← The Wolf Of All Streets
The Wolf Of All Streets
BTC Stalls, But Massive ETF Inflows Signal What’s Coming | Crypto Town Hall
00:53:42
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- [00:01]
Dave
Well, good morning, everyone. Welcome to Crypto Town Hall. It is Tuesday, April 29, 10:18am so not doing too bad on time. And here we are, bitcoin trading within 100 bucks of where it was trading yesterday at this time. I was reminded of a Simpsons episode where they showed an American announcer and a foreign announcer describing a soccer match, and the American one was bored, kind of like sitting. He holds it, he holds it. And the foreign one was really excited. He holds it, he holds it. And I wonder if we got a lot of that going on. I think bitcoiners are generally excited. I see Perri Ann is on stage, so I think we probably should start there with Arizona and legislative momentum. It seems like beneath the surface, there's a lot going on, but on the surface, nothing's happening. So why don't you take it away, Perry Ann, if you're available to, you know, what is going on beneath the survey surface?
- [00:58]
Perri Ann
Well, there's a lot happening from a policy perspective for bitcoin and for crypto. You mentioned Arizona, but I'll start at the. The federal level. We've talked about this a lot in this. In Crypto town Hall, but D.C. is really ramping up efforts to create a better policy environment for the crypto space. This is being spearheaded by David Sachs, who's our new AI and crypto czar. And then Bo Hinds from his staff is really the guy on the ground doing a lot of the work. But this is coming directly from President Donald Trump. He wants to make the US the crypto capital of the world, and there's a concerted effort to make that happen. We've had a really hostile environment here in the United States to the crypto industry for a number of years, and President Trump wants to undo that. So on the agenda over the next, I would say weeks and months, is stablecoin legislation. There's a really, really big push to get the stablecoin legislation across the finish line, like as early as this week. And then as soon as that's done, we're turning to market structure. So that's more like the regulatory framework for the crypto markets you mentioned at the state level. So a lot of times the states are first movers in policy, legislation, regulation. So there are. There's also a number of states who have already implemented comprehensive crypto regulatory regimes. New York was the first, which was done in 2013, 2014, they implemented the BIT license. We're now seeing a lot of activity of creating strategic bitcoin reserves at the state level, which is Quite exciting to see. But a lot of times the states will go first. What happens at the state level will then be used to inform and we take those learnings and use them to create policies at the federal level. So it's, you know, that's a lot of times the states go first and then you see, you know, and then that's used at the federal level. So there's a lot of activity happening across the country. It's a really, really critical time for crypto policy. And definitely recommend being a part of these conversations because this is going to shape how the industry can operate here in the United States for the long haul.
- [03:37]
Duane
Cool.
- [03:38]
Dave
Great summary. I mean, you know, it's funny, this weekend I was asked by somebody, why, you know, an incredulous younger person, you know, how could you support Trump? And I basically started with, I said, well, the previous administration tried to destroy my family. You know, considering how many of us are in the, in, you know, coin routes. You know, my son and I built coin routes and, you know, we had to fight for four years against, you know, uphill. And I don't think people truly understand outside the US or even in the normal communities just what it's like to have an administration hostile to an entire industry that we all believe in is the thing that is going to help drive the goals of financial inclusion and the modern markets moving into the next century. So it is interesting that you started with that. Probably a little bit more pontification. We all need this warning for me, but so be it. Anyway, Duane, you have your hand up, so why don't we start there?
- [04:39]
Ryan
Yeah, sure. Good morning. Actually, I had a quick question for Perry Ann. Would do you think that the administration could be on the clock, so to speak, in regards to the midterms approaching, or do you think just overall the general thrust in regards to policy, regardless of the outcome, will be positive for Bitcoin?
- [04:58]
Perri Ann
Yeah, no, you're absolutely right. The midterms are going to play a role in all of this as well. A lot of folks, myself included, are saying we have two years to get this done, not four years. Even though Trump has been elected for a four year term, we really see it as a two year sprint. And I know the White House does as well. If you just go back in political history, it's when you have, I mean, what we had this past November was, you know, really a landslide victory for Republicans and the Republican Party, where you have Republican and the White House and then you have a Republican majority in the House, in the Senate. And why that's so important is because Republicans control the agenda. So that means Republicans get to choose which bills go to a floor for a vote. If you remember, last year, we made a lot of progress on market structure. That's the legislation that helps create the regulatory clarity and really build the regulatory framework for digital asset markets here in the United States. We got a bill passed through the House with overwhelming bipartisan support. We had over 70 Democrats vote for that bill. Why didn't it go to. Why didn't the Senate pass a bill? Well, it's because Democrats had the majority in the Senate. Sherrod Brown, who was the chairman of the Senate Banking Committee, refused to bring a bill forward. So although we got a bill through the House, we weren't able to get a bill through the Senate and nothing got done. So having Republicans leading in all three chambers just makes it that much easier to get legislation passed. We want to get legislation passed because we want to codify this in law. We've seen a lot of activity from President Trump through executive action. He's done a number of executive orders. You have the agencies that are also coming out and doing a lot of things. The SEC is a good example of that. Repealing SOP121, the approval of more crypto products, things like that, all that's great. But without this codified into law, you could have a future administration that comes in and reverses this. It's really hard to undo something once it's been passed in legislation. And we never want to live through another Gary Gensler like era ever again. So that's why the legislation is really important to get done. We absolutely are on a timeline. Two years is really after the midterms. We don't know what's going to happen. It's very, very possible Republicans will lose. It means more than likely they will lose one of those chambers. That's just usually what happens. The pendulum swings in one direction. It always goes back. So we've got a really, really, really critical and important time right now to get this done.
