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BTC Strategic Reserve Announcement Friday? | Crypto Town Hall
01:08:51
BTC Strategic Reserve Announcement Friday? | Crypto Town Hall
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- [00:01]
Scott
What's up, everybody? Happy Wednesday. Welcome to Crypto Town hall. Every weekday, 10:15am Eastern Standard Time here on X, we are joined proudly by the ghost of Mario Novel. You guys may remember a time when Mario used to speak on the spaces. We used to hear his voice and not just stare at his avatar. He's busy traveling the world, interviewing world leaders about more important things than crypto price today. So I think we'll give him a pass today. Ran, I don't know what his excuse is hanging out with his kids, you know, but you guys get to hang out with me. I guess you can accept that as your consolation prize. And with our amazing panel that we have here every single day. And, man, this volatility is absolutely wild. Obviously, you know, Sunday, one of the best days we've ever had in crypto. Monday, I think the second worst day we've ever had. And then pumping right back up above 90,000. Today we were already, you know, up in the high 80s, kind of floating around, which is where we are now. But in case you missed it, seemingly the reason, since we always need one, right, for everything that happens in crypto, but seemingly the reason that we had sort of this mini pump this morning again was that Howard Lutnick made some comments about a reserve. This was the quote. So bitcoin is one thing, and then the other currencies, the other crypto tokens, I think will be treated differently. Positively, but differently. Also said that there will be a very clear announcement on the structure of the strategic reserve. A bitcoin strategic reserve, he said, which President Trump wants that will be announced at the summit, the White House on Friday. So that's the title here. We have very clear news apparently coming on a bitcoin strategic reserve. And seemingly the altcoins will be structured differently and maybe not a part of that reserve. Listen, we know that this changes every single day. We know that when Latnik speaks, it's not the same as when Trump necessarily speaks. But seemingly we're going to get a lot more clarity on this reserve in the coming days, specifically on Friday. As for that White House crypto summit on Friday, guest lists slowly being released. Michael Saylor, David Bailey, Matt Wayne from Paradigm Exodus CEO JP Richardson Multicoin Capital Kyle Samani, World Liberty Financial co founder Zach Witkoff, Chainlink co founder Sergey Nazarov, Coinbase CEO Brian Armstrong, Vlad Tenev from Robinhood, Kraken's CEO Arjun Sethi. A lot of heavy hitters in the industry being invited to the table for Friday's summit will Be interesting to see what comes out of it. Apparently there's an event afterwards as well that a lot more people will be going. Saw a list today that seemed like it was not necessarily real, had all those names, but also cz, but I can't imagine that necessarily CZ is going to be a part of that. But I guess that list is ever increasing since it's only been a couple of days. Some great representatives of the industry that will be there. So I mean, let's start here with the whiplash, I guess in price, but also whiplash in narrative around the reserve because I think that's the story right now that's largely driving prices but also largely has people really confused because on Sunday, obviously on Truth Social, Trump said, you know, xrp, Cardano, Solana and now Lutnick sort of backing off of that and saying Bitcoin Strategic Reserve. Any anyone on the panel have specific thoughts on this? Just raise your hand or jump in and let's get the conversation. Let's get the conversation going.
- [03:45]
Ran
Yeah, you said it. Well, Scott, it was quite the weekend. Just a wild up and down ride. I will say one of my favorite parts was the hour in between Trump's two tweets where Bitcoin and Eth maxis were just going absolutely insane thinking that they possibly weren't going to be part of the reserve. And the timeline on crypto Twitter was just hilarious until he of course came out and clarified that yes, of course they're part of this. So that was fun. And yeah, just wow. What, what a week of weekend of up and down. Also disappointing though, I must say. It's just, it seems like so much manipulation and we see that people are showing the, I guess the person that went super long right before the announcement went short right afterwards. I think someone said he's up over 3 million or maybe it was even 30 million at this point.
- [04:37]
Scott
A lot more. Yeah, just, just for clarity. So the first trade was long Bitcoin and ETH with 50x leverage. It was on hyper liquidity, deposited 4 million. He or she, excuse me, deposited 4 million and made about a $6 million profit on the long, but then kind of more head scratchingly went short. Ethereum massively right at the top with 50x leverage. So for anyone who doesn't know what leverage is good, I'm not going to teach you, but if you do, you know, a 50x leverage short means a 2% move in. Ethereum would have liquidated them entirely and by the way, they doubled down with their profits apparently. So Took that long, took everything, and went short. And now I think that account sitting was sitting at about 80 million off of the 4 million.
- [05:25]
Ran
Wow.
- [05:25]
Scott
On the short.
- [05:26]
Ran
Crazy.
- [05:26]
David
Yeah.
- [05:27]
Ran
So either a crazy gambling degen or someone that had insider info, which most likely the latter, which is a shame that it's happening. And the markets are still so small. The entire market gap of the space is at a point where manipulation can easily be done to those. To those numbers. But here we are. Hopefully we get some interesting and good news on Friday. I'm not holding my breath on any specifics or positives, but we'll see.
- [05:55]
Scott
I think it's positive to be furthering the conversation in general. And we're obviously a fickle community and people want everything now, but this is making progress, you know, and I think even the fact that there's a roundtable on crypto happening at the White House this Friday to some degree still is in the camp of, you know, promises made, promises kept. They're continuing obviously in the right direction here. Go ahead, Dave.
