← The Wolf Of All Streets
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- [00:00]
Andrew
K Pop Demon Hunters, Saja Boy's Breakfast Meal and Hunt Tricks Meal have just dropped at McDonald's. They're calling this a battle for the fans. What do you say to that, Rumi? It's not a battle. So glad the Saja Boys could take breakfast and give our meal the rest of the day.
- [00:14]
Scott
It is an honor to share.
- [00:16]
Andrew
No, it's our honor.
- [00:18]
Scott
It is our larger honor.
- [00:20]
Andrew
No, really, stop. You can really feel the respect in this battle. Pick a meal to pick a side.
- [00:27]
Tom
Ba da ba ba ba.
- [00:28]
Scott
And participate in McDonald's while supplies last. Is Bitcoin doomed? Good morning, everybody. It's a very hyperbolic title on a day when Google has put out a scathing report saying that bitcoin is at serious risk of the quantum threat. Now, I've been largely dismissive of the quantum threat, but there is some compelling evidence here that there could be a problem. On the flip side, the silver lining is that maybe this will actually light a fire under the asses of the crypto community to come together for once and work to make sure that this threat does not exist. We're going to break that all down and everything happening in the market today, of course, with Andrew and Tillman, but also with my friend Tom Dunleavy. Let's go.
- [01:10]
Andrew
Let's do.
- [01:25]
Scott
Good morning everybody and welcome to hell. You can see that we've chosen a hellscape of doom, despair, destruction, lava, burning cities because bitcoin is doomed. It's over. I couldn't do such a negative title without making fun of myself for doing such a negative title. But we're going to go ahead and bring on everybody right now. We got Tom, Andrew and Tillman. You guys, looks like the world's not ending where the three of you are.
- [01:53]
Tom
Well, I, I mean the world may be ending, but you had, you had a haircut, you know, so, I mean, you took the time to get a haircut.
- [02:03]
Scott
I'm not going out, Shaggy. I'm not going out Shaggy.
- [02:07]
Tillman
It's always darkest before dawn. Listen, I, I don't think it's doom and gloom for most people. I think, you know, everything else is that kind of all time highs. These are modest pullbacks, if you will. And considering all things, I mean, we, we're at war if anybody's noticed. I mean the, the, the pullback has been operation, operation whatever it is. I just, I think the markets are handling it pretty well, actually. I, I, if you have dry powder on the sidelines and you are watching it, you're seeing, you know, a lot of strength. And you know, when the world's in a lot of turmoil, I'm not, I'm not feeling like it's doing good.
- [02:48]
Tom
Well, and meanwhile, Morgan Stanley is launching a bitcoin fund. By the way, they have designs based on my conversations yesterday with some Morgan Stanley folks. This isn't going to be their only bitcoin fund, just like BlackRock. So you know, I guess if, if those types of organizations aren't, you know, overly concerned that somehow bitcoin's going to zero because supercomputers are going to destroy its very existence, I don't know, maybe they wouldn't be launching products. You know, it's kind of, it falls under the, you know, watch what they say rather than watch what they do rather than listen to what they say. So I don't know, that served me fairly well over, let's call it 30 years in the markets. Yeah, Quantum is an interesting conversation. It's worth evaluating, it's worth reading the papers. It's also worth noting that Google is a for profit entity and so putting out papers, you know, may, there may be a reason for that. Maybe Google has a quantum, you know, fight quantum product in the mix somewhere online. And so yeah, it's nothing's new under the sun as they say.
- [04:13]
Andrew
I think this is fantastic news to be honest. You don't get a warning bell for the apocalypse three years before it happens very often.
- [04:19]
Scott
Right.
- [04:19]
Andrew
So hey, this is coming in three to four years maybe if everything goes right. Right now we have I think a thousand qubits from the best machines and it's estimated 25 to 30,000 qubits are needed to crack algorithms that are there today. So still we need a 30 to 40, 50x improvement in this really complicated technology. So for protocols like Ethereum and Solana and others that can look into this and by consensus update their protocols. Fantastic. For bitcoin, I think this is really a wake up call. Right. Nick Carter and others have been sounding the alarm for a while and Scott, you and I were just talking. I think we both were not really believing the FUD and the know, the, the bad stuff that could be coming down the line. But it sounds like it's actually happening now, so gives them two to three years to get their act in order. And this does take time, right, to actually upgrade the algorithm and to actually upgrade, you know, the entire protocol and get everyone to, to move through and how slow bitcoin's blocks are, it's going to take months and months and months.
- [05:16]
Scott
So I hated on this, at the first time I read it, I thought it said Qbert and not cubits. Do you guys remember that game with the little guy that jumped up the. Anyways, before we dive deeper into the quantum threat and the volcanoes, I mean Toby just said we're at all time highs. Like this is the worst Q1 we've had since 2018. We're down 23%. If it keeps going like this, we're gonna have to get all time high. It's not that good.
- [05:45]
Tillman
Well, I'm just saying the S P 500, the markets have, have been really crazy up for a long period of time. This, the consolidation that we're seeing now. And in, in light of the news that we're seeing again though, people want, it's always for the knee jerk reaction. It's like what timeline are you looking at? Bitcoin. Is there a threat to bitcoin for quantum computing? Yes, we all have all. I think anyone who's in, you know, the space can acknowledge that there's some threat. Whatever that threat may be, there's a percentage threat there. And you know, if, if you're looking at like how much has been mined on the current chain, we're through 95, who cares? Let's switch chains. There's, there's, there's a lot of ways to solve these problems is the point. And markets are incredibly resilient and we're seeing these markets be incredibly resilient. I mean, I think to, you know, the point earlier, I. A lot of these chains can be updated, right? A lot of these things can, can morph into the current landscape. Right? They can, they can really through consensus voting, be completely altered, completely changed. All of these things will be handled in time. There is no doom and gloom. Everybody, all the, you know, we always want to go to the extremes. It's either the greatest thing ever or the worst thing ever. And the truth typically lies somewhere in between. As someone used to tell me.
