so much more to be built in our sector. We won the money battle. Bitcoin they had to concede to. But we have to win the social media, the identity and the artificial intelligence because they want a monopoly on the truth through controlling media. They want a monopoly on all of your movement through social data and they want a monopoly on your identity if those are taken away. And Bitcoin was the mechanism for doing it, just by Putting it on 800 exahashes of hash power, then I think we enter a world where regulations do get disrupted because they can't keep up with technological innovation. And tax authorities do get disrupted because they just can't figure out what to do when they're trying to tax an artificial intelligence and they can't tell the difference between a human and an AI. So recognize we are on the path. It is a transitional phase. And that crazy world of freedom that Bruce has presented there might just happen if we, if we do this right.
- [52:55]
Dave
I'd love to see it. I want to make two quick notes before we go to Gaurav first. For those who are watching the market. It's always amusing on an options expiration Friday how the big figures are magnetized. And right now we are like, we have been right around 84,000 and it feels like it's pinned there until everything expires. Don't be terribly surprised to see some volatility later today. Don't know from which direction it will go. Frankly, don't really care because I don't think it'll be a big move because of what we're saying. But it is worth noting for the audience. And the second is when you talk about the government being the, the monopolist on money laundering, you have to also understand that the media has been weaponized to help them. All you have to do is look at the amount of paid protest and others and useful idiots in the media going after what Doge is trying to do. Primarily, especially with usaid where we've effectively proven that the government is money laundering federal funds back to politicians and their families and to pet causes of said politicians and their families that were never authorized. And yet there's enormous pushback just to preserve that, you know, from the media. So it's like, yes, you're right, we want that freedom. We do. But I feel like we are, you know, I hate to say it, but go back and watch Matrix 1. You know, someone posted that this week. You know, I feel like, you know, we've all taken the right pill here, but we're in the minority. And so that's where a large of education and where, you know, where a lot of this, this actually matters. Anyway, Gaurav.
- [54:29]
Zillion
Yeah, thanks, Dave. My, I have a genuine question and genuine as in it's boiling in me for a long time because, you know, when, when we took the orange pill, sort of complimenting your statement, Dave, we all came in for the sincerity of decentralization, the value of assets, the store of value of bitcoin and so on and so forth. My question to Bruce is, Bruce, what's happened? Like, the stuff that's happening with meme is memes and NFTs and these stupid tokens that are launched every day, that were launched every day on Ethereum when ERC came up and then there were bitcoin forks and shitcoin and poop coin and whatnot. All of that has happened in capital markets and I think still happens to some degree. And the only way it was ever controlled and these bad players were just endlessly and controllessly launching fake assets with no intrinsic value or whatever. They were controlled by the regulators. What do you think is a solution for crypto in this case? If you're not depending on regulations and compliance and stuff like that? What's the answer? When will this pain end?
- [55:55]
Fred
Well, I don't think it really was stopped by the regulators. You look at the ICO wave, the government didn't get around to prosecuting a lot of these cases until half a decade later, and they've been slow on a lot of this stuff. What corrects it is the market. If you just let people do their thing, the market will correct it. There's no world where junk assets just keep going up and up and up and up and up forever for a century. You know, like, oh, you know, that would have. Those memes would have gone to the moon if the government didn't step in. No, they're going to go down to zero because they're worth zero, and the market fixes that. And the quicker the government gets out of the way and lets the market work, the quicker that will happen. And so they don't. They're kind of counterproductive. You know, people should be allowed to do stupid things. It's part of freedom. The world is a stupid place. You know, cough syrups are a scam. A lot of gym memberships are a scam. There's scams all over. Politicians are a scam, Fiat's a scam. You know, like, that's the way the world works. And people need to have the freedom to do things. And the best regulator is the market itself. The best regulator is when you say, oh, man, my cousin Tony, he put 40 grand in an ICO and it went down to zero. And then five years later, oh, man, my cousin Tony didn't learn. He put 40 grand more in a meme token and it went down to zero. I guess I'm not going to do that. And now that Tony's done it twice, he's not going to do it a third time. That's the way the world works. That's what's good when you try and put trust into some sort of central authority, like, oh, yes, mother, government will protect me for a. They