A (4:31)

Do you think that this will end up extending beyond Bitcoin, Ethereum and usdc? I mean, it's interesting that USDC is.

B (4:37)

Very, I think that the way it should, let's be simple, it way it should work is how it does in equities that the prime brokers and companies are allowed to create a formula based on volatility and volume traded in order to understand what the, you know, the, you know, basically to model out what the value of collateral is. And so the more val. More volatile and less liquid a crypto is, it will have the less amount of leverage, you know, less amount of collateral value to it. That's how it should work. And so effectively.

B (5:16)

That will have that. Now, they do make changes. Like, for example, you can't pledge a Stock that's under $5. Now, if you ask why is that? It's because back in the old days, if a Stock fell under $5, it was flirting toward bankruptcy. Obviously, it's a stupid, arbitrary rule, but the goal of it was to understand that there was some value there. They will probably come up with thresholds of market cap. They will probably come up with thresholds of real liquidity on us.

B (5:44)

I hate to use the word regulated, but we'll say U.S. oversight exchanges like Coinbase and Robinhood and Kraken and Gemini, etc. And so they'll probably do it that way. That is what will happen when there is actual changes to the accounting rules will be based on volatility and volume. But that's a really important point because one of the things that's interesting about Bitcoin as collateral compared to a stock is if a news event happens on the weekend, you're taking a lot more risk by having stocks as collateral. With Bitcoin, it's immediately accessible, and so expect lots of changes here, but the truth is that it will be based on volatility and volume, and it won't include volume from derivative exchanges or overseas exchanges.

A (6:34)

Got it. We'd love to open this to the panel. How important you view this if it's a meaningful advancement, why it's specifically those assets. Andre, you probably are watching this. Audrey. Also, guys, congrats. I should say the bit. The Bitwise 10 finally approved.

C (6:53)

Yes, it's been approved before, but there's been essentially like an uplift thing, you know, from. From like OTC to etf.

B (7:01)

Okay, fine.

C (7:04)

Yeah, that's definitely a big deal for us.

A (7:08)

Yeah. Dave, your mic is lifted.

B (7:11)

Yeah.

A (7:13)

Anyone specific thoughts on. On this? Yeah, I thought. Andre, that was just great news. Finally after. I know that was celebrated and then uncelebrated and then grayscale got theirs. But. And I also have to say the Matt Hogan fart coin commercial is incredible.

A (7:28)

For anybody.

C (7:29)

Yeah, he did a couple of ones. Yeah. One of the best since like the most interesting guy in my view.

A (7:34)

Yeah, absolutely. Love it. So I think that we can just talk about how directionally this CFTC kind of, as Dave alluded to, is just another data point in the progression of how Bitcoin, Ethereum and other assets will be viewed in the financial system. Atkins just gave an interview as well, the SEC chairman, and he said, which by the Way I'm calling bullshit on this, but he said, I think all Rails, all financial Rails will be on blockchain in the next two years. So I don't think that that's necessarily happening. All US markets tokenized on chain in two years. Anyone believe that that's possible?

B (8:12)

No.

A (8:13)

Anyway, close.

B (8:15)

But I love it.

A (8:16)

I love hearing him say it. Love it.

C (8:18)

Yeah.

B (8:18)

I mean look.

B (8:20)

You can't. If you, if you token. There's two aspects of tokenization, right? There's aspect which everybody thought things about and when. If you watch that and I did Roundtable the other day where it was from the investment advisory committee, it is possible that you could replace and be on blockchain rails 100% in two years if you use the proposal that I think it was. Was it Chuck from NASDAQ that made it? I think it was Chuck, but I can't remember. Anyway, I know the players. So it was one of them. I think it was NASDAQ said, which is let DTCC go from instead of old paper registries moldering in a basement at 55 water, let DTCC pick a blockchain and tokenize that and leave everything else the same so that there's tokenized assets underneath DTCC that companies might be able to eventually access in some way on behalf of people or people might be able to access it. But effectively everything is still held in street name and people really just own IOUs. Because like as I've said millions of times on this, on this, not millions, but dozens of times on this show, when you buy irin, you don't own iron. What you own is an IOU from your broker that you own IRIN and your broker doesn't own irin. Your broker has an IOU from DTCC that says they own irin. So going to tokenization will change the second piece of it. The broker will have a direct claim inscribed on the blockchain that their address at DTCC would have irin but you would still hold it at the broker. Or they might not even do that. They might just say that it's on the blockchain and the broker can see how much IRIN is at dccc, but they won't actually know who owns it. There's a lot of details to be worked out there. So if you go down that road, it's important from the technology perspective, but it doesn't really do anything. Where tokenization matters to everyone on this audience is when you can have side by side with centralized ownership that you can take personal delivery that you can do 24 hour trading via whatever exchange or defi platform you want because you have a tokenized asset. It means you could swap the Bitcoin for iron, for example, or back and forth. It means that all the rails that investment and banking systems and brokerage systems use could be made compatible, whereas right now they're not compatible. They have different regulatory, different everything. So there's a lot to be worked out, but it's incredibly important to move in that direction. And so that's why my no is to do what we actually care about, which is all of what I was just talking about. Does that make sense, Scott? Because there's a lot of detail here and it's really, really technical and I don't want to have everyone's eyes glaze over because, hell, my eyes glaze over when I think about this stuff.

A (11:19)

Yeah, it makes sense. Ryan's got his hand up jump there.

D (11:23)

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. I'm sorry, it's a great idea, but I think we're at least a generation out. Like, they don't understand the technology, they're paranoid of the technology. And I think the current generation of experienced traders, Wall Street SEC people, are all going to have to basically go away before they move on to a new technology.

D (11:56)

The government does not move that fast in any regard. And when they do, it's often reactionary.

