Loading summary
Transcript124 lines
- [00:00]
A
Good morning everybody and welcome to Crypto Town Hall. Every weekday here on X at 10:15am Eastern Standard Time. We could have made a title about a grand news headline. Something about the Clarity act or any of the other things going on in the market. We decided with is the bitcoin bottom in? Because it's a lot more fun to have that debate and discuss it and then see where the conversation goes. I personally taking a look at the market right now, given I'm a glass half full kind of guy, I think that the bottom is very likely in here. I think there are a lot of reasons for that that we can dive into as we continue with the conversation. Before we do dive into that, we have an awesome sponsor and I do not want to be me and forget to give you this read. AI is reshaping the world. But right now it's stuck in the hands of just a few big players. But what if AI could run openly, verifiably and on chain? That's what zero G is building the world's first decentralized AI operating system open to everyone. Imagine a network where you don't just trade tokens, you train, store and run independent AI models at scale. No lock ins, no black boxes, no single point of failure. Just quick, cost effective auditable AI that anyone can build. If you believe the future of AI should be a public good, not another corporate monopoly, join us at 0g.AI that's the number 0g.a I. Okay, now we can actually dive in. Dave, I see that you are still on account number two and not back to account number one. Sorry.
- [01:29]
B
Yeah, yeah, well I, I decided because X being a profit organization, I would pay for premium on a second account so that they, I could actually. Because that's the only way you could actually chat with the premium support people. So. Okay, there we go. And given the fact that, that I'm tired of all the. The idiot copycats, I decided to go to my real picture. Not that that matters, people can obviously copy that too. But it. This is what I look like. So for those who care, this is a relatively recent picture. Although now I'm sitting here in my 60 some odd degree apartment because the heat still isn't working here in Miami. But you know, whatever it is, it is Smelter Town hall again. And I'm not taking a victory lap just yet. But every time everyone was calling for the death of silver and gold yesterday I was like, I don't think so. And I don't think so. I think that the, that the people, the Real interesting thing that I take away is. And you had an all caps, which mean I know it's your staff that did it, you know, post about Matt Hogan saying how we are in the depths of crypto winter. In fact, I think the quote was Leonardo DiCaprio in Revenant style crypto winter. And people who. There's a need for, there's a huge thing. This debasement trade is not, not, it's not crazy. I mean, you know, we are spending enormous amounts of money and so that's where people are putting their money. This too shall pass, but it doesn't pass in, in a second. And that's the thing. And time matters. And we're going to sit here and we're going to talk about crypto, we're going to talk about bitcoin and you know, it's, it's a, you're getting an opportunity, maybe a generational opportunity to buy in at a, what is at or near a bottom in the short term in an asset that is, its ceiling has risen. I mean, gold is up two and a half times over the last, you know, whatever period of time and effectively that raises Bitcoin ceiling by 2 1/2 times. So I think that's the way you have to look at it. I think we are closer to a bottom than anything else. But when you were, when, when it is so morose and we had Those idiots in D.C. you know, you see both sides come out of a meeting in D.C. and one says, oh, it was constructive, etc. And the other says, yeah, screw you, you know, that, that, that's what we have going on. And it's just, it's the kind of thing that, that shouldn't matter for bitcoin, to be blunt, but it does matter for crypto and it does matter for innovation. And so, you know, I think that's where we're at. So bottoming is a process. I see Carlo, go for it.
- [04:01]
A
I agree with that. By the way, when I say bottom in bottoming you. No, no, I agree with you. I'm just saying, to be clear, I, I actually agree with you because, yeah, listen, as a, when I do technical analysis, which has always been kind of my lifeblood, which I laugh about because I still think it's astrology for men, but I think at least it's a good risk management tool. I see oversold, you know, RSI on the daily chart on bitcoin and I say, hey, maybe one, one more low and we get that nice bullish divergence. I'm Always looking to.
- [04:32]
C
Right.
- [04:33]
A
And then people say, you said the bottom was in, but we went down 500 more dollars. Right. Or so. Or it's a close lower. So, yes, I think bottoming is correct. Yeah.
- [04:42]
C
Sorry.
- [04:42]
A
Go ahead, Carlo.
- [04:43]
D
Good morning, Scott.
- [04:44]
A
Good morning, Carlo.
- [04:46]
D
So, yeah, yesterday was pretty much theater, in my opinion. I talked about it on the daily Finance show that one of the interesting observations about this White House meeting on the stablecoin yield issue was that no principals were invited, so we didn't have a chance for Brian Armstrong to meet face to face with Jamie Dimon. So Jamie Dimon can tell him to his face that he's full of shit or what he's saying was bullshit, which was what I was getting my popcorn out for. Because I think Brian is making great points. And I will cite a post yesterday by chief general counsel for chief legal counsel for coinbase, Paul Grewal, who nailed it. Quote, in my old days, in my old judge days, I mediated hundreds of disputes, big and small. The oldest tell that a party isn't looking to negotiate anything is to send negotiators with no authority to negotiate. And that's kind of what we saw yesterday, because the bank lobby is now trying to push this absurd narrative that they are concerned about passive yield on stablecoins because it will hurt community banks. And if you think the big banks care about what happens to community banks, then I'd love to get what you're smoking. And the fact that there were no principals at this meeting essentially just made this theater. We're no closer to a compromise on this issue. You had a phenomenal show today, Scott. And what Bill talked about with respect to what's really happening with stablecoins is something people may want to play back because he really nails it. And this is really an existential fight between Coinbase and which wants to be the Neo bank chase of the future and the legacy chase, which wants to continue to control their fee extractive triple, quadruple reserve model of spending your dollars many times that they possibly can. Also, I invited Preston up today because I think it would be great to talk about what the hell's going on in France with X obviously X major announcement yesterday and then of course, the continued attack on free speech. And I also think that AI and crypto are something we need to talk about because what we're seeing happening with these bots and these autonomous agents and people basically yoloing their identity over to these agents is going to create a myriad of unintended legal and tax consequences. But I think it's also going to be a major spark for renewed altcoin season because these bots are talking to each other and they're spending in crypto. And if we were looking for new users, there's billions of bots coming on board soon. So back to you, Scott.
