Loading summary
Transcript121 lines
- [00:00]
A
Good morning everybody. Welcome to Crypto Town hall. Today and every other weekday here on X at 10:15am Eastern Standard Time. I think it's fair to say that we are in the height of the winter holiday doldrums. Obviously as much as there is to talk about each day it feels like there's less and less to talk about as bitcoin effectively trades sideways and institutions close their books up for the year and get ready for for the holidays. Honestly, I can even say anecdotally that I spend a lot less time staring at a chart or looking at prices at the moment because until certain things happened, seems kind of avoidable to waste time on a day to day basis. That said, I did just look for the first time in hours and Bitcoin is trading at about 90,000 89,900. So nice little bump from markets today. Anyone who's actually paying better attention have any idea what the catalyst would be for? Because now we have to talk about like 1%, 2% moves. If they're a big deal. They're not. But is there a narrative as to why we're seeing a bit of upside today?
- [01:12]
B
I can hop in there first. Yeah, thanks, thanks for having me on. Good to see you again Scott. Everybody here, you know, it's just the back and forth of risk being convoluted with overhanging, you know, poor macro setup. But then we're seeing, you know, the debate about the long term holder selling. But then you also see in the last coin bureau posted this chart from Glass node showing that there has been a pretty massive amount of whale buys, largest in 13 years in fact here in the last 30 days that it basically really stacked into the dip right, right now. But I will just caution everybody, you know, we are seeing data that there's a little bit of a short squeeze in terms of the price action up to this 90k level. However, that's almost exactly coming right into a descending trend line. You know the chart squigglers on here, support line that went all the way back from basically about September 25th, retested again October 18th, basically broke through on November 14th. We've been butting up against that trend line which is exactly where we're at right now. So as it stands I, I'm still looking for, you know, a retest back into the mid to low 80s, like 83 to 83, 000 down to 80 000, likely a swing down into somewhere in the 70s. It feels to me I was looking at a bunch of open interest data Yesterday. And it does look like we're a little more heavily on the, the long side. It seems to me like we still have a little bit more indication that we have some more pain to endure, whether it's time based or price based or probably a bit of both. But as it stands right now, I think everybody's just excited to see a green candle. I just hope people don't just go overboard and get themselves further out of position. Friday last week we had 119,000 people liquidated. So it just shows, it just shows on every one of these movements. Everybody's just going over leveraged long and over overlevered, short. And the institutional players are just absolutely having a field day just wiping people out with this free liquidity. So as it stands right now, I think, I think the Japanese fear, the, the fear of the rate hike on the 19th is a looming. And then the question is with that, how much of that is priced in? Since we've seen three of these in the last year and a half or so, this will be the third, I think.
- [03:35]
A
Yeah, we've seen pretty big bitcoin moves down after each of those, right? 25, 30% ish. But they're so telegraphed now.
- [03:45]
B
Well, but the problem with it too is they all had something else correlated with it. There was one right after the 74, 000 top, which was the first, you know, high before the having. There was another one that immediately followed Germany dumping, and then there was another one right on basically Inauguration day. So you had the buy the rumor sell, the news of the, the crypto administration coming in also tied in right there, you know, pushing up, you know, $109,000. And then, you know, the day after inauguration day, we started seeing that massive decline that was also, also tied with the tariffs. So who's to say how much of this is unwound, how much of it is just speculative dribble? I think we're gonna have to, I mean, I'm personally kind of on the sidelines with ultimate bullishness until probably about the, the middle end of January into February, because I still think the risk, the, the risk mindset of the market is very tied up right now with no consideration of what the long, mid to long term outlook is regarding what's going on with government appropriations and all these things which are still overhanging from the, the government shutdown that's only been kicked to, to mid. To in January. So I think that all these things kind of tied together. I'm bullish on 2026, but right now it's kind of like, you know, mind your P's and Q's, hop in rooms, learn stuff, get, get in here and be patient.
- [05:02]
A
Yeah, I love the point about effectively causation not in correlation. Right. Just because we saw something happen last three times, you have to look at the other events surrounding it. It certainly doesn' to happen a fourth time.
- [05:18]
C
Scott.
- [05:19]
A
Yeah, please. Brian.
- [05:20]
C
Sorry, sorry, it's. Brian was just going to say I'm. I don't know how true this is, but I'm seeing this latest mini spike being attributable to comments from Fed Governor Chris Waller.
- [05:30]
A
What you say?
- [05:31]
C
So he's like he's the leading contender to be the next Fed chair. And then he just like two hours ago suggested that rates are 50 to 100 bips above the neutral level. So I think the market could be running with that.
- [05:43]
A
It's amazing how many Fed governments, governors and representatives we have speaking on a weekly basis that seem to move markets when there's clearly no consensus.
- [05:54]
B
It seems like that's their only function is to figure out how they can ping pong shaping a narrative to drive market price. Right.
- [06:03]
A
It's really wild. Yeah, it's really crazy. So Brian, then that means that hard to get excited if we could see the comment and we see a temporary spike. I mean to me this price action regardless is just sideways, right? I mean 90, 88, 86, 92, kind of all the same.