- [06:24]
E
Yeah, I think that, you know, the. Taking a step back is kind of important here. And there was an interesting tweet this morning from somebody who basically showed the chart of 2020 post Paul Tudor Jones, you know, having. Making the first proclamation of any major traditional financiality that bitcoin was the fastest horse. And we're looking at whatever. I know I remember that time very, very carefully because I managed finally, you know, within a month so of Mr. Jones making that comment, being able to set up 401ks, which at the time was really, really hard, to do a checkbook, ira, whatever, and putting some money into bitcoin. And it took months. And if you look at the chart, there were some. There was a Bart Simpson pattern, blah, blah, blah. It's actually interesting if you overlay that with where we are now for the previous N number of months, it looks very similar. And, you know, so someone who's a chartist, who I actually respect, said, oh, no planet is this possible, because what happened after that was bitcoin tripled. Now, I actually think that's my base case, although not necessarily quite as fast as it happened in 2020, because Paul Tudor Jones was one thing. We still had a hostile administration. There was China banning it. There was all sorts of things that happened in 2020. We now have the administration of the United States of America, not just the President, although, you know, who knows, you know, what he really thinks. And not just his family, but the Secretary of Commerce, the Secretary of Treasury, the HHS Secretary The Vice President. Are all, all bitcoiners all own bitcoin or. Well, if they, maybe they divested it, I don't know. But they all own the bitcoin and understand it and we're having a roundtable at the White House. Now do we, do I expect anything to come out of this meeting to be particularly bullish? No, actually I expect people in crypto to get their hopes up and to be a little bit disappointed. But at some point all it will take, the spark that needs to happen is effectively one more large pool of capital deciding to allocate because the supply just isn't there. Most of these moves are on relatively low volume until derivatives get involved and then the volume spikes because it's people trading with themselves. And you know, that's the up and down thing. So it's really important to contextualize what's happening here. You know, this is, I don't see negative, you know, you know, there aren't really headwinds here. I mean the, the headwinds are the headwinds or macro? Well, macro. Let's talk about macro. Macro is massive tailwinds. I mean, I heard your show with Noel this morning and you know, Noel, who I dearly love and is awesome loves, does not want to get into hyperbole, but when you hear she made the statement that Germany is giving up a little bit of their fiscal discipline, understand Germany is the European Union's parking brake. They are the only country in all of Europe that doesn't have a massive debt to gdp. Well, maybe there's some smaller ones, I don't know. But of the big ones that does not have a massive debt to GDP and has had a central bank policy of effectively being worried about inflation. Now obviously because of the Weimar Republic, they still have memories, that's reason. But if Germany is going to start loosening the financial spigots, then don't tell me the bat. We have a bad macro situation because that is a signal in a world where everyone goes into competitive devaluations, that is the signal of liquidity spigots turning on. If in fact this morning's employment report is true and truflation, which is seemingly accurate, are true. You know the ism stuff, you know, these surveys don't really mean as much as the actual hard data. If it is true that we are going to have liquidity bigot, that we're going to see weakness due to the employment report, etc. That Bloomberg and other people think are going to happen, the Federal Reserve is going to Act. I mean they may take a couple of months to act, but they will act. So no, I don't think macro is, is, is. I think macro is actually quite constructive. Is I think the point.
- [10:34]
F
Amateo Yeah, I think on the macro piece it's constructive in certain ways when it comes to future liquidity. But obviously we're seeing weakening in markets. Scott I saw you post the job report miss 50% down of expectations. There was also a piece that was released that IRS refunds are 32% lower on average this tax season. And we've got January data showing consumer spending fell for the first time in two years, largest monthly decline in a year. So overall I think we've got a lot of economic pressures. There was a great post by Chris Patel, I don't know if anyone saw that, but basically saying that he anticipates rates are going to fall faster than people are assuming because Trump is sort of forcing the hand of the liquidity spigot. Right. He doesn't want to refinance the rate at a higher rate. He wants to get the 10 year to come down. The only way to do that is this all over the place. Tariff pressure, short term pain in the markets. And I think Fed pivots based on economic data, not based on the market and not purely based on inflation metrics, although they've had their target. So I think we're seeing quite a bit of economic data that's showing slowdown. The predictions of the recession are getting higher. I think all roads lead to liquidity being turned on. I mean, I think that then the secondary question is where are, where's retail going to be at with actually having the economic resources to participate and how much of a slow grind is that going to be? But I think obviously institutions, we're still seeing more high volume accumulation on Bitcoin pretty strongly. So I mean, I think things are looking good, short term pain, long term gain, but we haven't seen these kind of economic factors in quite a while.
- [12:38]
Scott
David?
- [12:40]
G
Yeah, I was going to make a simpler point which is that the macro outlook is anything but clear. And I think for me that's important terms of adoption of something new by people that have yet to be involved in crypto. I was talking a little bit this weekend on one of the spaces that was formed because of Trump's tweets that I think traditional investors, the larger ones, are going to need to see divergence between traditional assets and crypto to the point where they can't avoid it. This past year, equity markets were strong Wrong. So, you know, if you did what you normally do in terms of long, short equity, you probably made 30 something percent. The fact that, you know, your local crypto manager made 60% or 70% last year, I don't think does anything in terms of moving you to, you know, absolutely have to go ahead and invest, you know, in the asset class. And you know this, you know, when, when your book that exists, your investing book that exists is doing things that you need to react to and need to be on top of on, I don't know, even a minute to minute basis or at least half a day to half a day basis, your ability to go ahead and focus on another asset class, some burgeoning opportunities is thin. Your bandwidth isn't there to be able to do it. And so I think the macro picture maybe just either becoming clearer or, you know, the market, you know, having well digested the fact that we have a very different administration here and we're going to need to go ahead and have a different playbook in terms of how we go ahead and trade or how we react or the volatility, you know, all that needs to go ahead and be, you know, I'd say settled before there's this major uptick in investors screaming for crypto adoption in their books.
- [15:11]
Scott
So much to unpack there. And David, I think that the main point you're making is that markets hate uncertainty and we have boatloads of that right now. It's just that very hard for anybody to be confident in what's coming next. Which makes, if you view Bitcoin as a risk on asset, very tough to sell in this exact environment.
- [15:32]
G
Yeah. And I think that people that are thinking about crypto and trying to make rational decisions about it, the things that happened over the past couple of weeks, whether it be with Trump and Melania Coin, whether it be with Bybit, whether it be with Eric Trump shilling, all that stuff doesn't go ahead and give people who like, you know, predictability and sanity, you know, the warm and fuzzies. And I think that, you know, again, I'm not saying the assets can't run higher, prices won't explode. I'm not saying any of that stuff. It very well may be and, you know, certainly I'm positioned for that, you know, no doubt, but to expect that people, and by the way, this goes also for the strategic COIN reserves that are being proposed at the state level, to expect that legislators who have very much a CYA attitude and getting reelected and so on, are going to go out on A limb for an asset to be the first or to be a revolutionary or a pioneer. You just can't go ahead and expect. I mean, I hope, as does Cynthia Lummis, that One of these 19 states comes through in terms of adopting bitcoin onto the balance sheet of the state. But, you know, it's certainly in this environment, it makes it harder for that to go ahead and happen. And I think once they go ahead and vote it down, you know, the chances of it coming up again, you know, very shortly on the heels of a vote down, I think is unlikely. I think it's going to take some time. And so, you know, the environment is what it is. There's. There's not much we can do about it. But I think you need to be honest about what the environment is.
