A (3:37)

I think that's right. I mean, look, I said it when I joined crypto eight years ago. I talked to my friend Larry Tabb, who's one of the heads of research at Bloomberg, and I basically said everything would be tokenized at some point in the next 10 years or so, maybe longer, depending on how long it would take. And I still think so. Obviously when you have the head of the SEC saying that's going to happen, you have a pretty good idea. What's interesting from an investor point of view is what the hell does that mean? Well, it means a few things. It certainly is incredibly good for adoption and understanding and valuation of bitcoin, there's no question about that. Now I'm not a maxi, but Maxis love this idea. Except for the fact that there is value in some of the token ecosystems that will support all of this and there will be new rules and new capital rules to kind of go along with it. And that's kind of the big problem, right, because people are trying to figure out what's what between, you know, what will be the value of their favorite token. But they also have to understand that they're going to have more competition within the token ecosystem because by IBM or Tesla tokenized or SpaceX for that matter. Anyway, Paul, you have your hand up. Sorry.

D (4:57)

Yeah, I think you nailed it. Except that the problem is everyone's looking at price and defining price as like where's bitcoin? That's the number one thing and it drives the rest of the cryptocurrency market. Problem is it's not in it. It doesn't benefit from any of this tokenization. I think some people might think it has second or third order benefits, but it's so indirect that I don't think it really gets a chance to capitalize on it until at least it becomes the rail by which all this tokenization happens. And it seems to be very, very far from it. And just your thesis, Dave, you know, it's like all these other chains, your thesis is that oh well, it doesn't matter, none of those chains are going to really truly benefit from it. Which is why like Ethereum isn't That interesting at least to a lot of the people in this, in the space that are on the panel or have been on panels. Because well, if Ethereum becomes expensive you just go over to Polygon, then you go to base and whatnot. And so fundamentally if this is what people are getting excited about, then there's nothing to invest in other than, well, the stuff that gets tokenized. And now we can do that more efficiently and cheaply and maybe hyper for some degree and until the next faster hyper comes around. And so I'm still a bitcoin believer. I'm definitely not a maxi. If anything maxis hate me. But you know, when are these rails going to be on bitcoin? And that's what'll make me, I guess, a bull again.

A (6:10)

You and I have one big disagreement constantly and that is like, you know, the notion that value to Bitcoin has anything to do with utility. With utility beyond being store of value.

D (6:24)

Exactly, I get it. And that is our funny disagreement all the time.

A (6:27)

I get that. So let's, let's table that for a heartbeat. But the, the most important point you just said is exactly the argument I have with the XRP army all the time in particular, which is this notion people do need to understand that token ecosystems to the extent that they are substitutable mean that the price of the token going up is limited by the fact that if it goes up too far, people will substitute away from it. That is absolute economics and they always ignore it.

D (6:55)

Well, that's true of every single other chain that enables tokens. That's true of Ethereum, of base, of Solana, you name it, that's it of all of them. So therefore. So why are we excited about. Except for what?

A (7:08)

Unless a token has the ability to pass through economics to its users in a way that is open source competition versus you know, versus corporations that might offer the same thing and taking a. By taking lower profit margins than corporations might be able to do.

D (7:26)

Name one token though, that does that name any token based on that thesis that has the capability to do that and does not just store a value like Bitcoin.

A (7:35)

Well, that's the question, right? There are many that could. The question is whether they will. And one of the problems that's had in the crypto system and lawyer, you have your hand up so I'll go you in a second. But the problem in the crypto ecosystem has been there has been no mechanism because people were afraid of the SEC that their securities and therefore you couldn't get immediate liquidity. I Mean, there's this incredibly circular argument which says tokens are great because you can get immediate liquidity and not deal with this ridiculous set of rules that dates back to the 30s that slows down capital formation. And so they're great, except that if in fact you called it a security, then they wouldn't be able to do that. But of course, if you can't do that, then what's the actual value that goes to the token holder? So, you know, like Chainlink, for example, announced yet another major integration. But let's say there was revenue accruing to the Chainlink ecosystem. There is literally no way to know whether you're holding, you know, if you're holding the token, whether the token will get any value of that ecosystem or will just go to the foundation or company or whoever is running it. That's the problem. That's always been the problem.

D (8:42)

Well, the thesis of every one of these chains, that is a utility chain whereby tokens can get transferred, and that was the thesis of XRP way back in 2013. They were the first decentralized exchange ever and as well had a token ecosystem. Now granted, it's not, it wasn't as capable as Ethereum is today. It is now with, you know, with a lot of the EVM capabilities that have been added, bridged over from xrp. And I'm not an xrp, you know, army type of guy, but I'll defend them in light of what I think are false statements about xrp. Now everything you just said implies that xrp, which is no longer considered a security, and that was clarified now, should have all the capabilities that you can enact on all of the other chains and has all the utility of all those other chains and it predates them. And so all right, now what's the argument to say that, hey, XRP couldn't, why couldn't it be the chain that is used for tokenization? It could above and just like anything else, Right.

A (9:39)

So the question really is how much value? What's the total addressable market? How do you value it? It always boils down, down to the same thing. Correct.