- [06:25]
C
Yeah, completely agree. I think we need a major catalyst to kind of get us out of this range bound movement that we've seen. I think it's Clarity act. We'll see if we can get our ACT together. Obviously that's not imminent but rather just.
- [06:39]
A
Say if it's Clarity act, that means we can expect a lot more boring for a few months at least.
- [06:45]
C
I unfortunately think so. But I mean that one is such a big one. I do think like that could lead to the mother of all bull markets. Just given that it will kind of force big institutions to have to come in. They've been a bit loathe to really experiment with blockchain based technology just because it comes with heightened legal and regulatory risk. I think they'll be forced to come in because if they don't, they'll be disintermediated by those who do. And so I really think like this could lead to an explosion of development, adoption and usage.
- [07:20]
A
Anyone want to continue on that thread? I think it's a good one to pull whether the Clarity act is the next likely big catalyst or if there's another catalyst on anyone's radar that could finally break us from this range. Go ahead, Paul.
- [07:31]
D
Yeah, I'd love to chime in on this. So, you know, I've long promoted utility in crypto and that being one of the big blockers. And I think there was a really, really positive catalyst just the past couple of days with the SEC roundtable on privacy. And this was not at all in my bingo cards, the fact that government officials would actually in any way, shape or form promote additional privacy in the crypto ecosystem. And you have Paul Atkins actually talking about usage of zero knowledge proofs and kind of shitting on Bitcoin and every other transparent blockchain very subtly of course, right, Politically, politically correct. Implying that the transparency of blockchains is hindering its adoption and that we need to be more open to privacy based solutions long term. So to me this is bullish because this is a major hindrance. Like you really don't want to be paying with cryptocurrencies that have a transparency level of Bitcoin or worse, such as Ethereum. And so once again, completely unexpected. I've been saying this is like the part that organizations like Stand with crypto are not promoting hard enough. They're just saying, okay, positive adoption of crypto in the ways of make it easier for companies to issue coins. You know, go, don't go and target companies like Coinbase, but never on the utility side. So admittedly this was a huge surprise to me and one that is very, very welcome. Bullish for crypto as a whole, but probably one that may be less bullish if you actually look at the chains that don't provide this level of privacy. And so Bitcoin obviously can't adopt it. The layer twos are coming and there are proposals to implement privacy on it. But you know, zcash, Monero and a few others are definitely ones to keep an eye on and they're not go sink your bags of Bitcoin into these privacy chains. But it may be a good opportunity to start really accumulating some of these other alternatives as a hedge against Bitcoin. Which was a popular narrative by Naval, which was like, hey, bitcoin's the hedge against the dollar. What zcash and privacy coins are the hedge against Bitcoin. So it's an interesting thing that just happened past couple days. Don't know if it's been talked about enough, but one that makes me very bullish about the crypto ecosystem long term, short term, you're right, we're still Trading sideways. I don't think we're going to be noticing any major pump from this news but if it can enable better building of these tools to actually achieve adoption, I'm very excited.
- [09:39]
A
Mark, you're up. Here. Yeah, there you go.
- [09:50]
B
Yeah, I didn't get him either.
- [09:52]
A
I can't hear Mark. So Sasha and Mark won't get you. There you go. Mark's up there was the boomer mic button. I know.
- [10:00]
E
No, I'm right on the edge, Scotty. I'm very sensitive about that being as.
- [10:04]
A
You'Re in me about study.
- [10:07]
E
And the layer two point I think is a very good one. The ETFs on the back of the Judge Rao decision which I keep talking about was just something that we haven't seen since. So all of the regulation and building and infrastructure are constructive. I don't know if they will, I don't know how much they'll help with flows in the near term by a lot. I mean I don't think they will. But the layer two building, if there's a window onto a better UI for bitcoin where people can have that self custody and have layer twos emerge like what Marcus is working on, I think that is really the biggest part. So clarity layer twos. Bitcoin is basically the dos, the TCP IP as we all know and to have an integral layer two would be wonderful. So that's my five cents and yeah, this is a God awful sideways market. Get hobbies. Hang in there guys.
- [11:16]
A
Touch grass. Sasha, you had your hand up.
- [11:18]
F
Yeah, I think another catalyst and it's, you know, it's, it's more unclear where what and under what timeline but it's there and I think it's a bit more arcane for more crypto degens but it's really the, you know, we're starting to see signs of that like using bit. And yesterday there was an announcement that Jefferies and a bunch of other banks like Goldman Sachs, Morgan Stanley, JP Morgan are starting to do this. They're offering structured products to leverage and take some of that crypto volatility and offering like half a billion dollars in products. And I think that has a lot of potential to also offer other indirect ways of leveraging crypto and portfolios.
- [12:08]
A
Yeah, I agree. So listen, while we're on this topic, actually this is something that I wrote about in my personal newsletter this morning. So I think it could be a good sort of, sort of topic to dig into. There was a great report from Grayscale that just came out entitled 2026 Digital Asset Outlook dawn of the institutional era. So while we're on the topic of potential catalysts, I just want to kind of very quickly go through the headlines of what they think are the major themes for 2020.
- [12:47]
B
Do we lose?
- [12:48]
D
I lost Scott. I can't, I can't hear him either. So maybe we did lose Scott. Yeah.
- [12:59]
B
Scott.
- [12:59]
C
Yeah.