B (12:02)

Well, but here's the counterpoint to that, Ryan. It's not the government. I mean, the real question is, look, I sat on these industry committees. As I said, I know the players. So sifma, for example, is the largest multidisciplinary advocacy. And then there's sta, which I'm actually on the board of directors of the New York chapter. You know, these organizations are dealing with companies that want to move quickly. Why I said this before, if you're sitting at any of the legacy financial firms and you see how much money Robinhood and Coinbase is making from crypto, you want to be able to get at that and not be disrupted. They all remember being disrupted by electronic trading where they were way late to the party. So it's not the government, it's the private companies that want to jump in. Now the problem is, and this is where you and I are going to agree, the problem is when they do so, they're going to ask for rules that actually prevents real disruption and real change. So it'll be technology only. That's the problem.

D (13:04)

That's exactly what I was going to agree with you there.

A (13:07)

And.

D (13:09)

There'S two ways you can go at an opponent. You either try to disqualify what they're doing or you try to beat them at what they're doing. And if the banks cannot beat Robinhood or the traditional systems cannot beat Robinhood or the Web3 systems, then they're going to do everything they can to disqualify them.

B (13:30)

I mean, yeah, it's not disqualified. Look, keep in mind that it's like medieval warfare is a great analogy. I always use that. You know the Mont and Bailey castles, you know you have the outer wall and you know you have the inner wall. You have, you basically fight, you have a three step battle plan. Their three step battle plan is delay is basically I would phrase discredit delay and unfortunately I don't have a good D word and compete. So you know, the, the, the discredit is all the fud that comes out every time there's a downward market. All the bullshit. And we've seen it and you know, it's getting less and less hysterical and more and more less and less effective and more and more shrill. The second is delay. And that's exactly what we're talking about here. That's like, oh yeah, we're going to write great rules that are going to allow competition and then we're going to throw massive, we're going to keep throwing hand grenades into those rules. And you're going to see that over the next two years for sure. Just we've seen it with Clare, we saw with, with genius, but the banking lobby was dumb and they got en run and now they're trying to fight it again. So we've seen that. And the third is, and they're doing this all simultaneously is they have groups of people understanding what it means. In the case of electronic trading, the strategy was buy and so there was a massive acquisition M and a spree. The same thing's going to happen here. At the same time there were a bunch of companies that invested and changed their technology models in order to be able to create product. And so you're going to see a lot of that. And I would be very surprised if you don't see tie ups. And we're already seeing it. Deutsche Borsa and Kraken for example is a great example that was out. Was that last week, Scott? Yeah, we're seeing that.

A (15:06)

Did you see the tweet I just pinned above? Justin? Michael Saylor says the following US banks are now issuing credit against Bitcoin, Citi, JP Morgan, Wells Fargo, BNY Mellon, Charles Schwab, bank of America.

B (15:19)

Yeah. And so ask yourself a question for all the MicroStrategy FUDsters out there who said it should trade well below nav, all of those banks are trading, what are they on average? 1.5 times book value.

B (15:35)

I don't know what else, I don't know what else to say other than the fact that if MicroStrategy really does trade at 1 Nev. Or a bank, if JP Morgan or Citigroup thought they could buy MicroStrategy at 1.2 times, you know, price to book and they're trading at 1.5 to 1.8, they're going to buy it. It's really that straightforward. If my, if sailor wants to sell it. Now I'm not saying that he's going to sell because I don't think he will, but understand that this notion that they're going to have to sell their Bitcoin is so absurd and yet a large part one of the big planks of the Bear platform was exactly that. So I mean I think that's the one piece of information that needs to be taken out of this news.

A (16:18)

Yeah, that makes sense. So I heard somebody else jumping in or I think maybe that was a movement on Dave's end. So there was another story that I wanted to bring up unless anybody has further thoughts on CFTC here. This one was in Bloomberg and I talked about it a bit on my show this morning, came out yesterday but it was all the rage. Wall street hedged, big crypto bet and 500 million dollar ripple deal. I'm not sure if people saw this but obviously it was huge news a few weeks ago that ripple had raised $500 million from some of the largest investors on Wall Street. Citadel securities, Fortress, Brevin Howard on down the line, all the big names at a $40 billion valuation. This was a wide eye opening valuation at the rate that they did it. And obviously this was a great priority move for Ripple, gave them a huge valuation. Well a lot of the details of that deal came out and not I guess what many people anticipated. Interestingly, you know there were people that sort of pointed this out at the beginning. I remember Laura Shin took an absolute beating from the Ripple army for pointing out that some of this didn't quite make sense. But this was kind of highly touted as Wall street and these institutions huge belief in the crypto industry and in Ripple specifically to put, put $500 million behind this at such a high valuation. Well, it turns out that the deal structure was zero risk for Fortress and Citadel and Friends basically to give the TLDR they were guaranteed as their floor, worst case scenario, 10% a year for the next three years and with unfavorable terms for Ripple after that. Like if there was a buyback, it would be have to be at a 25% bump to what they paid and favorable terms getting first, first in line if there was a bankruptcy or obviously if there was an IPO or sale of the company of some sort that they would get paid first and biggest. So basically this was a zero downside deal for these guys to make guaranteed money investing. And I don't think it mattered that it was Ripple or any other crypto company or non crypto company. And so I guess the story is that it just wasn't what it seemed from the very beginning.

B (18:36)

Yeah, I, I don't think that's right. I think that that and, and I was listening to you talk about this morning and I wish I had, but.

A (18:41)

It was supposed to be like it was positioned as, like this, let me, let me see. Deal where they were investing in the future of the company they were actually getting.

B (18:49)

I think my point is. Okay, but let's phrase it this way. There are two different things. You know, it used to be that, that Ripple themselves always said, Ripple and XRP are not the same thing. They don't do that as much anymore for a very important reason. But you know, that used to be important. It is important. And my belief that the XRP army has their heads up their asses is because they keep conflating the two. There is no way this investment happens if Citadel and others don't believe there's potential in Ripple Labs to create a very important financially secure.