D (9:48)

For every single chain. Which means your argument against xrp, if

A (9:51)

that is your argument applies to xrp. My argument is against the absolutely unreasonable expectations of people in the XRP army. I actually own some xrp. So my argument isn't that XRP can't be worth double or triple what it's worth today. My argument is that it's not going to be worth a thousand times what it's worth today. Which these idiots seem to think it will be. And it literally is ridiculous to assume that any particular token could be worth more than the financial markets itself based on its utility, because of course it'll get substituted away.

D (10:25)

So there's nothing to. So based on that substitute away, there's nothing to invest in then outside of Bitcoin. But Bitcoin doesn't actually reap the benefits of tokenization.

A (10:33)

Well, here's the difference, Paul and lawyer, you've been very patient. But here let's get to the simple reality. The reality is if you're buying crypto, if you're buying a crypto asset looking for a lottery ticket and it's already valued in the billions, you're probably shit out of luck. If you're buying a crypto asset that's already in the billions and you think it could become slightly more billions and actually perform. I mean, people in the stock market are happy when a Stock goes up 25% in a year. They think that's a really good rate of return. And if you can get a portfolio that returns 10, 15, 20% in a year, you're happy. In fact, the actual early assumptions on most funds is to try to beat 7 or 8%. So if you temper your expectations, that's cool. Now obviously there's a lot of speculation in the crypto market because people think of it as lottery tickets. And that's the difference. All I'm saying is that the entire ecosystem isn't going to be full of lottery tickets. There will be a few, but which ones? And that's. That's the deal.

E (11:40)

Anyway.

A (11:40)

Lawyer, Sorry, I've been drawing on a lot.

C (11:43)

Yeah, that's all right. I mean, I just think. I know this is vague, but it is sort of. My whole investment thesis is and always has been somewhat vague, but I really think that the ubiquity of tokens and self custody and trading stocks on tokens, all of that accrues to bitcoin in that the idea of holding tokens, the idea of something digital having value becomes more ubiquitous. And as long as you think bitcoin's not going anywhere and all of that will slowly but surely or should, in my view, accrue to Bitcoin. What do you think of that?

A (12:17)

I mean, I think that's sort of similar to mine. Paul, you still have your hand up, right?

D (12:23)

Yeah. So I think that's true if all this tokenization that we have actually gets utilized in self custody. Because otherwise to the average person that acquires any of these tokens to Them it looks just like an E Trade account. It's like, okay, I have a tokenized stock on Coinbase, I have a tokenized stock on Kraken. Well then I have a tokenized stock on E Trade. There's really no difference. And so if it's true, you said, you did say that keyword self custody. So we're totally in agreement there, lawyer. And so if people are actually using self custody wallets and they're accruing these tokenized stocks and also seeing the value proposition of chains where whoa, I have a tokenized stock, but guess what, I can actually send that to my buddy, right? I can actually use it as a currency. I can actually have utility in it outside of just speculation. Then they can see, oh look, there's other true on chain native assets such as Bitcoin that they can acquire and send and receive. Then it ripples over. But the way our industry has been going, it hasn't been that way. It's all been just custodial etf. And when that transition happens that I'm in full agreement. But I'm not, not seeing that trend. And so since I'm not seeing that trend, I'm not feeling like Bitcoin is going to benefit from it. But it absolutely can.

A (13:42)

Well, yeah, I think that you're, you're missing the forest for the trees in a bit. I mean, look, the on demand settlement for a digital commodity makes enormous sense. On demand settlement for a share of Tesla stock is problematic. And the reason it's problematic has nothing to do with privacy or self sovereignty or any of that stuff. It's that the equity or ownership rights in a company, the company itself needs to know who its shareholders are and has to have the ability to find it. And right now the current system sucks. And tokenization allows that to be massively improved. Right? Because right now there are multiple flaws in the market. There's structural flaws like the way stock borrow works. It's this whole idea right now. And for those who don't know when you want to sell a stock short, your company that's dealing with you, that's your broker will do a locate, say okay, I can borrow this. You then sell it and then by the end of the since it's T plus one settlement by the next day, they have to borrow it and get it done. With tokenization, what happens is different. It's like you want to sell a stock short, borrow it first and sell it. There is enormous reasons why borrow it first and sell it with the technology to allow and Facilitate that quickly is a far, far better market structure. Far better for a lot of reasons. And you can go through all the issues about naked short selling. There's lots of good reasons why that makes sense. So but when you inherent in doing that, you don't want to stocks or it's economically bad to have stocks in self custody because it means those stocks will be kind of out of circulation. And so companies don't want that, the markets don't want that. And there's other reasons why that's true, why things went into street name, et cetera. There's also a need to be able to obfuscate, right? You have to. If someone is acquiring a management control stake in the stock right now the rule with 13F is you have some number of days before you have to report it, right? And thresholds and you don't want it to be that obvious. One of the problems with Bitcoin is we have all these whale accounts that people say oh my God, look, it's moving, all this is going to sell. And people try to run in front once again, not good market structure. And so you have to temper your enthusiasm for the whole notion. That's really just the way it is. And when you sit and look, I've sat in these rooms enough with the people who are designing the markets and building the rules that what I just said, everyone will be nodding and they'd say of course, who would disagree with that, right? I mean lawyers. Is that a phantom hand or is that a new hand?