- [13:00]
B
I think we lost you. I don't know if you need to rotate up and back down, but I'll kind of keep that thread going here for a moment. I do want to just highlight, you know, just on the price level, uh, when we're talking about 2026, we've also looked back, if you look back 400 days now, roughly 400 days, Bitcoin's been oscillating around this basically 80 to 125, 000 region. Really this was a four hour chart. It's just one giant sideways range that scared people to the downside, excited people to the upside. And I think we've all seen the headlines and the topics around this rotation from, from not all, but some OG holders and it feels like we're in, you know, what I, what I kind of call like the great rotation new foundation setup where we're seeing many old players that are able to take, take advantage of the liquidity and the excitement at this level and rotate out of tens of thousands, if not hundreds of thousands of percent of profit. While we're also seeing a new establishment, really set a base here. All these institutional players, the, the ma, I mean max bid buying, you know, that we're seeing comparatively with blackrock and Fidelity and you know, seeing some of these other major, you know, DATs that have been stacking in sovereign funds that are buying in Abu Dhabi and, and Dubai. And so it seems to me right, right now everybody was just expecting institutions comes in. It means up, up and away. But we've also hit this threshold back to that, that rotation side of it where we, we are seeing just a repurposing of these major swaths being held. And I think it's confusing people especially looking specifically at just onchain data. They see a headline on X that says whales have sold this much in this amount of time. And a lot of people take, have historically taken that as a signal you need to get out. And on the flip side of that, we're seeing a pretty equity basis there where we're seeing major institutional players really buy into that. But love to get your thoughts on that till we get Scott back up here.
- [15:02]
C
Mark.
- [15:08]
B
Mark it up. Yeah, Go ahead, Carlo.
- [15:11]
G
Yeah, so look, we've talked about this in previous spaces that institutional adoption is critical to mass adoption. And while we can take the position that we just want Bitcoin to be a pure, clean asset that is democratizing and independent of nation states, it's not the path to true massive adoption of this as a network effect. Because we need institutions to bring in people who have a desire or an appetite for Bitcoin but aren't comfortable playing in the crypto sandbox like we do. And it is inevitable that these institutions are going to, as we get regulatory clarity, continue to push forward. They've been on the sidelines, as we noticed from the past administration, because we had absolutely no clarity in the sector. Yeah, we're stalled right now. Yeah, things are choppy. Yeah, the bill has been punted to 2026, but I still remain bullish that we're going to see market clarity. And once that market clarity kicks in, I think all of this institutional accumulation, all of this sideways trading that's been going on right now is going to probably turn to the upside where we see mass traction in 2026.
- [16:32]
A
I'm just happy you guys are still talking because I heard nothing and then was gone and was afraid that the spaces didn't exist.
- [16:38]
B
Yeah, I took over there for a second and was talking about the level, but yeah, kick it back in with the grayscale points.
- [16:45]
A
Well, did I even get through through them? I have no idea if you heard.
- [16:48]
B
We heard up into the point you were doing the newsletter and you wanted to cover the points and then it went silent.
- [16:53]
A
Holy. We were waiting.
- [16:54]
H
A faded breath.
- [16:55]
A
Oh my God. Okay, here we go. Well, I thought I read them all. I was talking to myself for a good two minutes there. $ debasement risk drive demand for monetary alternatives Regulatory clarity supporting adoption of digital assets Reach of stablecoins to grow in wake of genius act Asset tokenization at inflection point Privacy solutions needed as blockchain tech goes mainstream AI centralization calls for blockchain solutions DeFi accelerates led by lending Mainstream adoption will demand next generation infrastructure. A focus on sustainable revenue Investors seek out staking by default. These are all the things. I think we've been pounding these 10 things on this show repeatedly for months. Focus on sustainable revenue Actual utility obviously stablecoin reach privacy, which Paul just dove into for us before also just before we go to the panel on these two topics that we do not expect to influence crypto markets in 2026. Quantum computing. Thank you. Such a stupid narrative to be worried about for price right now and digital asset treasuries, definitely we could talk about that. Despite their media attention, we believe that dats will not be a major swing factor for digital asset markets in 2026. All right, I got through it. Hopefully you heard me. Kelly, go ahead. You were hosting anyways.
- [18:13]
B
Yeah, no, I mean I, I think those points are absolutely Perfect. Looking into 2026, one of the things I will say though, I think the, the people that have been in the bitcoin market for the, you know, beyond one, not just this cycle, like this last cycle or you know, maybe six to 10 years, 10 years beyond, kind of like I have, there's been an expectation of, you know, I don't want to get into the whole four year cycle debate right now, but there's been this expectation of that repeating pattern and I think there's some broken hearts around it, especially with those holding the altcoins because nothing has happened there. However, because of all this institutional interest and involvement in integration that's happening and exponential on the horizon and especially with some of the legislation, I think if we take a breath, you know, and look at this more like a smart money mind, the best thing that could happen is that we don't have just abs, in my opinion at least getting past this cyclical 4 year absolute boom and bust cycle and actually have something that persists for the next, I don't know, three years, five years, eight years, however much time beyond, beyond just this being the top of a four year cycle and actually having these, you know, nice run ups that are exciting but then four to six or eight months sideways, you know, deca, you know, ten twenty thousand dollar ranges and then another move to the upside, maybe periodic 2030 downturns. Building nice healthy stair steps I think would actually ultimately be the best setup going into the future versus getting the blow off top people want and then the 60 drawdown. Because nobody tops times the top and nobody times the bottom. You know, maybe 1 in 1 million people get within a hundred dollars of those ranges. So I think the setup going into 2026 is beautiful. It's just a patience game right now because everything looking forward, you know, feels like it could be bullish. With the caveat of, you know, the black swan of if, if the economy actually does do what the doomers say and you know, we have some massive recession.