- [08:06]
Ryan
Right. That was one of the reasons I was asking, because, yes, the outcome is questionable. But then on the other side, I was also, you know, basically seeing some comments from Ro Khanna saying that his colleagues have made an about face in regards to Bitcoin, etc. I mean, I don't really know who those colleagues are, but I was just wondering if maybe the overall thrust may have changed in terms of bitcoin and just for reasons they may have, you know, turned the tide, so to speak.
- [08:32]
Perri Ann
Yeah. And I've had some really interesting off the record conversations with Congressman Ro Khanna, Congressman Khanna from California. He's a big champion for crypto. And you know, during the like Gary Gensler era, where the Biden administration essentially tried to shut down the whole industry and they did a pretty good job. You know, they really stifled a lot of activity. Unfortunately, what they did was, was quite successful. But Roe really stuck his neck out and said, you know, he continued to support the technology for all the right reasons. And I had some conversations with him and I hope he doesn't mind me sharing them. But I mean, I was, you know, kind of taken aback when he had shared this a couple years ago saying he went to the Democratic Party and said, I think you guys have it wrong. This is technology. We should be embracing technology. We should be at the forefront of all advanced technologies, including crypto, including blockchain. And Democrat leadership essentially told him we there, we don't care. This is the party's position. This is the party line. There is no amount of information or data you can share with us that would change our position because he was raising things like this can be huge for our platform of financial inclusion. This can be huge in terms of a tool of breaking up these huge big tech monopolies and oligopolies that we currently have. So I really applaud Congressman Khanna for continuing to be a champion for a community when it was extremely unpopular and risky for him to do so. And now obviously the tides have turned and we have seen so many more Democrats who are openly supportive of our community. And it is to people like Congressman Roe who stuck with us in those really hard moments that have made it possible to make this a non partisan issue again, which is really, really important. We don't want this to be partisan. This is about tech innovation, jobs, the economy. This is not about where you sit. We don't really care where you sit. In terms of the political spectrum. This really shouldn't be a political topic at all.
- [11:04]
Dave
Yeah, it's funny, Perry, and you mentioned that because yesterday there was an event that should solidify in everybody's mind one of the most important things, which is utility and bitcoin. And just how incredibly wrong Sherrod Brown and Elizabeth Warren's constant rhetoric, despite proof was, and that was mass power outage due to too high of a concentration of solar energy. But what isn't really generally understood by, certainly recognized by the Democrats, but any bitcoiner will tell you that were there an enormous amount of bitcoin mining to be able to manage the grid in Spain, that wouldn't have happened. I mean, the reality is they probably should have more, you know, what people would call high inertia power. That's euphemism for fossil fuels or nuclear, to be able to respond to grid variations also. But the truth is, is that Texas, the reason that they have gone so strongly towards bitcoin is because bitcoin mining has helped stabilize the grid in a very big way. And that news story, interestingly, is not in the mainstream media today, which I find I find hysterical. I mean, it's almost like we know that the media is very in generally very in with the Democratic party. Yet I did not see one story about it, which to me is kind of funny because it just proves why we shouldn't listen to these people. But we heard nonstop rhetoric from both Brown and Warren for four years about how bitcoin is bad for the environment despite every scientific study that's been done, shows how it reinforces renewables. It also effectively puts to bed the notion that bitcoin has no utility. And it's funny when you see these mass things with real human impact that they don't get picked up and talked about. I don't know if anyone watching and talks about it. I know Richie Torres understands this and Roana understands this, but I do think it's interesting. I mean, you know, does. Does anybody care about that aspect of it in your conversations?
- [13:18]
Perri Ann
Yeah, absolutely. And we have a affiliate organization called the Digital Power Network, which we started at the Digital Chamber, which is the largest coalition of bitcoin miners in the world. And we're driving policy for energy security related to. To. To bitcoin mining. The news that you mentioned, I certainly saw that and agree with a lot of your comments, Dave, that this woke clean energy agenda is not based in sound data, information, anything. I did just want to point to a really great study that just dropped yesterday from Cambridge University. It's the post on my X profile right now.