C (16:26)

Yeah, I mean the only. I think I agree with everything. The only thing I'd say is that I don't think everyone needs to self custody or even many people need to the self custody. It's the, it's the idea, the knowledge that okay, the stock which used to exist on a ledger and some backend system now can be custody. I have knowledge that there are people trading these and they can be held. All of that just does, I think accrues to the knowledge the belief that something digital can be held with a value that no one can argue with, right? Which is like what everyone still makes fun of NFTs for it and still instinctively wants gold instead of Bitcoin because you can hold it, right? But the more that people come to terms with the fact in the same way that money in the bank people acknowledge that it's not better off in the bank, it's not more so money, it's still money in your pocket. We don't have that knowledge with stocks and soon we will and it'll be based on tokenization. And I think that knowledge does matter when it comes to people thinking, hey, should I put a meaningful amount of money into Bitcoin? Is it just nothing because it's digital?

A (17:35)

Yeah, I think you're right. And of course, money in the bank isn't really money in the bank because we all know with fractional reserve banking. And yes, I'm teeing you up, Carlo, after I go to Paul. And I'm Mateo, because both of them have their hands up. But your money in the bank isn't really in the bank. Right, but that's besides the point. Yeah, I get it. So Paul, I think saw your hand first and then I' ma tell you.

D (17:58)

Yeah, I'll kind of ask and pose this question as a scenario for people. You've got a complete normie. They've been using E trade and whatnot and you've now convinced them, hey, there's this tokenized stock. You can now self custody. You can actually own it and you can transfer it 24 7, trade it, decentralized exchange even, no KYC. And they're sold on that now. Try to bridge the gap and go, by the way, you should now own Bitcoin. That is, I think, the core part that I think I have a challenge with and I'm open to hearing other people's arguments, how that actually translates from one to the other. Because I think I, I'm having trouble connecting the dots between those two.

A (18:32)

I think because there's more dots.

C (18:34)

I don't know the dots either. There's just lots of.

F (18:36)

There's.

C (18:36)

It's like a. There's connections in the brain that somehow

E (18:39)

allow are allowed to form.

C (18:41)

And I can say that because none of this is something that you can even test, right?

D (18:47)

Oh yeah, you absolutely can. I mean like our company onboards people to a very strong degree into cryptocurrency. But it's, I would say, struggled to bridge that gap with users.

A (18:59)

Right.

D (18:59)

Or the narrative right now has been like, it's now gold and stocks. Like, you know, like bitcoin's been generally speaking down crypto as a whole. Crypto native assets. So now we're seeing people and volumes increase in things like gold, gold tokens and stock tokens. But if you onboard someone and we have onboard the people with that concept of hey, now you can actually trade gold inside of our app bridging over and into, oh well, here's bitcoin, you should probably get that too. It just. You get people glossed eyes. Well, why Isn't that thing like, crashing right now?

A (19:31)

I'd love to talk to some of those people because the two things are completely different, right? I mean, the issue, the biggest bridge to Bitcoin is the ability to actually buy it on the same platform and trade it against it and understand savings. And then you talk about many other things. The bridge really ultimately is stablecoins not being able to buy tokenized stocks. But what stablecoins does is it means that Bitcoin won't be the only asset that trades on the weekend when there's a major macro effect. Like someone was joking before about how Trump always does his shit on Friday afternoon. So we know that everyone's holding their breath come the end of the market when the equity markets close at 4. Okay? Now the other shoe's going to drop, right? Well, that changes in a tokenized world because all of a sudden you can trade everything throughout the weekend. That'll be easy peasy lemon squeezy. And that does matter. I mean, the outdated way markets trade right now will be impacted. Now, that's different from the valuation of individual investments. But we're in that intermediate phase. Bitcoin itself, it's a very simple argument. It's compare Bitcoin straight up to tokenized gold. You don't need to worry that the gold's being stolen and men with guns aren't able to protect it. You don't need to worry about counterfeiting because it can be valuable. There are many, many reasons why you can compare Bitcoin, but the bitcoin argument is separate from the why is Bittensor going to have value into the future? Why is Chainlink going to have value or Ondo Finance, as opposed to Ondo the token, as opposed to Ondo Finance the company? And so all of those are. We tend to get this big bowl of spaghetti of arguments, right? And we have to unravel them anyway. Amateo, you are next.

B (21:19)