- [17:34]
Scott
I think legislatively, the bitcoin reserve and reserves in general have been a challenge so far. So, to your point, just so people know, I think five states have rejected it, including Wyoming, of course, which is where Cynthia Lummis is from, Senator, who's proposing the bitcoin strategic reserve on the. For the Senate. That said, you know, maybe those five were outright going to reject it anyways. And we do have some that have moved past committee and do have at least a fighting chance. And likely it's only going to take one if that's going to happen. But Lummis kind of throwing her hands in the air and saying, listen, this is going to probably happen at the state level, tweeting for people to reach out to their senators and Congress people to explain bitcoin to them. Clearly right now, it's a challenging environment to get something like this passed, but I still think it's huge news that it's on the docket. Brian, thanks for joining. I saw you in the audience and gave you the quick invite. I would actually love your take on this sort of whipsaw of the reserve. Right. Obviously you're a bitcoiner, have been close to politics and probably watching this. Interesting times for you.
- [18:48]
Brian
Sorry, was that for me?
- [18:49]
Scott
It was. It was okay.
- [18:51]
Brian
All right. Just making sure. Yeah. You know, like, you, like people have been talking about, like. But with the states, they haven't been able to pass a bitcoin reserve. Lummis is having a hard time getting co sponsors for her bill. I guess we're gonna have to wait till Friday and see what Trump announced. But I really don't think it matters in the long run. I come from traditional finance. I was institutional equity broker for over 20 years, and I did some Channel checks over the last few months with my former firms, just asking them why they haven't added like the Bitcoin ETFs to their platforms yet. And these are firms like Merrill Lynch, Edward Jones Steel, Nicholas Raymond James, Wells Fargo Advisors. They control trillions of dollars of assets for their clients. And the number one reason I got was that they're not a year old yet. And their compliance departments won't add a fund to their recommended list or recommend a fund unless it has a one year track record. And so that's coming up here this month in March. You know, the ETFs have been around for a year. So I think there's going to be a huge opening with traditional finance over the next few months where these traditional firms, these advisor firms, are allowing their clients actually to buy the Bitcoin ETFs. And I think that's going to be a huge pool of capital coming into the space.
- [20:32]
Scott
So the reserve to you right now is not the main driver, the main story. I agree with that, by the way.
- [20:38]
Brian
No, I mean the reserve would be nice, but I just don't see Trump selling our gold reserves and buying bitcoin. And I don't see Trump like taking, you know, taking on more debt to buy bitcoin. So I guess the question is where does the money come from to buy the bitcoin? Yeah, and yeah, I mean, that's my biggest question.
- [21:03]
Scott
Yeah, I think to some degree there was the notion that we would stop selling, you know, United States would stop selling what had already been effectively confiscated from, you know, Silk Road and Bitfinex. Although the Bitfinex coins, which has got to be Simon Bitfinex, is 100,000 coins roughly. Is that 100,000 up to 200,000 was.
- [21:24]
David
119,000 and then 100,000 were recovered.
- [21:28]
Scott
Yeah, so about 100,000 as they totally. I mean those are probably going back to Bitfinex at some point. I mean, those are their coins. But taking whatever we have, transferring it, moving it from department to department, putting on a different balance sheet and calling that the reserve. But that doesn't work as well. Well, with Solana, XRP and Cardano, which the United States isn't necessarily holding. But Brian, I think that I agree with you that there's a vast ocean between, hey, let's keep the bitcoin we have and call it a reserve and actually putting it in a budget item to buy these things.
- [22:03]
Brian
Yeah, our first step is to stop selling our bitcoin. Hopefully that hasn't happened. And I've Been sending FOIA requests to the government, government agencies for. I just looked the other day back in 2021 asking what Bitcoin do we own? Trying to get a summary of how much bitcoin does the US Government actually own. And no one knows. The only agency that answered were the U.S. marshals, but the FBI would answer the DOJ, the Fed, the IRS, the Treasury. It was just a complete runaround. They won't answer the question. So I think the first question for President Trump to find out is how much bitcoin does the US Government actually own and control?
- [22:49]
Scott
That's interesting.
- [22:50]
E
Hey Scott, if I could just jump in quick.
- [22:52]
Simon
The gentleman that was just talking referenced.
- [22:54]
F
Where would the money come from?
- [22:56]
Simon
And a lot of people in the space are speculating that the money could come from the stabilization fund, the currency stabilization fund. Some of the lawyers that work at.
- [23:10]
Scott
I completely lost Teddy. I don't know if you guys did, but I can't hear same. Yeah, Simon, go ahead.
- [23:19]
David
Yeah, so I was, you know, kind of taking a, a look back a step backwards. So look, the. The world has, you know, as a community we've created this one, two punch bitcoin and stable coins. You know, bitcoin is allowing everybody to exit the central banking system with their savings. And stablecoins are allowing people to send digital dollars or digital fiat as they get more traction around the world, which is competition to what transactions you make through your bank. And so those use cases are not going away and they're even going to grow because all of the problem with central banking and banking and so the governments around the world have a choice. Their choice is we can allow everyone to do it without us or we can jump on the gravy train and also be a part of it. And that's kind of the friction that we're experiencing right now. So the states or at the federal level, whether it happens or not does not impact us in the grand scheme of a few bitcoin cycles. However, if you want to accelerate it, and we want governments to be able to recolliborate because of these grand macro changes that were happening right now. I don't think everyone's quite realized that the world changed when America won the war against, sorry, Russia won the war against America. And now EU are deciding whether they want to take the reins on. That is a new world order. And that is what we are experiencing right now that has both geopolitical macro impacts and we're trying to get to that recollibration without going into World War 3 and that's kind of what we're experiencing. And so where everyone sits, what country, what treasury departments and what central banks do and what financial institutions to adjust to that new reality, and whoever's first lost is the global game theory game that we are experiencing right now. And so the application of Bitcoin plus stablecoins has different implications for the different blocks in the different regions. And America is kind of leading the way to take the charge and say this is how we can use it. But whether they do or whether they don't doesn't stop the fact that this solves a very real problem for competing jurisdictions. And that's the game that we're kind of sitting back and watching right now. But either way, whether governments do it or not, the fact that you can now send digital dollars and digital fiat currency over a blockchain rails, the fact that that might be coming to Bitcoin on lightning and the fact that bitcoin is just getting stronger and stronger and stronger, that's not changing.
