Podcast Summary

Podcast: The Wolf Of All Streets
Host: Scott Melker
Episode: "I Lost $2.5 Billion While The Government Destroyed Crypto Investors" | Charles Hoskinson
Date: January 11, 2026
Guest: Charles Hoskinson (Founder, Cardano)

Main Theme / Purpose

This episode dives into the turbulent years for the cryptocurrency industry, marked by catastrophic market downturns, shifting regulation, government interventions, and the resulting reshaping of crypto. Charles Hoskinson reflects candidly on losing $2.5 billion, institutional versus retail fortunes, the consequences of political meddling—especially the US government's involvement—and where “crypto 4.0” is headed. The episode unpacks how hopeful narratives turned into policy nightmares, and what the future could look like for builders, investors, and everyday users.

Key Discussion Points & Insights

1. The Post-Bull Reality: Not a Market, But a Reset

• Hoskinson’s Opening Take: The last four years have been a bloodbath for crypto outside Bitcoin. “We've been carpet nuked.” (02:01)
• Regulatory chaos and “Scary Gary” (SEC) era post-2022 led to a toxic environment where retail got wiped out and only select institutional interests gained.
• Government intervention, especially the Trump administration’s launch of “Trump Coin,” created confusion instead of clarity.
  • Quote: “We said, oh my god, the government's now rug pulling us. It's like, what the hell is going on?” (02:53)
• Altcoins and Web3 stagnated while Bitcoin became an “institutional asset.”

2. Government Involvement: The Dangers of Politicizing Crypto

• Crypto should be “politically, geographically, and ethnically neutral. They're global products… The minute you make it an American crypto, it doesn't make sense at all.” (00:48, 54:09)
• Trump's meme coin move, politicization (“Crypto equals Trump equals bad crypto equals corruption”) increased polarization and regulatory uncertainty.
• The administration failed to create a coordinated, inclusive regulatory strategy, resulting in adversarial regulation and lack of bipartisan support.

3. State of Retail, Institutions, and Builders

• Retail investors are exhausted after consecutive cycles of losses, scams, and failed promises: “The biggest issue is retail. Didn't want to come back. They're just like, my wife is going to divorce me if I keep buying this stuff.” (03:28)
• Builders made significant technical progress (zero-knowledge proofs, Cardano’s decentralization, Ethereum milestones), but this wasn’t reflected in token prices or sentiment.

4. The Need for a New Crypto Generation: What’s Next?

• Next phase (“fourth generation”) of crypto is not about new coins but about intention-based systems, chain abstraction, and rational privacy:
  • Intent-based UX: Instead of managing keys/wallets manually, users would simply state their intent (e.g., “I want $100 Foo Coin at the best price in an hour”) (01:03, 05:12)
  • Rational Privacy: Selective disclosure, AML/KYC with privacy, on-chain programmable compliance (05:12, 14:08)
  • Chain Abstraction: Use of crypto without wallets, via smartphones; seamless, multi-chain experience
  • Quote: “Intentions don’t care where the transaction settles… The wallet abstraction gets really good in this chain abstraction world.” (06:01)
• Predicts massive growth from this: “Probably a 2 to 3x in user count and a 10x in assets under management.” (06:59)
• Need for innovation to attract new retail. “You need a different narrative for retail to return.” (04:45)

5. The Privacy Narrative Returns

• Privacy emerging (again) as a core narrative, with institutional and VC interest converging to “pump” privacy coins and attract attention. (10:53)
• “We did a retail distribution with Midnight…our trading volume actually was like $9 billion a day when it first came out as the token. So I was pretty happy about that. It shows you like retail still has some juice and VCs aren’t necessarily masters of the universe.” (12:14)
• Combining privacy (ZK) with chain abstraction enables “private intents” and safer economic negotiation (12:45)
• Selective disclosure: “It’s a game of 21 binary questions.” Regulating by proving certain facts without full doxxing is both feasible and responsible (14:08, 16:09)

6. Centralized Stablecoins, Decentralized Dreams

• Current stablecoin landscape is transparent but not private: “Every time you buy something with Tether or Circle in its current configuration, it’s known forever by everyone, everywhere.” (16:36)
• The industry needs “a private stablecoin… with a selective disclosure component.” (17:36)
• For real mass adoption, end users shouldn’t need to know or care about the backend rails or token details—just “feel like they’re sending a dollar.” (18:58)

7. Cardano’s Decentralization Milestone

• Cardano achieved full decentralization, both in consensus and governance:
  • On-chain governance, ratified constitution, community-run treasury, and multiple independent organizations.
  • “All that’s there. So it’s kind of like Hyperledger or Linux Foundation… and it all runs and it’s boring, and that’s the way we like it.” (20:51)
• True decentralization only matters when it’s lost; most users don’t care until it fails. (20:17)

8. AI, Protocol Security, and the Quantum Distraction

• AI-driven attacks will surge: “Now with AI, I can load the entire code base of the cryptocurrency into the AI and then I can say, hey, find a novel attack to bring this entire network down.” (27:18)
• Formal verification and rigorous development (as in Cardano) are the only way to stay competitive and secure.
• Quantum computing threat is real but overblown; the industry can and will adapt when the time (based on objective benchmarking, not speculation) arrives (29:20).