Yeah, agreed. I mean, I think that there's a couple tracks here. Like, there's clearly a gap between what these assets are today and any potential future where holding these assets represents actual ownership of a company or project. But for now, there are operational protocols and tools that are actually gaining an immense amount of traction and that I think, like, it's still early enough, we're all still early enough that we're still operating in an experiment here. And if you look from the actual growth trends of the. The technological progress that's happening and where the regulatory signals are, it's working. You know, it's kind of weird, like every day. Of course, there's a lot of layoffs and people are leaving this space in record numbers. And if you're here and you're a builder, kudos to you. Hey, you know, let's, let's stay here. Let's keep building together. Because I think on a long enough timescale, the future is going to look back and really acknowledge that we stayed in these trenches building technology that really mattered and that ultimately won. And so then, yes, we have this equity trap, but in the meantime, we have these protocols that are delivering immense amount of value and activity. And we know that the agentic side of it is going to drive it through the roof. How that crosses the psychological barrier for the user into Bitcoin or into the actual ownership of these assets. Yeah, I think that there's something here that needs to be done. We need to do a better job. But I think that we very often in these kinds of conditions get overly focused on this piece when we know that all of this is narrative driven. We sat here and had smelting town hall until gold and silver hit all time highs and corrected, and now we're just not that interested in it anymore. Now oil is the new hot thing and it's proving so on the markets. But as these trends cycle through, more and more of it becomes tokenized. More of that activity happens on chain, and that's the real signal outside of the noise of these narratives. And when the narrative moves back on these assets, the questions that we're all posing today are not going to be the questions people have. They're just going to jump in to get exposure to these things when they're interesting and hot. But that, that's. It's not as fundamental of a thesis as I would like. I would like to have more of these questions answered. But when you have open protocols that are just simply having activity that do have some potential for value gain, but is not the core part of the ownership of it. Yeah, there's questions, but the protocols are working. And I think that that's what matters.

A (24:34)

Carla.

F (24:35)

Dave, good morning. Yeah, I agree with Amateo. Good morning, Dave. I agree with Amateo. I think a little bit of patience is necessary here because we are not only redesigning the entire token structure and how these things are categorized, and we're seeing unprecedented cooperation between two agencies that have never worked together, SEC and cftc, on how to properly execute this stuff. And at the same time, we're seeing a complete revamp of the entire plumbing in the banking System. It is very foreseeable to see soon that you are going to have back end defi wallets connected to bank networks which are going to allow people to seamlessly go in and out of their banks into their self custody wallet and buy whatever token, whatever perpetual, whatever commodity they want in real time settlement. And we're still figuring this out. And a lot of these tokens were built in an era where there was complete regulatory uncertainty. And I think they need to retool, they need to find their way and reclaim their narratives. But now that we're seeing the regulatory headwinds change and now that we're seeing the plumbing turn, I really think this is going to take traction very fast. So a lot of these questions, kind of like I'm a said, will be answered very soon as we continue to go down this road.

A (26:06)

Yeah, I mean, I think, you know, when you pull on the string of what's going on with, you know, with the regulators, what you end up with is you start understanding that it's going to take a couple of years from where we are now and there will be rule proposals to try to deal with things. And in particular this notion that utility being passed through by the efforts of the management of the companies makes it a security but then it can become a commodity after that is all open sourced is interesting. But the reason it's interesting is because there's these stupid laws, right, you know, that, that exist. And I say stupid, I literally mean stupid things like the accredited investor rules, which is code for let's have the rich people get richer and everybody else is excluded. It's just totally illogical and things like that. And things like seasoning, people wouldn't know what seasoning is. But the truth is when you're a company, if you don't go the IPO route, if you go the OTC route before you could actually trade publicly, you need, you know, time. The thing has to exist for a period of just, you know, random time. There's nothing to do with anything other than that. And then there's also the three quote rule. I don't want to go through all of them. But there are lots of these stupid rules that were built in a day when markets traded like Gomez Adams. Have you ever remember the Adams family with, you know, the ticker tape and the stuff? I mean literally that's how markets used to trade.

F (27:41)

You're dating yourself, Dave.

A (27:43)

Yeah, well, it's a. You know, the funny thing is that we rewatched some of the Addams Family online. I think it's Hulu. I can't remember which one, but it's a funny show. But you see all this stuff and when you realize that our securities laws, the last major revamp outside of Reg NMS which was 20 some odd years ago, that had to do with the way quotes worked. But most of the plumbing hasn't been touched since the 70s or in many cases the 40s. And so that's where we're at anyway. Amateo. I see your hand up.

B (28:15)

Yeah, so I mean like the thing is like I don't think that we should be expecting open protocols that are managed by foundations to try to take on some giant risk to open up equity ownership and inclusion to the general public. Like that's not what they were created for. Like that wasn't the purpose. Right. So, so this is, I don't expect that the actual, you know, incumbent winners of this space to be the ones that are going to take on some giant risk or even try to solve this problem. You know a lot of these open source technologies that power the world, Ubuntu, Linux, yeah Some of them have private ownership, but it's in these corporations and it's the corporations that you can, you know, trade on the stock market or get equity access to. You know, you're not buying stock in Ubuntu. Right. So, so like I think that these are things that we have to consider. I think someone will come along and, and start challenging the system by taking these risks by introducing new investment vehicles and shared equity and ownership. But I think to exactly like Carlo said right now this is, this is a protocol driven world and they are succeeding. And as this, this, this regulatory revolution starts to occur, we will start to see more value capture based on activity. And it does require some patience. What it's going to look like, I don't think we fully know yet. How does that thesis translate to Bitcoin? I have questions around that too. But from a pure just tech standpoint, my goodness, this is quite a transformation.