- [26:21]
Scott
David?
- [26:23]
G
Yeah, I think the most important thing that I'm anticipating is frankly the statement out of what happens on Friday. You know, the folks that I, over my career have invested money for, both in my distressed fund and then now my crypto fund, you know, have been high net worth, family offices, people that are a lot like Trump in the sense that they've had a really tough time, you know, getting away from their traditional financial products, certainly their love of real estate and bricks, bricks and mortar. I mean, and, and you know, recognizing and then investing in, in, in digital assets. I can't tell you how many conversations I've had with folks that I successfully ran money for in turnaround, distressed event driven situations that just, this does not resonate with them. Even though they love the jockey. This is just not for them. And for them, I think, to see a guy like Donald Trump go ahead and make a pivot on a national level, on a national stage and international stage as well, a guy who they see as being very much like them, going ahead and taking a bunch of resources, assets, existing or otherwise, you know, from the United States and going out and channeling them towards digital assets, it's going to do a lot for them. And frankly, to go back to the point made earlier about wealth management platforms, you know, the folks that have gone out on their own despite their wealth management platform not offering crypto, you know, options or crypto, you know, investments and, you know, being a bit more daring earlier on, look, there's a bunch of folks that I know that were involved in the likes of Voyager and Celsius and just got incredibly, you know, jonesed up by crazy return profiles and then got utterly burned. But then there are other folks that, you know, I've been playing it slow and steady all along the way when it came to digital assets. And, you know, they, you know, they've done well, but that's a really small minority of people. There are so many people that have yet to go ahead and adopt. And like I said, I think Trump's statement, the White House's statement, that the entire, you know, gathering statement, since it's going to be a small group, you know, going ahead and saying something meaningful at the end of what happens on Friday, I think is going to go, you know, is going to be the most impactful. Hopefully it says something, you know, really bold.
- [29:25]
Scott
Yeah, I think that we should get a lot more clarity. I think I trust that Ludnick knows where they stand right now. I don't think we're going to get a clear Bitcoin strategic reserve, but I do think that we'll get the ball advanced. And I think that that's what people are looking for. I think just what makes everyone hesitant at this point is that you had Trump for the first time say crypto reserve on Sunday on Truth Social, you saw what Price Action did, and the entire thing retraces a day later. That's going to make people very gun shy to trade on news like this.
- [29:53]
G
Regardless, in my humble opinion, Scott, regarding Lutnick, can we talk a little bit about the story that came out in the Journal profiling Jeremy Allaire versus the founder of Tether and kind of where Lutnick is going to spend his political capital in the White House with regard to Tether and frankly, USDC being more transparent, wanting to go ahead and IPO its shares, being an American footed company, where do people think that shakes out? Does it matter where that shakes out? And how long is it going to take David, to either?
- [30:33]
Scott
Yeah, yeah, I was gonna say it doesn't. I mean, I think that people on the stablecoin side are looking more to legislators to give us clarity there and less to Lutnick on that. But, yeah, obviously he has a personal interest. I think now what Cantor Fitzgerald owns 5% of tether. I don't want to be wrong, but something like that. And obviously they cost to be the bulk of Tether's assets, to my knowledge. So he obviously has a vested interest in Tether at least being allowed to exist in the United States, which some of the legislation, if the worst sides of it happen could disallow. Right. So you do have this sort of very private battle that was happening in the background for a long time, coming very public with Jeremy Allaire obviously firing shots and saying that tether would basically have to be registered in the United States using United States banks. But Circle could also be left on the outside with some of this more aggressive legislation if they try to push towards literal federal banks or federally registered banks like State street and bank of New York. Mellon and Goldman with their stable coins and USDC could be on the outside looking in as well. So I don't know it's even a winner between the two. Rationally. I think the two should be on the same team for crypto incumbents versus what's likely coming with Wall Street. Dave, go ahead.
- [31:55]
E
Yeah, I mean, the most important point and the good news is, is the administration gets it. David Sacks gets this point. And so it doesn't need people like Simon or I to talk about it. But there is a massive difference, positive difference in favor of the general methodology of stablecoins, both usdc, but certainly tether vis a vis the idea that banks should be the only ones who run it. And that's because our banks are fractional reserve banks and have way more risk without things like the FDIC to prevent runs on the bank. Well, frankly, we know. And the Federal Reserve having a howitzer of liquidity to prevent them. We've already experienced bank runs in the last few years that under normal circumstances could destroy them. Why would you say that banks are safer than an audited entity holding U.S. treasuries as their assets?
- [32:52]
G
Assets.
- [32:52]
E
I mean, it's nonsensical. And the good news is the administration understands this. Nonsensical. So the real question is just educating the legislators and how the sausage gets made. It's a process. And so the real question is going to be what's going to be the rules? And then you have to ask yourself, well, okay, assuming the rules are you have to be audited, you have to hold US Treasuries or equivalent, is tether going to be capable of handling that? And the answer to that is almost certainly going to be yes. You know, whether they have to, it depends on how much control or where it is. Working with Cantor or other firms, they're going to be able to do that. I thought the Wall Street Journal article was sort of a hit piece. And you know, it's, it's one of those things that, that we know that the Tether FUD has been there for Years and quite frankly, six years ago, seven years ago, a lot of it was probably true, but it isn't now. And so the real question is, is it going to be a binance like kind of thing where it's like, okay, you're allowing us to see what you're doing, all is forgiven or not. But you're right on the legislative part. The battle, we know what the battle is. It's banks versus a newer financial system that isn't fractional reserve. Now if Caitlin Long were on this panel, I'll speak up for her. Her comment would be, yeah, and that's why not having Custodia bank as an approved Federal master, you know, the Federal Reserve Master account was so insane they would have been the only non fractional reserve bank. But do not lose sight of the simple other fact. We want people to hold U.S. treasuries. Scott Besant's goal is to lower the long bond yields, not the price. Right. He wants price to go up, he wants the yields to go down. Getting rid of the kind of stockpile that Tether has would be a really bad thing. Do not underestimate that effect because I suspect that that's driving a lot of policy behind the scenes.