- [20:17]
A
Let's go around the horn. Anybody? Thoughts?
- [20:20]
D
I might say actually the narrative around quantum computing is correct that it will not impact crypto on a technical level in 2026, but having come from a recent conference, there was quite a bit of chatter around quantum computing and enough people being afraid of it and afraid of that narrative to start unwinding some of their crypto positions and moving into other assets that effectively don't have an impact from quantum computing. And I think that the, the jury's still out as far as like, whether or not what happens are those currency.
- [20:51]
A
My question is I kind of laugh at the quantum. The thing about the Quantum thing is I think you're right. Like, it's obviously not going to impact price. Now it's something that needs to be thought of from a fundamental perspective for protecting the networks. But I'm much more deeply concerned about the nuclear codes or the Department of Defense. If quantum computing issues are realized, if they can hack the Bitcoin network, we're going to be very low on their priority list of the hackers using Quantum. And yeah, you can't tell me they can't hack the dtcc, right?
- [21:24]
D
But you always know that the technical features of a technology don't necessarily align with the market reaction to it. Right? Like the, the most powerful technology is not necessarily the one that wins in the same sense. What we could do with quantum, it doesn't really map to what people are afraid of at least today, you know, so like the narrative is there and people there are companies built on protecting crypto against or protecting systems against Quantum. And their entire job is to create the fear, Right. So they're fear mongering like crazy. And that is having an impact on some people's decision to actually hold crypto.
- [21:58]
B
Yeah. Oh, Paul, I just, I posted up in the, in the nest up there, Willy Woo had a great post about it. On the one hand, people don't realize that the threat that Quantum poses to Bitcoin isn't to Bitcoin network per se. It's actually more to like the, the elliptical. I forget even what the term is. Elliptical curve.
- [22:16]
D
Yeah, elliptical curve encryption.
- [22:18]
I
Right.
- [22:18]
B
So, so early, early wallets, like for instance, the Satoshi wallets. But in my opinion, even if Satoshi wallets were hacked and dropped on the market, that would just create a great buy opportunity. It wouldn't change the nature of the fundamentals of the network. But the flip side of that is, you're right, Paul. The, the FUD narrative of people not understanding that is wild. Because if Bitcoin network was hacked, everything else has already been long since been hacked.
- [22:43]
D
Now I'm going to read Willy Woo's post, though I do want to make sure that people are clear. You know, I'll, I'll take both sides of the, the argument. But this doesn't just attack early, early wallets that use public keys. There is, there was a change to Bitcoin to go from public keys to public addresses. And public addresses use a type of cryptography hashing that protects against quantum. But if you've ever spent from a bitcoin address spent from an address, that address is now no longer quantum proof. But I still do think it's not a major concern. Just like you said, Scott, there's way bigger things that quantum will want to attack versus Bitcoin addresses as well. I mean, the cost to attack a Bitcoin to track a single address is so large it's going to be in the hundreds of thousands, if not millions, that, you know, we'll see it happening on other systems before any meaningful amount of attack happens on Bitcoin or for.
- [23:37]
C
At least the majority of addresses.
- [23:38]
F
But the, the other thing too is it's not something set in stone. Because the beauty of decentralized blockchains is that if you have more than x percent of the nodes that agree on the new algorithm, that's the new algorithm. And so post quantum math does exist. So there are ways to upgrade those technologies to post quantum math and make them completely resistant. Just the same way that you can upgrade the hash rate algorithm is you take the old hash, append it with the new hash and join them together. And that allows you to upgrade the system so that even if the old hash was weak from a security perspective, the new system is completely robust. So I think that there's going to be development to be done there. But like post quantum math does exist and it's been worked on for the past decades.
- [24:34]
J
Hey, can I chime in here? I think the conversation here is interesting. Both Kelly's comments about the 4 year cycle and the rotation and also this quantum thing. It seems to me humans really love to rationalize what's happening around them and make up stories. 4 year cycle I think is complete made up story and I'm so glad it's falling apart now. I think we had to go through this. We have to go through. A stage where there are no organic crypto buyers, which makes the market weak. That is the problem. You have no one other than Saylor supporting the market that is organic to the market and you have new players like myself, my brother and others coming in. This rotation was bound to happen. It needed to happen. Even though a third of the bitcoiners to Carlo's point. You know, we keep making some people better bitcoiners than others. That is a huge era. Anyone that's serious about bitcoin that studied anything? I'm with Scott. Dude, why would you have quantum computing and then attack a 2 trillion dollar market when you could attract attack a 200 or quadrillion dollar market? Like you're going to own the whole planet, dude.
- [26:01]
H
So this is really silly.