- [07:12]
Tom
Yeah, there, there are markets that, you know, the, the broader markets, you know, dealing with the conflict in Iran and the Middle east, you know, we're, we're down. I think the S P is down, you know, greater than 5% at this point. So NASDAQ I think is right around 9, 10%. You know, we're looking up today in futures, so get a little bit of, of that back. At the same time, if you take a look at a five year chart of the S pipe P500 and then you look at the tiny little blip, that is what we're Currently doing. It's laughable. Like it will make you laugh. Like you know the S P goes like this, right? Then there's a Covid down there that was a V shaped recovery inside of 90 days. And then we're up here and you almost can't even see the dip that we're currently in. Right.
- [08:09]
Scott
I mean looks on the chart, right? I mean it's literally, it's laughable.
- [08:14]
Andrew
You know the average downturn on any given year in major indices, 10%.
- [08:22]
Tom
The same thing with bitcoin. It's all right, we're here at this, at this moment and we're at 66 and change, right. That's effectively the top. The previous cycle we've done every time. We've done this every single time. As it relates with, with cycles bitcoin we pop higher and when we come down we're, we generally sit at the near the tops of where we were before and everybody freaks out. And half of the people that are in crypto Twitter leave. Nobody's around. Influencers go. When two years later we're at a, a new high and a new level.
- [09:04]
Scott
Andrew, your Internet is super, super glitchy.
- [09:10]
Andrew
Glad it's not just me.
- [09:17]
Scott
Yeah Andrew, you gotta try to sign off and sign back on. I don't know, your Internet is super bad. You ever see that movie? Movie super bad. Anyways, yeah, yeah, that's your Internet right now. But yeah. So on top of the fact that we have obviously depressed prices on bitcoins, crypto stocks at big discounts, maybe nearing bottom. Bernstein analysts, I mean Tom, how are you looking at. Sort of. We had this, I described it as our alt season this year or this cycle was basically crypto adjacent equities. Right. I mean you saw the Circle launch and the treasury companies and they all did the Burj Khalifa pattern straight up one side, straight down the other. Kind of looked like an alt season. Do you think that now we're oversold and irrationally sold off and that maybe some of these are going to start to look really, really good here?
- [10:09]
Andrew
So I think it was really a reckoning especially for something like Circle, which coinbase makes more money of USDC than Circle does in terms of net revenue and that was just way, way overextended from that initial pop. The rest of crypto equities are miners who have gotten absolutely destroyed with hash rate down. Digital asset treasuries which for a while were an interesting vehicle in terms of some of the financial engineering you could do staking and then using things in defi to gain a sort of net yield. But there's only so many folks who can pull that rabbit out of the hat. And maybe it's Tom Lee, maybe it's Michael Saylor, maybe one or two more. You can't have 50 or 60 of these things just wasn't going to work. So that's the other sell off and then the rest. I mean, there really aren't any other crypto equities. There are a ton that are supposed to come to market this year that have really pushed off their IPOs. So. And I think the broader crypto equity complex is really, really thin and has a lot of risk still. I wouldn't be buying those. I'd be buying the dip on these coins. Right. Bitcoin, Ethereum, Solana really retraced down to 20, 21ish levels. I mean, especially with all the developments that we've talked about ad nauseam on the private side and with all these big companies integrating, it just seems like it's a much, much easier sell now. I'd still concentrate in the top 10 assets. I think long tail assets are still cooked for the foreseeable future until we have broader regulation and actually other people buying these besides just crypto native investors.
- [11:30]
Scott
So you're much more interested in actual tokens than in any of these stocks, which I find interesting in this environment because that's a pretty big flip. I don't mean necessarily from you, but I think from consensus. Right. I think a lot of people just disinterested in tokens altogether and are just looking for other ways to gain exposure if they're going to. I found that really, really interesting. Andrew, you also made the point like Morgan Stanley launching their Bitcoin etf. I think what was even more interesting is that they undercut everybody on fees. I was wondering, I was like, yeah, it's cool that Morgan Stanley is doing this. Obviously Morgan Stanley's advisors will be pushing the Morgan Stanley spot etf. There's guaranteed money there, but also undercutting and basically saying we're not even going to make money on this thing, we just want to win was a pretty big statement at this point.
- [12:18]
Tom
So something that you have to understand is Morgan Stanley's ETF portfolio is like 21 ETFs, but this is, you know, effectively the first or second one that they've done by themselves. All the other ETFs that they have, they acquired when they acquired eaton Vance and two other ETF companies years ago. Actually, not years ago, it's in 2023. And so, you know, you can't understate what a big deal this is and the demand that they're seeing across their wealth management brand, that's where this is coming from. And so if you're seeing demand, there's such a disconnect right now between let's just call it retail, crypto, Twitter and the rest of the world associated with Bitcoin. Slash, let's call it the top five crypto assets. There's such a huge difference. You have Morgan Stanley jumping into the space. We don't even want to make money on this. We just want to gather assets because we know this is going to work. When you're doing that, by the way, as a global investment bank and wealth management firm, what that means is you're going to make meaningful money in other ways, AKA lending and additional products associated with the scale of the AUM that's going to come into that product. That, that's just a, I mean, listen, that's 90 seconds of, of Morgan Stanley information. That is a lot of things that are going to happen via Morgan Stanley and then others in the wealth management space over the next, you know, let's call it two to four years. They are, their actions are believing in what Bitcoin is and what it can be and frankly, what their, their customers want, what their clients actually want. By the way, what are, what do Morgan Stanley clients look like? Well, Morgan Stanley is the creme de la creme of, of wealth management. So yeah, they, they absolutely are. Right? So Morgan Stanley financial advisors have larger AUM balances than anybody else that they compete with outside of Goldman. Goldman really doesn't count in this conversation and they do more business, those advisors do more business on an annualized basis revenue than anybody else that they compete with. So if at the highest end of wealth management there is demand for Bitcoin, that Morgan Stanley, who isn't in the business of ETFs decides to open up an ETF to gather those assets. That's like doing this, telling people something, right?