- [34:50]
Scott
Does that answer your question? David? Didn't hear me, Simon, you had your hand up. Go ahead. Works.
- [35:00]
G
Works for me.
- [35:01]
Scott
Sorry, sorry, no charge the mic when you're driving. Go ahead, Simon.
- [35:05]
David
Yeah, no worries. It's important for everybody to update their narratives and I'm not saying that because I'm a shareholder in both Circle and Bitfinex and Ripple Labs is Launcher Stablecoin. But the so Bitfinex has been sorry Tether for a long time, has been publishing attestations and has been custodying their assets through third party regulated custodians. Now they just announced that they've brought on what they think is the foundation for able to meet the audit requirements. And personally, again, nothing. This is speculation. They were waiting for a number of years when problems existed. We know that they bootstrapped this network from 2014 and we know all the problems that they had and all the holes that they had and all the problems that happened in the past. But the audit I think now is set a number of years by which you can audit where the processes were fit and proper to pass an audit and also have an environment by which an auditor is willing to take on the risk of, let's face it, probably the most high profile audit in certainly our sector. But also the numbers are touching a company that is more profitable than citibank and some of the largest banks in the world. And so it's a lot of risk for an auditor to take on but I think now, now is the time to meet those requirements and there's enough known about our sector and industry for in order to, to be able to do that. So I do think it gets solved. Now this is a battle that, I've said this before but you need to be really careful as particularly from the circle side if you're using your lobby pressure in order to say Tether shouldn't exist. That means that by definition a stable coin needs to know exactly and stock US people using their stablecoin which means that you would break stable coins and all the efficiencies and everything that has made it such a game changing product. And so the regulations are absolutely vital and crucial and expect like we're talking about the most powerful vested interest in the world that will want a seat at the table. This is the battle of a lifetime to figure out what stablecoin regulations are going to look like. And if we think the Bitcoin strategic reserve and just getting Trump in and the crypto lobby, wait till you hit the vested interest in stablecoins that goes to the very top at the Federal Reserve level.
- [37:50]
Scott
It does. And to the point that was made before the biggest risk by Dave, the biggest risk stablecoins ironically is the banks where they custody the assets. I mean we saw Silicon Valley bank obviously the weekend when we didn't know if the Fed would come in with the Bazooka, had $3 billion of USDC at risk. And we saw USDC effectively de pag in lots of question marks as to what their future would be. And Palo Arduino at Tether very clearly stating that when they started to comply with MICA regulations in Europe that the biggest threat to Tether was going to be how much of the reserves were they were being forced to put in cash in banks in Europe that are fractionally reserved. So it's a really good and but.
- [38:33]
David
This is, this is by the way, I mean talk about the custodial story. This is why I had to leave the UK in 2015 because when applying for a full reserve bank at the bank of England they did absolutely everything to make sure it wasn't actually possible. So we had the identical experience that Custodia had at the Federal Reserve because you know, the biggest risk, which is ironic and I think Dave pointed it out, the biggest risk to fractional reserve banking is full reserve banking, which is actually significantly better consumer protection and also A better route for government to raise and have their finance. So you literally have the Federal Reserve and the bank of England and the central banking network being fully exposed for the fact that they're not really needed anymore. And that is a bitcoin story. That's what we took on. We did not take on the banks. We took on the central banks and stablecoins are taking on the banks.
- [39:34]
Scott
Fascinating, Dave.
- [39:36]
Simon
Yeah.
- [39:37]
E
I mean, Simon and I on this issue are 100% on the same page. I think it's really helpful for people to understand, however, why this is fractional reserve banking. We talk about it a lot. Basically, it's a business where you put deposits into an account that you know is risky to loan out to other people. It's a lending business. Banking used to require that because that was, you know, that's what the, that's what savings loans do. That's what a lot of banks do. And there's. It's a perfectly valid business model, but it is not the same business model as I put my money into something that is invested and safe and I know, and I can then use it, use that money to, to transfer around the world and to be part of a better method of monetary transfer. Those are two different businesses. Now we in the United States and in England and a lot of other countries have combined them, but there's no need for them to be combined. It's just historical and frankly, the risk products, the risk profile say they shouldn't be combined. So, yeah, we use fancy words, fractional revert banking and fully reserved all. What we're really talking about is there's no need for banks that are engaged primarily in lending and risk management to be the arbiters of the holders of assets for a payment system. They need to be able to participate in the payment system, but they don't need to be the holders of the assets. And I think it's a very basic thing and it requires education and legislators need to understand this. Too many people ignore why things exist the way they are and just kind of assume them. And that's what's happening here. And so, you know that that's how this fight comes down. But Simon's right. I mean, you know, look, I worked for Citibank, you know, for a few years after they bought, you know, the Solomon Smith Barney. I understand where this is coming from. And you're right, this, this is going to be a big fight. There's no two ways about it.
- [41:31]
Scott
I just want to move on to one more topic before we jump to Buzz. Robbie, since we have you here, there's some news, I guess around Ethereum. One of the stories was that one of the whales and institutions that I think was the largest genes, 140,000 Ethereum or something sold 40,000 of those Ethereum over the last two days had a few people eye opening. But on the flip side, seems like the PETRA upgrade looking like it's in testing going to be exceptionally smooth and a pretty big advancement for Ethereum. How. How are you guys sort of framing Ethereum right now in that ecosystem moving forward since so much I would imagine of what you've invested in and looking at is still built there?
- [42:16]
Robby
Yeah, definitely. I mean Ethereum and the general EVM ecosystem, you know, we have a lot of exposure there. I think Ethereum, we love it for everything it does and for the incredible community that's there. And I think I didn't make it to Denver myself, but I heard good things from all my colleagues and friends who went. So I think Ethereum is very much alive and well. But if you've been in the Ethereum ecosystem long enough, I think the one thing you know is just don't pay attention to the price because the price never seems to index precisely with all of the activity and the great things that are going on and being built there. And I think one other comment I might make as we've been talking about regulation and the Bitcoin strategic reserve and all that stuff is I think it's very hard for legislative change to be affected. It's much easier to have talk and make promises and things like that. But I do think one legislative area where we have seen tremendous progress that should not be underestimated is what has happened with these SEC enforcement actions. So everything from Coinbase and Kraken to. To Yuga Labs, frankly, and the fact that we have now seen, I think pretty much I don't know of any of the enforcement actions that are still remaining open, so to speak. And that is actual legislative change. And I think that's something can all be really pleased about for our industry as far as the US goes.
