← The Wolf Of All Streets
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- [00:00]
A
Good morning everybody. Welcome to Crypto Town hall every weekday here on X 10:15am Eastern Standard Time. Dave, I completely missed the last two days. How was it? Maybe doesn't have his mic.
- [00:15]
B
Yeah, whatever. It misclicked. Well, I don't know, we had you know, some interesting conversations. Look, the market has, you look at, it's the same price it was two days ago when you left. So, so you know, how exciting could it be? I mean we did have an interesting conversation about Epstein and what does it mean and Gary had some really interesting, interesting commentary on why things aren't being released, you know. Etc. You know I, I actually then follow that up with a video basically said in a world of lies, you know, you know, what's the value of truth? You know talking about, you know availed reference to Mark Yusko's analysis that Bitcoin is the technology of truth. But look, this market is bouncing around here. I read your newsletter and your commentation Benjamin Cowan and I think it's interesting, I think it's worth talking about. I just published a quick article because I did some quick analysis on the fact that you need to compare this cycle to past cycles based on Bitcoin in gold, not Bitcoin in dollars. And when you do that it the gap shrinks rather dramatically. So you know, if you look this current peak to trough the 67% versus 70 some odd percent in the last one and that 10% difference is much easier to explain via the rotation of OGs to new investors via the ETF than the difference between 50% and 27% so I mean 50% is 77% so.
- [01:48]
A
Basically or 50% and 85% or whatever we've had.
- [01:52]
B
Well whatever. I mean, you know, whichever one. But I mean the fact is is a lot it explains a large part of the potential delta. It's easy to look at the rest of it and say well the amplitude of the up move was much less so therefore it's fine. I mean in short I think that you wouldn't be violating a structure if such a thing were a universal constant. Now remember, three data points is not exactly statistically significant but it makes it a lot easier to say this time is different. I hate whenever someone says this time is different it makes my skin crawl. But there are things that change like AI is is a change for a lot of stocks and if you look at software companies, you know, they are certainly feeling that, that it is different this time for a bunch of reasons. You know there are changes that have happened. Dollars have been Printed gold is up much, much higher. You know, back up over 5,000 today. So anyway, I mean, that's my thought. I mean, as far as the title today, you know, the open interest being lower, that is not necessarily a less demand. That is less. That is necessarily less hedging. It could very well be. It doesn't mean there's less buying, although there is a lot of. There's less hedging of, of derivatives. And, and that's not necessarily a bad thing. I don't think that's bullish or bearish. If anything, I'd lean it to being, you know, less bearish. But, you know, I'm curious what other people think. So far we haven't been able to get anybody to throw their hands up, so we just start calling on people.
- [03:22]
A
Like in class, Scott, as is tradition. Yeah, I mean, I can, I guess, talk about, you know, I was obviously at Bitcoin Investor Week in New York, and there's a gaping hole in, I think what we see in retail sentiment at, you know, crypto. Fear and greed index at 5. And what I saw on the ground, which is that a bunch of people who actually have dry powder or are institutional are loving this price action. Like loving, loving, loving, loving. Tillman, I think, put it the best on my show yesterday. And then he said it actually on stage with pomp. He said, right now you're depressed if you have no dry powder and if you actually have money on the sidelines right now, you're ecstatic. And that's actually the bullish, bearish divide for vibe.
- [04:11]
B
Well, I mean, I'm going to tell his hand up, so let's go there. But all I'll say is retail are followers. Institutions not. Some are, some aren't, but retail are followers, meaning that retail will get excited when price goes up and retail gets morose when price goes down. You know, it's. It's literally the. There's a reason why companies like the one that I started at Two Sigma called, you know, that takes the other side of retail makes money. And it's not because retail gets trends. Right. Retail follows trends and exacerbates them. Anyway, you had your hand up. Sorry.
- [04:42]
C
Oh, you're good. I actually, Scott, was going to ask you to drill more into this because I think that there's a huge disconnect happening in the perception of Bitcoin and crypto right now. And obviously in this kind of price action is to be expected with down bad sentiment. But everything from this is the last cycle and that bitcoin is Outdated tech, quantum resistance, all these confluence of negative signals flying all over the place. But I think that what this is completely oblivious to is the enterprise institutional development and interest that's actually going on to embrace this technology. And since you are at the ground floor of that event, Scott, I was just wondering if like the actual outside of just like the, the buying interest, the real like development, embracing of the technology and onboarding into the space side of it that you were getting some intel on.
- [05:45]
A
I would just say that every single institution and wirehouse is coming to conferences like this hungry to figure out exactly what their plan should be, where they should allocate and how they should be able to do that. I think Brian can probably speak to some of this as well in a moment. Not that he was at the conference, but obviously as running a salon at treasury company and the way that they're approaching it and none of them are concerned at all that it's going anywhere. There's no talk of going to zero. There's no concern about the government. People are literally just trying to figure it out. And I had a conversation with Matt Hogan yesterday and I asked him a lot of these questions and he said, you just have to look at the way that these institutions generally operate in their timeline. So if you go, they specialize obviously in registered investment advisors, RIAs. So he said there was a tweet yesterday From Hunter, the CEO of Bitwise, that said, we've been talking to this one institution for two years. They finally allocated 11 million yesterday. They're really excited to be buying at the 60 in the 60 thousands. And I asked him about that and he said, well, you have to realize, like, if you're looking at an ria, which is their primary business, the first thing that RA does is they, you know, they do their research, they wait for the clarity, and then when they're finally allowed to do it, they buy and then they hold it for a year. And after that year, what do they do? Well, they have, you know, I asked him, if you have 100 clients, you know, what does this look like? He said, well, 10 of them have probably been rabidly asking for exposure and you've told them to just wait. You're kind of experimenting, then you allow those 10 to allocate and then you wait a year and after those 10 allocate, you can start pitching to the next hundred. So it's a two to three year process and the wirehouses are just coming online in the last three months. So they're not even looking at the price Action. Like I, I, I talked to Dan Tapiero, Gary, I talked to, you know, your, your brother, everybody, same thing. We have a 10 year fund. Nobody gives a shit if it's 120 or 60. Like a bunch of retail people who can't stand watching their balance drop in US dollars are freaking out. But everyone else with a long time horizon, it's a rounding error if their thesis is right as to where price is going and even if it's a rounding error, would rather be buying at a 50% discount. And that's really the consensus across the board.