- [15:02]
Scott
1 4% expense ratio. I think the grayscale minis are like 0.15 but BlackRock 0.25. Right. I think even the crypto natives are, you know, above 0.2. To me this is just like a,
- [15:16]
Tillman
just a massive statement acquisition. Right? It's about, you know, they want to get into the, to the market that we're in and you know, back to the point of like prices being down. It's just a matter of zooming out. It really is. There's I've heard this adage from a lot of traders and a lot of investors and it's the truth. It's like there's a new train leaving the station every day. If, if, if you look at oil, oil's not down. If you look at silver, silver's not down. If you, there's, there's things that have movement that I think we're going to see an intensity in market velocity. And what's exciting to me is the tokenization of all of those real world assets that is, is going to, I think, bring a lot, a lot more velocity, a lot more access to, you know, commodities specifically as it pertains to, to investing and trading. And you know, I think, you know, if you, if you look at the velocity now and it makes you sick, well, we're, I think we're headed to a bigger roller coaster, guys. I, I don't think this is going to stop. I think this is only going to accelerate.
- [16:25]
Andrew
Just to circle back on that Morgan Stanley point, I think they're setting up for their RIA base, which is really important. But an even bigger move is that this new legislation and direction from the Department of Labor that you're now allowed to potentially put crypto, private credit, a bunch of other assets directly into your 401k or IRA or whatever retirement account you have, that complex is $14 trillion worth of assets. So it's a ridiculously huge pool. And I used to help put a lot of these plans together. So the way it works is you pay a consultant or someone else to assemble a suite of products that your pensioners or whoever, or if you work at a big bank or whoever, there's someone who services your plan and says what options you could actually pick for your 401k. And those guys look for the lowest cost fees possible and the most efficient vehicles. And that's effectively what Morgan Stanley is putting up here. They're doing the vanguard substitute, the cheapest possible product that you can put in here to give your plan participants some exposure to this asset class. So I think this is a huge, huge move for Morgan Stanley. And if this deal, legislation or direction goes through, which it seems like it's going to, there's going to be a lot of new assets flowing into crypto might happen day one, but it's going to happen over time. As those flows come in, every two weeks, every paycheck you have, everyone chops off a little bit to put it in their 401k, just automatically buy.
- [17:47]
Scott
Morgan Stanley is above my pay grade. So as far as retirement accounts, for one case, like what size as Morgan Stanley in that market relative to the market as a whole? Because that makes a lot of sense. Like just who cares if we make money on the product if that gives us a way to move all that money into our own retirement accounts?
- [18:06]
Andrew
It's a good question. I don't know the answer, but it doesn't really matter because it's all of the different advisors and folks who have access to the individuals who need to put assets into 401ks and they just look and say, okay, we want a Vanguard ETF that we're going to put here. So these folks who are putting money into their 401ks can select. So now Morgan Stanley is an option in that pool and it's the lowest cost option.
- [18:30]
Scott
And they can, and they can force the Morgan Stanley product to anyone that the Morgan Stanley IRAs are pushing. Knowing that bitcoin's coming. I mean, I just want to be an ria And I mean, you just go work for Schwab or Morgan Stanley and they tell you exactly what you're going to sell to every person. You don't think, you don't, you don't go, you know, big Brother's watching. So you just sell the exact portfolio that they're saying, and you play a lot of golf and go to a lot of dinners and it's a little more complicated.
- [19:01]
Tom
You actually have to, you actually have to have clients and therein lies.
- [19:07]
Scott
Yeah, you go get them on the golf course and at the dinners.
- [19:10]
Tom
Yeah, right, right. Yeah, you just go to the golf course and then you have lots of clients.
- [19:15]
Andrew
90 of the members at my golf club are RIAs or sales people.
- [19:19]
Scott
Like, that's all I do. My old roommate was a pharmaceutical salesman. Change the laws eventually, but all he did was go to basketball games, strip clubs and fancy dinners and, you know,
- [19:31]
Tom
yeah,
- [19:34]
Scott
he's going to use, you know, ozempic Instead of WeGovy or whatever, you know, thing we're putting in ourselves.
- [19:41]
Tom
Listen, you know, Morgan Stanley has $8.9 trillion in assets under management. Right. That's not BlackRock level. But there's a diff, there's a meaningful difference between, between blackrock and Morgan Stanley. Morgan Stanley is high net worth, ultra high net worth retail money. Okay. Whereas BlackRock is institutional money. And so again, that is such a big deal in our world because that means that normie retail investors who have $4 million at Morgan Stanley are still bidding for access and some level of, you know, allocation to Bitcoin. Right now. Whereas, if I'm not mistaken, before the show started, you know, Scott, you're talking about influencers that you talk to that are like, I hate my job. I hate it here. I no longer want to be in crypto. Right? So there, again, these huge differences in worlds where we live in crypto, and just because we're down to the previous cycle of highs, we. We, we all just want to quit, right? Whereas in the real world, it's a very, very different narrative that says, oh, look, over the last three, five, and ten years, bitcoin is extraordinary. Ooh, maybe I should get some exposure there in my core portfolios. What do you guys have to offer me? Right? And that's why Morgan Stanley does what it does to the tune of almost $9 trillion, will now have access, and believe me, Morgan Stanley advisors will be, let's just just say, instructed to start with MSBT versus ibit. I think, I think Morgan Stanley's Bitcoin ETF a year from now will be the second largest after Ibid. It will move that quickly based on the scale of their organization.
- [21:46]
Scott
Wow, that's a bold call, Andrew.
- [21:50]
Tom
Oh, nine, nine trillion dollars.
- [21:52]
Scott
I mean, you know, give me a break.
- [21:55]
Tom
Yeah.
- [21:59]
Scott
I mean, Tom, do you think we get to a point where, like, these RAs are aggressively or even actively pushing 5% into these products, you know, saying that the model portfolio should have 5% Bitcoin? We've heard BlackRock say, hey, maybe 3 to 5%, but you don't see them out there selling it necessarily.