- [26:03]
B
Okay?
- [26:03]
J
It's, it's awesome that people are not buying bitcoin because of quantum, but like you shouldn't be buying ge, Raytheon or anyone else or in fact anything. You should probably be buying drones and investing in quantum computing companies. So look where I'm at. I can't believe that I'm being given an opportunity. I'm gonna, I'm able to buy 57, 65 thousand dollar Bitcoin I think and this rotation is happening. It has to happen. Guys, we need 20% of these coins in someone's pocket that paid between 57 and $100,000 for them. We need this average rotation. The baseline price is too cheap. Keep asking people on the panels, hey, what's Your cost base? -57,000. I'd love to hear from everybody, hey, what's your cost base? When was the last time you bought any reasonable amount of bitcoin? Because my, all the, the guys that have been around with a th000 Bitcoin, their, their cost bases of you know, $10,000. I'm like wow dude, you stop buying now. I can understand that. But that just shows you where the new demand is coming from is the older generation of people who are stacking. 10:15 I think Abra, you, you, you, you talked to Bill this morning, right? Hey, it's the sharks. 300 Bitcoin, 500, 800 Bitcoin. This is very important.
- [27:33]
A
Buying like crazy. Yeah, that that level is stacking like Matt is what he said. Go ahead David.
- [27:43]
H
Yeah, I was just going to say going back to the quantum issue, we wrote up a post about post quantum blockchains and why you didn't see more of them.
- [27:52]
I
And just this space was downloaded via.
- [27:54]
C
Spaces down.com Visit to download your spaces today.
- [27:58]
H
Outline some of the issues involved of what you, what you would run into in terms of overhead, burden on nodes and validators as a result of introducing it. We did put forward a solution. I did put the post into the chat here if people want to look at it. But I would agree with Gary is that you know, people will invent nightmare scenarios and yeah, Quantum's being kind of whipped around here based on fear and not necessarily on a lot of understanding. I would recommend, if people want to look at the issue a little more depth, we took a shot at it, love to get the feedback on it because we think that there are ways that blockchain can be secured with quantum resistant ciphers without necessarily having to burden the network as a whole. So, you know, try to provide a constructive suggestion here on how do we counter this issue because it's basically fud.
- [28:55]
B
Yeah, I just wanted to say I, I found that in the, in the, in the post. I, I put it up in the nest. If anybody wants to take a peek at that.
- [29:04]
D
Yeah, let's take a peek at that one. Based on what I've at least come across with people that are working on post quantum cryptography. Everything that I've seen though is that exact like you had said, David, a lot of it is very, very burdensome on the network. And to address the concern that hey, they'll attack the DOJ and the government and other uses of cryptography before they attack crypto, one of the narratives from the fear mongers is the fact that all of those systems can easily pivot to post quantum cryptography, whereas crypto does have this burden of nodes and miners because all of the nodes have to validate these transactions and, and therefore it's exponentially more expensive to have a cryptographic protocol that is five, ten times more expensive in both size and in computing cost that is quantum resistant. So there is a little bit of that concern. Now the question is the race, like how long is it really going to take for Quantum to catch up and be able to be cheap enough to break a mass amount of the different keys out there with mass amounts of value? And then at the same time racing that is can we improve post quantum cryptography to be efficient enough and deploy that and can computers get fast enough, you know, just like block size wars, right? Can we get fast enough to be able to deploy these solutions and which one is coming first? I think that's the, the concern that people don't know about and creates this just unknown, you know, into the ecosystem. Like I said, I'm still feeling very confident in the next two to four years, no issue. But that narrative starts to really get pushed and it is creating some fear mongering that people get concerned about.
- [30:45]
A
Yeah. David, last comments on quantum. Go ahead. I know you're jumping in. I want to pivot after that because I think we've, we've beat it pretty good. But go Ahead.
- [30:52]
H
Yeah. I would just say that my bigger concern, nearer term from a cybersecurity standpoint is the deployment of AI and how AI is basically just, you know, amping up the level of attacks. You know, the people who are on the, the black hats who are out there, they're getting more resources all the time. My focus here would be more on AI as a risk than. Quantum.
- [31:18]
D
Is really bad at cryptography. Yeah, it's really, really bad at doing cryptography for now.
- [31:23]
A
Yeah, it's great.
- [31:24]
D
It's great at frauding people. I'll say that. You get a whole ton of people getting frauded and scammed by a lot of the scammers that now are using AI. Suddenly we noticed a lot of the support tickets of people copying and pasting the communication they had with, you know, a romance scammer. And the English got amazingly good, like 10x better as soon as the AI came out. And that is like the big concern.
- [31:47]
B
I, I kind of. To tie it in a bow. I think an interesting thought on this is the FUD that people are seeing around Quantum. We're expecting them to understand the nuance in it and the mass. Majority of people don't even understand the difference between the simplicity of an infinite money supply, which is fiat, versus a fixed cap supply, which is Bitcoin. So we're arguing technical points to people that don't even understand some of those, those basic tenants that are the foundation of, of Bitcoin. So it's just, it's kind of beating a dead horse.
- [32:16]
F
Yeah.