- [14:12]
Dave
I was gonna go there.
- [14:16]
Perri Ann
But. But a lot of the things we've been saying for years at the Digital Power Network, which is Bitcoin can be a tool to advance and strengthen domestic energy security. Bitcoin mining is a tool to extend more opportunities like in a cleaner and greener energy environment. It's driving investments into clean energy production. Bitcoin mining is literally cleaning up emissions for those who are following things like methane gas capture using bitcoin mining tools. So to have Cambridge University, an independent, credible academic institution, also do their own study, their own Independent analysis that's data driven that also comes to the same conclusion I think is huge. And this is going to be a really, really strong tool for us to be able to take to Capitol Hill to use with policymakers. But we do have, just to answer your question directly, there are many policymakers, members of Congress, those serving in the administration that do care about this, that do understand bitcoin mining or leading a lot of that education at the digital power network. And we're gaining a lot of momentum and yesterday's study was just a really, really good development for sound policymaking.
- [15:41]
Kelly
Did you guys go over any of these stats in it? Because I just compiled like some of the main like takeaways for the, for stock twits as light paper just this morning. I mean the whole story about like dirty energy, not a thing. 52% of Bitcoin's electricity comes from sustainable sources and renewables alone make up like 42% of it. Hydropower I think is 23%. Wind and solar are another 18%. 10%, almost 10% is nuclear. And then even, even on the, the, the quote, fossil fuel side, like most of that is, is from natural gas. I mean it's, it's pretty crazy the report, it's, and it's beefy. It's a, it's a beast of a report.
- [16:30]
Duane
I just caution with Cambridge on their methodology. Be sure to read the disclaimer on.
- [16:35]
Dave
Methodology because they, you know, they, they.
- [16:38]
Duane
Rely on self reporting and IP address.
- [16:40]
Dave
Tracking and it's notoriously unreliable. So just like it's important, I think.
- [16:45]
Duane
Their, their percentage of contacted miners using renewables I think is quite useful.
- [16:52]
Dave
Their geographic location data, less so. Okay, Ryan then Sasha I think actually Sasha then Ryan, I think. I can't remember. I didn't see who was first.
- [17:04]
Jonathan
So one thing I would say is another catalyst which I think can be good for, for, for bitcoin mining is what's going on with AI. Right. Because we, we've seen over and over a lot of pieces around bitcoin mining there, to say the least, very uninformed with bogus arguments about scaling of number of transactions and comparing to MasterCard networks or things like that. And now we're seeing all the discussions were often centered around, oh, bitcoin is consuming so much energy. And now we're seeing Eric Schmidt saying that he expects that up to 99% of electricity consumption is going to be for AI and LLMs and data centers. So I think that that's helpful sort of reorienting the discussion to. Right like the differences in size and where actually bitcoin mining can be helpful in bringing more adaptability in the system to adjust to the demand and to the swings in demand. And there are going to be necessary to be able to service all that AI system.
- [18:18]
Sasha
Yeah, I'll jump in on that. And second that. What's interesting is politicians and higher education both will sit on the wrong side of a subject to the very last minute until they're proven wrong and they'll switch and then history will just forget that they were ever on the wrong side of the subject. So I never, never ceases to amaze me how higher education and politicians will take credit for things even though they were on the wrong side of the sub. We've been saying this for years, as Perriann said about bitcoin mining balancing the power grid. We've been talking about production following for years. I think we started narrowing in on this narrative back in 2013, 2014, saying that the renewable power grid at scale has to have a constant load or it has to have load following. So with bitcoin mining, you can ramp up and ramp down based on your energy usage. We've been talking about that for years. But now that you have AI coming into the scene, which is a variable load as well, where it can require a ridiculous amount of electricity, but not all the time. So we've been treating electricity as this exhaustible resource, which it's not. We're just not building the power systems at scale as we need them because we've never had enough of a load to require 100% of the time. So what we've been saying now for the last two years is that bitcoin mining will be the saving grace for AI Compute because AI Compute is a massive load that when you need the power, you need the power, but it's not constant. So there will be times where AI COMPUTE doesn't need as much electricity and something is going to have to swoop in and take that electricity. And that's where bitcoin mining comes in with its flexible load. And we're going to see this pop up all over the world as nation states start realizing this. And I think it's just time before the Department of Energy realizes that has a vested interest in working with bitcoin miners. And I really do think that there's going to be a national bitcoin mining pool probably popping up at just about every single nation state when they realize that they have a vested interest in working with the miners on the pool level.