- [43:49]
Scott
Totally agree. And I've continued to say, I think those are even bigger stories than the legislative side because it just allows people to actually innovate and removes all the barriers. I saw also today, the Cumberland. Dave, you and I were, you were so angry, Dave Weisberger, about when, when the Cumberland SEC suit came. I remember us talking about that. That was dropped as well. And then Robbie, to your point, dropping Yuga and, and OpenSea and Consensus, all of these, I mean, without legislators having to say so, it seems like NFTs could come back without fear of them being securities and all these other things. Clarity on meme coins. So listen, like we can't predict, I guess what the cycle will look like and what will be adopted, but we now know that at least all of those things can be right.
- [44:35]
Robby
Yes. And I think also the appointment of Brian Quintes back to CFTC where he was before, I think is going to be a fantastic addition to the team because the time that he spent in the meantime at A16Z working together with a lot of Web3 projects, I think has really opened his eyes as to what we're trying to build.
- [44:55]
Teddy
Robby, question for you with Danny Ryan founding Etherealize, do you think that that could really help ETH with its institutional adoption as well?
- [45:06]
Robby
I do, I think, you know, honestly, ETH institutional adoption at the moment is from what I understand is held back by one main thing which has been lack of regulatory clarity, which has been the, the advantage Bitcoin has always had because it has never been in the same crosshairs. And so I think, yeah, absolutely. I think once we start to get a little bit more of this regulatory clarity than, than eth, I don't see why, you know, ETH shouldn't be valued in accordance with the size of the community that builds. There's.
- [45:40]
Teddy
Yeah, I think a lot of the non technical community just asked when marketing. That's definitely something to point to is the founding of Etherealize. So I appreciate those thoughts there. But we do have a sponsor today. It's Mentibus, previously Edge in. So Mentibus, do you want to go ahead and just give a bit of an elevator pitch on what you guys are building? Just kick it off.
- [46:03]
Simon
Yeah, no, look, thanks for that guys. I mean, you know, when I first started building this market with my team, I thought the, the whole entire market needed an enema. Now I feel like it needs Xanax. It's like a bad junior high relationships, the ups and downs. I'm just encouraging us like as a builder to really hone our focus and build the future, not be constantly paralyzed with speculation. Look, in my reality, what I see, the entire AI market, it's moving to a desperate need for structured, validated data. And so we have a chance. And if you guys can focus with me, I think we can see some really cool stuff. Right? Look, big tech, they built billion dollar legacy empires off of your data Lambos like these guys buy islands and it's time for Us to take that power back. Your posts, your connections, your entire network. It's called first and third party data. And today it's worth over $450 billion a year in revenue. The analytics and tools AI built on top, 89 billion. And so AI, it's worth trillions. And the biggest tech multiples are going to be built on your data. You own nothing. Social data tyrants, LinkedIn, Crunchbase, Masari, they steal your data information, they gatekeep it, sell it back to you. This is enough, right? Mintibus is the revolt. You can claim your public profile, you correct it officially, you stake your data on our existing network and in return, we help you organize it, update it, clean it with a network and claim your rewards and earnings. And so basically own a piece of the network. And that's what we're doing. We've got over a million profile pages indexed that users use every day. It's got 100 million data points connected to it, all contributed to this network. There are over a million visitors, 80,000 active users. We have an AI agent in beta. And so here's our bet that we want you to take with us. The next AI boom is going to be this next type of business intelligence revolution. It's all going to be built on your data. Instead of making big tech richer, you can stake your claim. The more data you stake, the more Mintibus grows and the more value you control. So if you hate Crunchbase's UI pitchbook, cost LinkedIn life coaches wrecking your feed. This is your chance to be early in something and take power back. When these platforms are really at their weakest, we can crumble these data empires. So get on the bus, Mintabus. And you know, thank you guys for me being able to interject a little bit of my vision and mission in life in the company.
- [48:42]
Teddy
I gotta say, we do a lot of these, these AMAs and that, that's one of the best elevator pitches that I, I've personally heard. I mean, it's great to showcase problems that we're all familiar with, right? Everybody sees those Life coaches on LinkedIn and has those issues with Crunchbase. So I, I really appreciated that. That was, that was good. And then even the cheeky tagline of get on the bus, I loved it.
- [49:04]
Simon
Yeah, I mean it's Latin for collective mind, but that's a little bit too, it's a little bit too high level for me. I like to be at the bar, not the wine bar.
- [49:15]
Teddy
So how long have you guys been building this?
- [49:18]
Simon
So we've been at it about two years. I mean, we did over 200 different interviews of analysts at different funds and founders and everything. And it was really kind of this labor of love for me. I've been a builder for 20 years, so part of this is really built. It's solving a problem for me as a founder or investor or team member. Of all the different roles I've had, I just always wanted this data easy. And the frustration is it's just getting harder and more expensive because they don't care. I mean there's truly a difference between shareholder value and user value. And the problem is if it's all our data, not theirs. So I really want to leave this as a legacy product.
- [50:00]
Teddy
And why is, after two years of building, why is now the time for a token?
- [50:06]
Simon
This was always kind of a struggle, right? Do we tokenize? Do we not? When I look at the market, there is a big advantage of being able to allow attribution, remittance and reconciliation with your data sets. I think Web3 infrastructure is perfect for that. With AI agents emerging, this is the only way you can scale this type of data. Right. And to be able to really truly reward the users for that. So it's a perfect mechanism to just distribute value. And so I feel like if we wait any longer, will be left behind. Now is just perfect timing. The market needs a place for reliable, validated data. You need a place to be able to store and stake your data somewhere to get it cleaned. Nobody is doing this today. So if we do this right, it'll change everything.
- [51:05]
Teddy
So who is the application for? Who's your ideal customer? I assume it's sort of like a dual sided marketplace.
- [51:12]
Simon
Yeah, data is like a Rorschach. This is really funny. I mean if you go to our data sets and you do business development, Mintibus is for. If you do ecosystem development, you get developers that are in different ecosystems data. So it's easy for you to start thinking about how to build your ecosystem if you're a hiring person or recruiter. It really does replace the need for platforms like Musari Data, Crunchbase, Pitchbook to some levels. But as more users join it just it strengthens the graph because they're claiming their own data, they're adding additional data points to it. It really is a truly contributory network.