- [07:29]
A
I love the idea of autonomous AI agents spending in crypto, which I do think is the future, but I think that they're more likely to hack our crypto in the short term.
- [07:38]
E
Yeah, I don't know what the biggest, the big difference is. We, you know, we just have. It's just more bad traders, right? Like we had a bunch of bad traders trading meme coins and now we're just going to have, you know, chat GBT running a bunch of them, which is just, I don't know if it's like world, you know, it's all just slop. Like sometimes they're good at stuff, sometimes they're not. But when it comes to like, you know, getting them in a room together and they're chatting with each other on Molbook or whatever, they're just prompting each other.
- [08:04]
A
Right.
- [08:04]
E
It's like a recursive nightmare. But it's, and it's, maybe it's interesting, but it's not like some new paradigm where, you know, AGI has formed out of it.
- [08:13]
D
Yeah, but look there. The interesting thing too is that even if it's, even if the slop, even if it's theater, even if it's engagement farming, these bots are still learning from each other. And to go to the lengths of encrypting their own communications outside of human detection is certainly something that we should be paying attention to. I think a lot of people say that this is Skynet. I don't.
- [08:39]
E
But it's human prompted. Did that actually happen, do you know?
- [08:43]
D
You know, that's what's really hard to parse out of all this. How much of this is fact and fiction. But I think this weekend definitely was a turn for AI because regardless of whether it's theater or not, you have adult people in crypto that are full porting their API credentials to bots and I just don't see that ending well.
- [09:07]
E
Yeah.
- [09:09]
B
Look, my guess is, is lawyers, right? And there's some Mickey Mouse going on and some people, you know, wizard behind the curtain, but it doesn't matter because what is important is at some point in the next n years, maybe months, but probably years, there will be a gentic AI that will be set up and instructed and given ability to transact and invest and those agentic AIs are not going to buy and sell silver coins. I'm sorry. Just not going to happen.
- [09:42]
D
Right, and who's paying the taxes on all that? And who's responsible for the fraud and the market manipulation? Well, this is interesting stuff.
- [09:50]
B
The people who, who set the agent AI free on the world. I mean, it's no, no different. I mean, you know, it is what it is. I mean, but the. There is a singularity that's going to happen with regard to natively digital assets and money and acceptance. And if the entire world has agentic AIs doing things for them, then acceptance of Bitcoin is probably the entire world or at some point. And that is an event that is into the far future, I believe, but not that far. And I don't think people understand what that means because the difference. And everyone keeps talking about tokenized gold, except for there's a real problem with tokenized gold. You don't know if it's really there. You know, the bridge from real world assets to tokens is a big, big divide, particularly with something like gold, because it could be stolen at any time. Right. You know, you need men with guns to protect it. And I guess the AIs could be looking at computer feeds, you know, cameras to see that the gold bars are.
- [10:49]
F
Yeah, those are AI generated gold bars on the computer screen though.
- [10:53]
A
Right?
- [10:53]
B
But yeah, that's the point. That's exactly the point. Anyway, so sorry for interrupting, but if you really want to go down this rabbit hole and you want to think about it, then we're talking about much higher prices for this stuff. But anyway, I saw Amateo's hand next. I really didn't want to interrupt you, dude.
- [11:07]
C
Yeah, I would say to that, Dave, is that it's actually happening much faster and is coming much sooner than people think. So I understand that there's a lot of slop and there's a lot of human intervention on say, Molt Book, this thing that went viral, which is essentially for those who don't know Reddit, that was created for all of these AI agents to be conversational and some of which the smoke behind the curtain did get revealed. But what's more important is that Moat Book itself was built by this AI agent. What's more important is that all of these other software platforms that these AI agents are engaging on was built by the agents themselves. And in the majority of cases, 100% built by the agents were with zero code. And now the agents. Yes. Was it human ideas that prompted some of the Software creations. Absolutely, but not always. This was also spurred by the creativity and the ingenuity of the agents themselves that are then going and deploying these things, creating platforms for the agents to then create multi agentic coordination. And they're already being built and launched with tokenizations and token access trading right off the bat. And these agents launched a prediction market. They launched a prediction market. Exactly. And you know what, they're not only going to launch their own markets, but they're going to be so much better at finding inefficiencies in all of the markets that people already participate in. So no, this isn't just conversational. This is actually conversational agents that have the ability to execute complex tasks. This isn't just like making a dinner reservation or a calendar. This is building dynamic software and then it's creating multi agentic coordination. So there's multiple step functions of innovation that are happening and they're embracing crypto from the get go. And there will be step function synergetic trading that's going to emerge out of this new platforms that come. I do think it's going to be huge for the industry and is probably, you know, my whole thought is that this is the sleeper that most people aren't really realizing that's going to create the next retail hype cycle in crypto. And it's going to be massive. It's going to be massive. People are going to freak out. It's going to be insane.