- [20:43]
Dave
Yeah, I mean, All I can say is that I wish that our electorate wasn't like dory in Finding Nemo when it comes to, you know, holding people accountable. But unfortunately that is the case. And you know, Elizabeth Warren famously just won reelection against, you know, our collective friend John Deaton because people in Massachusetts have no clue how, how that fact that she has zero fidelity to the truth in pretty much anything that she says. Who knows, a year from now she's going to probably claim she supported Bitcoin and just it wasn't the rest of crypto that, you know, that she didn't like or whatever. I mean, nothing would surprise me. But in any case, you know, here we are, you know, still at 95,000 and, you know, there was an argument over the last few days. You know, people, you know, people have come out of the woodwork saying, yeah, you know, it's such a hype cycle, etc. You know, Kelly, you know, I see you're joining. I saw your hand up earlier. I assume that you kind of wonder about this. I mean, do you see any hype or any froth or euphoria in this market? Or does it feel more like the crypto universe is still selling to the tradfi universe has been buying by ETFs, et cetera, et cetera. I mean, what do you think?
- [21:58]
E
I think the froth is in the right place. I think when you look at the on chain data, the old whales and also the new new whales, large money players moving into acquiring Bitcoin is showing not only resilience, but sort of a matter of exponential increase over the last 12 months, especially over the last about four months with the new whales. So for me, it's kind of like follow the money. You know, we also saw Bitwise CEO, our CIO the other day, talking about the incredible institutional advancements just in the temperature of those conversations around bitcoin, let alone also seeing the stacking. I think the number is somewhere north of. It's somewhere roughly about 750,000 bitcoin held now by global corporations. This includes everything from things like GameStop to MicroStrategy to Meta Planet. The list is only growing. And it's not just those. Those are the ones just making headlines. Interestingly, so far this cycle, I would say since January of last year, we have not yet seen any sort of retail, large exponential increase in retail, which for me kind of signals that we're actually at a pretty good place of market strength with the structures we're seeing in price action and the fact that unfortunately retail has been shaken, being shaken, shaken out and about. With last year's 7 month sideways price action, only seeing large players, the accumulation addresses, stacking in and where we're at right now, $95,000 I think is an overwhelming steal for what's to come. Considering I, I, considering where I think this market's going and the fact that bitcoin just entered the world stage, I think what's really confusing a lot of people is they're locked in on this idea. You know, considering we've had three, three cycles in this four year cycle narrative and people think this is the case and it will always be the case and I think unfortunately a lot of people are going to be wrecked considering that notion because I think that the landscape and the, the environment in which bitcoin lives is 180 degree difference from even where it was seven months ago. I think the fact that these institutions are now waking up to it and not only do you have blackrock and Fidelity out there, you know, selling bitcoin products and promoting this, we're also seeing the charts speak for themselves on companies like Microstrategy or now known as Strategy or Meta Planet. I think that outside the charts itself, I think that the move towards, especially with the trade war and understanding that we're seeing basically the global M2 pushing up and all the different money metrics showing the inevitable which is in every fiat system. Money printing is coming. The devaluation is only getting exponential here because the problem doesn't get smaller. Servicing the debt means that there's going to be more printing and it's going to be exponential. So I think the fact that the bitcoin is where it's at right now is an absolute steal. I also did share up in the top from Perryanne's comments. I, I, I think she's right on the money. I shared a metric I, you know, basically pull from AI. I think a lot of people forget whether you like bitcoin or not. You nailed it. You hit the nail on the head. Dave. I think that the argument that bitcoin is worthless is a tired and overwhelmingly misplaced argument nowadays. Because even if you look at it just from the point of energy consumption and energy usage and also green energy, if that's your full narrative, there's some metrics globally that it's like 30 to 40% of wasted or lost energy that's produced, it shows here that somewhere between 60 to 70% of US energy that is already being produced is wasted or lost. So it seems like just from that metric Alone, there's an incredible value in just capturing that energy and transmitting it, transmitting it into a store of value while also strengthening power grids. I think where we're going is nothing short of unfathomable. And those that are stacking right now and not being shaken out by the bizarre headlines and the 15 minute charts are going to. I mean, I just couldn't be more excited. But thank you for having me on stage, Dave.
- [26:17]
Dave
Yeah, no problem. Nice soliloquy there. So you know the other, other news this, this morning that is interesting. Well, it's not really this morning. I don't know when they actually announced it, but I started digging into it this morning and the market seems to be, you know, you know, kind of slightly starting to stir is Ethereum. The news of the, the planned hard fork, which of course has to get voted on, et cetera. You know, I'm curious if anybody up here cares or thinks that Ethereum sitting here just kind of reclaiming the not so important but kind of hard to reclaim 019 of Bitcoin level matters. Ethereum at 1800 hardly seems like a bull market, but compared to the 1600 it was at two days ago or three days ago seems high. Jonathan, what is your network thinking?