- [08:16]
D
Yeah.
- [08:17]
E
Thank you, Scott. I think that's interesting though because it feels like you touched on two different themes there. You started with the technology and I couldn't agree more. That's where I see quite a bit of conversation and adoption still to this day. And especially like my thesis around agentic economies of the future, blockchain is tailor made for the, the scale and volume of transactions because Traditional banking, Visa, MasterCard, Rails just won't be able to facilitate that in a cost effective manner. And then as far as like institutional adoption or you know, high net worth, people actually accumulating the asset and more specifically accumulating Bitcoin, I think this is a story that we've seen seen play out in various asset classes for quite some time where you know, they'll, the powers that be, the large behemoths, if you will, will do their damnedest to depress the price or tell, you know, anyone within earshot that the asset is garbage. But in the background they're quietly putting together the puzzle pieces to be able to accumulate and accumulate at scale. And I think that, you know, know, as you see, you know, headlines of microstrategy being underwater on its costs and things of that nature, all this is, is fuel to the fire of institutions and high net worth and family offices buying into the space. And I'll just end with this. Like there were two different family offices that I've talked to over the course of this week and they are both aggressively looking to buy into bitcoin. They had dabbled in the past, but this is their first foray into, you know, serious alloc.
- [10:06]
A
Exactly. And I also asked him and Amateo and Brian, I want you guys to speak as well. But I also asked then what's the other narrative? Because Matt's my guy I check in with once a month just to see where the institutional adoption is coming. And it used to be that they bought bitcoin and then they started asking about the ether and Solana ETFs. He said now our only two conversations are Bitcoin and tokenization and stablecoins and real world assets. And nobody has an answer yet how to invest in that side. So that has changed to some degree. But they will buy Ether Solana exposure to gain exposure to that, but probably the future. There is some sort of index of layer ones and publicly traded equities that you can gain exposure to. I' ma tell you, I had your hand up just to kind of tie up that conversation. Then when I go to Brian, go to Brian.
- [10:57]
C
That was a ghost hand from before. That's my question.
- [10:59]
A
Yeah, yeah. Brian, obviously you're running things over at upexi as the Chief Strategy Officer, you're very deep in the weeds on, on all of this.
- [11:12]
D
Yeah, appreciate it and appreciate having me on. I had two thoughts, really. One is I think now is such a great entry point, it's easy to see why people are confused and disappointed. Obviously, like the underlying fundamentals are just improving. The US has done a 180 in terms of like their view on crypto. Institutional adoption is only accelerating and many other asset classes are near all time highs versus BTC, which is roughly 50% below. So this in my mind is what has led to this atrocious sentiment. If you look at fear and greed, it's basically at its lowest since 2022. And crypto kind of trades on sentiment, not fundamentals. We don't really have any fundamentals that we can throw into any sort of like discounted cash flow valuation model. But what gets me so excited is these fundamentals continue to improve. So price is down, fundamentals up, it means more potential upside. And over time prices have to follow the fundamentals. And so that's why I am still supremely optimistic and bullish. Point number two is I think so many people just let price inform their view of the fundamentals. When BTC is at 125, it's the best monetary asset out there. And then when BTC is at 65, like the thesis is dead. And I actually am having a hard time pinpointing exactly what's changed since BTC hit its all time high in October, other than price. And I think that letting price inform your view of the fundamentals is the exact opposite of what you want to do. And it's actually the perfect recipe to buy high and to sell low, which again, we want to avoid. So thought I'd share both.
- [12:50]
A
100% agree, David. Aligns with what we always say, and I always say it the nothing is a better cure, nothing gets is a better catalys less than higher prices, right? Every story that we're missing right now, if bitcoin goes up, $20,000 will be the biggest bullish story of all time and we'll be going to a million, right?
- [13:08]
B
I mean look, the Wall street pathology is narrative follows price instead of price follows narrative. And there are investors, probably all the famous investors, all basically say the opposite. Say, listen, invest based on narrative is probably too strong a word, but invest based on fundamentals, invest based on narratives and price will eventually follow. But you know, we've all added in the crypto world, don't over leverage yourself so you get washed out when inevitably you time it wrong, right? I'm going to tell you, you had your hand up and then it just disappeared. Was that in a ghost hand or did you or is there something you want?