- [22:20]
Andrew
So bank of America said 1 to 3% earlier this year. So that's, That's a pretty good movement. I think that's a pretty sizable allocation. I mean, you got to remember to your earlier point, how do you get your clients? You win them on the golf course, but then your biggest risk is is losing them because you just clip a management fee of 1 to 2% per year. So anything you do that's risky is risky to your bottom line as a financial advisor or ia. So you want the least amount of risk possible while still making your clients happy. So if they're demanding bitcoin exposure, if they're demanding crypto exposure, then you're going to have. And this is the problem. Before, they weren't able to actually put their client assets into their. And build a portfolio with crypto in it. They'd have, you know, their normal 60, 40 equity bond portfolio, and then they'd have a client with Coinbase over here, and they weren't making any money. Coinbase. So they were, they were annoyed by that and now they can put it in the portfolio, but it's going to be at the client direction. And that's really likely going to be when we see some sort of sharp uptick or sharp upturn in, in these assets and they're going to start chasing them. So I think once you see a breakout, you know, up above 80, 90, all of a sudden you're going to get people calling up their ris and saying, hey, why don't I have exposure here? And then that's, we're going to get a really quick reflexive move, upside up to the upside on the back of, you know, things like this.
- [23:37]
Tom
And by the way, all retail investors that are Morgan Stanley or whatever, they've all been taught for 30 years that anytime an asset that they like is down in price, shovel money into it, shovel money into it, shovel money into it and do it programmatically, do it, do it consistently over a period of a year or two until you're at an allocation that you're comfortable with or slightly uncomfortable with and then you stop. So, you know, depressed prices for Bitcoin or otherwise is actually a good thing for that type of mindset. So, you know, again, money is going to keep getting put into, into these products at a retail wealth management type of level. It's not going to slow down.
- [24:24]
Tillman
Yeah, everything's pointing up in terms of usage. And if you care about usage metrics more than price metrics, then you're, you're really thinking we're in a, a pretty special spot. And you know, when you're in, when you believe you're in a special spot, and what I mean by that is I think the price is disproportionately low compared to the upside of what our industry, you know, has in front of it. If you just talk, start talking about AI and the fact that AI agents can't walk into banks and set up bank accounts, they don't have proof of citizenships, they don't have Social Security numbers, they can't do in Web 2.0 what they can do in Web 3.0. And I think a lot of people have thought about Web 3.0 as US interacting with smart contracts and smart functionality on the Web. I think that is going to completely be skipped. And where we're going to see the use case and where we're going to see the volume and the traffic is agents using crypto and setting up wallets and managing wallet systems inside of corporations, but also for individual enterprise purposes and entrepreneurial efforts. And I think that you're going to see an on ramp broaden or a top end funnel broaden as it pertains to people's exposure into the space at every level, whether it be through their registered investment advisor and the traditional means and buying some exposure to Bitcoin through their retirement account. Or it means that they are literally using DeFi within their bank or within their exchange unknowingly to serve purposes as it pertains to earning yield and borrowing money and things of that nature. So I just think that the actual use case we've been talking about for as long as I can remember in cryptos, this one has true utility. Well, we're actually seeing our entire industry have utility as a whole like and be acknowledged as that fact across every single. I mean the fact that we now have clarity against. I can't remember how many they said, but I think like the top 20 cryptos or top 10 cryptos is like these are commodities. Well, you know, we're moving in a direction where the cat's out of the bag. And this type of technology is so disruptive and so incredibly delta positive. I mean in terms of what you can do from an.
- [26:51]
Tom
That volcano is not real.
- [26:53]
Scott
I was gonna say that does not align with the health.
- [26:55]
Tom
No, you're nervous. But that's not a real, that's not actually thinking.
- [26:59]
Scott
He could, we could type in something AI and make it start moving. That's what I was thinking.
- [27:04]
Tom
By the way, just as a reminder, both boomers and Gen X live through, you know, significant turmoil in markets. Right. Nine, 11, the dot com bubble, all these things. Like Amazon was $2.14 in 1999. It, the, the, the people that have all the money that our investors remember that they remember. Oh, I wish I would have bought Amazon when everything was going to zero in the dot com bubble. I did buy it three years later when it was up 10x and I still love it because that was 30x ago. Right? Same thing with just about any asset that, that you can look at during that time frame. Like by the way, I remember when bank of America during the financial Crisis was like $2.25 because I had a bid in at 225 or 220 or something and it got one penny away and it didn't take it and I never took that trade. Right. So these are the, these are the history of the mindset of these folks, folks that these assets, they may go down and it may be painful at some point, but you just never stop investing it's like the Josh Brown thesis of wealth management. You can throw anything you want at the markets. Over the past 30 years there have been an innumerable amount of we're in real trouble, make meaningful changes. And every time, six to 12 months later, it's not mattered, assets are higher.
- [28:52]
Scott
Right.
- [28:53]
Tom
So by the way, that thought process is pushing money into Bitcoin every single day via the ETFs.
- [29:04]
Andrew
I think it's really important to underscore that there aren't many ways for young folks, particularly ones who don't own homes, to accumulate wealth in this economy. Right. You look at the upside of the biggest companies in the world right now. SpaceX still private, what is it? 1.51 trillion in excess of that. Xai sort of went private, anthropic private, OpenAI private, on and on and on. All these things are going to go public at a trillion dollar plus valuation and all of the upside is destroyed for retail. There have been a number of solutions that have tried to disintermediate that. Right. You have some of these private shares being sold on Robin Hood and others. You have these new kind of ETFs that have private shares and none of them have really worked out. So really if you're a young person and as the wealth transfer happens from boomers who are all turning 65 in the next few years and have to start distributing assets or die and pass on their assets, the logical thing to look at for these folks is crypto. I mean that's the last upside remaining, unless you want to go pick individual equities or stocks, which is just, I think everyone's been coached over time to understand that as a losing game.
- [30:12]
Scott
Right.