- [27:11]
Kelly
Stock users or Ethereum? It is overwhelmingly bearish. Still, nobody's happy. If you look at like any of the message traffic, a lot of people have moved on. There's been a definite rotation, at least stated from our users that people have rotated out of Ethereum. And I mean listen, Ethereum's been a horrible painful experience. I mean you had 14 and a half months of pain from January 21st through January 23rd and then you had like nine and a half months of screw this from February through November of 2023 where it was just sideways price action. Four months of joy between November 23 and March of 24 and then seven and a half or seven and a quarter months or so of a slow drain south. I mean it's just been. And then most recently we had a one and a half months of like, oh yeah, let's go. That was October to December of 2024. And now we're in what, almost five months of horror. And the picture upgrade is like what it's like. It's the same thing, oh is we're going to make it cheaper, more scalable, better. We'll see if this one will do it. But that's been kind of the MO for Ethereum for last number of years is the next thing is going to make it Better and it just doesn't.
- [28:26]
Dave
Yeah, it's interesting. I'm of two minds in this. First when I hear you say that I think it's a short term tradable bottom because that sounds like capitulation. But the problem is, is, you know, Ethereum's market cap is indicative of a successful tech company and a successful platform and it's hard to understand whether that's actually going to be the case. I guess institutional adoption will matter anyway. Ryan, Ryan, you had your hand up first then. Kelly.
- [28:58]
Duane
Yeah, I agree with you actually 100%. It's hard because everyone wants to push towards utility. You have Michael say they're either even looking for a way to put utility on top of Bitcoin. You know, Ethereum, you know, has utility and is one of the most utility used networks in the ecosystem, including all of its layer twos of base and arbitrum and all the dexes and the lending and everything that's happening. At the end of the day it's, it's just about the speculation and the investors and institutional capital coming in. So until Ethereum starts capturing the larger institutional capital and even nation state capital, I don't think we're going to see it move. I don't think utility is enough to move these networks anymore.
- [29:47]
Perri Ann
Cal.
- [29:48]
E
Yeah, on that note, you know, I think there's still a disconnect that a lot of people in crypto that look at, they get blindsided by just the speculative coin price and then the other side of that, the actual utility and integrations, you know, there's a Ted Pillows actually shared that there's about a 62% surge in active addresses which obviously shows is a massive amount of utility in that regard. But also in BlackRock Biddle Institutional Liquidity Fund, I think it's $2.5 billion and 2.3 billion of it is on the ETH network. But on the flip side of that then everybody says if coin price not go up, that project must be dead. And in reality I think, I think a lot of the altcoin market speculators are going to kind of have a rude awakening going into the next three to five years where there are going to be, you know, coins that perform very well. But I think that's going to be more narrative based than actual reflective of, you know, directly tied to what this project is actually integrating and being utilized for. But I, I don't think ETH is dead. I think it's just changing dynamics of how, how it's going now do I think it's going to go to $22,000 like people were claiming last cycle, I think maybe, but I think that's an irrelevant sort of argument in this market cycle where the narratives are so, so, so disparate across, you know, an exponential number of opportunities that are out there. I think the narrative is going to go, speculation is going to go where the narrative is flowing. So will E do? Well, I, I think it's a little bit of a local bottom, sure, but it's among that diversified sort of thought, I think.
- [31:30]
Kelly
Jonathan this is back to like how Ethereum is and this is really just altcoins in general, but Ethereum for, for representing all the alts is actually the word one of the worst performers. But I remember when it was I was trying to find the article I wrote about it last week or a couple of weeks ago. But the number of Ethere addresses that are, that are at a loss is, is lower than it was During FTX Collab FTX's collapse and lower than during terrorist collapse by it was like 50% for both of those but now we're sitting at in the 80% range. I haven't checked it in in a few days it might be different but yeah, Ethereum and altcoins in general since about the middle of the month the on chain analytics, no matter which way you measure it, there was either a bottom established or it has been found. But if, for if you're like somebody who likes short term speculation is looking for some something that screams oh my God, this is like just stupidly overdone. It's been like that for a couple weeks and it's not going to take much to push these things up once they start to push up because there's nobody involved in them right now.
- [32:38]
Dave
Yeah, it feels to me like the Ethereum, I mean not all alts, but a lot of alts and a lot of the ones that people who are building tokens that we don't really think about are really going to be impacted by regulatory clarity here because it will allow real money to come into those ecosystems and allow real use cases to emerge. And people are trying to anticipate that. But I don't really think the crypto market is doing a particularly great job in doing so. I mean it feels like every time I look it looks like the correlation between pure memes and other tokens is very high. I mean Solana okay, I understand why that moves with memes because it's the house in the Meme Coin casino, but in general it feels that way. I Don't know if Jonathan, if either you or Kelly have been noticing this, but it looks like the correlations inside of everything other than bitcoin are pretty high but all looking kind of icky. I know where my portfolio is and I can kind of see it there, but it feels like that now. I don't know if that matters, but I think at some point my thesis has always been the back half of this year. You'll see a sorting function where real utility is going to get rewarded relative to none. I mean, I don't know what you're seeing.