A (19:25)

That's fair. They do capture all the upside they care about.

B (19:29)

Ripple Labs. They on the other hand, don't believe that XRP as a commodity has explosive upside because that was what they gave away. Because the notion of XRP with explosive upside is just patently absurd.

A (19:43)

And, and it should be added just as you're talking about that, that in this same article the insiders from the deal divulged basically that when they valued this, it was 90% of it was the XRP token holdings at the time they were 120 million. I think now it's like, I mean billion now. I think it's 85 billion somewhere in that ballpark. And obviously at a $500 million investment collectively, there was no risk of not Getting paid back when they're holding 85 billion or whatever it is on the balance sheet.

B (20:13)

Right. But the valuation, on the other hand, does care that it's there. So, you know, look, it's a nuanced take. I mean, when I say the. I coined the term years ago when I wanted to be polite in society when I thought someone had their head up their ass, I called it rectal cranial inverted version, or rci. So if you hear me ever say that the XRP army has rci, it's because they do. Their heads are up their asses when it comes to not understanding the difference in Ripple Labs and xrp. That doesn't mean XRP is going to zero. It doesn't mean it's even going down. It doesn't mean it can't go up. But what it can't do is become more valuable than the companies that are creating actual value in the entire financial system. And all of these, these people saying it could be worth, you know, tens or hundreds of trillions of dollars are. I mean, it's, it's a delusion that, that is almost unmatched in the financial system because it doesn't make sense because it's designed as a utility. And Ripple Labs themselves built their software that they could use other things. Now, that said, Ripple Labs will do really, really well if they, if they execute on their strategy and XRP stays at exactly the price it's at today. And if it goes to $4 from today and doubles and just keeps up with inflation, for example, they do very, very well. And the notion of XRP as, as collateral will get there. But you said something else this morning that I disagreed with. You said that, you know, the hidden road, you know, requires Ripple Lab, requires XRP as collateral use. No, it doesn't.

A (21:40)

I didn't say that.

B (21:42)

You sort of said it. I said, well, anyway, the hidden Road could do really, really well as part of, you know, ripple brokerage.

A (21:48)

Yeah, maybe, maybe one of them said that. Because I would never say that. I don't. Okay.

B (21:52)

Yeah, but. Okay, so you understand it. So I'm sorry. I was in that. You're good.

A (21:56)

I just want to be clear. I don't.

B (21:57)

Yeah, no, but, but my point is that XRP becoming a more stable, less hyped asset, that is, becomes. That is, that becomes usable as collateral.

A (22:10)

Yeah, that's better.

B (22:11)

Collateral at the current balance sheet of size is more than sufficient for Ripple Labs to execute in a really, really interesting business plan. Now, they still have to execute, right? Hidden Road has a Good business. They do lots. I know the guys, they're smart people. They're arguably the best FX prime broker out there. There's a lot of things they need to do and offer, but the truth is it's a big market. And the market for prime brokerage in, if you think about tokenization, is really controlled by the banking cartel. If Ripple Labs can be a large balance sheet competitor to the banking cartel, there's a pretty. There's just. There's a lot, a very large total addressable market there that will do nothing but grow as the, as the profits and as the margins decrease a bit because it becomes more. More available and it becomes more global. So you have to understand that there's a lot here. And if you're in. Look, I know the people at Citadel who evaluate these things, right? And they're smart people. They're doing this specifically because they believe that there's a reasonable chance that Ripple Labs can execute and make this a really great business. None of that has a damn importance for really, it doesn't matter very much to xrp, except that it probably says XRP will get slightly more valuable and a lot less volatile. That's really what the bet is.

D (23:39)

I just have a question because you guys probably know way more about Ripple than I do and I stopped paying attention to ripple like 10 years ago. So I really don't know what's the point of it? Because it's open source and if they're just running like a business, the barrier to entry, to copy their tech is.

A (23:56)

Basically, this is the fundamental disagreement. And you can get it. You can go endlessly down this road. I think the critics will say Ripple could do exceptionally well and XRP could not be a part of it. And the proponents will say, listen to Brad Garlinghouse, who says that XRP is at the center of everything we're building, right?

B (24:14)

So.

B (24:16)

Because that's that.

B (24:20)

I don't want to address that and answer Ryan.

A (24:21)

So better you than me, buddy. Have fun.

B (24:24)

What Brad said is exactly what I would say. If I own $80 billion of collateral, I am not going to. I'm not going to talk trash about it because why would I, you know, it doesn't make any sense for me to. In fact, if that $80 billion in collateral stated exactly today's price, Brad would be able to execute in his business plan and do really well. Because Brad's business plan, because they bought Custodial Solutions, they bought Prime Brokerage Solutions, they bought Wallet Solutions. They're putting together an ecosystem where they can become a blockchain based prime broker. Now prime brokerage, Brian, just to be clear, means a firm that is capable of financing every aspect of the financial transaction ecosystem. So if you're a hedge fund and you have a long short, they finance both the longs and the shorts. If you're an individual and you have a collateralized loan, they can finance that. It is a financing activity. It allows for firms not to have to deal with the plumbing and not to have to deal with, with handling collateral. On individual exchanges they get the prime broker to give them their collateral and manage their risk on a totality of their trading as opposed to, you know, if they have one leg on one exchange and one leg on a different exchange. So prime brokerage is a very large business. It's basically securities finance writ large.

A (25:49)

Ryan, aren't you asking what's the purpose of the token specifically?

B (25:52)

Yeah, like what's the token?

A (25:54)

Totally different. Totally different.

D (25:55)

Yeah, because if that's interesting, but he's.

A (25:58)

Saying like why does the token, why.

D (25:59)

Wouldn'T you just use tether if that's the business? Like.

E (26:02)

Well, I mean, is Ripple the settlement.

D (26:04)

Layers that the, is that the idea?