- [30:13]
Andrew
Even the best managers can't outperform the indices. So the upside that folks see, and this kind of is what precipitated a lot of the meme coin crisis in my view is like financial nihilism. Let's find a, an outlet to try to hit it big before I miss the train here and crypto is really the only option and I'm sure there are plenty of folks right now who are salivating, who are like man, Bitcoin's only 65 know 70k right now. I wish I had more money to buy and that money's coming. So I'm really excited. I think it's going up.
- [30:41]
Scott
Going up when?
- [30:43]
Tillman
Right.
- [30:44]
Scott
Right now. Right now?
- [30:47]
Andrew
Yeah, I think it's three, six, nine months direction travel.
- [30:53]
Scott
Yeah. Previous cycle, six month bottoms, you know, time based capitulation, people give up, disappear
- [30:58]
Andrew
and, and this whole Iran saga, which hopefully will end soon, knock on wood, is really distracting us from a lot of the really positive things that are happening right now. Dollar based liquidity is still really strong. You have enormous fiscal impulse. Right. Not only from the tax stimulus that is at record highs this year from folks getting tax returns, but also the folks who had to pay are done paying now in the next month or so. That's going to be a positive fiscal impulse. You have a lot of the monetary stimulus that potentially could be coming. A lot mechanics are going to work behind the scenes. Very unlikely to have rate hikes, we're not going to have rate cuts. But there's going to be other ways for them to, to stimulate monetarily. I mean, complicated stuff we need to get into. But there's a lot of positive backdrops here that the Iran war is really just, just really taking a lot of the pressure away from. Yes, higher oil prices are really bad. Yes, higher gas prices, really bad. But it's a blip on the radar. Unless you believe this long is going to, this war is going to be six months or longer. I don't, I think we're going to be back to, you know, smooth sailing here in the really short term.
- [32:04]
Tom
Yeah. If you don't think Kevin Warsh is going to be the next Fed guy and he's not going to cut rates. I, I don't.
- [32:10]
Scott
I mean, I mean the dot plot. But now, you know, Fed funds futures are no cuts this year. Not that they've ever been. Right.
- [32:17]
Tom
Right. So who again that, that is. If for nothing else, it's all clickbait, right? Oh no, the dot plot has changed. Oh no. Let's write an article about interest rates because we have nothing else to write about.
- [32:31]
Tillman
It's a pile on. It's, it's like that when you were in elementary or junior high and there was sense weakness in one of the kids and all the kids just, you know, piled on because they don't really have a leg to stand on. They only have a leg to stand on. If they're chiming in to from the back seat, I think they would actually
- [32:51]
Scott
pile on the kid who only had one leg to stand on.
- [32:53]
Tom
Yeah, that sounds like repressed.
- [32:58]
Scott
My point is
- [33:01]
Tillman
it's group think is the point. Like everyone is buying into this doom and gloom mentality but they're not really looking at any of the, they're listening to the noise and not this and not looking at the signals.
- [33:13]
Scott
Yeah. My guess, I just want to know if Tom has a minute. He's got to go real quick. Someone asked him about Clarity Act.
- [33:20]
Andrew
Yeah, let's go for clarity and then we can help.
- [33:23]
Scott
Final stablecoin yield test expected as Clarity act talks continue. Anchorage chain laid back hybrid. And then we're saying that it's basically a markup likely coming in April with a chance of May. I'm putting that at 1%. Personally, I think stablecoin yield is one of many issues and we can't even get an answer on that yet. But I love your take.
- [33:44]
Andrew
So I think the stablecoin yield issue is on the way to being solved now. I think Coinbase is going to be really tricky to bring along. So it's a industry and congressional effort to see if they want to piss off Coinbase, which, you know, is a huge donor to Fair Shake, which is a huge, you know, directional mover for a lot of these smaller races, in particular at the congressional level. I think that's on the way being solved now. The other issues are a lot of the stuff around the Trumps, right? There's going to be they want to ban, you know, not only the president, but anyone sort of affiliated with him on trading or profiting from these assets or for from crypto more broadly. That is a real sticking point and a real issue. And there's a bunch of other nuances throughout the bill that I think it's pretty unlikely, unfortunately, to pass. And if you talk to folks who are in Washington, there's folks are pretty pessimistic. You know, there's a lot of vocal support by Lummis and others who are out there trying to jawbone this thing into to the right place. But, you know, from what I hear, it's pretty unlikely. And, you know, I think if we flip the table right now, it seems like crypto really needs this bill, but actually the banks really need this bill too. Right? Because we are getting exactly what we want in terms of stablecoin yield and rewards today if that doesn't change, if the current legislation doesn't change. So I think we have a better negotiating position than folks have let on. But we're about to roll into the summer recess pretty quickly, and then all of a sudden it's the midterms. And this Iran war is the big backdrop of everything else. And the longer that plays on, the less appetite there is to discuss things like crypto. It's just not a top priority for most of these folks. So I'm pretty pessimistic it gets passed, but I'm also fairly optimistic that it doesn't really matter as much as we initially thought it did. And it matters a little bit more for the folks who are actually entrenched in these ecosystems.
- [35:32]
Scott
That aligns exactly with my take. Tom, I know you got to run, man. Thank you so much for your time.
- [35:37]
Andrew
Thanks guys.
- [35:37]
Scott
You guys give Tom a follow right down the description. Peace. Yeah, that aligns very much with my thoughts. Wow, our faces got big.
- [35:46]
Tillman
Yeah, that's 100 spot on right there. He, he's got a good read on it. I, Unless somebody comes up with something new out of nowhere that gets out of necessity, you know, I will say that I think both sides are somewhat desperate. And when you have two sides that are somewhat desperate, I mean, I think the bankers are probably more desperate. And, and here's why. Because the rest of the world doesn't need us to keep moving in the direction that they're moving. Like, just like Tom said, we're, we already have what we want. The whole world has what they want. Not because someone gave it to us, but because the technology provides it by very definition. And so you know, that accessibility and the ability to prop up a proof of work network like Bitcoin and have it grow organically over a 17 year period when every force on earth at some point came against kind of proves to the resilience of the network and to the industry as a whole.