- [34:03]
Kelly
Yeah, yeah, there's a lot of the, the people who like use stock twits who, who are like those C suite people. There's a lot of tickers that they pay close attention to that that don't generally get a lot of buzz. But you know, if you ever think about like an altcoin cycle, I don't know if we've ever seen anything like we ever did before, but certainly there are going to be some who do like they did back then like Avalanche essentially is one of them that I can think off the top of my head. Chain link. I mean there's a lot of, there's a lot of altcoins that people are aware of, they know about, but they don't necessarily generate a whole crap ton of news. The gaming space is, there's so much money in that right now it's. It's insane how much Money is in Web3 gaming. You have these networks that are just like pitch us a deal, we'll give you millions of dollars to, to do it. It's. But yeah, real world token tokenization is a asset Tokenization is a big growing thing and there's a lot of sophisticated mature networks that are operating more like a business than an altcoin and we'll probably do very well in the next cycle.
- [35:18]
Dave
Yeah. So the last story that I thought was worth talking about, I'm curious and, and especially if Perri Anna is still here, is there was a couple interesting threads from Caitlin Long, mostly about how the Fed still has retained some of their anti crypto and anti bitcoin bias at the same time that pressure against the Fed from the administration is going on. I was wondering, I don't know if you're still at your mic Perian, but is there any talk in the administration about, about this? Because it really look, the Fed having being a regulator as a private company is something that I doubt seriously would be politically a hill anybody wants to die on. And to the extent that, that, that their activities is so obviously biased toward their owners, which are the big money center banks. It feels really like an interesting political lever that could get pushed, but the kind of thing that would probably show up inside Washington. I don't think the media, I don't think the actual public really cares about any of this inside baseball stuff.
- [36:27]
Perri Ann
Yeah, I mean it's, I, it's been a, an issue for a long time. Right. I mean, Bitcoin really disrupts the kind of, the purpose, the entire, you know, the whole focus of what the Federal Reserve does. So, and you can't put anything past them. And I have a lot of respect for, for Caitlyn Long, I think she's always pretty much right on the money. So it would definitely reference her, her comments on this. But you know, I think the administration does understand that and I think there's just an inherent conflict of interest and it's hard to know exactly how to, how to resolve that. I mean, the Federal Reserve is one of the most powerful entities on the face of the earth. So to introduce, you know, a new digital asset, a new kind of competitive monetary system that will obviate part of what the Fed does. It's, you know, it is a really tricky conversation to navigate. I mean, the way we've always navigated is we don't want to, we don't want to position Bitcoin as a competitor to the Fed or the US dollar. It's just not a helpful conversation to have again because you're up against an extremely powerful entity and it's almost like creating an unnecessary enemy. The way that I've always positioned this conversation is that Bitcoin can be a tool to enhance and strengthen the US Dollar. When you look at things like the strategic Bitcoin reserve and this being a tool to strengthen our financial security, or if we look at bit bonds, kind of an extension and kind of the next step once we get through strategic Bitcoin reserves, being able to make our bonds a lot more competitive and attractive to international investors. So the relationship with the Fed is going to be a long term thing to work through. I do think the administration understands that inherent conflict of interest and is navigating it the best they can. And in the meantime, I think it's really important that we position Bitcoin as a tool, tool to strengthen national security, economic security, financial security, and let's not make unnecessary enemies in the highest places in the ranks. Over the holidays I did an interview with Natalie Brunel and I am seeing on my feed whoever Thomas Jeffersaurus is, who looks like a real interesting dude, has a poll going right now, and who's the most annoying woman in crypto, me or Natalie Brunel. So I think together we're probably extremely annoying to this Jeffersource dude, which I take that with a badge of honor. But I met with the Fed back in November and brought up, when I was meeting with board of directors of the Federal Reserve System, and I brought up the strategic Bitcoin reserve in my meeting with them, and one of the members of the board just had this insane reaction where they're like, this is. I mean, they were cursing, saying this is basically the dumbest idea they had ever heard. There's nothing strategic about Bitcoin. And literally was like, okay, the meeting's over, and got up and walked out of the room just by me bringing up the topic. So that does kind of give you a little insight into where the board is, where the Fed is on, on bitcoin. And just, you know, the challenge we have at really overcoming that and the challenge the administration has leveraging that relationship and navigating what they're doing to support and advance bitcoin and crypto in the United States. But that inherent conflict that. That, you know, is ever present at the Federal Reserve.