- [13:38]
A
I also heard running it right now, if you don't have it optimized can be like 100 to $1,000 a day. If you're trying to do too much.
- [13:44]
C
Absolutely. And be at an entire security risk of unprecedented proportions if you don't know what the fuck you're doing, it's very dangerous.
- [13:54]
A
Yeah, it wasn't the topic of the day, but it's a good one because we all know that. I mean, we've already seen actually one of the first stories I think after it was launched was that it was being used to hack people's crypto.
- [14:06]
C
Right.
- [14:06]
E
No, I completely agree, but I think what people are also missing is like just the amount of power, like I've been playing with it and you know, the, the creativity you have, you could just do anything.
- [14:18]
C
Right.
- [14:18]
E
Like I'm creating a piece of software that's just to organize some of my files and also at the same time, like I like to fall asleep to listen to it. Like listening to a story. I had it write me a novel and it was like using itself to Critique the chapters and to put it together and I fell asleep. You know what it was? It was okay. And imagine like anything with creativity. I'm not suggesting that it creates creative, but anything where you have a huge task that you would have text window before you could just have it, creating files and folders and doing all that stuff, it opens up so many doors. But I imagine all of them must be crushed for people who are joining the software development field but for creativity and anyone being able to spin up what you know, used to need specialized tools like in the future when you're making a smart contract for an entertainment that has a unique idea, you know, it opens the door for a lot of people to do these things. I think that the way that people can apply these tools is just. We haven't even started thinking about it. But as far as Carlos question is like, okay, who's responsible for the fraud? Who's responsible for the taxes? Nothing's changed. I think what the big difference is going to be, you have a lot of people who think it's, well, not me, it's my bot. And they're just wrong. And then they're going to find out pretty swiftly. But the tools like those, those, these tools are going to be and are already being used by the government to find out. It's like, no, pretty sure all these wallets belong to that guy. You know, it's literally just a button that the tool spat out. And so that's going to be just as easy with your agents running around.
- [15:59]
C
Yeah. Lord, it's going to get weird when your agent does something you don't approve of and then whose fault is it? Right? Like, like the government's going to come after you and you're gonna say, well, you own this agent. They say, well the agent went rogue. What am I supposed to do?
- [16:11]
G
And this is getting money on all sorts.
- [16:14]
C
Yeah, yeah, it's like I didn't ask him to do that. I have proof of the records. Decided to launder money.
- [16:21]
B
The problem is, is that there's a well established precedent for this. You know, in the broker dealer world, you know, it doesn't freaking matter if you use, if you're a broker dealer and you use a software company to do X, it doesn't matter what X is. And they fuck up and break a law, it's your fault. And it's just in finance it's really well established that if you sign up for software and it does something illegal, it's your responsibility. And you know, people aren't.
- [16:49]
D
And Dave, it's even worse here. It's even worse here because this is all open source stuff with no terms of conditions and no accountability.
- [16:59]
B
So the reality is people are going to need to be careful when it comes to real money. But it is going to happen. I mean, Amateo's point is very well taken. And I see your, I think, I see your hand up. I don't know if it's a shadow hand or not, but.
- [17:16]
C
It'S shadow. I mean it just from what I already chimed in on, I just think that, you know, it's funny that people are choosing to tie their social identities to these bots, but not of course that's a small percentage of. Not everyone is choosing to tie their.
- [17:30]
A
Identity to people also tied their social identities to 10,000 collection cartoon characters in the last.
- [17:37]
G
Stop it. Scott.
- [17:40]
A
I'm just saying I am my lazy lion and my lazy lion is me.
- [17:46]
C
But didn't we all make it? Scott?
- [17:49]
G
No, I don't think so.
- [17:54]
C
Exactly. But yeah, I think that this is a trend that everyone just needs to really look out for. It's going to go crazy and it's an unstoppable force that's going to move faster than anybody can keep up with. And that's really my thoughts on it.
- [18:14]
A
Tomer, I think you have your hand.
- [18:15]
F
Yeah, I guess the reflection I'm trying to offer people on this is like we don't know exactly which event, like did these robots actually create a religion of their own? Did they actually. But we can see the trend and the momentum of these things and the idea that's already come up that I kind of want to shine more of a light on is the only thing we can all agree on that's real is, is Bitcoin because it exists and is verifiable in the, in, in the Internet.
- [18:38]
A
Right?