- [36:55]
Tom
Yeah, we're getting really close to the whole too big to fail idea now being a. The crypto narrative. Right. So tether has 500 million users. Coinbase has 125 million users. I mean these are huge, huge numbers. Versus, by the way, the banks. Banks don't have those numbers. Not even close.
- [37:16]
Tillman
They want them, I. E. Why they just gave away all the fees on the ETF they just launched. And so like if I'm the banks, I, I'm the one that's going, you know, I'm, I've got all the power, right? I've got all my friends in the room and we together are the most powerful force on the earth arguably. And we're all going, you know what, there's a bunch of, there's 7 billion unbanked people in the world and crypto can bank them and provide the on ramp into our rails. Like that's a powerful on ramp. That's the most powerful on ramp. The accessibility that Bitcoin or, or crypto provides someone in the middle of nowhere with a cell phone gets them into Morgan Stanley's ecosystem. Yes, please. And they know that or they wouldn't even be talking to the. They wouldn't even be doing all this. But it's just a matter of. I think, you know, some of the biggest battleships take so long to turn around that, you know, they have to run interference while they do the U turn. And I think a lot of this is just interference noise. I think they're trying to slow down Coinbase's effort. At the same time they're speeding up their effort so that they can try to bridge the gap.
- [38:34]
Tom
I just want to know who Tillman's one legged friend was in grade school. I. I want to know.
- [38:40]
Scott
He didn't have a leg to stand on.
- [38:42]
Tom
And was he the bully or was he the friend that's that stood close.
- [38:45]
Tillman
You know that this reminds me of the Seinfeld episode where Elaine just gets fed up with the. The group and she goes to the Bizaro group and they meet on the street. We already have a George and we already have a. You guys are pushing me to that.
- [39:08]
Scott
That edge.
- [39:08]
Tillman
Okay. What are you talking about?
- [39:12]
Andrew
I can't.
- [39:13]
Scott
I didn't have a leg to stand on. You said it.
- [39:15]
Tom
You said you like to have you
- [39:18]
Tillman
guys never heard that before. Is that.
- [39:19]
Tom
Yes.
- [39:21]
Tillman
Why focus on it like two.
- [39:23]
Scott
It reminds me of.
- [39:25]
Tom
Because we're immature. All right.
- [39:29]
Scott
I was waiting for that answer. It reminds me of a joke that used to be one of my favorites in the early 90s is your mama only got one leg. That's why she wears New Balance. Honestly guys, I'm very disappointed the mood here does not align with the volcanoes. I do want to just very quickly before we talk about other things because I brought up all these articles. This is the Google paper Safeguarding Cryptocurrency by Disclosing Quantum Vulnerabilities. Responsibility. There's a great TLDR here, but basically they're saying they can. I think it said that they can do it in nine minutes and the block time is 10. So this is way lower than they thought. Which. Which means the mempools are at risk. The top thousand Ethereum wallets could be cracked in less than nine days. There'll be no more warnings. This is basically it. So get ready. This is the whole qubits thing, Qbert. You've seen them here and bit. That's Qbert. Those are the Q Berts. Then Google considers the underlying quantum circuits too dangerous to publish. This is the first time this happened in quantum resource estimation. Basically like, ha ha. It can be done. We're not going to tell you how but I mean, listen, I think it is worth Taking this as a warning. That's all. I'll say. 6.7 million Bitcoin are currently sitting in those addresses. We know that outside of satoshis and the earliest coin, everybody will move them to addresses that are quantum resistant. Right. Because we'll have years of warning. But, yeah, I mean, it's, it's. And then CZ comes in with a very reasonable take. He's like, anything that dies because of quantum should be dead already. And we'll fix it. Long live crypto.
- [41:11]
Tillman
Well, yeah, and we can delete it if we want to. We can do a 2.0 Bitcoin chain right now and say all the addresses that you move it or lose it. Basically, we're forking Bitcoin. And you. Like, there's all sorts of ways to deal with this, and none of them are catastrophic and none of them really pose any threat. And quite frankly, if quantum computers are that powerful, they should be. They should be taking advantage of things that are a lot more valuable than the abandoned bitcoin wallet addresses. I mean, it's, it's, it's, it's just. It makes no sense to me at all.
- [41:47]
Tom
There is Eric Balshunas, the Bloomberg ETF analyst that, you know, obviously has been turned into a bitcoin ETF analyst over the past two and a half years. That was. His question is like, what I don't understand is what. Why are they aiming this at. At crypto?
- [42:03]
Scott
There was an answer, and it was at, like, someone responded that, like, Cloudflare put out a big thing that was like, Cloudflare is already quantum resistant. We've moved everybody on the Internet to quantum resistant. But that, to me, doesn't still answer for, like, the Department of Defense.
- [42:17]
Tom
Yeah, right.
- [42:18]
Scott
I mean, their website's not upgraded by Cloudflare. Right.
- [42:22]
Tillman
And I don't, I don't know enough. Does it even address whether the quantum computers are breaking the wallet encryption or whether they're.
- [42:30]
Scott
It breaks the private key. It takes, you know, nine minutes to break a private key when they thought it was going to take, you know, weeks or months.
- [42:35]
Tillman
But I want you guys to think about that. That's not even the change. That's not even the network.
- [42:41]
Scott
No, the. Yeah, right. It's not really breaking the network, to my knowledge. It's that any coin that's not put
- [42:46]
Tillman
in a quantum resistant wallet treasurer's business model. So who cares? They're breaking like.
- [42:52]
Scott
Yeah, that was my joke with, like, does this mean now we have to put our coins back on exchanges?
- [42:57]
Tillman
So, yes, it does because they're going to be the only quantum resistant, you know, folks. And this is the, this is the slippery slope of like technology. At the end of the day, you know, he who has the computers makes the rules and we don't ever have the processing power that they, they do. And so we will have to go towards, you know, more centralized networks to protect ourselves from vulnerabilities like this. But you know, God help us, that's, you know, that coupled with AI. I mean, we're not even talking about AI and the vulnerabilities that that brings to the top table. And you know, 24, seven markets that have this much liquidity and that have 95 on ramps in terms of defi market access and global access that we can't control. Like we're headed into an exceptionally exciting time. If you love volatility. And my suggestions to everybody is stop trying to bet on a horse based upon conviction of that horse and realize that, you know, a rising tide kind of floats all ships. And the more this technology is used by AI agents, crypto specifically, the more liquidity is going to come into it, period.