- [13:49]
C
I think my hand is completely schizo today, but I'm happy to jump in here and actually ask a question. So there was a interview that I'm sure everyone here saw between Chamath Palihapitiya or whatever his last name is and ncz and towards the end of that interview. This isn't a commentary on either of these gentlemen. This is just commentary on bitcoin, which was Shamath, even though he's been very early to bitcoin, talked about privacy being a critical component that he sees being a hurdle for mass adoption of bitcoin as a whole. I think obviously the privacy narrative is very hot right now, but it's also strengthening as a thesis and just wanted to get everyone's takes here on their thoughts around privacy in relationship to Bitcoin and maybe a response response to the clip.
- [14:45]
A
So I can tell you something anecdotally before everybody jumps in. I had this conversation yesterday. So I was at this conference, but I was just shooting my own content basically in the corner with anyone that we could grab. And Chris Giancarlo is one of my favorite people, literally in the world. Like we've become friends. He was the ex, you know, chairman of the CFTC and since then has basically advised every exchange, all these public offerings, everyone in the industry and is very close to the politics. And he was the first person that I heard say this and all he wanted to talk about was privacy. So I asked him about the Clarity Act. He put it at 60, 40. He thinks that it gets passed, but he very clearly said, I think it gets past 6040 and all of us absolutely hate it and it's a disaster. And I said why do you think? Exactly? Because the banks and the politicians will win. A, he's like, but B, it's just they don't get it. But he was like. And then he said something that I had never heard. He said, well, look at the Genius act. And I said what do you mean? Everybody's been celebrating the genius act this entire time. He said the Genius act's a disaster. I said well, why is the genius act a disaster? And he said well, you know, I've been working on the digital dollar project. For those who don't know his background, he has a non for profit and his thesis was that central bank digital currencies are inevitable and he was going to create basically a non for profit to advise on adding privacy to them so that we didn't lose the aspects of cash if central bank digital currencies ended up being inevitable. So basically making sure that privacy was a part of it. He said the Genius act has locked in every fear that we've had as an industry about surveillance and the worst parts of central bank digital currencies. And we all just cheered it. He said, not only do you now have government surveillance locked in because it has all of the features of the Bank Secrecy act are included in the Genius act. So the government has full transparency into any transaction that you make with a stablecoin period. It's not just law enforcement, which it should have been. He was like, but we also have given private companies full visibility into every one of our transactions, which is the double worst case scenario. So definitely made me kind of think about the reasons we got into this in the first place, the privacy and the original ethos and that we're tiering a bunch of shit that's literally horrible for us and horrible for the future. And Chris is the most measured, reasonable, honest person I've ever met. I won't even say in this industry, in our government and then in our industry. And he pointed all this out and we've never had that conversation here. I'm a like, we've never talked about the privacy of stablecoins because we were just happy to get something done. Gary. I saw. Yeah, go ahead Dave. Yeah, go ahead Dave.
- [17:32]
B
Well, I mean look, I hate is I'm not rendered speechless often, but I think that, that there are two pieces and this was a classic one where, hell, even I admit to it, where we're all focused on one thing, namely control and ignored privacy. And, and that is, that is a big deal. I mean he's not wrong. I mean I'm not, not disputing anything that you just said. The only difference between what we have or are getting, assuming the banking industry allows it by their, you know, the amount of money that they're throwing at the politicians. The only difference is, is it. They can't control what you buy. The government can't control. It's up to, you know, and stablecoin issuers. It'll be so competitive. If they do start trying to control what you buy, those stable coins will be the ones that people will avoid. So, I mean, it's a control thing, but privacy is right.
- [18:28]
A
But he, but he, he thinks that in a world where the pend swings to a different kind of government that we currently have right now, that there's nothing in the Genius act that protects us from that happening.
- [18:39]
B
No, there's nothing. The only thing that protects anything is up to the Supreme Court to invite to talk about the fourth amendment of the Constitution. That's pretty much it.
- [18:49]
A
Right. And he said if we had a central. And he literally said if we had a central bank digital currency, he's like. Which we all feared so much, including myself, we would have Fourth amendment protection. And we do not with private stablecoins in the Genius Act.
- [19:02]
B
Yeah, well, that's true. I mean, I think it's, it's interesting. It's definitely an interesting take. I, I need to process that. But what I would say about clarity is. My guess is, is we'll hate it. I think that the banks will put lots of poison pills against defi in there. The fact that, that the banks have the ability to do this at all is, Is disgusting. But it's disgusting because we have so much money in politics right now that, that the politicians are bought and paid for. I mean, the bank shouldn't even have a seat at this table. They've been stealing, literally stealing $100 billion a year from their depositors for quite some time now. And so the fact that that's okay and that they can take some of the. In all likelihood the north. I mean, north since the financial crisis, well, north of a couple trillion dollars of effective subsidy and then take a small percentage of that and put it into the coffers of all the political campaigns so that they have the influence is one of the biggest travesties out there. I mean, it's not as emotionally. It's not as emotionally horrible as what you're seeing with Epstein, but arguably it's worse in terms of the, the impact on society. So, you know, it's, It's, It's a crazy world that we live in. And, and it's not, not like anyone disputes these figures, Scott either. I mean, that's the funny thing. I mean you just, you don't hear it. Nobody disputes it. I mean, it's like JP Morgan and the banks. We know that it was $100 billion in net interest difference, of which the vast majority was not in business loans. It was in things like Fed deposits and Treasuries. So it's a crazy thing, but that is what's happening. So yeah, I can understand being negative. That said, if what you're talking about is number go up versus number go down, I think that passage of a clarity bill, which will validate and be a starter's flag essentially for all the traditional firms to move much deeper into this space, it will push the number up. It may not be, it may be, what's it, a Pyrrhic victory, but it will push the number up. And I think that that's something that people need to understand. I personally think it's interesting that people like are saying 60 and you know, higher percent chance of getting passed. I think our market has given up on it or had given up. I thought it was less than 10. Now it seems to be higher. So I, I'm just curious what other people think.