won't. They're terrible at it. They're terrible at every single thing they do other than killing. It's the only thing government is good at. Every single thing they do, every single thing they touch turns dirt. They're horrible. They're violent, they're authoritarian. Nobody would. Nobody in their right mind would. Would trust government to watch their kid or feed their dog. They can't be trusted to do anything. They break everything. They take a bunch of innocent people and cause them to jump through hoops with, with ridiculous things like AM KYC and paperwork and all of this other stuff. And then it doesn't solve anything. The biggest fraudster in history was the head of the biggest regulator, Bernie Madoff, biggest fraudster in history was head of the biggest regulator. Biggest fraudster in our industry was Sam Bankman Fried, the closest person to the regulators. He was the number one most politically connected. He was the number one close with the regulator. He is the only one who got a meeting with Gary Gensler. Brian Armstrong didn't get one. Jesse Powell didn't get one. Sure as heck didn't get one. Sam got the meeting. Why did Sam get the meeting? Because it is a corrupt and broken system that is rotten at its core and it can never work and never has worked and never will work. Every single society in the history of mankind has done better. All else being equal with more freedom. You know, there's other factors, like if you're landlocked or you have low education and other things that can make you richer or poorer. But if it's equal, if you have two countries that are equal in terms of resources and access and one is more free, and you can see this from satellite photos looking at board borders, the place that's more free is going to be more prosperous. It's going to be, it's even going to look better from the, from outer space on a satellite photo. That's, it's going to have greener trees and better houses. It's all about human freedom. People should have the power because either you believe people are good or you believe people are bad. And if you believe they're bad, then you sure as heck shouldn't give power to certain centralized ones like Gary Gensler or Bernie Madoff or Sam or, or, or you know, Maxine Waters or anybody else. And if you, you know, so either way, whatever your belief is, it makes sense to have the people have more individual power. So yeah, I think these things are, are corrected by markets. You know, believe in markets. Markets work fast. You know, the, the ic. Nobody right now. When's the last time you heard somebody say, hey, I have a white paper for an ico? You haven't heard that for five years. They call it something different. They might call it a defi staking mechanism with meme coins or whatever. And then that, now that sounds stupid. And then, you know, next year they'll create some, they'll create Some other name for it. And they're like, oh, it's a, it's an Internet of things web 3 token or, you know, whatever the next stupid buzzword is going to be. But the point is the market fixes those things. And if government gets out of the way and lets the market work, it actually works even better. It's even more efficient and people do things more. So, yeah, you know, power to the people. I want you to have the freedom. I want everybody to have the free freedom. Central. It's a total illusion pushed by centralized offices and the people in these power positions that they can help because they don't, they never have. They didn't help with Madoff or, or Sam. They made things worse. They always do and always will. They're not going to solve it. So the trade off, it's, See, the illusion is, well, yeah, government's really terrible and they murder 300 million of their own people and they burden a billion people with paperwork and they cost a lot of money and they steal our money and on and on and on, but at least they stop fraud. No, they don't. They don't even do the one thing they're supposed to do. They make it worse. They enable the SAMs and they enable the Bernie Madoffs and they create a situation where only the fraudsters get away so you get nothing from it. They steal all your money and they murder people and they put people in cages and they do all of this horrible, horrible stuff and they still don't do the one thing that they say that they're going to do. We got to scrap it entirely. It's all illegitimate, it's all evil. It's all horrible, horrible. Get rid of it. Let the markets work. It's never going to be perfect. Yeah, sure, there's still going to be fraud, there's still going to be bad ideas, but the market will work much more quickly and efficiently. And you, and, and when I say fraud, by the way, certain things there, it is legitimate for government. You know, it is legitimate for government to go after hackers or somebody who outright lies. You know, if somebody launches a coin and say, I have a billion dollars worth of gold securing this coin and they don't, well, that's fraud. That's the crime and should be a crime. But all this other nonsense where there's no victim, when you're talking about paperwork and accredited investor rules and the nonsense that VARA does in, in Dubai and the nonsense that SEC does and all of these things, it's all junk, all illegitimate. All ineffective and it's all for nothing. It's not like oh well at least we have all this stupidity, but at least it works. It doesn't work.
