Podcast Summary: The Wolf Of All Streets

Episode: CFTC Approves Crypto as Derivatives Collateral (#CryptoTownHall)

Date: December 9, 2025
Host: Scott Melker
Notable Panelists: Dave, Andre, Ryan, Florian, Adam, David, Joe, Mike (EtherFi)

Main Theme & Overview

In this episode, Scott Melker and a rotating panel of finance and crypto insiders gather for the Crypto Town Hall to discuss major news: the U.S. Commodity Futures Trading Commission (CFTC) is piloting acceptance of Bitcoin, Ethereum, and USDC as collateral for derivatives trading. The conversation spans the regulatory and market implications, institutional adoption, the nuances of Ripple’s $500M deal, macro sentiment, and the evolving market structure. The panel also hosts an interview segment with EtherFi, an emerging DeFi neobank.

Key Discussion Points & Insights

1. CFTC Approves Crypto as Derivatives Collateral

[00:00–06:34]

• CFTC Pilot: The CFTC’s pilot lets Bitcoin, Ethereum, and USDC be used as collateral in derivatives markets.
  • Seen as a “massive tailwind” for Bitcoin and USDC.
  • Follows similar moves by JP Morgan and institutional players.
• Broader Impact:
  • Equates Bitcoin’s treatment to equities in finance, potentially allowing real yield and lowering interest rates for things like Bitcoin-backed loans.
  • “This is a dramatic increase in the value of MicroStrategy, for example.” — Dave [01:36]
  • Banks could see stablecoins as a threat, as USDC collateralization provides yield via lower rates, circumventing deposit restrictions.
  • Brings increased legitimacy to Bitcoin as a financial asset.
• Volatility Risks:
  • Allows more leverage, possible for increased market volatility unless margin requirements are adjusted.
  • “When you have collateral that is also what you’re trading, you double your leverage… so CME leverage just increased.” — Dave [03:34]
• Anticipation of Expansion:
  • Expected to expand to other coins, but only those with sufficient liquidity and low volatility.
  • “They’ll probably come up with thresholds of market cap, real liquidity on US exchanges…” — Dave [05:44]

2. Tokenization, Market Structure & Regulatory Hurdles

[06:34–16:18]

• Market Structure Changes:

  • This CFTC move is another data point in crypto’s gradual integration with TradFi.

• All Financial Rails on Blockchain? Skeptical.

  • SEC’s Atkins claims everything will be blockchain-based within two years—panel dismisses this as fantasy.
  • “The same government that makes the majority of people remove their shoes before they get on an airplane is not going to be able to handle tokenization of securities.” — Ryan [11:23]

• Real Obstacles:

  • Private companies, not the government, are the driving force for change—but also push for rules protecting legacy interests.
  • “Their three-step battle plan is: discredit, delay, and compete.” — Dave [13:30]

• Institutional Adoption:

  • Michael Saylor reports major US banks now issue credit against Bitcoin.
  • The negative narrative around entities like MicroStrategy is being undermined by this shift.
  • “If MicroStrategy really does trade at 1 nav… Citigroup… [would] buy it.” — Dave [15:35]

3. Breaking Down the Ripple $500M Deal

[16:18–24:24]

• Deal Structure & Valuation:

  • Wall Street invested $500M in Ripple at a $40B valuation—initially seen as bullish for crypto.
  • Details reveal near-zero risk for investors: guaranteed 10% return annually, favorable terms, and priority in bankruptcy/exit scenarios.

• Ripple vs. XRP:

  • “There is no way this investment happens if Citadel and others don’t believe in Ripple Labs [not XRP].” — Dave [19:25]
  • Most of Ripple’s valuation is based on their XRP holdings; Ripple could succeed while XRP remains stagnant.
  • On the “XRP army”: “Their heads are up their asses when it comes to not understanding the difference in Ripple Labs and XRP.” — Dave [20:13]
  • “XRP as a utility can’t become more valuable than companies creating actual value in the financial system.”

• Prime Broker Ambitions:

  • Ripple Labs wants to build a blockchain-based prime broker leveraging their XRP treasury. The token serves more to power this balance sheet than to capture value as a speculative asset.

• Open Questions:

  • The purpose of the token: settlement, liquidity for cross-border payments, and as a balance sheet asset for Ripple—but arguably, its role is generic and could be replaced by other instruments.

4. Macro Outlook, Sentiment, and Bitcoin Market Cycle

[29:00–46:09]

• Crypto/Risk Appetite Cycle:

  • Depressed retail sentiment linked to macro factors, job market. Upside depends on risk appetite returning as consumer confidence improves.
  • Some see risk appetite in high-beta stocks as a sign Bitcoin will catch up.

• Bitcoin as Leading/Lagging Indicator:

  • Debated whether Bitcoin leads broader markets or is just idiosyncratic.
  • “It seems batshit crazy that Bitcoin would lead $70T global stock market.” — Dave [32:25]
  • Leverage dynamics and hidden risk masked by derivatives were likely behind recent volatility.