- [21:29]
A
Brian.
- [21:31]
D
Oh, I was just gonna comment on the privacy point. Not an expert here, but I'm a little bit less worried about it. Two reasons. One is actually I'm not so sure the average person really cares about decentralization or privacy. People use blockchains that are not fully decentralized. People are willing to give up their privacy to Google or Facebook for the ease of single sign on. And so I'm not so sure, like that's a big deal for a lot of people. And then the second thing is a bit more toward smart contract blockchains outside of Bitcoin. But there's just been tremendous advances in the use of privacy technology, like zero knowledge proofs. So pretty soon and even now I think like we can prove compliance with existing laws without actually revealing any information about the transaction itself. And so I think as that technology continues to move from the theoretical to the practical, we'll be able to comply with laws and still enable privacy for a number of different use cases.
- [22:36]
B
I mean, one thing is certain, Scott, is that at Paul's, Brian is right about one thing. People don't give a crap, right? You know, the average, the average human being will put any, everything they have into an iPhone and tell and, you know, effectively not care. People Want ease of use and safety. I mean, if you look at how popular. Just, just, just to put it just as even in our industry, if you look how popular Dubai is because of the low tax rates, I mean, and safety. I mean, I'm not gonna lie, I love being there. I mean we have an office there. You know, Ian lives there.
- [23:09]
C
The.
- [23:10]
B
It's a, it's a, it's a great place for business. But do you have privacy? No. 90 some odd percent of the entire country is covered with cameras. So do people really care? I'm not saying this, it's not an important thing. I'm just saying that people vote with their feet and Brian's undeniably right there. Come on, that had to have triggered somebody.
- [23:29]
A
I definitely agree that nobody cares. I just think they will if it ends up being their money. I'm a tail. Go ahead.
- [23:36]
C
Yeah, I mean, look, it's not about, I think the question isn't about whether retail cares. It's about whether businesses or enterprises want wallets that they control exposed with wallet balances and having transactions on chain that are visible to other people. Right. And whether that's a security risk for individuals, which we've already seen become an issue. Ultimately, I have a lot of belief in the space and the development and engineering in the space that if you've got a multi trillion dollar asset in Bitcoin with the ability to build and innovate on it, it's not impossible or crazy to create a privacy layer on top of Bitcoin more natively or even if it's a side piece that settles on bitcoin side chain, whatever it may be, however they achieve the tech, I think that it's ultimately solvable and that kind of falls back into the BTCFI world where I think you can, there's more value in building that kind of thing when it comes to Bitcoin on a hardened protocol like Bitcoin, rather than trying to create bitcoin private, which obviously exists out there, but I think having it natively on bitcoin. Bitcoin is something that's solvable, but is something that we'll see continuing to have demand for as Bitcoin scales into the more institutional and enterprise level adoption. Even these family offices that may not, you know, if they get wallets that are tagged and associated with them, they just may not want all that stuff visible and how they're moving their money or whether they decided to sell some or buy more.
- [25:17]
B
Well, there's, there's two things here. First, there's within the financial system. There are, it's. There's an obfuscation layer that is baked into the cake. Now it's a costly obfuscation layer but you know, if you buy an ETF you, you know, your BlackRock knows who you are or bitwise knows who you are or Fidelity knows who you are etc. Etc. But nobody else does. So that, that's thing number one. Thing number two is inside of crypto. I mean you know bitcoin native. If you, you have the optionality to take delivery that's important. But a lot of people won't.
- [25:49]
A
This space was downloaded via spacesdown.com visit to download your spaces today for all.
- [25:54]
B
The reasons you said. The other thing that's worth interesting is if you think about in the financial system, you know, people talked about why is. I'm not going to shill the coin but I will but I will mention the tech some technical details. If you want to know why Canton Network was one of the ones that was was picked by dtcc. It's because Canton Network allows for, you could call it permissioned blockchains. It allows for you to create permission blockchains. And, and you need that in the financial system. It's not like it's a question. Nobody, nobody wants to buy stock having the entire world know that they've just bought stock. You know, there, there, there's an entire process by which we obfuscate less people who buy less than a certain percentage. And then even after that you have 30 days to report. You know, the reason for this is simple. If you're trying to buy, you know, a controlling stake in a company, you want some time to be able to acquire it before everybody else knows you're trying to. Otherwise they'll just run in front of you. And so, you know, things like that are necessary in the financial system. Now that is not necessarily true when it comes just to moving wealth around, you know, but, but even there, you know, we have this idea in cash and $10,000 is stupid because $10,000 when the rule was passed compared to $10,000 now is a very different thing thing. But the idea that transactions under a certain threshold don't have to be reported, et cetera. But if you're on a blockchain, everything is effectively there. And so there's a lot of things that need to be worked out. The reality is that bitcoin transactions, small ones, no one's going to care. The big ones are the ones that people are going to care about. And that's kind of the way we want it to be. Right?
- [27:37]
A
Yeah. But it's private. I think the fear there, and I think you're absolutely correct, is obviously Citadel can't have their block orders broadcasted. They need privacy. Right.
- [27:46]
D
As.