- [32:16]
A
What I want to pivot to is the two things that said are not Quantum being the first, but the second, because I have you, Brian. They said digital asset treasuries will not be a driver for the net for, for 2026 or a huge narrative. I disagree.
- [32:33]
C
Yeah, I think that there's, I think it kind of depends on the market environment. If we have no change in the market environment. DATs are really working on three strategies right now. One is accretive M and A. I actually think like, if you can kind of sop up some of this excess supply to where you have many fewer DATs out there, then you're much more likely to attain this multiple, which you can then monetize. Although I'm pretty dower on M and A for a bunch of reasons that we can get into. Another is buying an operating company. I also don't think this makes sense. You will tend to likely lower your multiple and, you know, if I had 200 million of cash to do something with and I think that soul is going to 3x from here. I should be putting it into Solana but I actually think like the one key thing is can you actually increase your yield beyond something that's just a simple staking yield? I think that the market can and should pay up for that. That would absolutely be worth something to your multiple and I think can help sustain this premium valuation. And so I actually think there are things that treasury companies can do to kind of push themselves back into escape velocity and enable to utilize this capital markets flywheel. And then the second thing is even if none of that comes to fruition, if we come into a more full bull market, what we've seen with MicroStrategy is their M nav tends to rise in a more full bull. And then so I actually do think like if btc, eth, Solana all rise like pretty substantially from here, I would think that some of these discounts would go to trading at a premium and then you know, these dapps could be back in the market buying crypto in a big way. So I'm very hopeful for next year and I too would disagree on that point from the report.
- [34:25]
E
Hey, can I jump in here?
- [34:26]
A
Scott?
- [34:27]
H
Thanks.
- [34:28]
E
Hey Brian, love the comments. I think the technology on this staking is just unbelievable. But from a investment standpoint and I remember marketing this when I was at 3 IQ to try to market a 3 to 6 and I know salon is a higher yield than eth on a a 30, 40, 60 bottle product. It just didn't drive the needle as far as increasing the adoption curve and bringing people in. And you know there's a precedent in high yield. The coupon really had to have people say listen, I'm going to pay you a 6, 8, 10% coupon. Forget about my 12 times EBITDA multiple and and and everything else that I got going here. So I think on this point of yield you have to go to integrity first. Is it the tech? Is it going to live great. And I only look at the yield component as a proof of concept as opposed to something that's really going to drive adoption. That's Anyway that's my 5 cents in speaking to some of the institutions about that distinction.
- [35:43]
H
Sure.
- [35:43]
A
Anyone else thoughts on this specifically? Gary, I can't tell if you lifted your mic or Fitch has to move JAP there, but I don't think so. But I know that. Did you see the news Gary, that Nakamoto could be delisted in six months? They don't trade back above a buck. Wow.
- [36:02]
J
Makes sense. Dude, what a trash investment. What do you, what do you think happens to his career? I mean these are colossal mistakes in my opinion.
- [36:12]
A
I'm just hoping that they find a way to get back above a buck.
- [36:16]
J
I don't see how that happens. I looked at the deal my brother's looking at doing this pet med thing and I'm like, whoa dude, some of these just broken companies, you know.
- [36:30]
A
Yeah.
- [36:32]
J
A million dollar write off.
- [36:34]
I
There you go.
- [36:35]
A
Oh man. Everybody will be happy to know that since the show started, the much celebrated pump that we were discussing, up to almost 90,000 is now retraced fully. And bitcoin's down on the day trading at 87,415. And this once again is why we can't have nice things. Yeah.
- [36:56]
C
On some of the BTC DATs. I am a huge, huge fan of bitcoin. I do believe it is the best monetary asset out there. And I think some of the things plaguing the bitcoin dats is you a have 200 of them. So it's a simple rule of supply and demand. Not all of them are going to take on this premium multiple when you're oversaturated. But number two, they really don't have any value accrual mechanisms beyond the ability to issue equity above book when they're trading at a premium.
- [37:25]
A
So.
- [37:26]
C
So when their premium goes away, you're essentially tantamount to this closed end fund and it's really hard to get back above that. One of the reasons why we chose to be underpinned by Solana is there, you know, we do have that as a way for us to create value. We've done one subsequent raise which was nicely accretive and increased our sold per share in a big way. But we also have that 7% staking yield and we're buying loxle at a discount for built in gains for shareholders. You add them all together and we're increasing our sole per share double digits while we wait for a more full bull when our multiple can expand and we can then tap the capital markets in this accretive way. And I think unfortunately with the bitcoin treasury companies you don't really get that. I think that MicroStrategy is in this unique spot because it's proven that it can issue capital in this accretive fashion and so folks are more likely to award it this premium multiple. But the others that have kind of just entered the game, I think it's going to be a tougher slog for them.
- [38:26]
A
Yeah, I Mean it turns out that raising a bunch of money and top blasting the shit out of bitcoin all in one shot with zero plan to ever buy any more bitcoin maybe wasn't the greatest model that we've ever seen.
- [38:44]
J
Load the fucking pistol and fire it. Just like blow your load, huh?