B (26:06)

It's more than just that. It's the settlement and financing. Prime brokers do provide settlement services. Yes, that's part of the package, but it's really, it's the financing activities is where the profit is generated. The settlement is done more or less at cost or with a small markup. But the where XRP is in that XRP as an asset is one that is valuable to them because they own a lot of it and it gives them the ability to have a big balance sheet. XRP as an asset, if you want to value it, is really based more upon what gas fees and what will be needed in the XRP in the XRPL ledger. And XRP as an asset could be pumped by Ripple as their business grows. So if you build a business as big as Binance, you took BNB and said, you know, if you own bnb, you're going to give you lower rates. And if you look at hyper liquid, if you own Hype, you'll get lower rates. Well, those lower rates are very valuable if you, if you want to use the service. There's nothing stopping Ripple Labs from using XRP in exactly the same way in order to tick up demand for it. In fact, they'd be dumb if they don't and so they probably will. So there, there are ways that they can create value for the token as they build their business. But Right now the value. But, but I think that, that they, they can't afford the token to get too expensive because it gets too expensive and it makes their business more expensive if you need it. Right. It's always that dynamic tension. That's why when they first did their first product, which was. What was it? It was Ripple. What the hell was it called? Was a ripple net. That was a different one. Oh, X Rapid. When they first did X Rapid they made it very clear that although it was using Ripple that they could pivot to Bitcoin or anything else if they needed to. They always used to tell people that they don't say it's nearly as much anymore but, but the software is designed that way so there's always that, that, that, that. Does that answer your question, Ryan?

D (28:01)

Kind of. I think my understanding takeaway is XRP is essentially a open purpose chain that they haven't really utilized other than just moving.

A (28:12)

Yeah, right.

D (28:12)

They'll tell you value around.

A (28:14)

Right, but they'll tell you that. Yeah, it was obviously. But they'll tell you that it's the liquidity pool for cross border payments that if you want to swap quickly and cheaply in between to go from you know, a euro denominated stablecoin to something different, crypto, whatever, that it's basically the bridge, the liquidity and cross. That's the argument that I've heard. You can debate whether that's it's valid or not, but that that would be the theoretical purpose. I mean generally I think you can just send a dollar denominated stablecoin to somebody.

D (28:46)

That's every smart contract chain in existence right now though. Yeah, interesting. All right, thanks for that.

C (28:53)

This space was downloaded via spacesdown.com visit to download your spaces today.

A (29:00)

Anybody else for the thoughts here? I mean we could pivot to the market obviously. I know we do have a sponsor I think in 10 minutes or so and we haven't really heard much from Andre, Florian, Adam, David. So maybe talk about where the market's at right now. It's hard to even talk about where the market's at right now because it's just in the low 90s. But we are at 92, we're up 3% today.

D (29:21)

But we're just gonna pump at the end of the week.

A (29:23)

Obviously guaranteed probably to like 150.

B (29:27)

Just, you know.

D (29:28)

No, I, I think it's gonna be.

A (29:29)

Like 100 predictions to be good, you know, like come on man, they were so big. David, go ahead.

F (29:36)

Sure. I'm just gonna say that at a ground Level, I'm seeing people on the developing side actually pulling development assets away from blockchain and moving over towards prediction markets. So, you know, no surprise there. People are going to follow where the money goes. You know, what does that bode for crypto in 2026? You know, fewer people working on pumping out product and updates. Bigger question for me right now, just looking on a monetary policy standpoint is all these central banks who are indicating that they may move to ease, but the long bond is basically blowing out.

F (30:15)

What does it say for financial markets in 2026? Unless we have a Fed who comes in or a Treasury that comes in and starts exercising yield curve control a la Japan over the last 10 years.

F (30:30)

Things may not necessarily look as positive in 26 as they have been in 25.

A (30:36)

Andre?

C (30:39)

Yeah, I just wanted to comment on the macro side because Jodi Visser, he's made an interesting observation, right? He, he said like better high beta stocks are actually outperforming quality, which essentially means that there's like return and risk appetite and Bitcoin should follow. Right? And we are also observing something similar based on our cross asset risk appetite index. But at the, I have like a funny kind of working hypothesis that I'm thinking about and I actually wanted to pick your brains about this. So my thesis or my working hypothesis somewhat that crypto as a sentiment has been low or depressed and retail interest has been depressed because of like overall depressed consumer sentiment. And you can see it in like labor market indicators like job openings, I mean they obviously surprise today, right to the upside. It appears to be the case that the job market is turning around the corner. And I, I think that if you look at leading job market indicators like the ASA staffing index, right, the daily index, it's already picking up, right? But like my working hypothesis is once you see this kind of return and like risk appetite and once the job market actually improves, you should also see like improvement consumer sentiment because like the University of Michigan consumer index, like at all times slash cycle lows, right? It's very depressed as well. So I think, I, I don't know, but what's your take on this? Like on job market slash sentiment, retail interest and so on?

B (32:25)

I mean, yeah, for what it's worth, I think what Jordy was pointing out is actually interesting. The real question frankly is a lot of people have this belief that I think is nonsensical that Bitcoin is the tip of the spear, the leading edge and is leading the market. And since October, Bitcoin has been saying one Thing that's been different than the stock market and the stock market is going to follow. And all I'll say is that since the global stock market is 70 times the size of Bitcoin, I find it very hard to believe that bitcoin will have that kind of macro influence and is a leading indicator of that scale. During a weekend when there's a news event, of course it is because it's the only thing that's trading. And so you see that. But for a two month sustained period, that seems just batshit crazy to me. I think that equity markets ignore CDS spreads and blowing out of risk and they ignore a lot of other stuff very often for periods of time. And those markets are big. Yep.

C (33:24)

No, I agree, I agree with the credit observation, equity observation. It's true. Like credit tends to lead like equities.