- [27:46]
A
As you said. But it's yet again, a. The rules that we desire exist for the big players in the institutions, but maybe not for the individual. I think that's what he was getting at. Yeah, they'll have privacy, but you might one day be living on a social credit system where you need to spend your money on groceries or can't get on the bus. I'm not saying that's going to happen, but that's the fear with what he was saying about the genius act and privacy.
- [28:10]
B
No, true. Absolutely true. I mean, look. I mean, is anyone here not seen that Black Mirror episode from a few years ago? You know, it's on social credit score. And then knowing that it's happening. I mean, look, that. It's horrifying. I mean, it's horrifying when sci fi shows start predicting reality. But they do tend to do so in. You know, we've seen quite a bit of that. AI is causing lots of fear there. Right, Scott?
- [28:34]
A
A ton. And I think I'm starting to believe it's justified from the conversations also that I was having there. Mostly from Bill Barheit, who, if anyone doesn't know, Bill's here all the time. He's the CEO of Abra, but he was one of the early Internet coders. Like, ran Netscape, like, really deep, deep in the weeds. He said he hasn't slept in the last 10 days because he got his hands on Cloudbot and his coding again for the first time in decades. First of all, he said, anyone who's doing that, that does not have coding knowledge, you're going to hack yourself. And maybe, I don't know, Skynet's going to kill you. But he was able to put up a firewall and control the VPNs and do it. It's really expensive. It's like 1000 bu a day if you're doing the stuff. But he said that in 10 days, he could replace basically everyone and everything in his life and that it's coming for everybody. I mean, he said, you know, he was showing me it's his chief of staff. If there's an emergency, it calls him on the phone and talks to him and tells him that something's happening. You know, if something. If something happens with an account or there's like a liquidation event or something, it will call him it processed every legal document, full financial history, everything he's ever had. It knows the code names of things he never shared with anybody and discusses it with them. I mean it's absolute insanity. And it's. A couple of weeks in.
- [29:52]
B
There'S. I made a point on Finance Daily this morning, which might help you sleep a little bit better. That is that if you look at the difference between coding and building systems, the people in most companies that are actually doing the coding are the lower priced people, many of which from the US have been outsourced to cheaper jurisdictions. But that the real value are the people like Bill who know exactly what to code. It's not the translation from human speaking to computers that is the most valuable. It is the what are the instructions, what do you want it to do and how do you set it up to do. Now that doesn't change the fact that that coding is becoming much less important. It doesn't change the fact that the ability for people like Bill to do it will be real. But that's.
- [30:44]
A
Yeah. So now he was making the exact point. He was like, don't touch this stuff unless you're extremely experienced or you're just going to open yourself to complete disaster. He was like, it's very, very challenging to allow whatever I want to go out, but nothing to come in to that closed system, you know, to allow this thing to go out and utilize. And he also said like, you know that the whole singularity and self thinking and all that, it's still very far from that. And none of that, that's not what it really is. It's able to anticipate, but it anticipates, you know, in the morning it's like these are the things you need to do. These are the things you should do. These are things you should be looking at. It anticipates. He's like, it's like having 10 of the best chief of staffs ever.
- [31:25]
B
Yeah, I saw, I saw the show where he said that. I thought it was, it was fascinating for people who don't know that is up on your YouTube site already.
- [31:33]
A
So yeah, it was great yesterday Live. I'm Matteo. Go ahead.
- [31:38]
C
Yeah, I've been getting my openclaw all configured, trained and set up and, and there, there may. There's various ways to, to make this easy for people. Simple claw and all these tools. There's also deploying it on a Mac mini. I mean all you guys saw the post but I would say that there's ways that you can get this set up and configured you don't have to connect it to your entire business. You don't have to connect it and give it credentials to your Google Docs. You can just train it up on the things that you want to do and automate and start the process of testing it. So I just wanted to let people know that there are ways that you can get this running. You can start the process of it automating different things. You can give it a personality. You can educate it on your personality. You can talk about your goals, your aspirations. You can ask it to interview you to get a clear understanding of everything that you're working on and everything that you're doing. And then you can set automated jobs for it to provide you notes every morning for crypto town hall, you can train it on all of the past crypto town hall transcripts or anything else that you want to do. It's unbelievable. And yeah, to exactly what you said, Scott. There's people who have multiples of these going and running and they're serving different roles within a company. They're meeting with each other several times a day to talk about next steps and actions. And it's unbelievable. I mean, this is just a couple weeks in. It's completely shocking. And having played with it some myself, I am blown away by the utility and functionality of this. And I'm not doing the risk.
- [33:22]
A
It wasn't. He wasn't fear mongering me. He was more complimenting exactly what it does, but a cautionary tale of what it could do.
- [33:28]
E
Right.
- [33:28]
A
If you're not. If you're not safe with it. So I agree with what you're saying there. I would never give it access to all of those things even if I knew that it could run my life better. Because I'm an idiot. I have no idea what I'm doing. Seems like a terrible idea, but for someone like him, it can run his entire life in ten days. Eric. I don't hear Eric. Do you guys hear him?
- [33:55]
B
Nope. I don't see the speak. I don't see the mute button, but I can't hear him.
- [33:58]
F
Hey, can I go back to where we started, which was your conversation with Hogan and saying like there's a. It seems like there's two markets here. There's the new institutional buyer, which is confirming what I like. That's been my sense. We do not have organic purchasing here and we need these outsiders. So I love the time frame you gave also, Scott, because I think that's very realistic. It takes these people two years. How long's the ETF been lit up.
- [34:29]
A
A little over two years about that. But he made the point that it's really not even the ETF approval, it's the wirehouse, like Morgan Stanley. These guys are coming online literally now. Right, right, right.