- [44:08]
Scott
I just have to say I'm reading the comments and it's unbelievable. Today we have someone named one armed bandit who has one arm and thinks our one leg jokes are funny. And I appreciate that, the sense of humor. And you guys are just going back and forth. Somebody said he types faster than the rest of us. I'm just reading the comments. One arm Bandit, you're the man. What are you doing here? So I did say that technically even if you have one leg, you do have a leg to stand on. So I was, I have been.
- [44:44]
Tom
That's a good point. I like that point. That, that's well said. That's well said by the commenter there.
- [44:50]
Scott
This is amazing. Should we bring up the thing we got a company.
- [44:55]
Tom
Look at the newfangled website. Look at all that.
- [44:58]
Scott
Nobody told me there was a new website until I just brought it up.
- [45:03]
Tillman
Oh, there's constant development work going on
- [45:05]
Scott
at Arch Public going on over here.
- [45:08]
Tillman
We're trying to make it easier and easier to get access to tools that make it easy to acquire Bitcoin, but also every other digital asset and traditional asset focusing right now on tokenized assets, you know, in a methodical, risk adverse manner. And that's kind of a mouthful. But the bottom line is, is that anytime you have volatility, you should have systems that manage that volatility for you. And as when in particular when the market is open 24, 7365 and you have to sleep. There's a lot of emotion in that volatility that needs to be managed. And there's also a lot of time, effort and energy that needs to be managed. And we just aren't available as human beings all the time. And so setting up automated parameters that help you reach your goals as it pertains to accumulating these assets, I think is our passion. And so you've probably heard us talk about it a lot, but we talk about it every day, all day with our customers. And we have a steady stream of people who want to see what automation really can do for them. And if you've asked that question and you want to do it in a completely riskless, positive manner, reach out to our team. They'd love to walk you through the platform. They'd love to get you up and started completely for free. You can use our product for free in an ongoing way. The only time that we charge a license fee is for enterprise customers and high net worth individuals that come into our concierge division and need more, you know, complicated instances and layered instances across lots of time frames and lots of asset classes. So we'll be more than happy to spend the time to help.
- [46:53]
Scott
I mean, this is the Bitcoin. Just to show how much I've been buying using the tool. So this obviously goes back to when we kind of bottomed in February, but much longer. But I mean, we've just been stacking. That's on the daily. I'm buying the daily. The 12 hour. That's on the 12 hour in that same period like crazy, you know, right below prices now. A lot of that six hour buying like absolute mad. Doing the same with salad and eth. I mean, it's just been amazing. Even like in this tight range, it's not buying the 74 part of the range, it's buying the 67 part of the range. Right. It's awesome.
- [47:29]
Tillman
Yeah. It manages that pricing, you know, risk for you because the longer it stays inside of a price range, you know, the more you're going to accumulate within that price range. Your weighted average cost basis is continued to get better and better. And the allocation of the capital is the most important part of the equation. Right. And running regression analysis against. Okay, if I've set up these parameters within my automated tool and I look back over the last year, how many instances it's been triggered, how many times has the market given me what I'm trying to go for in this specific setup? Well, you can run that regression analysis across multiple time frames and get really comfortable with the frequency, the amount of capital that's being placed so that you're putting a lot of smaller eggs and a lot smaller baskets over a much longer time frame. And that allows you to keep powder dry for times like these where, you know, we all think we're, you know, we. Right now my emotional side wants to buy a lot of bitcoin because I think it's going way up from here. I think these are bargain prices. But even the software protects me from that bias because there's a lot of emotion attached to it and I don't want to be a slave to that emotion, especially when I'm making important decisions.
- [48:51]
Tom
Everything that we talk about on this show, all the negative narratives that exist right now, you know, algorithmic executions, don't care or know those exist. They just execute on your behalf and really, really flatten out your cost curve in crazy great moments, crazy bad moments, and everything in between. There has never been a time where you've needed these tools more than right now and going forward. Right. So right now and going forward, it's never going to be less complicated and less time intensive to be able to properly stack positions because we are going to 24 7. Everything crypto is already there. We could just choose to do a case study as arch public and say over the last year using these two instances with bitcoin, how many times in the last year were executed, did executions happen between 1am and 4am when basically everybody that matters is asleep? And you'd be shocked that there's no way you can do that as a human. Right. That's coming to everything. And over time we will have products that allow you to stack your assets, the ones that you want to own, whether it's crypto or whether it's equities to do the same. Because we're going to 24 7. It's not going to get less time insensitive or less complicated. It's going to get more.
- [50:23]
Tillman
Well, I, I'll. This, this is a nice tie in to Larry Fink because he's, he's talking about tokenizing everything. He's been talking about it for over a year that real world assets are coming and these markets are coming. And it's not a shocker to me that they came out and said these cryptos are commodities. Why? Well, I think a bunch of real commodities are going to be tokenized and I think the top 10 crypto list is going to be looking at the altcoins of the future. Maybe tokenized oil for example. And you know that managing the accessibility and the volatility of a broad array of markets, like Andrew just said, it's never going to be easier. And so with these tools it becomes very easy. And you know, the most, the highest compliment I get from some of our highest net worth customers is things like, you've given me 15 hours of my time back this week.
- [51:21]
Scott
Yeah, that's exactly right.
- [51:24]
Tillman
It's major, major, you know, emotional.