- [40:47]
Dave
Yeah, it's. It's obvious to people who have studied this that the Federal Reserve was granted the powers that it was granted in 1913 to allow, basically because it was established that way. And that legacy is insane. It's insane for a variety of reasons. There is no way, if you had a blank sheet of paper today, that would create the monetary entity of the Federal Reserve with the regulatory power the Federal Reserve has over the system. You would never do that. What you would do is you would have the regulatory power in the OCC or the Treasury Department or wherever the hell you want to put it, but not in the private entity, that the Federal Reserve would have to be auditable in terms of how it makes its decisions, and you would. Would leave the monetary setting arm as the independent entity. I think that the problem that we have here is people conflate Fed independence across all of its functions, and not just about its monetary function. I mean, I'm curious. I mean, I know the policy wonks in Washington get this. Senator Lomas obviously gets this. But my strong suspicion is most of the people that you talk to in D.C. heads would start spinning if you started saying what I just did. Am I wrong?
- [42:13]
Perri Ann
No, I think that's right. I mean, I think some people get it. But most people really don't. Most people just aren't going to go into that level of depth. And I think most people, I mean, if you look at our current generation, I mean, the Fed was created in 1913 and we went off the gold standard in 1971. So most people working in D.C. see, this is all they know. All they know is fiat. So the whole concept of bitcoin having a limited supply where you don't have, you know, a central bank, you know, centrally planning the economy, most people, it's just a concept that's beyond anything they, they, they've ever thought about or even knew existed. I mean, I was an economic major in college and I just kind of remember, like my own wake up moment was when I realize that economics is not science, it's a theory. You know, it's like, it's kind of almost like religion. If you take a religion class in college, they walk you through, okay, there's many different religions around the world and everyone kind of has to choose which one or not. But you know, most people choose one that resonates with them. But it doesn't mean anyone's necessarily right or wrong. There's just many different ones similar to economics. There's many different theories of economics and different countries subscribe to different theories. But what we were taught is it's science, there's not other ways to think of it. There's not other theories. There's not, you know, there's just one way and that's it. And that's indoctrination. And most people, you know, living, working in D.C. today were indoctrinated into the fiat system and don't even know. Yeah, that there's other ways to, to do economics, that there's other ways for people to interact and transact, you know, in their daily lives. You don't have to have a central bank, you don't have to have central economic planning, you don't have to have fiat. That's what we have today. But it doesn't mean that there's not other options. And that's why bitcoin is so special, because it really was for the first time in our lifetime that there was another option put on the table that people can peacefully opt into. They can choose to do that on their own. And you know, that's what, that's what we're fighting for. That's what it's all about. It's not about number go up, it's not about making money. It's about ensuring people have options and how they're going to interact and transact in their daily lives and they have an option to opt out of the fiat system if that's what's best for them.
- [44:47]
Dave
Well, you know, I agree the fish, the first two words in my X profile are economic freedom. So we understand it. And just for the record, I completely agree with you generally about economics. But then there are the cadre of people in Washington, including those who are claimed self proclaimed economics majors, that think they can repeal the law of supply and demand, that is science. Human incentives will always be something that matters. Where the art, philosophy, religion are on the edges. I don't think anyone's going to argue that if you tax something you'll get less of it. I don't think anyone can argue that if you, if prices go up, that demand will shift away from it, etc. Etc. The difference is, and I have this argument all the time with Mike McGlone from Bloomberg, is if your entire conception of commodities trading is based on commodities that are elastic to price, you cannot use that same model for bitcoin, which is completely inelastic because it's a fixed supply. And I think that's what you were getting at. Those sorts of things are more science than anything else, but around the edges there's a lot of art anyway. Ryan?
- [45:57]
Duane
Yeah, I love what Perry Ann was saying. It comes down to the word sovereignty, this idea that we control our assets, we control our money, we control our banking. And in the political arena, especially in the United States, there's just a lot of hubris with the quote unquote religion that you've selected, whether it be on the right or the left. And it's what I believe is truth and everyone else is an idiot. And that's kind of the system that we've found ourselves in. There is very little thought outside of, you know, one's worldview, very little thought out of sight of one's echo chamber. And the reality is if you take a step back and do some critical thinking and you'll realize that our government and our political system and our beliefs were formulated by people that are, that were our age or even younger than we are now and not of, you know, above average intelligence, a lot of them. So the reality is the systems that we find ourselves in are not above being questioned, they're not penned by God incarnate and must be followed. They need to be reviewed, they need to be altered and believe it or not, they should be iterated on over time and they will get better. And I think bitcoin is a great example of a better monetary system system than what we currently have. And when you talk to the Fed and you talk to anyone in the government, you know, they want to hold to the old system, they want to hold to the banking system, they want to hold to the safe harbors of what they know, because it's, like I said, safe. And they don't have to challenge themselves and they don't have to challenge the status quo and their echo chamber. But the reality is, is it's a disease, these people believing their echo chamber and believing their political beliefs without questioning them, without analyzing them, without taking a step back, saying, wait a minute, like I don't have freedom to Send my friend $1000 from my bank account without being questioned of who's it's going, who it's going to and why am I sending it. I'm sorry, that's bullshit. That's not okay. That's not freedom. And we need to rethink these things. And that's why I think Bitcoin getting into the US the way it is is a massive step forward.