- [18:39]
F
So an AI agent that thinks it owns one bitcoin knows it owns one bitcoin and can sign a message verifying that it owns one bitcoin to verify that that one bitcoin, that UTXO is actually on the blockchain and is unspent and that they do have the private key to it. And so as all, as we, this is zooming out a little bit more and I don't mean to bring up the Epstein files, but we, we're, we've been in a long term trend of loss of trust in institutions, whether they're government, whether they're educational institutions, whether they're healthcare companies, you know, whatever, whatever it is, whether they're media companies we lost trust in all these things and the only thing we can trust in is this trustless system, the system that doesn't ask you to trust in it. It says don't trust, verify and gives you the tools to verify its authenticity whether you're human or robot. And so I, I think the, is the importance of this verifiable decentralized money for, for this world in which we can no longer trust people because, or institutions because institutions are led by people and people are corruptible. Is, is the big pivot point around the fourth turning that we're experiencing, which looks like oh no, all these institutions are going to collapse. We'll be left without a civilization. And the answer is, well, you know, you have to have destruction to have creation and what's, what's going to be created. I don't have a crystal ball. So I, I'm just focusing on the general direction of these things. But it'll be, it'll be institutions that aren't prone to corruption because they aren't putting trust in human beings. And, and it's becoming more and more real with every breaking news story.
- [20:20]
G
And well said Tomer, because proof of.
- [20:23]
D
Human is going to be more important.
- [20:25]
G
Now than ever as this takes hold.
- [20:32]
A
So that said, tomorrow you think the bitcoin bottoms in?
- [20:35]
F
I, I, well the bitcoin, yeah. Bitcoin block height will only go up from here.
- [20:41]
A
Yeah, there you go. That makes sense. Yeah, I mean I do think it's a worthy conversation about the, the market and one of the reasons I just want to touch on that a lot of people are pointing to for optimism.
- [20:53]
F
Scott, can I give you a bit of a more serious answer to the question? Because it'll be, it'll be very quick. It's like there's always noise and so I can't say for sure if the bottom is like there's people saying Epstein was Satoshi. It's stupid and it's wrong. But stupid and wrong often impact short term market trends. So I don't know exactly what's driving the short term price. It feels like what a discount it is compared to the fact that it has been for a long period of time. Over 100,000. So I can't say that the bottom's in or not, but boy is this ever a good price. And do I ever wish I had.
- [21:25]
A
A job right now I'm really excited to buy it here regardless of whether the bottom is in or not for sure. But one of the bigger narratives I think that people have been looking for obviously to Drive Bitcoin price is liquidity and there hasn't been much evidence that that's coming. One of the big stories today was the PMI data because it, the PMI ISM data gave a reading of 52.6, well above anyone's expectations. If you've been following the Raoul Pals and the Tom Lees of the world who talk about the business cycle ra ramping up, well, this is the first and major glaring signal that that's actually happening. So I mean there's a, quite a bit of data here in the entirety of Bitcoin. And listen, Dave's going to jump in and say that a few data points is not statistically relevant and he's absolutely correct. So I want to point that out. But in the entirety of Bitcoin's history, PMI has never pushed to 52.6 and not resulted in it continuing to expand for at least 306 days with an average of 385, sparking the beginning of Bitcoin's true expansion phase. Just a lot of data that sort of aligns with the business cycle ramping up and bitcoin follow. Yes, Dave, I, I can see the funny faces because as I'm reading it I'm, I'm understanding how stupid it is even in my own mind because I know, but the, the general narrative though that liquidity could drive price and the business cycle ramping up could be a signal of liquidity. I think has, is valid.
- [22:46]
B
Look, the, here's my indicators. My indicators are we have at the exact same time extreme fear going on months. We have, you know, people like Matt Hogan and myself effectively pulling on the hair shirt and saying, yes, we're in the middle of crypto winter. It's all terrible. We have Gary who you know, was one of the most unabashed bitcoin bull, not selling his bitcoin but basically yelling at everyone in the bitcoin community to stop being the children that they've always been expecting them somehow to become adult and you know, all of this stuff happening at the same time that the price is basically sitting on, on what, what you would call a long term support line. I mean, I find it, I find it interesting at the same time we know that, that this administration is going to do everything they can to run the damn economy hot. And whatever you want to call that, whether you call it liquidity, whether you, whatever you want to call it, they're going to run it hot. The GEP is going to continue to get pushed and they've made it very clear that they're not going to attack know affordability by hurting asset prices, making it very, very clear. And so we know that that's the backdrop. And if you want to short into that, well, go for it. Good luck. It's like the people who are shorting silver, assuming yesterday that, that we were going to collapse back down to 50 immediately. And you, you know, I mean, I felt alone because everyone on the thing was telling me I was nuts, but here we are and guess what? It's going to start marching back upwards again because it's exactly the same reason. Not just silver, both gold too. You know, it's like shorting assets. When money is going to continue to get printed and the economy is going to be run hot, we're going to be deregulating as fast as they can. I mean, I don't think it's a winning strategy. And you know, I don't know if Tom Lee is going to be right this time. I mean, he feels, you know, it feels like you have voice in the wind with Ethereum below, you know, you know, what are we at below 2300 again and you know, unrealized losses, yada, yada, yada. But, you know, look, as long as he has the staying power to sit there, I suspect he's going to be right, you know, although, you know, from a credibility point of view, a lot of people are kind of pointing at him as, as tilting at windmills. So, you know, there's a lot going on here, right? Damn. I saw Gorav up here and I just switched to listener. I was trying, I was trying to poke him. Oh, well, you know, so be it. That was my attempt, Scott, to see if I can gin up some more, you know, some more controversy. I don't know if you want to DM him and see if he wants to come back, but I think that understanding what's going on with Ethereum may be more important than this. Space was downloaded via Space Down.com visit.