A (30:07)

Yeah, I mean it certainly is. I mean it's so hard for the average investor who doesn't understand the plumbing to get the fact just how much more efficient the process could be, how much better. Like for example, just a stupid thing, stock loan. You probably don't know it, but over 90% of the revenues made by people who are selling stocks and borrowing them go to prime brokers. The other 10% goes in the form of what the prime brokers allow the holders to get back out of it. Change that to an open competitive defi system and that number is going to probably drop from 90 down to maybe 50, maybe 40. You know, I don't know. But all of that means that owning stocks are more profitable for the holders. And so just little things like that all throughout the system happen. And some of that, you know, these decentralized protocols will, will be the ones who can take that smaller spread and open that up. And so yeah, there's there, that's a large part of what people are afraid of. Okay, Carlo, was that an old hand or a new hand? Because I saw you first and then Panos,

F (31:16)

I think that's a legacy hand. I'm sorry.

A (31:18)

Okay, sorry. Panos. Yeah, I joined this conversation a little bit late so you might already covered this. But with the tokenization of, of stocks, will people be able to still get dividends? And will there be like after hour trading after the markets close? Does anyone know those answers? Well, I know the answers. The answer to the first question is yes. And the way they'll do it in all likelihood the smart companies, because it's always up to the companies with the. The thing about dividends right now is it's so hard to track who's an owner. Right. Because it's all held in street name that it's up to the broker. So basically DTCC gets the dividend on the X date and they have to say okay, here's what's going on. I know these brokers have this and the brokers would say okay, I know these people have this. And so you have a process that more or less works because it's automated, but it's, it's perilous. In an on chain tokenized world, it's much simpler. It could all be handled by a smart contract. And so that is certainly the role and that's easier. As far as 247 trading, I mean it clearly makes it easier. One of the. Once again, the reason why 247 trading is hard in the current stock world is all this batch crap. I mean literally my first job on Wall street now I'm really dating myself, but we're going back to the 80s was to write the trade entry subsystem of, of Morgan Stanley's TAPS system, which was their back office. I don't remember what it stands for these days. And so if it settles the next day, then trying to trade it 247 it means that you have to say okay, this is after the close, so this is going to be for the next day. And you change all that. Once again, with tokenized stocks, there's no need for that because settlement could be on demand or instantaneous. They're still going to batch. There's huge benefit to having a TR being able to buy, sell, buy, sell, buy, sell, buy, sell, buy, sell, buy, sell and so on during a trading day and have it all net together, which is basically what happens in crypto. Right. Coinbase nets everything together. Kraken nets everything together. Prime brokers allow people to net across platforms together. But you then at the end of a particular point in time you call it and you say, okay, let's net everything together and let's start all over again. The difference is with tokenization, that's an instantaneous process. It's really easy and you can make it work that way. So the answer is yes, all these processes will be improved, made more efficient, but it shouldn't change any of the goals that you have in a market. I hope that answers your question, Panis. I don't know. Yeah, that makes sense. Thank you. Yeah, sorry. No, no, I was just saying that that makes a lot of sense. Yeah. Okay. I thought someone else was there. I'm going to tell you. Is that an old hand or a new hand? Because you can never tell on this platform.

B (34:01)

That's an old hand. But I'll just add that the 24 hour tokenization of stock trading is already happening. So it's doing it with liquidity based, kind of open community based liquidity with HIP3 on hyper liquid. Coinbase is new perpetual future stock trading that they announced today is going to be 24 hours. I think it's being introduced like right away. The intent based systems that basically are using price oracles to do off our trading that's actually pretty well underway. Which is, which is interesting. In fact there's, for right now, there's an interesting advantage to it because there's some predictability that happens between the markets closing and the markets opening. Not completely, but there is quite a bit of edge that could be found in those gaps for savvy traders that are already taking advantage of the system.

A (35:09)

Yeah, I mean taking advantage of the system. I can't underestimate just how large the debates are on who is taking advantage and where all that stuff's coming from. Right now it's not about fixing. I mean tokenization does not fix. The only thing tokenization fixes, absolutely fixes, is it can when it becomes the method, not when it's on the side like it is today, but it can fix the whole notion of naked short selling and borrowing because we don't have that problem in crypto. It just. You can't. I mean, you know, you want to sell spot, you have to own Spot or have borrowed spot. And people don't underestimate how important that is. Now, it doesn't mean that you can't have issues because of manipulation and stuff going on between perpetuals and whatever. And it's not paper, Bitcoin, I'll happily debate that with anybody. But these issues, it is a better structure, but it doesn't. There's no panacea. You don't change liquidity. The issue with a lot of what's going on 247 now is that when there are times of illiquidity, the stocks can deviate from where they would be in an open market. And we do see that on occasion. And that is a problem because you're relying upon market makers to do something that they don't have a legal obligation to do. And so, yeah, there can be issues, but it's not that big of a deal. All this will get washed out in the wash. But the important point here about all of this is there is a path now to being able to provide value to the token ecosystems. And there is a path for DeFi potentially to compete. And I think that's what matters. Right? Anybody. Panos, is that still. Is that a legacy hand or I changed. Yeah, no, I think that. I think that was a ghost hand. Okay, so. Oh, did Carlo. Carlo left because the other story.

B (37:13)

I still see Carlo, but I don't know if his hand's up.