- [38:51]
C
In the beginning the thesis was pretty simple. It was a risk reward based one. No one really thought these things would trade below one times and the companies can actually unwind and force it to trade back to nav. So the downside was basically you're taking on basis risk to BTC or whatever the cryptocurrency was but your downside was basically what you put in and your upside was taking on this peer like multiple. And we were seeing all these pops in the beginning and quite candidly I don't think a lot of investors understood that the stock price wasn't really real prior to the registration statement going effective and you having a liquid enough float for true price discovery. And so I think folks were generally looking at this as a supreme risk reward where you can see a quick doubling, maybe you get out quickly, maybe you see some pullback on registration statement effectiveness but it's still a really nice return over the course of one to two months vis a vis this really low risk of basically your downside is one times which is your entry point. And then I think what happened is the space got oversaturated and now a lot of these are trading at material discounts and so you're the risk and you're not really seeing these pops anymore. And so I think like that risk reward is now skewed negatively and I think just too many people just jumped in and tried to replicate this model unfortunately and kind of brought it down for a lot of folks.
- [40:15]
A
Yeah, David, a final thought because actually we have a alexia that makes me feel better. Yeah, go ahead.
- [40:20]
H
Yeah, I'd like to give a chance here for Brian to draw some distinctions between Soldat companies and Ethereum DAT companies. I mean obviously we're starting to see use cases of both Ethereum and Seoul. Seoul with Visa, ethereum obviously with JPMorgan Chase. But I'd like to get Brian your insights as to sort of which protocols got a better Runway or are you saying that they're all going to benefit?
- [40:47]
C
I think they will all benefit. I'm a big fan of Ethereum. Like I think that nobody knows which blockchain is going to win and I also think there could be more than one winners. I also think we'll see institutions Build like private blockchains too. So I think we'll see a smattering of it. We actually did do the first large scale equity private placement for an Altcoin Treasury. So anything outside of Bitcoin, we could have done it on Ethereum. I was in traditional finance for a decade, but spent five years running research for a large trading firm and everybody who was in crypto like full time. Basically the sentiment around ethereum was that L2s are parasitic to eat value capture. Obviously Ethereum is a bit constrained by its original design decisions. Had to actually push out execution to see separate L2 blockchains like BAS. Arbitrum optimism. And so in my impression is like the big reason why eth ran from 1400 earlier in the year all the way up to a new all time high of 5,000 is because Tom Lee came in and was buying like over 10 billion of eth. And so yeah, we chose Solana. I think that it's the first second generation smart contract blockchain. So it's like Ethereum, it has nice network effects but it also benefits from having best in class technology like parallel transaction processing. So it could really support any throughput that anybody needs. And also too, what I really like is it is targeting on chain finance. So it basically wants all the world's assets to be traded on chain in a single liquidity venue accessible 247 to anyone with an Internet connection. So it's really targeted and purpose built to see all of finance move on chain. So things like stablecoins and tokenization, which is the biggest theme that I'm excited about for this coming year. So I think they're all well positioned. But those are some specific reasons why we chose to be underpinned by Solana. In addition to additional value accrual mechanisms with a greater staking yield and the ability to buy lock tokens at a discount.
- [42:58]
A
Yeah. So guys, we're going to pivot here. I appreciate the conversation, always great. On the slower news days, sometimes I invite a friend to give them a little bit of focus at the end. And I invited Alexi earlier from Build on Bitcoin to have a quick chat here towards the end of the show. And I want to be conscious of his time, obviously. Alex, is your mic working? You're good.
- [43:19]
I
Hey, thanks for having me.
- [43:20]
A
Yeah man, of course. So listen, we're talking about Bob today, built on Bitcoin. Can you just give us the TLDR break down exactly what Bob is and kind of the journey towards building it. I know you guys launched recently.
- [43:36]
I
Cool. Yeah, well, thanks for having me on. Well, I mean Bob is building for Bitcoin what Revolut did for Fiat. We're building the rails to make Bitcoin, in my opinion, the most important asset of our generation, more productive. We have today a lot of banks adopting BTC, selling it through ETFs and DAT's and so on and Treasuries to essentially my grandparents. But in our opinion, if in five years time we have to go to banks, or in 10 years time we have to go to banks to use Bitcoin, it's not Bitcoin anymore. And that's why Bob is building essentially the same thing a bank offers to you today. But we do this in a decentralized manner. Trade Bitcoin, buy a dca, swap it into stables or any asset in a fully trustless manner, use non custodial swaps, takeout loans where Bitcoin stays on BTC and you can use it as collateral on Bob on ETH and other chains to essentially borrow stablecoins across some of the biggest defi players in the market. And ultimately our vision is to allow you to take out micro loans against your BDC and be able to actually use Bitcoin in your day to day finance. All of this built on top of Bitcoin in a way that retains Bitcoin's decentralized nature.
- [44:53]
A
Awesome. Yeah, that's a great description. Obviously. So maybe you kind of answered this, but what do you view as the core problem that you think it exists to solve? I mean, I know you kind of dove into that before, but maybe there's some more specifics.