B (33:30)

So it is entirely possible, if you believe what I think is that bitcoin has its own idiosyncratic stuff going on. Right. It had, you know, it was in a distribution phase. There was a lot of leverage. One point that someone made in response to me, which I think was brilliant, her name was Beckney or Backie or something she said, she pointed out or somebody pointed out, I can't remember who, that the use that Athena in particular and other players by selling crypto derivatives masked the fact that there was a lot of leverage built up in the system because funding rates, which in all previous examples of major leverage built ups, the leverage was built up on the long side and they paid a lot. But we didn't know that there was as much leverage built up in the system because you can't see it in something as easy as funding rates. So I obsessively look at that and now I realize I was looking at something that was essentially, you know, it was old, right? It was, it had changed because structurally there were a lot more players who had arbitrage is on that were selling and so keeping the derivatives in more balance to spot. So it was really October 10th was a massive buildup where there had been a massive buildup in leverage in the system and it got flushed. And that I think is far more reasoned that bitcoin went down and everything went down because there were a lot of people who were forced to sell, etc. Etc. Than it being a macro lead. So if in fact it isn't a macro lead and those were temporary, one would expect that if the stock market stays where it is and continues to do what it's doing, as Jordy pointed out that bitcoin will catch up and it will correct the underpricing that it currently has to most fair value models. That's really, that's. That was my takeaway from that. I don't know. Andre, does that jive, do you think?

C (35:10)

No, I, I do think like ripped asset sentiment is actually leading tradfi sentiment because we are actually calculating both types of sentiment ourselves. And you can see like it tends to lead by a couple of days. You know, both. Like during the recent, most recent downturn, like crypto asset sentiment moved first and then like cross asset sentiment, but across like equities, bonds, like across like all TRI assets actually followed. And same for the reversal. Right. Like crypto asset, crypto asset sentiment reversed up higher first. Right. And then like trepi sentiment followed.

C (35:53)

But like the, the observation by Jordy actually implies like the offset, like chain of causation. Right. That like tradfi sentiment, like this high beta versus quality stuff moves first and then like bitcoin follows. Right.

A (36:09)

Yeah, it's interesting thesis. I mean, Dave, any final thoughts there?

B (36:14)

No, I think that covers it. You guys have listened to me.

A (36:17)

Yeah, we got a couple minutes left before I know we have a sponsor from Etherfi jumping up. I mean, Florian, Adam, David, you guys, thoughts on the market here? Anything specific? I know, Florian, you're always looking deeply at metals and we've kind of had, you know, I guess we can take a launch from what Dave just said about markets being correlated or bitcoin being the tip of the risk. Spirit certainly has felt pretty uncorrelated this year as gold and silver have flown, stocks have flown, and bitcoin's trading down on the year.

G (36:45)

Yeah, thanks for having me again. Well, I think it's obviously pretty disappointing, the price action in bitcoin the last one and a half, two months and I'm afraid that, yeah, the cycle probably is over. I mean, something's definitely wrong here. Yes, it could still catch up. And yes, if there is a big wave of new money printing coming, bitcoin certainly will react and should bounce back here. But right now it doesn't look too bullish. I mean, something's wrong in my opinion and I'm much more cautious now. I mean, I thought last quarter should bring the big grand finale, but we saw the all time high being met in early October and since then it's been a strong sell off and everything else is outperforming bitcoin. So I assume right now that we're probably in a bear cycle now.

B (37:34)

Yep.

A (37:35)

Anybody, Anybody want to take the other side of that besides me, I, I.

E (37:39)

Would just say, I, I would say.

D (37:40)

I think we're in a reprieve.

E (37:41)

Yeah, I would, I would say actually this is when, when at least in crypto and just general sentiment in crypto is, wow, this is kind of like the ad. We've been adopted, right. This is the, the Wall street cycle. And, and so, but it feels like, well, why didn't the number go up a lot more? And certainly with the alts, we've been kind of crushed. And my feeling is actually, no, this is actually the start of, of kind of a weird like second cycle and. But we'll see. I mean it's not, we're not going to know till 2026. But I think it, you know, the, the awareness in crypto, anytime you get like, people will say building is bearish. When you actually launch the product, often you get this kind of like disappointment. And I think that's what kind of crypto is going through right now. But overall, long term, very, very bullish crypto.

H (38:32)

Andre.

C (38:35)

Like, my big picture view is essentially like risk appetite will return. Maybe we're already seeing in this kind of return because there's no recession. Right. There's rather re acceleration growth. There's even like a re acceleration leading employment indicators already.

D (38:50)

Right.

C (38:51)

So that should drive a rebound in, in risk appetite like growth expectations. And I, I don't know whether you've seen that chart that's been posted by Northman Trader. Right. That's kind of decoupling between the SPX and Bitcoin. I think, like, bitcoin's ridiculously mispriced relative to other s. I mean, the market's always right, right. There's no doubt about it. But like price what you pay, values what you get. And so I think bitcoin is rather trading on the cheap side. It's undervalued relative to other assets like Gold Max 7 and so on. But also in absolute terms and especially with respect to the growth outlook in 2026.

A (39:33)

Ryan.

D (39:36)

Yeah, I think we're in a reprieve right now.

D (39:40)

We had kind of a blow off the top. We had a lot of people taking profits. We hear all these like, positive headlines. People are all really hyped up. I always find when people try to sell me on, oh, it's going to, you know, 150, 200, 500. To me, that's the sell signal. If people are trying to, you know, push, push a price, that just doesn't make sense in, in the near term. And they're saying there's going to be this explosive growth. Like you just typically don't see that it's like this.

B (40:09)

Yeah.

D (40:10)

Anyways, I think we're in this reprieve and I think generally in the US right now, life feels very expensive. Just the cost of living seems to be increasing exponentially. Like Southern California, Puerto Rico, even in Texas, parts of Texas, it seems like it's getting very expensive. So people don't feel like they have a lot of cash and they're not going to gamble with a strict budget at this point. So maybe, maybe in 2026 when the economy's churning and.