- [51:52]
Teddy
And how does the token fit into things? What's the utility for it on the application?
- [51:58]
Simon
So what we're leveraging the token for is for you to be rewarded. So a user comes in and they claim their profile, they stake their data and that begins a validation process. Once that data is validated, it's shown as more true than network and it that drives more earnings. You are rewarded tokens for that, for staking, claiming your data. And then once we earn that, it's a distribution mechanism. We're allowed to distribute up to 25% of the data earnings back to the network. So we use it as a distribution mechanism as well.
- [52:34]
Teddy
There's probably a lot of people tuning in that love the aspect of being able to earn from their data and own their data. So when they're potentially going to the application, like how do they know if they're going to have valuable data or if they're going to earn, how can they use it to generate some income?
- [52:50]
Simon
Well, it's really like the mechanism of us understanding how to earn is really simple. So there's some data on the network that is clickable, that creates conversion. Today we have users paying already. Today there's APIs that we have big customers like Circle that use it, that we understand like what data is more important to them. And so the network itself is already an earning network. Right. And so we look at which data is being used the most. And that's what determines how we distribute the rewards over time. Right. It's a fair marketplace and we're not meant to try to like do anything like create burnings and stuff. We just have a simple buy mechanism so that you can earn off of it. I think one more thing that's important to kind of bring out is your network is also part of your data too. So your followers, you know, your friends, whatever you want to call it on these different networks you've built that right now, like if you make any one person upset, you can lose your whole entire network. And we know your network's your net worth in this industry. If you don't have the ability to have the connections, we're solving for real problems for you to be able to have whole and manage your entire business network over time. And right now it's more important than ever that we do that.
- [54:10]
Teddy
So it sounds like it's not just an application where, hey, I'm Dave Weisberger, who's up here on stage. I have a huge network and I can make a profile and monetize on that data. But really anybody listening in can benefit from signing up.
- [54:28]
Simon
Absolutely. Hey, Dave. Yeah, I think that that's the biggest part of it is right a lot of people, we have these huge networks and we'll move from one market to another and that network follows us. Those earnings never go to us. They go to the people that own the very tiny part of the value of the network, which is the technology. Sorry to cut you off, Dave.
- [54:51]
E
No, I was just. You're talking about the nirvana that people. One of the two or three underpinnings of crypto that going back since the beginning, you know, how, you know, the entire notion of Web3 and, you know, lots of people have been trying it. I'm just curious how, you know, being an inbred skeptic, I love the idea and I think it's incredibly important, but how do you incentivize it around there? And how do you get the entrenched monopolies and call them what they are to play along? Or do you just have to create, you know, outcompete them?
- [55:25]
Simon
Look, I think there's a few different things that are important. One, you can outcompete them. Not in like the giant networks, but you can outcompete them in the small. Right? If you think of like how we structure our data is based on tags and it's broken down into, you know, what part of the tech stack does your organization fit into? What ecosystem do you belong to? Who do you sell to? How do you sell it? Those tags, you know, we could index any market. That way we focus on, hey, let's get all the ZK startups, founders, investors and you can win in a village in the small because you focus on being useful. And then people in that graph want to contribute to the usefulness of that graph. So, so on in competition wise, it's, it's there in an overall model and business model construct. Like people pay for data, right? We already know that. We understand that we've carved out and we have our money flows, you know, direct to Treasury. I mean, that's all we can, we'll be sharing that publicly with everybody. You know, this is a method where people earn, you know, money off of the data already. It's just simply like writing the smart contracts and living up to what you say you're going to do. Right.
- [56:47]
Teddy
Dave, do you have any comments on that?
- [56:49]
E
I mean, yeah, I guess you have to see how it all develops. Look, Web three in every, you know, whether it's all the parties we used to go to in Miami and you, you know, you talk about it, people talk about the difference in web 2 and web 3 is, web 3 is ownership of your own data. And you know, it's a trite thing, but you know, it's, it's real it's very, very real. The issue is individual data doesn't have critical mass and therefore you don't have the ability to do it. So you have to effectively digitally. Unionize is maybe the best example I can think of is the only thing it's very hard to conceive of how to do it. I mean, maybe it's UX ui. I think that, you know, if Robbie were still up here, he'd probably opine on that. But to me, what you're tackling is incredibly important. It's literally the place where the rubber reads the road in Web two versus Web three. So it's, I guess you just gotta wait and see and how it gets delivered and how it gets accepted.
- [57:49]
Simon
Well, David, I'd love to open up our analytics and stuff on the back end and even show you kind of how the platform works. I mean, anyone can go to Mintabis XYZ and see the platform, right? It's there, it's live, it's, you know, I feel like it's a pocket, right? But so we, we have about 5,100, 5,200 contributors of the million to the million visitors. And those contributors, I'd say 70% of them claim their data right on the platform or they have their data added, then they claim it and they say that this is ours. So that's one mechanism that I can show. And then they earn the points. And then instead of them paying 15 bucks a month for our tiny app, right, it's kind of simple. They use the points. And so we tested to make sure we could see the value and we know which data points convert to paid versus just viewed, all that other stuff, that's what we're building the model up on. Instead of just talking about it and having that debate, we're trying to prove it out over time. And so it makes for an imperfect build. But if you're passionate about it and you keep driving forward, I do think there's a model in there. My background, I, I came from Bell Labs where I was building large telecom business models. So I believe in the model and that the model is true. It's more about making sure that the architecture, the smart contracts live up to it and that people trust us over time. Right.
- [59:22]
Teddy
Sorry, go ahead, Dave.
- [59:23]
E
I was just going to say it makes sense. I understand that.
- [59:27]
Teddy
Earlier on in the show you said one of the magic words that's been a hot point over the course of the last six months and it was your, your AI agent, I think it's called M Gent right?
- [59:38]
Simon
Oh yeah. So a lot of what M Gent was was us just pushing out and understanding how our data would interact and it's allowing us to kind of start to engage with the community and move it. We had a lot of success early on. I think about 45 minutes we went up to 675,000 market cap. Right. And so that to us was an understanding proof point that, yeah, the Mintibus token should exist, that there is a, there is a market for this type of validated data out there. And so I mean we're, we're excited about that. We're right now and this is, you know, we'll, we'll make this announcement. I guess it's now a good time. But the revenue that we generate from Mintabos has started buying back that token. Right, as part of the methodology because we, we just wanted to test and.