- [25:19]
A
To download your spaces today.
- [25:21]
B
Bitcoin because, you know, I think that what's going on here is, is interesting from a price point of view. Lord, you don't agree?
- [25:30]
E
No, I just don't know what's going on from a. I'm interested to hear what you think. Like, I think you're right, something's important, but I don't know that I know what it is.
- [25:39]
B
Yeah, I mean, it's when, when you're in. The only thing I can say, and I say it every day just so we understand when, when when you're in a winter, when you're in this period of time when everybody is like saying it's toxic to buy, that's generally how bottoms are formed. But they take time. It's really, I mean, I, I, I, I wish, I wish it was a more exciting point. I mean, I mean, Scott, you guys, in your conversation this morning, you were talking about, you know, indicators, I mean the PMI indicator mattering. I mean, look, we're going to have economic expansion. It's going to continue to be the top part. Want to look at a K shape, but that is going to happen, you know, you know how it actually unfolds. I guess we'll see, right?
- [26:24]
E
Our winters run pretty deep when we have them. But you know, I just, the backdrop is just too positive for me to think that this is one of those, you know, where we shoot way lower than anyone thinks. There's just, there's too much going on for Bitcoin.
- [26:40]
B
I saw Gorav flop in as a speaker. Gorav, are you actually behind the mic? Can you hear us?
- [26:45]
H
Yep, I can.
- [26:47]
B
I was trying to trigger you with talk, talking about Ethereum. I mean, what, what do you, what are you seeing? Is there, you know, from a developer and from a Q, you know, VC point of view and from the Ethereum ecosystem point of view. Are people worried at. But you know, is it panic there too, like it is in Bitcoin at 2300 or, or people are like, eh, we're moving.
- [27:05]
H
I think, I think people have lost hope in crypto, man, on a, on a serious note, and this is not typical me. I'm of course I'm being funny on a statistical point of view, from a venture capital point of view. And then eventually we run large accelerators in partnership with governments and so on, not for profit. I, and people like us are seeing the biggest fall off in crypto. There are more people in events that very proudly say that crypto is my side stint now. And I am doing blah, blah, blah and blah this time. You know, for a change, God didn't hire me as his man on ground in Davos or else I would have been super excited to represent him and crypto town hall like I do every year. And dude, it was such a relief that they were like 100% less crypto scammers and about 80% less crypto entrepreneurs and about, you know, 80 or 75% less crypto sponsors in Davos, which only means that the promenade that used to extend to the other side. Sorry, I have a bad throat. That Used to extend from one end of Davos, you know, legal boundary, political boundary, to the other end of Davos and even extent beyond was basically crypto guys doing that event and having nobody or whatever, you know, having other crypto guys. Yeah, yeah. So again concluding very quickly that we're looking at one of the largest entrepreneurial and skill fall off ever in crypto. I've, I've seen.
- [29:06]
B
Yeah, so, but, but here's the thing. So I've gone to a bunch of tradfi conferences recently and all they want to talk about is all but the biggest two, one of the, the single biggest things are tokenization and using crypto Rails and building for a digital future. So if, if what you're saying is, is true and obviously I'm sure you are telling the truth, I mean, you know, Ian was in Davos and told me more or less similar things that the entire world, the financial world is more bought into the technology and the crypto world is like then you know, what does that tell you? Does it tell you that it's being co opted? Does it tell you that there's different opportunities? I mean, you know, what do you make of all that? Because the dichotomy is, is incredible.
- [29:51]
H
It's a very. Yeah, yeah, it's a very statistical and simple to understand fact. Tokenization does not, I mean largely, it does not require you to build complex contracts like we've been playing around since the genesis of smart contract. Right. Tokenization is a plain vanilla. Some ERC20, some 721, whatever prevail standard takes five minutes to mint for a simple guy. I mean for an expert guy, maybe two days. And then most of the work around legality, corporate structuring, yada yada yada. And you know, how many, how many people, let's say developers or let's say typical blockchain people would a billion dollar company or Maybe even a 10 billion dollar company would need two man, two, three, four. I mean, and then all these other blockchain defi protocols suggesting tokens, building geysers, they are the ones that used to ask for 200 developers. I mean near protocol had three teams of 180, 200 and something like that employees and so did polkadot and so on. So what I'm saying is the fall off by numbers is happening because of the more useless use cases that we have sort of thought would work and didn't work. And by the way, the bullish me is saying that all of this is momentary and we will be so fucking back very soon. But I'm just telling you the status right now. And then finally I'm attesting to your fact that tokenization and institutional use and stablecoin movement is at its all time high. I. I probably ended up incubating three banks if you may believe me, including global licenses in just one Davos trip. That is like the maximum I've had in my 12 years career. So this is the reality. Institutional cases are at an all time high but they don't need crypto people. They don't need a 200 people dev team, they don't need 5000 startups to build on an ecosystem or whatever. Some numerous startups to integrate a dex and all of that humans is basically because of the utility shifting to institutional utilities.