- [48:22]
Dave
Well, yeah, I mean, I agree. I think there's a couple of assumptions that the Fed makes. I mean, the person who walked out, I mean, I'm not sure who I find lower on, on the totem pole in intellectual ability, the moron who called Daddily and Perry annoying or the Federal Reserve guy who walked out of the meeting. I mean, neither of them should pass a high school economics class if they actually had a freaking clue, but so be it. The other big thing is the Federal Reserve and all the banking system have this religious belief in fractional reserve banking, just in general. And I'm going to start sounding like Caitlin Long and she would be smiling if she were listening to this. But the truth is fractional reserve banking evolved because the system of capital formation required it.
- [49:12]
E
Why?
- [49:12]
Dave
Because we had literally no freedom of inflation information and movement of information across the globe. Capital was very regional. Capital was very specific. And so if you wanted to start a small business in Peoria, Illinois, you were going to the savings alone in Peoria, Illinois. And there was no way there was enough capital in Peoria to necessarily, you know, I'm picking on that one just because it was industrial at one point, and I went to Northwestern. But today capital is global and mobile and industrial information travels at the speed of light. And you could make a very strong argument there's no need for fractional reserve banking to create the pool of capital necessary to start businesses. And that's Obviously something like Caitlin with Custodia would say. But the fact is that statement itself is anathema. And that's why in the stablecoin legislation they have this silly belief that they need to keep yield away from stablecoins because they have to. After all, if you get up stablecoins with yield, then checking account balances will go to zero. But here's the joke. The funny part is once the stablecoin legislation passes, once there's a market structure bill, the checking account balances are going to go towards zero anyway. Why? Because you'll be able to have the velocity of money will go dramatically higher because there won't be the frictional cost that there is in the ACH system. And so people will. The business models that win will be the ones that sweep unused or unneeded monies from checking accounts into savings vehicles that will of course pay much higher interest than the money center banks pay their savings account. And so people don't understand that that's a bigger Trojan horse than Bitcoin because Bitcoin until it 10xs isn't even on the radar of competing with fiat. And so right now we have a generational opportunity as a government to using Bitcoin bonds and strategic reserves to support the dollar by getting in early into an asset that almost certainly inevitably will 10 or 20x when it does 10 or 20x. Well now that's a different situation. And that's where Ryan, the philosophy behind bitcoiners and by the way, I agree with that philosophy. I'm just more tactical about it. You don't fight straight on with people and I think that's the issue. Anyway, I'm sure you do differ on that piece.
- [51:31]
Duane
No, I think there's a lot of strategy there and you know, regardless, I wanted to comment on one thing you said and you know you have a lot of listeners here and if they're looking at startups and they're looking at companies and what's coming next, the smart startups right now are already prepping for the smart contract ecosystem that will replace all the different utilities of the current banking system. So the ACH payments as you mentioned. Right, like building out in smart contract systems to replace all the functionality of ACH systems, all the lending and the credit systems and we've already have lending on a lot of these platforms but having more institutional grade lending, credit, ACH payments, payroll, like all that, like the smart startups are already building that stuff for the stablecoin economy.
- [52:27]
Dave
Yep, that I agree. And I think that's a rabbit hole we probably don't want to go down to today because we're coming up against time once again. Interesting conversation. Anybody else have any closing thoughts? Because I think that, you know, with token 2049 going, audiences and speaker lists are down and the market is basically sitting at the same price. I mean, I guess a few hundred dollars higher than it was when we started, but the volatility for. For what's going on, it seems like we're kind of caught in this. This amber right now, which probably isn't the worst thing in the world. Maybe. Maybe it's a good thing, but it is what it is. Okay, well, if there are no. No other thoughts, we'll see everybody back here tomorrow. As Scott is fond of saying, everybody should understand that the people who are speaking are doing this, you know, with their own time. You should give them a follow. There's a lot of incredible thought processes. And regardless of what some idiots think, you know, Perry Ann is not annoying, nor are any of the other speakers up here particularly. And I think that, except for maybe me. But I do think that following people and understanding that people are giving their time is important. But we'll see you back here tomorrow for Crypto Town Hall.
- [53:41]
Perri Ann
Thanks, Dave.