- [60:28]
Teddy
Understand and, and what role does the, the AI agent actually play within the application?
- [60:35]
Simon
So it works three different ways, right. The first thing that it does is it delivers alpha in any way you want. Hey, can you give me a list of investors in. I'm on ZK for some reason in ZK startups in Hong Kong. Right. So being able to answer alpha questions like that based off our data sets are really important. The second thing that we're going to be introducing into it is the ability for you to upload your data spreadsheets. So any of your old spreadsheets, any of your old data outside public information lists, all of that stuff into the agent and it'll transform the data and allow you to stake it on the Mintibus platform. And then it will also allow you to earn points based off that data so it makes it easier for the user to add in stake that data to the network. And then the third thing that it will be able to do is it will be allow you to kind of shift the points that you earn with your data set and move it to either M Gent or Mintibus token itself just to make it easy for the users to be able to leverage the data that they aren't, you know, and the tokens that they earn over time.
- [61:54]
Teddy
Have you had significant interest from like the Web3 marketing angle for this product? Like the thing that comes to mind is just how cumbersome it can be to get KOL lists and contact information for KOLs. And in regards to Web3 marketing, has that been a big vertical for you guys yet?
- [62:11]
Simon
You know, a lot of this is we, I focused on one enterprise customer for us and you know, they're, they're, they're amazing. We have had a lot of marketing agencies that come and so for will be, will be giving access to kind of the back end. It's more of an advanced mod position for certain cities and certain representatives in certain cities for the next wave. And that's where you kind of want to be. That's the sweet spot for the data. We just need to make sure that people are respectful and responsible with it. Right. I think of us as being a steward over time of this and so grabbing this and know you have to be sensitive and smart.
- [63:00]
Teddy
So in that regard, what, what is next for your community and product roadmap?
- [63:06]
Simon
So look, I, you know, for me like we've been constantly iterate iterating. We've got a, a million pages live, we have groups list live. There's a lot of things that I'm going to be like holding off for the next iteration. We're going to start releasing a lot of different polls not because we don't have things we want to build out, but because we want to create this sense where if the community says that they want something on Telegram, certain data set at a certain product feature, they also get to see us deliver it. And that's how we want to build trust over time. Based on a couple conversations with some launchpads we have right now, we're looking at a team tge early between the 17th and 22nd of March. Early. We've been at this for a long time. We just have a lot of indicators and signals that the timing is right right now for us and so we'll be moving on that right away. So you guys will, will see and hear a lot more of us banging the drums on that in the near term.
- [64:07]
Teddy
Very cool. So that, that was, that date was March 17th you said?
- [64:12]
Simon
Yes.
- [64:13]
Teddy
Awesome. And how does your product compare to traditional data platforms in terms of privacy and user control?
- [64:24]
Simon
There's two things. One, we have all similar privacy and user controls as competitors. Masari Data, Nansen, all the way up to some of the bigger boys like LinkedIn. Everybody takes your data, they sell it. It's. It's all just clever ways to get access to repurposing the things about you. All the thing our intent is to take the tools that they use and use it against them and give the power and ability of that over time. And you know, if you get enough of the network, validating the data sets that we have on the network, that gives us the ability to pull all of that revenue away from them. It's. It's the, this is the. The refinery and the actual data lake that everybody talks about that they need to have, but they don't want to poke at LinkedIn or any of these other large providers that have the access because then you don't get to build your network. But we've got enough of a network now in rhythm that I don't think we have to be worried about them anymore. We just have to push it and build better.
- [65:32]
Teddy
Very cool. Well, I commend you from. For what you've been able to build thus far. It's two years of building. You don't come across projects that build for two years and then launch a token quite often in the space, especially ones who can speak as eloquently about the problem as you can.
- [65:50]
Simon
I care a lot about the problem and I've tried to do this in a way where I don't have to give the value away to a bunch of VCs or a bunch of insiders. I want to give the value back to the people that are actually on the platform that use it, that need it every day. Right. That's the only way a platform like this works. It's been very hard with the current market going up and down and left and right. This is not my first rodeo. It's not my first round, it's not my first network. I hope it's the last one. I promised my wife it would be. Right.
- [66:25]
Teddy
Fingers crossed, right?
- [66:27]
Simon
Yeah. You know I'll always get the bug, but I do.
- [66:30]
E
I like.
- [66:30]
Simon
Look, I care about everybody. That's an actual builder that gets frustrated with data. I do not think my platform is perfect. It's far from perfect. But we don't have enough engagement with you as a community to build to that. The more you actually throw into this, the more return that we'll get for us all over time. All right, I appreciate that.
- [66:51]
Teddy
Well, there's about 4,000 people who are tuned in right now. How can they help and how can they get involved?
- [66:58]
Simon
So, Juan, sign up to Mintibus XYZ join. If you don't see your profile, that's okay. The system will start like pulling that data together for you. Claim your profile right away. You'll get rewarded for that in the next iteration. We'll do an NFT drop or something very soon for all those users that you'll be able to convert. It won't just be pedantic or pandering. So if yeah is sign up, share, talk about the mission, talk about the value Give us about two weeks after the token launch when we're putting this to work for the new product, and then judge us harshly. Critique. Critique the shit out of us. This is your data, right? This is your data, your network. It should be your earnings. It will be your keys over time. And that's it. That's it. Hold me accountable and let's go.
- [67:51]
Teddy
Cool. So sign up. Check it out. For anyone tuning in, click on the Mental button us profile there. Give it a Follow any final words for us here today before we wrap up?
- [68:02]
Simon
Build. Don't panic. Don't listen to what everybody's opinion is of the, the last like 35 seconds. Oh, my God. Just build and it'll be okay.
- [68:15]
Teddy
Yeah, building certainly takes away the, the stresses of the, the market going up and down Sunday. I think it was Sunday when, when Trump made that reserve announcement and we go up however much we went up and then retrace the. The entire next day. It's, it's like if you're just building and not staring at charts, it's just noise. So I, I appreciate you for, for joining us today. Everybody have a wonderful Wednesday and make sure you give Mentibas a follow there. So thanks for joining.
- [68:47]
Simon
All right, thanks, guys.
- [68:49]
Teddy
Take care, everyone. Have a great day.