A (37:16)

Carlo, are you there? Because I don't see you anymore. Yeah, I can't tell what this platform. I. I was going to kind of move towards the other big story, which is that, you know, that they're changing the. Expanding the Clarity act to now include deregulation of community banks in order to try to get there. I mean, this story is just. It's an indictment of the American political system more than anything else. But the fact that the industry wants, needs, and needs a regulatory framework is important. So I. It's hard to. It's hard to handicap this. I still think that our system is so broken that I. I kind of have the feeling that they will manage to get something done. But I know Scott where he would say, no, they can't get anything done. And who knows? I mean, I don't have a strong, strong opinion on that. What I do know is that we're in a crazy world, you know, Is anybody on the panel in Dubai right now? Out of curiosity, I guess that's a no because it's so hard to tell what's going on there. Everyone I know that was living there isn't there right now to understand. But there's a lot of the crypto world was based there.

E (38:33)

Isn't Mario based in Dubai?

A (38:37)

Yeah. I mean, I don't think there's anyone behind the mic over there. I mean, his team is there, I think. But I'm just. I'm curious. I think that people would be curious about what's actually happening there and how all this stuff resolves. I certainly don't know and I don't want to talk about it. What I do think is interesting is bitcoin is basically sitting and doing nothing. If you look smelting town hall, Silver is down 5% today. Gold is down 2% today. Bitcoin is basically where it was yesterday, give or take it not moving. Oil is still bouncing between 90, getting towards roughly the US side, roughly around 100. A little below. Brent is still at 110. And that spread is as big as it's ever been. And that's telling you that a lot of people are terrified and no one really knows what's going to happen. So I'm going to tell you.

B (39:34)

Yeah. I mean, I don't think we should be surprised that the market trends are gearing towards where the volatility persists. And the volatility is just so high still on metals and oil. We shouldn't be surprised that it's absorbing the volume, the narratives and the attention in these hyperbolic times, attention follows the volatility and the markets respond to that accordingly. And it doesn't seem to stop anytime soon. I see Andre's hand just went up, so. So pass it ahead.

A (40:09)

Hey, we got a. We got a new. A new person willing to speak. Andre, what's going on?

E (40:14)

Hey, Happy Friday. Yeah, sorry, just like I haven't joined over the past couple of days because I had like family incidents, but yeah, Happy, Happy Friday. So, Amateo. I mean, I'll totally agree with you with your take. Right. Price action was rather boring, Right. In bitcoin and crypto.

A (40:33)

Right.

E (40:34)

But the macro environment, the whole market environment has changed so much.

D (40:38)

Right.

E (40:38)

It keeps changing all the time. Right. I think, I mean, most notably, you've seen these higher recession risks. Right. On culture. Right. I think they've. They've just increased to 36%. And I have. I don't know whether you've seen this piece in the Wall Street Journal that like, like they asked economists about what kind of Oil price could trigger a recession. Right. And like I think the consensus was around 138, but I think it's even, it's even lower.

B (41:11)

Right.

E (41:12)

It's probably around 110 because then you get this kind of 50% increase in real oil price which at least historically has been associated with recessions every time. Right. 90, 70, 1990 and 2008. Right. Always been like a 50% spike in the real inflation adjusted oil price. And I think we're probably moving towards this. I mean you could argue, okay, the US recession is more resilient towards oil price shocks because it has become a net exporter of oil. It's the biggest oil producer in the world. Ise manufacturing has gone up because oil price prices increased and so on. Right. And as a matter of fact, I mean we, we didn't see recession in 2022.

A (41:59)

Right.

E (42:00)

During the Ukraine invasion. Right. So maybe the U.S. economy has changed so much that like the, the decline, consumer spending because everything's becoming more expensive, will be balanced out by, yeah, higher enterprise revenues in the shale oil sector or something. I don't know. But I'd be interested to hear your take on this.

A (42:23)

Tell you what I think so I actually had, I was in a car, but I did a show with Robert Infra yesterday and he was going through the data and the truth is, if there were to be a recession in the classical sense in the United States, our budget deficit could easily blow out to $5 trillion by loss of tax revenue and the need for spending and particularly with AI and the potential new handouts that are going to go on. That is what the government is staring down. Therefore what are they going to do at the first hint of any of this stuff coming home to roost is there's going to be a significant amount of money printing just like in the pandemic. Maybe in the pandemic they handed money directly to people with those semi checks and that caused at the same time supply chains were constrained. That was a disaster from an inflation point of view. So hopefully they learn their lesson not to do that, but to do everything they can to stimulate investment to actually try to overcome supply chain disruption such as what's happening in the Straits is absolutely certain. The one thing we know for sure, we don't know who's going to win or there will be a resolution in the next month, two months, three months. We don't know that. I mean anyone who thinks they do, unless they actually are privy to the intelligence briefings that are happening inside centcom, they have no idea. But let's just take it for the fact that we don't know that. The only thing we do know is in the aftermath of all of this, there will be enormous amounts of reconstruction and there will be a huge need to inject liquidity. And they're going to do that. And so you know that. I think that that is why people, you know, you talk about why markets are balanced, sometimes they're balanced because nobody knows what to do. And nobody knows what to do because if you go to sell, if you sell something and you know that it's, it's likely like if someone says, well, anytime someone says to you the words, well, I think bitcoin's going to drop to 40,000 and then it's going to rocket to 250. It's like if you're sitting there and you understand tax collection consequences, what do you do with that information? Even if you knew that was going to be the case, what would you do? Sell 40, 40k puts? I don't know. I mean, what I wouldn't necessarily do is sell because if I'm wrong on the, if I know where it's going, if I, if I have equal opportunity, I'm just going to basically hold on. Because from a tax point of view, that's probably smarter now. Maybe you could trade around it, you could use derivatives, etc. That seems to be the predominant narrative. And so, you know, maybe the answer is, is that we're stuck here because a lot of people don't want to sell because they think they see this liquidity thing that's going to be in the future and they don't want to buy because they're like, well, screw it, you know, we're going to have a lot more, more uncertainty before that. And so you're stuck in that situation. And I think, you know, you know