- [34:40]
F
Yeah, I think that's the right timeline. These institutions really, you know, unlike us, we're always chasing, hey, how can I make some money tomorrow morning? These institutions don't really think that way. The first thing is, hey, let's make sure we don't get in trouble, let's make sure we don't get sued, let's make sure we have all our documents in place and we'll make the money in three years. We're not going to, you know, blow our entire business on racing to the start. So I think this, and I think our community doesn't understand how they move or how they think they have to go through committees. I mean, it's, it's a process.
- [35:19]
B
That's, that's true, Gary. But, but a couple things. I mean, first of all, you're 100% right as it applies to volatility in the way trading is done. I mean, you know, have, look, I, I was in the belly of the beast for, for many years, right? So I, I, I, I can tell you categorically what you said is true. I think I told the story on this, this, this station, how I was designated by the Internet operating committee in 2000 to rebuild the technology stack from inside Solomon Smith Barney because of this Internet thing. I mean, literally, that was, that. It was called the Internet Operating Committee and this was in 2000. So to understand how far behind the curve these organizations can get, it's crazy. But once they get moving and once it all happens and the starter's pistol goes boom, they move. Now, does they move mean they're going to jump in and push everything up immediately? Of course not. You're 100% right. But it becomes, they're not going to stop. And so once they view their vested interest being in something, there will be investments there. You will see, you will see a flurry of M and A activity. And it's, there's, there's a lot of things that go into it, but you're 100% right. And the point that you're making I think is critical for people to understand you don't get FOMO chasing rally type stuff. That's just not happening. You know, advisors won't say that they will potentially recommend, they do tend to recommend stocks that are moving. That is true. So if bitcoin get they're not in that respect. They're not different than anybody else. But the mechanism that they buy is far more controlled. Right. You're not going to see these ridiculous wicks from, you know, coming from Tradfi, you just won't. Anyway, now we have three different hands up. Eric, I think if your speaker's working, you were up there from before.
- [37:06]
A
Nope, can't hear. Eric. Eric, just drop off stage and yeah.
- [37:12]
B
Just check, check your mic is what I would do because sometimes I push that button and bad things happen. So I don't know Amateo or Brian first. I can't couldn't tell.
- [37:23]
C
We're back to ghost hands. Go to Brian.
- [37:26]
D
I was just gonna say like fully agree that opening up bitcoin and crypto as an asset class and it, you know, will lead to more buying over the long run. It takes a lot of time for folks to get comfortable, allocate a material portion of their portfolios to it. So I think that this is a long term underlying tailwind. But what I was going to say is I actually think there's some short term headwinds here. And this is just looking at the BTC ETF inflows. So 2024 total inflows were 35 billion. 2025, like a lot of folks that wanted to buy via an ETF already did. And so those inflows actually fell to 22 billion. So that was a 37% decrease decline. And then so far this year BTC ETF inflows have been negative 3 billion. And so I actually think like that new demand is falling like quite significantly and fully agree it will build up over time as more folks like do their research and understand what BTC actually is and why they should own it. And they will certainly do that. But I kind of think for like the near term, like there's, you know, it's hard to argue there's less demand from the ETFs versus at least that first year.
- [38:39]
B
I will point out, not that I like dancing on people, you know, doing victory laps, but you might remember a bunch of people, you know, coming out with the notion that when there is a drawdown, when you get the next drawdown, when you see these 30, 40, 50% drawdowns, expect the ETFs to magnify them because people will stampede for the exits. Jim Bianco, who I know was on your show, basically said that I'm not going to ever let that one get forgotten because that was just wrong. And I knew it was wrong. At the time said it was wrong at the time because most of the investors, not all, but more than not the investors in the ETFs are making long term allocations and in fact that we're only down 3 billion given the fact that we literally hit an all time low on Bitcoin sentiment is I think a really good result. So I think that that's important. Right. I mean I'm curious and you don't, you don't think so, Scott, or you do think so or what do you think about that?
- [39:39]
A
No, I absolutely, I absolutely think so. I mean Matt Hogan told me he was like you can look at, you look at the numbers overall and then lost in the weeds. He said last week that bitwise had 200 million in inflows if you looked at them on that huge drop where all the news was about outflows. So I think it's depends on the product, it depends on what's happening behind the scenes. So yeah, I agree generally.
- [40:02]
B
Right. So I think that's important. I also think that the macro news is all I can say is strange. Not strange in the sense of unpredictable, but strange in the sense of people don't know what to do. There was a long conversation on Finance Daily this morning. Morning about what happens that the Fed is likely to cut rates are going to come down and in only one person. And, and I often criticize him. So you know, that's fine. But on this one I think he's right is David Levinson was making the point that you've made many times, Scott, which is the beginning of a rate cutting cycle is usually really bad for the stock market.
- [40:46]
E
Yep.
- [40:47]
B
And. And he was going through his reasons and I agreed with half of them. I mean I'm not gonna. It's not worth revisiting the whole conversation. You can rewind and listen if you care. But the TLDR is that when rates come down, the financial complex suffers for a variety of reasons. That said, out on the risk curve things tend to be okay and do well, but it's usually after it falls. So who knows what's going to happen when war gets in and things go. But the morning data inflation moderating is generally making people think it's more likely. I don't think anyone thinks anything's going to happen before May, do they? I mean I haven't checked Polymarket in the last two days, but I think in general there's no expectation there. Yeah.