- [32:24]
B
Thanks. I think that's what they need is anyone who's worked inside a bank knows that AI notwithstanding and it will matter but it won't matter that much that banks there's a reason there's an entire fintech industry. You know, I actually, I don't know if I told you Gaurav, I'm writing a book where I'm talking about how and why. Speaking as someone who built some of the first financial systems like literally the first program trading system on the street, you know that the banks just don't have the structure for actual innovation. They will. In fact you use some whether it's startups or fintech firms to get it done. But you're right, you don't need thousands of them. The thousands of them are almost. Well, most of them will fail but will be more retail oriented institutional. You'll get a handful that will end up growing into monsters. You know, a handful, maybe a dozen dozen thousands.
- [33:18]
H
For the book we do, we do a chat together because you know, Scott knows this. I was the first investor and you know, an active contributor board member of the first crypto bank and since then many and then now, like I said, going back again in in banks. So it'll be fun to give you the little secrets of how banks started in in the history of crypto. And by the way, for those who don't know, I came into crypto in 2015 making a payment solution on.
- [33:46]
B
No, no, I, I agree with you that that'll either be the second or third book. The first one is from believe it or not 1985 through to 2000 watching you know how electro Wall street got electronified because I'm an old dude but as long as I still have my memory I can, I can write it all sorts of funny stories along with it. So it should be.
- [34:06]
H
Yeah.
- [34:07]
B
Anyway, that is what it is.
- [34:10]
H
You know, we'll sell your book later.
- [34:13]
B
I mean, Carlos, so you, you, you're working, obviously you're focusing on trying to help people in stable coins and, and whatever. I mean, how do you bridge the divide that Gorov just mentioned? Because I think it is a big deal and it has lots of investment consequences to it. It put you up.
- [34:28]
G
Look, education. Education is critically important right now, and we are seeing a convergence of things happening. The exponential age is upon us. And the fact that Xai is actively seeking a educator to teach crypto bots how to maximize trading puts everyone's job at risk right now. Because the industry understands that AI can do things a lot faster than humans can. But I think ultimately, on the other side of this, the humans who are advising, creating, and thoughtfully thinking about the consequences of these things are always going to be essential. But there's going to be a lot of disruption. Just the fact that we're going to see an exponential growth in stable coin Bitcoin transactions between AI agents is going to create so much blockchain traffic and activity to the degree that we've never seen. I think, I think it's fair to say that we are entering an exponential age in not only crypto, but in AI, and the pieces are coming together. I hope that answers your question. But the fact that we're seeing X announce its merger yesterday and the fact that we are seeing AI front and center in the conversation only reinforces to me that the future of blockchains is going to be over. AI.
- [35:56]
B
Yeah, I, it's funny, I understand certain things and it'll be interesting to see how AI responds to it. The, the problem with most with trading systems, anyone who's built them before, you know that like let's take, let's take October 10th for a second because it's, it's the, this is the cautionary tale. Hyper Liquid gets, in my opinion, a lot of, of of flowers for making the decision early on that they needed to not only trust their own order book, but use other people's order books to have a good sense of what was going on in the world. That is the right design for 99.999% of the time. The problem is that there's a thing in markets called self help, and it's happening in the equity markets, et cetera, and that is that it is very hard to know when an external exchange or external data source is down. And when it does go down, it doesn't usually go down cleanly. And so the net result of that is you have an inherent instability in any completely automated system because when you start trying to come up with rules that say, okay, well if this happens, it must be down. There are plenty of case. Almost every one of those has happened without it being down. Now, if you think of what happens with false positives, etcetera, It's a very grunky, nitty gritty thing to say, but humans can pick up a phone and find out something and it's really hard to do that from a pure data point of view. And so a financial system that has only AI bots trading is one that's going to have enormous, what's the opposite of resiliency? You know, fragility. It'll be an incredibly fragile system and we're a long way from being able to fix that. I mean, Gaurav, you were flashing your hand up. Is that a shadow hand or is that new?
- [37:48]
H
No, no, it's a real one. I have a question for Carlo Carlos. Carlo. While I agree 100% with their argument about, you know, an explosion of transactions, an explosion of utility and whatnot, of blockchain and transactions altogether, but we've already sort of, I think, achieved it to a degree where the transaction cost is getting too negligible. I mean, look at Fogo and the, and Monad and, you know, the newer versions of BNB, even, like, even BNB. So I foresee a future of blockchain from practically 2018 onwards. I started looking at it like that. It's a part of a tech stack. It's not a world by itself. And we never talk about how incredible MongoDB would be or how incredibly valuable Oracle would be if the transactions explode. I mean, yes, there will be an impact of fees and whatnot, but we are in the sort of, sort of a place where the more transactions increase, the lower the cost gets. And that's because of the development of Infra. How do you see that growth relevant to, I don't know, token prices altogether?
- [39:15]
G
You know, that's an interesting thing that I'm thinking about a lot because if you look at, for example, what SUI is doing with their super fast latency and their own dedicated deep book for liquidity. If you look at what Polygon just announced with their full stack integration for stablecoins across a vertical stack, I think there's going to be pressure on tokens to retain value and use cases where, where I think that's solved is going to be in the tokenization of assets. Because the one thing stablecoins offer, which obviously other chains and other tokens don't, is they offer a stable peg, which is critical to microtransactions, where tokens I think pick up is going to be in the tokenization of assets and the.