- [62:02]
Dave
Well, look, Bruce, you and I should probably have a one on one on this. I think we agree about 80%. You know, the 20% we disagree on are really about on the edges of what you started admitting there, which is that we do want people to be deterred from and prosecuted for fraud. I would add manipulation. I would add, I would add make lying. Exactly. Yeah.
- [62:24]
Zillion
Where is the boundary?
- [62:26]
Dave
I would say there are, I, there are a lot of well meaning people at the SEC and yet the SEC's work product for the last decade has been crap. Right. You know, in fact the person who.
- [62:38]
Zillion
Dave, if I can.
- [62:39]
Dave
Yeah, go ahead.
- [62:41]
Zillion
Yeah, if I can just like continue to what you said and sort of compliment my append. My question. Bruce, you were about to complete your statement and then probably we digressed. You said you can either believe the world has good people, I mean bad people, and then that implies to the people sitting in the government are bad, or, and then you never said or the world has good people and that means the government has good people sitting. I mean, would you like to complete that?
- [63:10]
Fred
If people are good, then you don't need government to nanny state us around. You know, overall most people are good, 98% of people are good. So you don't need some nanny state to sit there and be like okay David, you need to have this form before you can do a transaction with Simon. You know, we don't need that. It's just a bunch of nanny states. You know, let, let them do their thing. People are, I believe people are generally good. I believe that some small percentage are bad and I, I guard very carefully against that bad because they can kill you and they're, and they could be very, very bad. There are people and I teach my kids this, I say, you know, be, keep because my kids are very, very blessed. We live in a, almost zero crime area in New Hampshire and we have this wonderful home and wonderful neighborhood. And you know, I have to remind them, I say, yeah, you know there's places in the world where people will kill you for ten grand. And so yeah, there is evil people in the world, but most people are good. And therefore markets will mostly work. So you can have a light touch state where it just goes after the real crimes with real victims against life, liberty and property. And property includes things like fraud. And that's really all you need government for. You know, you don't need to. The idea that a lot of people, you know, communists and leftists have is that, well, the whole everybody's stupid. I mean, you listen to Bernie Sanders. He has almost a disdain for everybody in the world. Like, he knows everything. He, you know, he's complained about Uber and Lyft and how many deodorants there. There's too many deodorants. Hedge fund managers make too much. He complains about everything. He thinks from his narcissistic point of view, that he can live in like some king on a throne who sits there and knows better than everybody else. Like, Bernie Sanders has never had a job in his life. He knows better than everybody on Chat. He knows better than Gary, he knows better than me. No, he doesn't. He doesn't know anything. It's a place of arrogance. These guys think that, they think they're in it. They think that they think they're better than us. They think that they know better and that we're all bad. You know, the implication that Bernie would have, Bruce Fenton is a wealthy guy and wealthy guys are bad, and therefore we must control it. And so he thinks I'm bad and he thinks Gary's bad and he thinks Simon's bad. He thinks you're bad, he thinks everybody's bad and only he's good. He's good because he is the enlightened liberal man who had quadruple vax and wore a face diaper around and proclaims his greatness. And therefore he gets to decide. And that's wrong. You know, he thinks we are all bad and he's good. I think most people are good. I think most people are good. And he can just leave us alone and things will go pretty well. And occasionally 1% or 2% will commit crimes. And that is the only rare cases where government interference is legitimate. All this other stuff regulating deodorants or aml, KYC or any other stupid nanny state stuff that Bernie Sanders and Elizabeth Warren want, all illegitimate.
- [66:05]
Dave
Well, I think you got, you know, look, there are public goods and there's where you draw the line. I mean, you talk about deodorants. Do you want people to be able to manufacture things that put poison in you, that there's no way that the market will detect it for sure.
- [66:20]
Fred
Of course, people should be able to make things that have poison in them. What they shouldn't be able to do is lie. There's all kinds of things that are poison, my friend. I mean, look at, look at. I mean, you know, every one of us probably has poison on our shelves. I mean if you read the ingredients of you know, Girl Scout cookies.
- [66:37]
Dave
I retract my statement because I am an RFK supporter on that topic. Anyway, Simon.
- [66:44]
Simon
Yeah, I was just going to say it is a tight line because in stopping someone from lying comes the SEC disclosure regime and then you end up with lots of pieces of paper in order to try and stop someone lying.