E (45:12)

what my theory is why bitcoin crypto's holding up so well. While it's relatively resilient, it's, it's because a lot of bad news has already been priced in, right? I think bitcoin has been this kind of canary in the macro coal mine again, once again, right? It has price tightening financial conditions well in advance, right? Had like this 50% drawdown already. And now I think, and we did a quantitative study on this. I think most of the best news already reflected in, in bitcoin, right? This, it has already reflected a recession, right? And across asset, it's, it's not even halfway done. Nothing. So there, there's probably some kind of catch up from Trei to Bitcoin right now. Which is why Bitcoin is relatively resilient while the whole market continues to be red. Right. I think today is the prime example. Right. Bitcoin is even slightly positive, which is funny. Right. Q. Q. Q. 1.2% lower. Right. Russell 1.5% lower. Gold even 1.7% lower. Right. It's crazy. So it's still, don't forget silver.

B (46:23)

Yeah.

E (46:23)

So yeah, long story short, I think a lot of bad news has already been priced and that's why it's probably so resilient.

A (46:31)

Bitcoin fell. I, I, I did the simple math and, and if you look at it it so if you looked at 2022 when Bitcoin collapsed. Right. Okay. So we had this, this fall from the 60s down into the 30s. It is entirely likely that had Sam not stolen funds and Mashinsky not, not gone out and, and prop traded away his client funds when he couldn't do yield that the extent of the, of the sell off would have been 60s down into the 30s, let's say 30 as opposed to that last leg which took it down below 20 and then kind of stabilized in the low 20s. Well even if you take out the fact that since then we've devalued a lot of. There is a reason to believe if you adjust it for money supply growth, etc. And devaluation and deficits and all that stuff. Even without that, just without those waves of forced selling, it could very well be that 126 to below 60 is the extent it would be the exact repeat. So people expecting that exact repeat are basically saying okay, I expect waves of forced selling to come. You know, other than microstrategy, which there's no way there's going to be a wave of for selling this year, two years from now, three years from now, maybe, but not now. And when I say maybe I mean unlikely. But still it's possible you very quickly realize that everyone who is selling on the basis of previous patterns ignores the differences fundamentally underneath those patterns. So it's entirely possible that we at this 126 sell off down to you know, whatever 60 I guess is where it bottom 60.

E (48:11)

Yeah, 60.

A (48:12)

Right. Is it was the extent of it. And that's certainly what it looks like as we sit here with a, you know, people say oh well this is a dead cat bounce. It's like maybe, I guess I, I don't know. But you know, it doesn't feel like it, it feels like we're kind of stuck. You know, I' ma tell you. Is that an old hand or, you know, what is your thought anyway?

B (48:33)

Yeah, look, I think that clearly bitcoin was predictive of this. And I say this not to take shots at Gary, but I started to really get my hackles up when the whole recessions are illegal narrative started to circulate. And I was like, okay, this is. I don't like that sentiment. This is making me very concerned. And. Because no one's invincible. And then we started to see. I mean, I also really knew that the minute Pam Bondi did the whole look at the Dow moment, that this was. That this was top and. And that we had a heaviness to go, you know, 50,000. We barely passed that. That was. That was gonna be it for a while. Right. It was just too iconic, too ironic. You just can't ignore those things. So where do I think. So I. I think that we have a huge opportunity for some additional black swans here to show up and basically just some liquidity events to be triggered. We seem to be in a trend of overreactions. And I think that these overreactions. And I'm not downplaying the severity of what's happening in Iran and the street of Hormuz or energy and all the humans affected by that. That's not what I mean. I'm just purely talking about markets where the reaction in silver markets was so high. Kind of predicting this, following this, in many ways, lagging bitcoin by months. But what I'm getting to with that is that I feel like the overreaction in oil markets probably hasn't fully kicked in yet. And I think that at some point we're going to see something that's very shocking. Maybe the top is in for oil, I don't know. But I think that there might be more here. And I think that the higher it goes, the bigger the fear. And I don't know that this is done. I think there's too many variables at play for us to have a definite idea of where bottoms are. But I do think that we're starting to get into an interesting time frame to start chipping away at some of these really repressed prices over the next 12 months.

A (51:10)

Yeah, I think the liquidity flows are the key. And look, where the government will get involved is when it is lunch pail issues. Right. Because we're going into midterms. You can pretty much expect they're going to do everything they can to try to affect Main street more than Wall Street. That said, I can't think of ways to actually help Main street without helping Wall street or without helping certain assets. And Bitcoin being the single most sensitive asset to pure liquidity, I think, on the planet. And so that could be wrong, but that's what it feels like. That's sort of my thesis, Andre. I can't tell if that's an old hand or a new hand, but I know you care about this.