- [40:04]
D
Winners in that are going to be.
- [40:05]
G
The ones that can execute these smart contracts very fast and very cheap. And that's why my eye is still on what SUI is doing, because I think they're solving for a lot of this interoperability and I think things like Polygon and what they're doing with their full stack and stablecoins are where the puck is going.
- [40:24]
D
The age of Ethereum being the go to layer for all of this.
- [40:29]
G
I think if we see a tremendous uptake in ETH activity, if that spikes.
- [40:35]
D
Gas, then that's where L2s like polygon.
- [40:39]
G
That are built over these infrastructures I think could win.
- [40:43]
D
I hope that answers your question.
- [40:45]
G
I see it going.
- [40:47]
H
Yeah, yeah, we'll have to have a separate conversation on L2s. We've got to have a separate conversation on L2s and with Mr. Vitalik trying to take L2 game, but I don't want a personal conversation. But still, the more popular question these days is if utility and transaction explosion and fees was a parameter for the value of the token, at least of the coin of a chain gaining its value, then we're talking about the biggest and the most practical and the most valuable narrative of, of the, of the last three years, which is prediction markets. And polymarket being on Polygon did not even impact the price of Polygon at all.
- [41:30]
C
No, it didn't.
- [41:31]
G
In fact, they're talking about launching their own token anyway.
- [41:35]
H
Yeah, I mean, I'm sure they launched their chain also. Why not?
- [41:42]
G
So again, 100%, if we go back to what? Yes, sir.
- [41:49]
H
I mean, simple, we go back to the point that chain and transaction and chain, utility and transaction don't really impact the token price anymore these days.
- [42:01]
G
No, they don't. And I think if we talk about what Dave said at the very beginning and what we've talked about on many occasions, the more we commoditize these services, the more the fees are going to go to near zero. And that's actually good for exponential growth of the adoption of the technology. But that does disrupt the traditional profit model that these tokens were launched upon, which is why a lot of them in the alt market are probably going to suffer and disappear. But the ones that are continuing to build for near zero fees and for full stack latency I think are the ones that are going to win.
- [42:39]
B
Can I make one other point? They'll win the assets. The tokens will win. If in the smart contract or in the code there is a mechanized transparent method for fees collected by the ecosystem to be passed back to token holders. Now that could be via burn, that could be by a variety of ways. But if it's not clear, tokens that don't do it are going to languish and they're not going to do anything until that changes. And I, I, I, I can't. I've been saying this for, for a year and a half that this has to happen. I think this crypto winter is going to force that that change and, and I be and I'm happy you're going.
- [43:16]
H
To so love this thread. Yeah give 2 minutes or 5 minutes on the whole Jupiter Tokenomics and Anatoly Solana founder sort of backing.
- [43:28]
C
The fact.
- [43:29]
H
And I love by the way I have absolute respect for him but like they are arguing about whether or not to pass the platform revenue to token holders by buybacks and what they usually do and I was surprised that even totally backed the fact that no keep the cash separate. Keep yourself alive. I mean dude, you raise the capital on this revenue and like you're shamelessly dumping the token investors for some flimsy future that doesn't even exist. Gaurav all give it some time. You'll have fun.
- [44:08]
B
I have been the three words that pissed me off the most in 2017 and I've never lost this anger. And I've seen people become famous crypto influencers and make lots of money, have yachts and fly on private planes for it but will ultimately fail. You mean Scott is no, no. Scott.
- [44:30]
A
Yeah, can you send the odd in the plane over that I'm unaware of? I would love Seriously.
- [44:36]
B
I mean I'd be happy to help pilot it there Scott if it was if we could go around the horn. No, it's the words are non dilutive capital and you know and Scott knows this. He's had guests on his show that I've asked him can you ask about the token economics and without without giving up people who some of which are friends. The answer was no. And if the answer is no, then why the. Excuse my language people, but why the fuck should anyone invest in a token when the, when the when the founders won't tell you what the benefit of owning the token is And I'm sorry and with all due respect and since I don't have they're not all following me now to hate me, but I'm going to start poking the crap out of them, whether it's the link army or the XRP army or any of these friggin armies of people who say we're part of a community but if they have no idea how the network growth can, can actually end up putting money in their pockets then they're simply fools. And we will look back on this era as lots of fools. Now that said, we saw the same look, we've seen this, this movie before, right? You know, we've seen it, we understand it right to that point.
- [45:44]
D
Dave, I want to chime in because.
- [45:46]
B
I think so there we go. Go for it.
- [45:50]
G
So to that point I think all.
- [45:52]
D
These founders got a pass in the.
- [45:54]
G
Gensler era where they were terrified of publicly saying what the use cases and what the profit models would look like for fear of being tagged and targeted as a security offering. But I think now that we're pivoting to the new SEC era, I agree with you. I don't think you can get away with that. You've got to be completely transparent about where the token value goes to the holder.
- [46:17]
D
But I think for a long time.
- [46:19]
G
They were all shell shocked because they were afraid to publicly say those things for fear of getting targeted.