D (40:43)

Trump policies take effect in a positive way, then people are going to feel wealthier and start putting their money into riskier assets.

A (40:56)

Anyone else? I mean, I think that we're just fine. Technically there's some obviously concerns the 50 MA on the weekly if you're a chart watcher, but otherwise I find it hard to get panicked on a 30% retrace when Price made it to 125. When we've seen this movie so many times. I mean, how many times have we seen 30% plus corrections in bull markets and then long periods of sideways and you know, the fact that it's been doing that and it has not moved like metals or like stocks to me is even more bullish because even if your thing is uncorrelated to the downside, at least it's uncorrelated which people will appreciate and view positively into the future. I mean, one of the best cases for bitcoin is it doesn't trade like anything else. Unfortunately, sometimes that means it goes down.

D (41:50)

I'll just add this, Scott. If you have not taken out your resume and tried to polish it up, we're not in a bear market.

D (41:59)

When the Price pulls back enough.

A (42:01)

Think pieces on that though. Ryan, did you see all the people coming? Like, I literally see these viral think pieces like, dude, I, I wasted eight years of my life building in crypto. It's a scam. Like, I literally, like those things are going around.

D (42:14)

Yeah. But I, I would say on a personal level, if you haven't really considered, like maybe I should get a job, I, I, I think we're pretty safely out of the bear market for right now.

A (42:25)

Well, the problem is I can't go back to DJing at 49, so you could.

D (42:29)

It just won't be pretty.

A (42:33)

Yes, I, I'm running out of options personally. I mean, David, what are your thoughts on the market here?

A (42:42)

Throwing out bullets, putting people on the spot. Go ahead, David.

F (42:45)

Sorry, you could put me on the spot. You know, maybe we're basically just sort of stable, trying to bump around 90,000 and hold these levels. Yeah, Jordan's point about Trump benefits kicking in next year. You know, people only probably see that after they file their taxes. So maybe we see something start to trickle in from retail as we go into maybe February, March, the next couple of months. It's highly dependent, I think, on what interest rate actions you get coming out of central banks.

A (43:23)

I mean, we're getting cut tomorrow.

F (43:24)

I think at 49, you're still cute. You could probably do it as long as you're on air.

D (43:30)

That's true.

A (43:31)

Listen, I mean some of the biggest DJs in the world are well into their 50s and even pushing 60 now. A lot of my contemporaries who are much more famous, they still live that life at 55, 60 years old. I just like to go to bed at like nine, I understand.

F (43:45)

And drink a glass of milk. But we'll know you as Rock and Scott. Go ahead.

A (43:49)

That's right, Rock and Scott. I like that. Jesse, Joe's jumping up on stage. I'm assuming that's because he had some specific thoughts on Joe. Can you hear?

B (43:57)

Yes.

I (43:57)

Good morning, everyone.

B (43:58)

Good morning.

A (43:59)

What's going on?

I (44:01)

Oh, nothing. I'm just very excited about this price action, man. It's what a time to be here that the. At the death of the four year cycle. It's probably one of the most exciting things that has happened, I think in the history of bitcoin. So I'm pretty pumped.

A (44:17)

Well, last year's, Last year's New Year's party at sailors was 100k party. So this year we can rebrand it to the death of the four year cycle party.

I (44:25)

This is big, guys. I mean we live in a very sentiment driven world. We live in a narrative driven world, as we all know. Right. And the narrative shifting about bitcoin where it doesn't have to collapse and you don't have to engage in this market timing nonsense, more like an institutional asset that's massive and I don't think people realize it yet. I think it's huge.

B (44:45)

Yeah. Did you see my arguments yesterday? I don't want to go through.

I (44:49)

Yeah, I mean you might my brother in here. I appreciate your post because you're willing to go out there, right or wrong.

B (44:56)

Right.

I (44:56)

I appreciate people, you know, taking a view and explaining it well and you're doing a great job.

B (45:00)

So I appreciate the TLDR for people is that we didn't get the bull face. So why the Hell, do you expect anything close to the magnitude of the bull phase? Why would you expect or sell based on the bear phase being at a bigger amplitude than the bull phase was relative? So, I mean, that's probably the biggest thing from a technical point of view. It doesn't make any sense to say 30, 33% is essentially half of the, quote, normal Bitcoin four year cycle. But the bull part of this was half of what you might have expected it to have been, you know, if it had been previous cycles. So, you know, even, even on their own argument, it's, it's fucked up. And if you take into account gold or money printing or anything else, then it never happened. Right? So there was no bull part of the cycle. So, you know, so we're not in a cycle anymore. We are in a, in a market where the network is just relentlessly grinding higher and it's gotten more and more cheap as time goes on. So, you know, short that at your will. And it happened because of excessive leverage being flushed out. And, you know, unless the stock market crashes, ain't coming, you know, all the, all the pundits who have been taking victory laps for the last two months are going to look stupid. That. That's really the bottom.

I (46:09)

Yeah, well, well, Dave, I mean the analogy I use, you know, drawing on my trial or background is like a rubber band, right? If you stretch a rubber band really hard, right, it's going to snap back. It's gonna, it's gonna snap your finger, right?

B (46:23)

That's.

I (46:23)

And I think that's what you saw in a lot of prior quote unquote cycles. You know, bitcoin quite honestly had no business going to 19, 6 in 2017. And I think it snapped back real hard. And that's the parabolic move and the snapback where we spent a year trying to sort through that. And what is the appropriate price at that point for institutional adoption, for people understanding the asset, for the hedging tools that need to be there. And you didn't get the pull. The rubber band's pretty slack right here. I think you didn't get this huge move over. So if you didn't stretch the rubber band, why would you expect it to snap back so hard? I don't understand why this is so difficult for people to get.

B (47:02)

Get.

A (47:03)

Yeah, I love it. And Joe, thanks for jumping up, but we are eight minutes delayed on a conversation here that was planned with Etherfi, as I mentioned before, so we're going to move on to that. Mike, do we got you behind there? I Know we always have technical issues getting people on stage. So if that was happening. Welcome to to X. Are you there?