- [41:32]
A
Patrick McHenry I think said Memorial Day and that's kind of a consensus for Clarity.
- [41:36]
B
Yeah, that makes sense.
- [41:40]
A
So I have my doubts.
- [41:43]
B
So the other, there was one other topic I thought was interesting.
- [41:49]
D
We got.
- [41:50]
B
Oh, well, not, not Bhutan and not.
- [41:53]
A
Coinbase earnings, I think was an interesting one. I don't know if anybody dug in, but that was kind of the, the story of the last two days, I think. Yeah. Posted a $600 million plus loss, but that's obviously on trading volume and, and retail and you know, so people freaked out about their loss, but then they said that they had earned, basically had 100 million revenue in 12 different other verticals. So I think the real story is them becoming an everything company, much like Robin Hood has talked about and being less dependent on the retail consumer trading, you know, meme coins.
- [42:33]
B
Yeah, the other, the other, other story that I was curious about because I'm still, I still don't know what it is, is the AAVE governance, you know, sending 100% of the revenue to the DAO. I don't know what that does for token holders. Is that good or is that bad? But it does show that. What'd you say?
- [42:51]
A
So above my pay grade. Yeah.
- [42:54]
B
Brian, you have a comment on that one? Because I. We always talk here about value going to token holders. If you want to see a renaissance in any crypto, people are going to have to understand what the hell they're going to get. What do you think?
- [43:09]
D
Oh, sorry, that I, I think the hand was delayed. I was gonna comment on Coinbase earnings.
- [43:14]
B
Well, that's okay, go for it.
- [43:18]
D
Yeah. So I mean everything I was reading said they missed earnings. Analysts cut forward numbers, but obviously it's not versus where like sell side analysts thinks. It's where the street generally came out to and where the sentiment was prior to that. And so if everybody thought that they were going to miss, maybe the miss was less bad than everybody thought, which I think is what is probably leading to the stock up 14 today. And then the second thing is like everyone is pointing to exactly what Scott said. So having this big positive be this revenue diversification. And so in my experience, there's really three things that determine valuation multiples. One is profitability, another is growth, and another is earnings visibility and volatility. And the Coinbase several years ago was completely predicated based on trading volume, which was also predicated on crypto prices, which is this exogenous variable that they can't control. And so just because Coinbase puts up this really great quarter basically says nothing about what their revenues will look like in a year, because that's again determined by crypto prices. And so I think what you're seeing is them put forth this big effort to diversify the revenue sources and that's going to significantly help this earnings visibility and volatility and help the multiple. And so I think, like, that is my sense of what the market is cheering for today.
- [44:42]
A
I didn't even realize it was up 14% today, to be honest. So that's hilarious.
- [44:46]
B
Well, I mean, look, there's no doubt that Coinbase and the whole reason that they've angled where they have on all these acts is they want to compete directly. They want to basically make sure that they don't get flanked by the traditional financial firms. Right. They want to own crypto in the sense of being on the edge and having the first critic keep maintaining their first mover advantage. And that's why they went into DEFI and did many, many other things. But at the exact same time, they want to make sure that as soon as they can offer investments in pretty much everything and all the services that financial services firms do, that they can. And so they're trying to be the first one stop shop. I'm not saying they're going to be, but that's what they want and that's what investors care about. At the same time, their profit engine is crypto. And so obviously, if crypto looks like it's bottoming, people are going to look at Coinbase as the word leverage is not being used correctly in this sentence. But I can't think of a better way. A high beta play is probably better to crypto. And so if people start getting expectations of the market improving, they're a high beta play. Way to. Way to play it.
- [45:59]
A
Yeah. I mean, I'm looking at the chart right now, actually, because I hadn't opened it in quite a while and I mean, it swept the April low. If you're looking at the weekly on that news yesterday, right. On the earnings and then pumped off of it today, I mean, that might. If I'm looking at the stock market and you want something crypto adjacent, I mean, 142 was a better price yesterday, but you know, in this area it's a gratuitous buy. If you're a chartist and you actually believe the narrative of Coinbase's growth.
- [46:29]
B
Yep.
- [46:30]
A
I don't say that often, but that's a hell of a chart right here.
- [46:33]
B
Yeah, well, no, there are a lot. I mean, look, it won't take much for quite a bit in the crypto sphere to have charts that look the same. I mean, you know, all the negativity is, is there. I keep making the point that there's, I think a lot of selling, I think selling exhaustion happened. I think it happened on the 5th. And I think what we've seen since then is showing that now does that mean that there isn't some new old wallet that's going to say, oh wait a minute, I meant to sell at a hundred thousand, now I want to sell at half that price? I mean, maybe, but seems unlikely. And I seen my, see my friend grain of salt up here. You know, being one of the only other people who, who have been saying the same thing as me over the last couple of weeks, I'm curious, you know, what do you make of what's going on today?
- [47:18]
G
Going on today? You know, I'm not really sure. It's, it's so hard to predict what's going to happen on any given day. But what I do want to ask, and I've been listening for about 15 minutes here and I posted a chart in the nest showing the CME open interest which changed in June of 2024. And then what's happened recently with the IBID options, I think my view is that the institutions have been here, I think they've been here since 2017, but they've been here at size after the spot Bitcoin ETFs got approved in January 24th. That's what Gary Cardone said earlier. And so I think the market is so looking at the on chain data I don't really think helps you for predicting the price of Bitcoin. I think what does help you is looking at either Ibid or CME futures because I think that's where the market is controlled by the big players, not the retail. But I do have a question for you, Dave. Did you, did you catch Jordy Visser's presentation yesterday on at Bitcoin Investor Week?