- [66:58]
Dave
And hold on a second, let's be very specific here. That disclosure regime was written in the 30s and it was updated last in the 70s. And you know, so right now there's not even a mention of the Internet. I mean they've kind of bolted it on sort of but they still have a 30 day period in IPOs to cop to to handle the fact that it takes that long or it did back in the the 30s for printer to create the prospectuses. So I mean come on, it's a bunch of crap. And not. There's not a human being on the planet, not one who would say the laws as written would be what you would write today. And that that's an enormous indictment of those laws. And by the way, you want to know one of the people who said that to me, Paul Atkins, who's about to run the sec. So you know, I think we need to give him some time because I know he agrees with that sentence. I know he was the biggest dissent on reg NMS which has created the whole high frequency need for the data centers and we could dive into that one too. But look, you know it the line is there anyway you were going to comment about something else. I'm sorry.
- [68:00]
Simon
Yeah, but yeah, you know the. I, I do and we know that these regulators they just become co opted by lobby groups and then they become a mafia racketeering organization that's to tap up all the brakes broker dealers and allow the large financial institutions to do the crime and pay the fine as long as they get a cut and then they can expand their bureaucracy. We know that story to tell us all the time. It happens every single time. But in the whole philosophical conversation I do think that fundamentally having a monetary system and this is where I come to one of the things to focus on, it doesn't fix everything but fix money, fix the world is that we do have a duty to give the world a monetary system that is not based upon Ponzi economics. And the reality is that the credit based financial system is a Ponzi scheme. There's not enough money to pay off or to service all the debt. And so you have to have more debt, to service the interest payment on the money that the bank has the monopoly on its creation. Fundamentally, that drives out the worst habits in human behavior, because everybody is driven into a system where you have to figure out how to get your positive balance on your online banking at the expense of a negative balance for somebody else's online banking in a world where the money doesn't actually exist. And so I think that drives out the worst in human behavior. You can either regulate that away and create a monetary system that actually is not a Ponzi by definition, or you can compete it away, which is where I think Bitcoin actually was the regulator of the crypto market, because those that have no Bitcoin right now because they spent too much on meme coins are going to look back and say, what went wrong? All right, well, by actually having a sound monetary base by which to compare your bad habits, Bitcoin was the regulator. And those that end up with the most Bitcoin without messing around with too much and the other side, that was what regulated ICOs, what regulated meme coins. And then you've just got an element of obviously scammers and theft, which is something you have to figure out some way.
- [70:26]
Dave
Zillion. And we're getting close to time here, but let's get see if we can wrap up your final comments. Zillion, your hands up.
- [70:37]
Bruce
Oh, sorry. Yes, yes, I'm here. Sorry. No, to join Simon's point. Simon always has very good points. Just to give like, again, like a kind of a worldwide perspective. The credit system from, from standpoint of many traditions, including the large Muslim tradition, is, is not allowed.
- [70:58]
Dave
Right.
- [70:59]
Bruce
This, I mean, most, most of these countries had to follow whatever modern finance does, but at a certain point, they will have enough. And now in Saudi Arabia, this is a big debate. Etc, they will have enough abilities in independence to kind of choose whatever monetary system they want to build for the future. So I totally agree with Simon's points and I want to disagree with Simon one, one day, but I can't.
- [71:21]
I
It's very tough.
- [71:23]
Bruce
Very tough.
- [71:26]
Dave
Yeah, I think this is, this is one of those conversations that personally I would love to go on forever, but I think we all have lives. So, you know, it's 11:30 on a Friday. I think we'll, we'll take it up again, but thanks, Bruce. One of these days we should have a, a one on one podcast where we could really dig in. The only problem is we're not going to disagree enough for it to be fun. We need to find someone, you know, who really does believe in the nanny state to challenge you all.
- [71:50]
Simon
Joe Calasari. He'll fight for the fiat currency. He can come up.
- [71:53]
Dave
Oh, yeah, yeah. Well, Joe's not up here now, so I don't want to say anything about him. He and I have had those discussions. We should definitely do that. But other than that, I think Scott will be back at the helm next week. So hopefully I haven't disappointed too many of you guys, but Crypto Town hall will be Monday morning at 10:15 Eastern. Have a great weekend, everybody.