H (47:21)

I sure am, yeah. Hey, thanks for having me.

A (47:23)

Perfect. No problem. So listen, let's dive right, right into it. I've been seeing you guys obviously everywhere. I think better than me giving the tldr. Perhaps you can give us a introduction to Ether Fi, the cash card, your other products and I guess you know, the simple elevator pitch for the listener.

H (47:42)

For sure. Yeah. So Ether is pretty straightforward. Our mission is very humble. We want to replace all banks. So basically what we've built is a full end to end alternative to traditional banks. We call it a defi bank or otherwise known as a crypto neobank. But the basic idea is you should have a product that is fully self custodial that gives you all the power of defi but at the same time all the functionality and ease of use that you've come to expect from Fintechs. And so with Etherfi you can deposit your assets, you can wire your money in through good old fashioned fiat Euros, USD, whatever you feel like. You can deposit stable coins without any fees. You can then buy some ETH or BTC and stake it, use that as kind of your base yield. Then you can deploy it into DeFi with one click super easy and get great rewards. And then you can actually get a credit card that lets you either spend your assets one to one. So no fees, no nonsense, no extra FX charges, nothing. Just spend your fees, spend your, your crypto directly or you can actually borrow against your crypto portfolio at currently at 4% rate. So a better rate than you know, you can get anywhere.

A (49:07)

You get 4% rate against your entire portfolio. That's.

H (49:11)

Yeah, yeah, that's.

A (49:12)

Those are, we obviously have people on here constantly and it's usually, you know, 9 to 12 seems to be the market rate for borrowing against crypto.

H (49:20)

Is that accurate?

A (49:21)

I don't want to misquote.

H (49:23)

Yeah, no, that's exactly right. Yeah. And that uses just the normal defi market rates. So. And that tends to be a lot cheaper than anything you can get from you know, a traditional bank or you know, obviously from a credit card that typically would charge you 30% for, you know, for boroughs and it works great. It's super easy. The, the main, if you want to simplify the, the value proposition for somebody who's not, you know, super deep into defy, it's that you have the equivalent or an alternative to a checking account that pays you a, you know, a great yield these days I think it's 7 or 8% on your stables but that you know, varies with DeFi. So earn 7 or 8% these days on your stables and get 3% cash back on your, on all your spending. I mean that's a better fintech product than basically anything else that's, that's out there. We also have a crazy promotion going on right now called Cashmas which is where if you refer a friend or you get referred, you get 10 cash back on your, your spend for, for cashmas for two more days today and tomorrow. So yeah, it's super easy. You can get signed up in, in a minute, go to Ether Fi and, and check it out. Uh, I think it's great, I'd love to hear feedback uh, from users so feel free to message me on, on X or, or telegram or whatever. So tell me, tell me what you think.

A (50:49)

So obviously you guys have a huge element here that's non custodial liquid restaking. So maybe you can break down how this works with staking versus restaking and DeFi. I mean you kind of just gave us the broad strokes I think of how you do you generate the yield. But I mean do people who are deeper in the weeds and aren't normies who maybe just, you know, understand that this is a banking alternative? Like how do you explain the restaking in that side?

H (51:17)

Yeah, we, we try to keep it simple honestly. We try to abstract away all the crypto complexity. So when you're, when you're using Ether, you're not dealing with, you know, seed phrases or signing random hex transactions, any of that that you've maybe come to expect if you've tried to use Defi, it really is meant to feel like a, just a simple fintech product. The underlying yield on ETH comes from staking and restaking. So you know, for those of you that aren't familiar, staking is basically the mechanism that keeps the Ethereum, Ethereum blockchain secure and it's part of the consensus mechanism. Basically you deposit your, your eth into a special contract and in exchange you get to run a part of the, part of the network and earn some fees on it, earn some rewards, which these days are I think around two and a half percent.

H (52:09)

Now that's pretty complicated if you want to do it yourself, but protocols like etherfi let you delegate the complicated part and just earn the rewards. So you deposit your eth and all the complexity is taken care of in the background. Restaking is.

H (52:26)

A concept that was pioneered by Eigenlayer, which is another DeFi protocol that EtherFi works closely with. And the idea there is, in addition to securing Ethereum, you can secure other crypto economic networks in exchange for that earn additional rewards. And so these days those additional rewards are around I think 0.25, maybe 0.3%. So it's a, you know, it's a 10% increase in your staking rewards.

H (52:54)

And so, yeah, and again all of that complexity is handled for you in the background. You don't need to know, you know, all the mechanics of running a validator node or delegating your staked eth. You basically just deposit. Ethan, all this stuff is, is taken care of for you.

A (53:13)

Yeah, that makes perfect sense. Can we dive more into the card? Is it a credit card, is it a debit card? Obviously I, I know that it's a Visa card, works with Apple pay, offers up to 3% cash back as I'm reading through this, but you also said it allows you to basically split spend your assets one to one.

H (53:29)

Yeah, exactly. So it is, you know, this is a technical distinction, but it is a credit card. A Visa debit card is just a different thing that doesn't work everywhere that a normal credit card would be, would be used. And so it's important to.

H (53:48)

That this is structured as a credit card. That being said, it is a fully collateralized credit card. So you're either directly spending your stables like USDC or USDT or you're borrowing against your portfolio. So if you have, for the sake of argument, you have $10,000 of stuff in your Ether 5 vault, let's say some that is stable, some that is eat, some that is btc, you know, Heath, Phi, token, whatever. You've got a bunch of stuff in your portfolio. You basically get a credit, a line of credit that lets you spend or borrow against those, those assets. So a very common pattern that we see is users would deposit into our DEFI strategy vaults. That.