9. Policy Failures and Industry Cohesion

• Government crypto czar failed at basic industry coordination, leading to missed opportunities, poor regulatory framing, and lack of clear standards.
• The “photo op” culture (White House meetings, roundtables) replaced real strategy (37:01).
• “If you’re the czar and you’re in charge of this whole thing, I got to judge you by your track record. Most cryptos are down 40 to 50% since Trump took office. So the industry’s unhealthy.” (37:18)
• Partisanship and photo ops replaced real coalition-building, industry-wide strategy, and global thinking.

10. What Gives Hoskinson Hope?

• The fourth generation of crypto (rational privacy, smart compliance, chain abstraction) is underway and could eventually unlock a billion users and $10 trillion in assets (56:49)
• The current phase is a reset, not a death; drawing parallels to Amazon’s decade-long maturation (2011 vs. 2000)
  • “I think will be 2011 Amazon, where the crypto markets will have real use, utility and adoption behind them.” (57:41)
• This moment is make-or-break for crypto’s soul: Stay decentralized and global, or surrender fully to Wall Street and centralized players.
• “I just don’t want to be in this toxicity anymore… I want to talk about how we can work together.” (59:14)

Notable Quotes & Memorable Moments

• On the devastation of the last cycle:
  • “We've been carpet nuked. All the cities have been firebombed. It's pretty grim. But we can rebuild, and we'll make it better.” —Charles Hoskinson (02:01)
• On government’s role:
  • “Crypto should be politically, geographically, and ethnically neutral. The minute you make it an American crypto, it doesn't make sense at all.” —CH (00:48, 54:09)
• On retail pain and lost hope:
  • “The biggest issue is retail. Didn't want to come back. They're just like, my wife is going to divorce me if I keep buying this stuff. Because every time I say it's going to 10x, I just get destroyed.” —CH (03:28)
• On intent-based systems:
  • “Instead you just want to be like, I want $100 worth of Foo coin, best available price within an hour. That's an intention.” —CH (05:20)
• On privacy narrative and VCs:
  • “All these big guys...they just got together and said, hey, if we do the pumpity pump on one of these coins, then everybody’s going to pay attention to privacy and then they'll pay attention to the real privacy.” —CH (10:53)
• On selective disclosure and regulation:
  • “You play a game of 21 binary questions as selective disclosure...they get bundled together and they get transacted and then if it settles, it’s compliant. But you haven't really doxxed yourself.” —CH (14:08)
• On why true decentralization matters:
  • “You don't ask for it, but you beg for it when you lose it and you face the consequences of it.” —CH (20:17)
• On the failure of the government’s approach:
  • “The administration failed to create a coordinated, inclusive regulatory strategy, resulting in adversarial regulation and lack of bipartisan support.” (Summarized from 35:37–37:01)
• On incentives and bipartisan opportunities missed:
  • “You can't expect people to collaborate with you in a negotiation if there's no upside for them. You have to create an upside. You have to give them something.” —CH (40:17)
• On leaving toxic discourse behind:
  • “I just don’t want to do it anymore, I don’t want to be in this toxicity anymore... I want to talk about how we can work together.” —CH (59:14)

Important Timestamps

• 00:32 – Government steps in: Trump elected, launches Trump Coin, expectations vs. reality
• 02:01 – State of crypto: “Japan 1946” analogy, devastation, and hope for rebuilding
• 05:12 – Defining fourth generation crypto: privacy, intents, chain abstraction
• 10:53 – Re-emergence of privacy as a narrative, VCs and “pumpity pump”
• 16:36 – Stablecoins’ lack of privacy; need for private money with selective disclosure
• 20:51 – Cardano's fully decentralized, community-driven governance explained
• 27:18 – How AI will change (and threaten) protocol security
• 29:20 – Quantum risks: real but manageable; industry can and will adapt
• 37:18 – Industry health, leadership failures, and need for new strategies
• 40:17 – Missed bipartisan opportunity and the Trump ‘scorched earth’ approach
• 54:09 – Why “American crypto” is an oxymoron
• 56:49 – What’s still exciting: the promise of crypto’s fourth generation and market maturation
• 57:41 – Amazon analogy: crypto’s current reset, not death; the real utility phase is coming

Closing Tone

The conversation is blunt, irreverent, occasionally darkly comic (“Klaus Schwab will just be furiously masturbating in the corner”—CH, 59:05), but retains sparks of optimism for crypto’s future. Most importantly, Hoskinson’s faith remains in technology, true decentralization, and global inclusion—not government photo ops or regulatory theater. The “reset” of 2026 is less the end, more preparing the stage for crypto’s next, potentially greatest act.