• Divergence Sentiment:

  • Mixed outlook: Some see Bitcoin failing to decouple or recouple with risk assets (underperformance), others see a potential “reprieve” and new cycle forming, not a bear market.
  • “Anytime you get… people saying ‘it’s going to 150, 200, 500,’ that’s the sell signal.” — Ryan [39:36]
  • “One of the best cases for Bitcoin is it doesn’t trade like anything else. Unfortunately, sometimes that means it goes down.” — Scott [41:50]

5. Death of the Four-Year Cycle?

[43:57–46:09]

• Debate on Market Cycles:
  • The panel discusses whether Bitcoin’s classic four-year boom/bust cycle is over.
  • Joe: “At the death of the four-year cycle. It’s one of the most exciting things… in the history of Bitcoin.” [44:01]
  • Market behaving more like a maturing institutional asset.
  • Dave: “If you didn’t get the bull phase, why would you expect the bear phase to be bigger? There was no cycle anymore, the network just keeps grinding higher.” [45:00]

Notable Quotes & Moments

• Dave: “Once Bitcoin is treated the same way as equities as collateral… owning Bitcoin becomes not bullshit yield but real yield capable, and that matters.” [01:18]

• Ryan: “The same government that makes the majority of people remove their shoes before they get on an airplane is not going to be able to handle tokenization of securities.” [11:23]

• Dave (on industry resistance): “Their three-step battle plan is: discredit, delay, and compete.” [13:30]

• On Ripple:

  • Dave: “They [Citadel] don’t believe that XRP as a commodity has explosive upside because that was what they gave away. The notion of XRP with explosive upside is just patently absurd.” [19:29]
  • Dave: “The XRP army has rci… their heads are up their asses when it comes to not understanding the difference in Ripple Labs and XRP.” [20:13]

• Joe (on cycles): “If you stretch a rubber band really hard… it’s gonna snap your finger. I think that’s what you saw in a lot of prior cycles. … The rubber band’s pretty slack right here.” [46:09]

Segment Timestamps

• 00:00–06:34: CFTC crypto collateral pilot, implications, volatility, inclusion of USDC
• 06:34–16:18: Broader institutional adoption, regulatory and technology rails, TradFi/crypto convergence, market structure, reactions to SEC/Atkins claim
• 16:18–24:24: Ripple’s $500M raise, deal structure, Ripple vs XRP, prime brokerage, token value debate
• 29:00–39:33: Macro outlook, sentiment, retail activity, market cycle, relationship to trad markets
• 39:33–46:09: Bitcoin’s underperformance, cycle debate, is the four-year pattern dead?
• 47:21–62:32: EtherFi interview—DeFi neobank, staking & restaking, product functionality, vision for non-custodial finance

Interview: EtherFi — The DeFi Neobank

[47:21–62:32]

• Overview:
  • EtherFi aims to replace banks by offering a seamless, non-custodial DeFi banking experience.
  • Product suite: deposit fiat or stables, buy/stake ETH/BTC, access “checking account” yielding 7-8% on stables, and a cash/credit card.
• Card Features:
  • Visa card (credit structure), allows spending crypto 1:1, borrowing at 4% against the portfolio.
  • “The main value proposition… equivalent or alternative to a checking account that pays … 7 or 8% on your stables and get 3% cash back on your spending.” — Mike (EtherFi) [49:23]
• Yield Mechanics:
  • Uses ETH staking and restaking (e.g., via Eigenlayer) to generate yield—abstracting complexity from end users.
• Token Model:
  • EFI token: Protocol buys back tokens regularly, tying token value to protocol success. Simple revenue-share approach.
• Growth & Ambition:
  • 8B TVL, “hundreds of thousands of users”, aiming to compete directly with incumbent banks, citing cost and operational advantages.
  • Mike: “There’s more than an order of magnitude difference in cost and efficiency vs. banks. That’s why we can give higher rewards and lower fees.” [58:32]
  • Vision to make non-custodial finance the mainstream model.
• Promotion: “Cashmas”—10% cashback on card spend for new users (lasts two days from episode).
• Long-term Vision: Revolutionize financial services; “stateless financial infrastructure” as the endgame.

Closing Thoughts

• Crypto Market in Transition:
  The panel is divided between those who see the current period as a return to a bear cycle and those who believe a new, more institutionalized cycle is emerging, supported by increased regulation and TradFi adoption.
• Technological & Regulatory Progress:
  The CFTC pilot is widely seen as the next step in legitimizing crypto assets in mainstream finance, but concerns persist around volatility, regulation, and the inertia of legacy systems.
• Innovation Beyond Hype:
  Products like EtherFi demonstrate how the industry is shifting focus from pure-trading by retail to broader, practical financial tools—a sign of maturation.

For listeners new and familiar, this episode provided deep context and expert views on crypto’s rapidly changing integration with traditional finance, unpacked viral headlines, and spotlighted one of DeFi’s most ambitious startups.