H (54:29)

Representative yield might be you're getting 8% rewards on that. Again, this is variable, but let's say for the sake of argument, that's what it is. And then you're borrowing at 4%. And so they're basically kind of arbitraging those two. They're earning 8% and they're spending by borrowing at 4%. So that's a common use case. And in other cases people just borrow against their ETH because they're bullish on ETH and they want to keep the upside. And it's a great way to borrow and use the crypto in real life.

A (55:04)

So I assume in that case there's some theoretical liquidation risk or margin requirements if price drops dramatically.

H (55:11)

Yeah, exactly, yeah. In both of those you're taking on risk. So it's not. Arbitrage is not a, probably not the right description. Exactly. Because you're taking defi risk by you know, depositing into the D5 strategy vault and then you're, you know, you're spending. So they're, you know, you're, you're taking an opinion about I guess the, how big that risk is that you're taking.

A (55:38)

Got it. And so you mentioned in passing there the EFI token. So maybe we can dig into that a bit like what role does that play in governments? Protocol fees incentives, how is it used as collateral? I guess what's the role of the token itself within the ecosystem?

H (55:55)

Yeah, we honestly kept it pretty simple. My background is, my previous company that I started was B2B SaaS. So software as a service company, it was really straightforward. We made a product, we charged money for it, users paid us and then we grew the business. So that's, that's the kind of like mindset I guess that, that we've taken to building ether buys in many ways it's, it's really straightforward. And so the token utility is really simple. Part of the protocol revenue goes to buy back the token on the open market, which therefore ties the sort of the fate of the token to the success of the uh, of the protocol. We recently, I think, I think it was in the last month or so actually announced a $50 million buyback program where just every day we buy, you know, 1 to 300k of the token on the open market and.

H (56:49)

You know, that's just the way that we're returning value back to token holders.

A (56:59)

Yeah, that makes perfect, perfect sense. Thanks for digging more deeply into that. So how do you like, I guess from a business perspective, how do you gauge what you would view as success? Is it based on like how much tvl? Is it spending volume? Is it more people using the card? And I guess with that in mind, like what targets do you have in the future? What are you building towards?

H (57:24)

Yeah, that's a great question. So there's a couple of things. I mean ether is already one of the more successful defi protocols out there. We have I think about 8 billion in TVL, you know, depends on the price of eth that day. So we're top five DeFi protocols out there in terms of the card products specifically, we're by far the largest non custodial card out There, I think by maybe even an order of magnitude at this point, so doing incredibly well. But look, honestly, I measure my success in terms of the number of, you know, customers that we have, number of people that we can actually help live their lives in this new financial universe in a way that is, that gives them the freedom and flexibility and ability to defend against government, you know, currency debasement or seizure of assets. That's really what, what I care about. That's what motivates me day in, day out. And we have, you know, hundreds of thousands of, you know, users now and growing, you know, incredibly fast. We're adding, you know, a couple thousand a day now.

H (58:32)

And so my, the, the real end game that we're aiming for is to be a viable alternative to traditional banks. Like we want to have millions of customers next year and hundreds of millions of customers in the years after that. We want this. I think this is objectively a better model for financial services than the traditional model. If etherfi was a traditional financial institution, if we were custodial and operated like a tradfi institution, with our current deposit base and revenues and customers, we'd probably have to have about 6 to 700 employees if you just look at comparable institutions. Whereas today Etherfry has 35 employees. So there's just a, there's more than an order of magnitude difference in cost and which, which is efficiency. I mean, this is why we're able to give much higher rewards. We don't have to kind of screw our users with all kinds of hidden fees. We don't need to do that because we just operate much more efficiently and we can pass that on as higher rewards and lower fees to our users. And that's, you know, that's what gets me up in the morning.

A (59:41)

Yeah. So how can people get involved today?

H (59:45)

Yeah, super easy. Just go to Ether Fi. As I said right now we've got this, the biggest promotion we've ever done called cashmas. So for two more days, you can get 10% cash back on your, on your spend if you sign up for the card specifically. So just go to the etherfi X account or anybody that's tweeted about it and use their referral code to sign up so that you can get that, you know, that 10% cash back bonus and then invite some friends and then you get cash back on their spend too.

A (60:15)

Awesome. And I guess I got like two more minutes. So beyond all of this, you kind of gave the grand vision humbly at the beginning to replace the bank. Like what's the Five year vision.

H (60:27)

I mean if we can do that in five years, I'll be, I'll be pretty happy. I mean that'll be a big win. I do think it'll. I mean this is, it's going to take probably a decade or more to truly replatform what financial services look like. But I do think this non custodial model is going to be the default model in the future. And I think when we look back at the early days of bitcoin.

H (60:55)

I got into it back in 2011. I bought some bitcoin when it was 80 cents a coin. So I got excited about it early on. But in many ways the vision went unfulfilled because.

H (61:10)

The big limitation of bitcoin and the bitcoin script language that sort of underlies it is that it's not Terry incomplete. In other words, you actually can't, you can't build financial infrastructure on bitcoin. It's sort of. It's always just going to be a pet rock. And so the power of Defi is exactly what. In many ways I look at Etherfi as the end game here. Like this is what been working towards and what many people got excited about in the early days of bitcoin which is creating a truly stateless financial infrastructure where people. Where the sort of power dynamic shifted dramatically from governments and central bankers to individuals. So I'm pumped about that. I mean I think this is really revolutionary.

A (62:01)

Awesome man. Well thank you so much and for sticking through it after the issues. We've got Mike here obviously give Ether Fi a follow. You can see them up on stage. Mike, you're at. I don't know how to put. Is it still a godze? That's how. Is that correct?

H (62:17)

Yes.

A (62:17)

Nailed it. Yeah, so. So Mike, you can follow him as well at Mike Silgade and check out the promotion that you guys have going for two more days, man. Mike, thank you so much for your time. Thank you everybody for listening. We will be back tomorrow for another crypto Town hall. Have a good one everybody.

B (62:32)

Bye.

C (62:54)

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