- [48:17]
B
No. Is there a link for it?
- [48:19]
G
I don't know if there's a link for it, but I'll give you the summary here in 30 seconds. So what he said was he said that AI caused the re rating of SAS companies and he said basically large asset managers or hedge funds, they rotated out of those and that's why those companies have taken such a big, a big drop. And we saw what happened with IBIT options also. And so he, what he then said was that sell off has to basically end by the end of February. He didn't give a specific reason why, but he thought that it had to end by February. And I thought that was odd timing because if a 13F is published, I'm assuming 30 days after a quarter close, that would be March and then that would happen, you know, sometime around May. So I don't, I don't know. I didn't look up when 13 Fs are published. But he said they want to reposition so these rotations now are happening. But he seemed to think the bottom, either we, we, we, we seem to hit the bottom pretty quickly if we're not there. And I thought that was plausible, but I didn't, I didn't really figure out, he didn't, really wasn't specific why that sell off had to end pretty quickly. Do you have any insight to that?
- [49:31]
B
Not a clue. But I do think that, that the narrative and I thought Jeff park was the one who first, you know, published it. But you know, Jordy is basically saying the same thing as Jeff, which is that the COR. That the recent correlation of Bitcoin to SaaS companies effectively sweeps Bitcoin lower. When the SaaS companies go, you know, get caught, it's sort of like being caught in the wake. I mean, because there is a tendency in finance to overfit recent correlations. And so you get these crowded trades which cause all sorts of, of supposedly unexplainable moves both up and down. By the way, it's, it's, it's something that I've seen in history. I mean I will never forget 2007. Now you people were like thinking, 2007, that's a long time ago. For me, that's not even all that long ago, which is kind of sad in and of itself. But in 2007 we saw companies. There was a collapse of a Goldman Sachs funded hedge fund that was a deep value fund and it started a run on quote value stocks that believe it or not, created so much turbulence in the market, in the internals of the market in terms of what was correlated and what wasn't that I had my own team would come to me and say Boss, this is a 14 standard deviation event at someone like now. Of course that's absurd. Anyone who knows statistics understands that that's more or less the likelihood of an individual standing on the street being killed by a flying meteor and nobody around them being killed. I mean, it's like it's a once in the universe sort of thing. But the reason that these things happen is because so many people run the same models that the world's not normally distributed. It's not normal. These crowded trades create really interesting effects and Sometimes, you know, just completely theoretically unpredictable effects. I think that's what we saw in the fifth and I think that's what, that, that's what's coming to an end now.
- [51:28]
G
You know what, you know, Dave, because we're similar in age, but I have seen, I don't know, since 2000, since Y2K in the Internet bubble. I don't know, I would say about once every two years I have a once in a lifetime. You know, I watch in the markets once in a lifetime events every two years. Every time we say this, like, oh, this is this, I look this up all the time. This is a six standard deviation thing. And like this should only happen once every, you know, thousand years. I'm like, why does that keep on. That goes back to exactly what you just said. Why do these once in a lifetime events seem to happen every 18 months or every two years? And you're like, like how many times can the yen carry trade blow up? And it blew up in August of 2024 and then it blew up two weeks ago. Nobody talks about that anymore. It's like, oh, remember the yen carry trade? I'm like, I know that thing keeps on blowing up. And so I think it's kind of, I don't want to say comical. I mean I, I don't do the yen carry trade. So does.
- [52:29]
B
But the important thing, you know, the important thing is not that individual events are comical. It's, it's why does it happen. And the reason reason it happens are crowded trades and crowded trades meaning that more people are in a position than would be statistically likely if you just took, if you just, you know, where everyone was coin flipping. And so as a result, that's why the industry focuses on obsessively on things like gamma squeezes. That's why the fact that there's a shit ton of covered call strategies is really important. It may not matter ever, but if you get a move to the upside, that surprises these things and people think all of a sudden lose their bitcoin exposure and they want their bitcoin exposure. You get much more violent moves. And that's why on the downside, we've seen it, right? You know, when you see all these put embedded put strategies, the same thing happened. And a large part of why we saw the fall that we did, it just, it means that that volatility, the volatility of volatility is going higher and it's been higher. And so everyone says, well, this can't happen. I don't think that there is a more dangerous set of words in the world for investors to say. Well, that can't happen because it occurs. It creates people to do things like lever to that point. So just to be specific, someone says, well, it can never fall below X. So I'm going to use leverage that says I'll give myself. If it falls 25% below X, I'll get liquidated. But that can happen, right?
- [54:01]
A
Well, every person using leverage thinks that. I don't mean to interrupt, but we got a message that we need to absolutely be done in the next minute.
- [54:08]
B
Okay, sorry.
- [54:09]
A
No, no.
- [54:10]
G
Hey, real quick, Dave, are you going to go on to another space next? Because I have a really cool theory that I want to say publicly.
- [54:17]
A
Buddy. Buddy. DM him. We gotta go. Sorry. We got to go ahead and wrap, guys. We will be back on Monday. Thank you so much for tuning in.
- [54:25]
B
Are we doing Monday or with. With the holiday or.
- [54:28]
A
We. Good question. Maybe not. We'll be back maybe not Monday, maybe Tuesday. I forget that there's a holidays here, but we do have to run. Thank you guys for listening. We'll figure it out and we'll let you know. Bye.