- [51:27]
Scott
I'm, I'm like a decade removed from the setting alarm on my phone for price action garbage of like being an early, early bitcoin crypto guy, like 2017, 2018, I would literally be like for like 30 coins I had alarms. It'd be like 2 o' clock in the morning you hit my price given. That's because the exchanges didn't have stop losses. Mostly it was like risk management tools. Like literally this could be zero when I wake up. So I need to set alarms, but there's still a lot of people who wake up to pee at 2 in the morning. Check the phone. Oh my God, Bitcoin, I need to do something. Whatever. Like it completely, if that was still part of what you have, removes that from your mentality. You know that you're covered. And listen, you also know you're covered to like sell a rip while you're sleeping. It's not even just buying dips. If you've set it to do that. You want to be doing that. And it's not just on bitcoin. It is on the more volatile assets. You can choose basically anything, right, that's on these exchanges to run it with with enough liquidity. So yeah, I mean it's such an important note about giving your time back, but it also like gives you your sleep back. It also reduces your stress and anxiety. It just kind of removed it entirely from your brain and as being a fundamental and like who's not thinking about money most of the time, right?
- [52:41]
Tillman
And this goes to a fundamental principle of, you know, management, right? It's like if you've ever heard of automation or bots as a lot of people call them, you know, those are stress inducing events. Those are, let me give this crazy algorithm money and go let it play in the markets and see if it brings more back. That is not what this is. These are robust tools that allow you to program your desires, your wills, your goals, and then set it and forget it so that when the market presents you opportunities, you already have those rule sets, you already have those in place and, and it's very different than putting programmatic limit orders in place because limit orders are a binary output. It's if, then there's lots of depth here. And so you kind of have to see it to believe it and you have to see it and experience it to see the value in it fully and understand it. So again, that's why it's free. Come to our website, sign up, let's have a conversation with, with some of our folks and, and get you guys going on it so you can really experience it for yourself.
- [53:53]
Scott
Still running the, Are we still running the special? I don't even know.
- [53:56]
Tom
Yeah, yeah, yeah. We're, we're running the promo as we speak. It's. So if you've ever wanted to be part of our concierge program, you need to do it right now. We, we do this once a year where we run a very, very meaningful promotional price. Right now it's a 40% discount on all of our tiers. As you can imagine, each tier costs more. So, you know, if you're going to go at tier two or tier three, I mean, that discount is really, really big. And also spots are limited. So yeah, it's a, it's a unique time to be able to get involved with us and to, to be able to take what it is that you want to get accomplished, automate it and do it at a price that you're not going to see the rest of the year.
- [54:44]
Scott
Love it. There you go, guys. Check it out. Let me bring it back up. Archpublic.com brand new website, looking fresh and clean.
- [54:52]
Tillman
We'll have an app launching here in the next 90 days. Let's call it Cross our fingers.
- [54:58]
Scott
I'm gonna be honest with you guys though, honestly. The background should be this arch public and it's like volcanoes. Protect yourself from.
- [55:10]
Tillman
Well, you should, you should have varying backgrounds based upon what the Fear and Greed index is. And this could be a very good fear and fear fearful background.
- [55:19]
Tom
Where is that right now? Where is the Fear and Greed index? It's at 28. I mean that's, you know, that feels like 28 actually feels like, you know, Garden of Eden heaven. Oh man, things are so good.
- [55:35]
Tillman
So you have a
- [55:39]
Scott
all high for the year?
- [55:43]
Tillman
Well, year's not over, Scott. We still have a long time to see what happens. You know, the summer could surprise us. I, I'm gonna be honest with you. I, I think, I think we could see some, some fireworks.
- [55:56]
Scott
I just want people to see. I'm getting criticism once again in my comments for looking at my phone. I want to show you guys. This is what my desk looks like. I had posted this before. I have a keyboard. It's right here. And screen here.
- [56:10]
Tom
It's your show.
- [56:11]
Scott
Reading your comments. It's right here. It's not a phone. This garbage. Horrid limoncello. It's the only thing left in the fridge. I felt like I had to keep the gimmick up. It is disgusting. This is, like.
- [56:25]
Tom
Tastes like floor cleaner.
- [56:27]
Tillman
I think it tastes like Mr. Clean to me.
- [56:29]
Scott
Never tasted pledge. Okay. Like, maybe when I was pledging college, they made taste buds, but let. This is. It's. This is. This is pledge. It's that they can't. There's no way. They were like, hey, we're gonna do the focus group.
- [56:44]
Tillman
Natural flavor.
- [56:45]
Scott
This is the flavor we need to make Lemon cello. They just like the name.
- [56:49]
Tom
Yeah, that's it. Yeah. Somebody at corporate was owed a favor, and so they're like, all right, let's greenlight that guy's, you know, flavor.
- [57:00]
Scott
Yep.
- [57:00]
Tom
There you go.
- [57:01]
Scott
Yeah, this is. This is like. You ever seen Succession or, like, you know, the Murdoch documentary? Like, one of the, like, mentally handicapped kids, like, came up with the idea, and they're like,
- [57:13]
Tom
you know, we're gonna do it.
- [57:16]
Scott
Little Jimmy wants the lemon cello.
- [57:18]
Tom
Yeah.
- [57:19]
Tillman
This is not about whatever drink you have. I don't even know what it is, but it is about, like, a lot of tastes and flavors are like, you know, the end of the oil refinery process has this unusable product. Kind of tastes like lemon.
- [57:38]
Scott
Yeah.
- [57:38]
Tillman
Let's put it in a lemon drink. You know,
- [57:42]
Scott
this is naturally essence. It does not. This does not have, you know, industrial vegetable oils. Right?
- [57:48]
Tom
Yeah.
- [57:49]
Tillman
I don't know.
- [57:50]
Tom
It's supernatural. Yeah, I'm sure it is.
- [57:53]
Scott
God, you get pregnant with natural essences. Anyways, guys, that's all we got for you. I'll see you.
- [58:01]
Tom
We have derailed.
- [58:04]
Scott
Next time. The volcano's moving. I'm not like it's moving. We're gonna have. It's coming up. We're gonna bring in the things in the studio to make it look like it's ashing, you know, like. Yeah, be awesome. All right, guys, we're just improving every day. Every day a little bit. All right, we'll see you tomorrow. See you two next week. I gotta set an outro video. It's not gonna work. There we go. Set out your video. Bye, guys.
- [58:29]
Andrew
Let's do.