E (51:51)

It's not a shadow hand. It says true hand.

A (51:54)

Okay, cool.

E (51:57)

So I actually agree with. I don't. I also don't think we've seen. I, I do think we, we haven't seen this kind of Minsky moment in oil, Right. That there's some kind of accident waiting to happen. Right. And I mean this, you mentioned the brand WTI spread, right? It looks like it's now the, the, the supply, the supply crunch in the Middle east, right. In Dubai, Oman crude oils is now propagating to Western crude oils. It wasn't propagating because the demand's mostly coming from Asia, right. As we know.

C (52:37)

Right.

E (52:38)

And now the Asian calculation is, okay, we're still buying Middle Eastern crude, right. But the moment it increases in terms of price plus transportation costs and becomes comparable to Brent, right. We start bidding up Brent, right. And then we start bidding out at wti, Right. And I think the, this kind of,

F (53:08)

yeah.

E (53:08)

Disapproval of this kind of expert ban in the US that was probably one of the key reasons why it's now even propagating into the S. Right. That's why it's. WTI has spiked higher. And now this kind of a local supply crunch is spilling over into all kinds of oil markets. Right. And yeah, I think, yeah, it's an accident.

A (53:36)

If you want to, want to take a look, look at, I don't know how, how to look at it. I mean, natural gas in the United States is, it's down to, you know, it's well down. It's like three bucks, right. I can't even imagine what it is in Europe because of where it comes from, because it's much harder. LNG is much harder to, you know, first of all, you have to create it, transport it, etc. This is a refining transportation issue, not a production issue. Oil is to produce, produce oil. In most of these places, getting it out of the ground is. Gary says, Gary Cardone said that he thinks it's a blended average of about 55 bucks. But that means that there are places where it's dramatically cheaper than that. In places where it's more. We're at A level where if you could sell it, everyone would be opening up every frigging field they could and the market would be a wash in oil. The problem is that you can't sell it because you can't get it from the place where you produce it anywhere else. So it's a totally different sort of situation than previous oil shocks. Right, agree.

E (54:41)

It's the biggest one. It's the biggest one by far.

A (54:43)

Right, yeah. And so it's the ability to, so it's going to affect things disproportionately and all of that is going to impact some companies within the stock market. There are going to be some companies who, you know, oil companies are making just printing. The ones who can sell their oil are printing money. Right. They're having an incredible year. Except for that. They, if you talk to their CEOs, they'd be like, I don't want this to happen because they're going to get all sorts of pressure, et cetera. And you know, they're doing what they can to sell forward the, the, the users of oil, which is most everybody else are going to have to, you know, do all sorts of stuff. And there's plane flights are getting canceled all over the place and people are saying, well it's because of the tsa. No, that's a convenient excuse. They're canceling plane flights because it's not economic to run the flight with the cost of jet fuel doing what it's doing.

E (55:35)

Yeah, jet fuels that new all time highs.

F (55:38)

Right.

E (55:38)

Same for like tank and fuel and stuff. It's crazy.

A (55:41)

Yeah, exactly. And so there's all sorts of effects that will hurt the real economy. There's no doubt. We just, you know, it's just a question of how long long does it go? That's really it.

E (55:51)

But you know, I also also think it's, it's an excellent waiting to happen because energy prices, commodity prices in general, copper, they tend to translate into bond yields directly by CPI swap rates, break even rates. Right. I think there's almost a one to one correlation between like one year swap rates and energy prices, especially crude oil prices. Right. And so they're about to break new all time highs. So oil prices are about to break new all time highs. Right. And I think as soon as this happens, you'll see a massive even crazier spike in CPI swap rates which translates into bond yields. And then I think at some point central banks will need to intervene because you have some kind of quartang moment, you know.

A (56:41)

Well, I mean look, the UK is about to go over five. The US is, is pushing four.

B (56:47)

Four.

A (56:48)

You know, this is, this is not something that, that, that, that make the governments particularly happy. Right. You know, and, and you don't know when they're going to intervene, but you have a pretty good idea certainly in the United States that, that there will be something that will be done. The only question is Powell at the Federal Reserve isn't likely to play ball, but we'll see. I mean, really, the question is, can this dysfunctional Senate in the US get Kevin Warsh in the seat? That may be the next thing that we're talking about, but all this macro stuff is exactly why bitcoin is sitting where it is and the rest of crypto is kind of following bitcoin. I mean, the correlations are higher than usual over the last week, and it's always been pretty high. So anyway, we, we are up against time. You know, we could keep talking about macro forever, but you know, it's it at a certain point it is what it is and we'll see. Will something crazy happen this weekend? Anybody have any final thoughts before we, we sign off? Nope. Well, in that case, everyone have a good weekend. Stay safe. I'm pretty sure Scott's back on Monday, so you don't only have to listen to me and that will be cool and let's see what happens. But we'll, we'll see you again on Monday morning.

B (58:06)

Thanks, Dave. Thanks, everyone.

A (58:09)

Thank you.

E (58:09)

Thanks everyone. Thank you.