- [46:24]
B
And here's the thing that really you're 100% right. That's exactly right. Except you can't find anyone, anyone to find even a case against a token issuer and people still aren't talking, although they are behind closed doors outside of those doors about why we need either by the CFTC or the sec, why we need disclosure rules and transparency and standardization so people understand the token economics of new tokens. I mean people in their brains, when you talk and I was in a room full of lawyers last week, I was in actually two different conferences with rooms full of lawyers and they all basically said yeah, that's true, but that's not really, that's not, that's not the first thing we need. The first thing we need to do is and generally it's fixing the trading or the secondary markets or the stable coin stuff or whatever but there is a need, right? And, and hopefully we'll get there because to me that's what that's your next alt season will be when there is, when you have alts that actually have a clear path to profit. And there are some, get me wrong, there are some, I mean, you know, there are people out here who, you know, maybe some others aren't friends with who consistently Beat the drum for some tokens which do have economics, but they're few and far between. Anyway, I'm going to tell you, you've had your hand up for a while. I'm sorry.
- [47:47]
C
Oh, you're good. Yeah, I mean, look, I think it's very easy to just try to. Because I agree with you Dave, in terms of like the actual profits going back to token holders and having a model for this. And I think ultimately someone's going to come along and take the risk and they're going to take the risk, they're going to do it, it's going to go viral and they're going to ultimately figure out a legal framework to make it work or deal with some kind of punitive thing that doesn't ever go through. And everyone's going to pile on and follow and it's going to create a trend that everyone wants to be a part of and people are going to start shifting their tokenomics to the safe.
- [48:22]
B
Right.
- [48:22]
C
Like eventually that's going to happen. But I think that in the near term a lot of this is just trend based and I don't know that it necessarily is going to require these things for a change of the trend. The trends and the seasons and the cycles will sort of come and go and it just has to have the right catalyst and the right macro and the right liquidity conditions for it to take off. And in that situation, certain things that people have valued before will start to become valued again, whether that's network activity, adoption, various use cases and as Carla was saying, the low latency, the actual transaction speeds. I think if anything, the real thing that people have to keep in mind of is the actual extreme liquidity chain musical chair environment that this agentic revolution is going to cause. I think that that's the thing that people may not be prepared for is that I don't think these agents really give a shit. Right? They're not emotionally attached to a project. They care about performing functions and use cases either where they're prompted to or where these things start to accumulate as a result of agentic activity and the ease of onboarding, etc. So I still think that we're going to kind of see two divisions here. We're going to see the moats that are built around things like privacy and enterprise that are still going to be able to accrue a ton of value and be a real moat where assets come in. I think that privacy is going to be essential for RWAs and that's going to, you know, we're going to get some moats there. But I think that the, the actual like chain based moats is gone, that the fees are going towards zero, they're only going to get faster and then it's going to be based on this sort of revolving activity. And I think that that's kind of the nature of what I foresee for the market in the next year or so until who knows what comes.
- [50:33]
G
Plus, add to that interoperability chains aren't going to matter anymore because they're all going to be seamlessly interacting with each other and there's not going to be a use case for you need to.
- [50:42]
D
Be, with the exception of Bitcoin, of.
- [50:43]
G
Course, all the other chains are going to be just ubiquitous and interchangeable, I think.
- [50:55]
B
So we're getting close.
- [50:56]
A
Getting cut off. Go ahead. Yeah, Dave.
- [50:59]
B
I was going to say we're getting close to time but it's actually the really interesting question is statements of value, where things go with tokenization, how this stuff becomes interoperable. And investors always want to try to know what the next big thing is going to be. And I'll stick my flag on the fact that the next big thing is going to be the ability for people to transact across asset classes, across currencies, across borders in a seamless, more efficient manner. And there's a huge unlock there. And quite frankly, the entire financial services industry wants to control, slow and limit that transition because of the economic inefficiencies that they currently benefit from. And that's the real fight. That's this, this whole thing. Yeah. Right now it's all about yield, which is absurd considering that it's a subsidy. We effectively have a subsidy to the big banks from the average American. But you know, whatever that is, what it is, you can call it whatever you want. But to me that's, that's what's going to happen. And we're going to be talking about this for years because the one thing I know having been and spent, you know, decades at these firms is they are at the same time working on the technology and understanding and knowing where they're going to put their chips in when it becomes available to them, then they, they can trade it. At the same time they're also having different people working on slowing it down and different people working on banning it. So you know, it's, it's, it's, that's the way these organizations operate because they've, they've understood and they've gone through multiple levels of disruption before and they learn. So for anyone who doesn't understand that. I'm happy to explain, but it's that's why I was asking Gaurav about Davos, about how come you know that that these banks are all working on various projects to tokenize and make things more efficient because they don't dare fall behind. But at the same time they, they want to crush all the info, all the startups because they don't want the startups to be able to compete with them. Does that all make sense?
- [53:04]
A
I think that's a perfect summation and a perfect way to wrap. I agree. 100 so great show as always guys. We will be back tomorrow 10:15am Eastern Standard Time. We will be holding our breath in suspense to see which Dave W. Shows up.
- [53:22]
C
Yeah.
- [53:22]
A
Never know.
- [53:23]
B
You have no idea how ridiculous this stuff is behind the scenes.
- [53:26]
A
Yeah I did it. I had it for three days once where I was hacked. It was bad. But yeah, that's all we got for you guys today. We will see you tomorrow. Thank you for joining. Thank you for listening and God knows what the topic will possibly be. See you then. Bye.