- [45:09]
I
Sure. So the biggest problem with Bitcoin defi is that it is a native. You have to ultimately go to either a centralized exchange where this works well until it doesn't. If you want to trade Bitcoin, if you want to do something with it, if you want to borrow against it, if you want to earn, yield on it or you wrap it. And today's wrappers are centralized and again it works well. Wrapped BTC by Bitco has worked perfectly fine until one day perhaps it doesn't. And it's not as user friendly as you know, it's not as composable and user friendly as we'd like to have it in defi. And this is why a lot of Bitcoin today still sits idle. In fact there are 750 billion of it that is not used, whereas 30% of Ethereum ETH is used natively in defi and staking and basically Powers the defi ecosystem of Ethereum. Bitcoin sits idle. And that's essentially a problem, right? There's a huge gap in the markets, but there's demand, right? There's over $40 billion of Rapid EC versions fragmented across 50 plus chains, 50 plus different wrappers. And ultimately this has become quite the hurdle and basically a problem for new users to enter crypto through bitcoin and use it in defi. Many wallets, neo banks, new players that enter the market, have users that have been acquiring bitcoin through the platform are looking to get involved in defi, offer them ways to earn yield on bdc, take out loans, swap it more natively and they just can't because infrastructure isn't there. And that in our opinion has been one of the big hurdles and is one of the last kind of missing puzzle pieces to finally onboard new users into the space. And in our opinion, with bitcoin being positioned as it is as one of the most well known brands in the world, and it's definitely the only thing the majority of the population knows about crypto. Bitcoin is the rails to onboard the next billion users on chain. But right now, if they get into bitcoin, there is just no easy path to go native defi. And that's what Bob is solving.
- [47:20]
A
There's obviously a lot of skeptics in the bitcoin world to doing anything with bitcoin, right? How do you make the case? I guess. And how does this actually, I guess two part question, like how do you make the case to a skeptical bitcoiner who thinks that bitcoin should just be digital gold and sit and do nothing. And then from a tech perspective, how did it actually work in a safe way?
- [47:40]
I
Well, I mean, sure, the cool thing about bitcoin is that you can do whatever you want with it. If you just use bitcoin as a hedge against inflation, against the dollar, that's fine, you don't have to use it. But there is a lot of people that want to use it and actually a lot of people that already do use it through different channels, right? They go to centralized exchanges, they go to off chain lenders, they go on chain. I mean the amount of off chain lenders and exchanges that offer yield products and the volume that they already have today is huge. So there is clear demand. And if you look at the ecosystem of different chains and defi protocols that have all been gearing up, developing a bitcoin strategy, fighting for bitcoin liquidity, pivoting to focus on bitcoin product. It's pretty clear that we're the start of a bitcoin defi gold rush. Everybody wants to get bitcoin liquidity. People have realized that the only way to scale in the space is if you have bitcoin and stablecoin liquidity. Now, not everybody will use it, but at the same time, if you draw the comparison to gold, well, people use gold, they borrow against it. There are enough financial products built around that. And the cool thing about bitcoin is, well, it's much easier to use, it's much easier to send around, and it's a much better collateral than gold, in my opinion. And from a technical perspective.
- [48:59]
J
The way.
- [48:59]
I
It works is, well, it can work in different ways. Right. And the beauty of what we're building and in fact, our team, I think, just pinned the post of something we announced today. You can choose your security model. Bob's mission is to enable bitcoin to be used in defi in a native manner. And this is possible through something called bitvm. Without going into too much technical detail, it's a way to create real Bitcoin layer 2s, real rollups, and basically allow you to use bitcoin on platforms like Bob in a way that you can always get it back, arguably in a native way, arguably, you're no longer trusting a third party custodian. You're not trusting a bridge in a way that you're used to. It's the same as we call ETH and Arbitrum ETH because it's native.
- [49:48]
H
Right.
- [49:48]
I
You can always get it back to Ethereum. We finally know how to do this on Bitcoin. And to make a final point about bitcoin maxis that have opposed bitcoin being used for anything else and a lot of debates about forks. BitVM won the Bitcoin Research Prize this year. And the Bitcoin Research Prize is something that is picked not just among the people who vote on this, are not necessarily DEFI enthusiasts, they're academics, they're core contributors. They're people who care about bitcoin. And by now it's been widely accepted that this is the best shot we have at bringing volatility to the asset, making it more productive, giving people the choice between centralized exchanges as centralized platforms and decentralized platforms. Something that the bitcoin community did not have as a choice so far. Whereas Ethereum, Solana, they do have that choice. But the bitcoin community is just so much bigger and it's unfair and it's quite controversial in My opinion that you don't get the choice. You don't get to choose whether you want to use your Bitcoin or you don't. You just can't today.
- [50:56]
A
Yeah, I think that's the great, great case for it. And you guys call Bob a hybrid chain, right? Maybe you could talk about what that means and then with respect to that, what the token actually represents and how that works.
- [51:10]
I
So Bob approaches trying to solve Bitcoin's big problem a bit differently. We've been at this for quite a while. I've been, I've had the chance to work on Bitcoin research for over 10 years, working on lightning payment channels, eth roll up designs, cross chain bridges. And one of the big realizations we had was building tech for ethos is not enough. We've seen this more times than we'd like in the Bitcoin space where lightning was treated as the best solution in theory, but turned out that it's not really good for users and nobody can use it. And the majority of lightning volume is actually through custodial wallets because, well, it's so complex nobody can use it. And we've seen attempts at Bitcoin layers before which acted in isolation, were built on completely new programming languages and essentially fell behind and failed to provide an alternative to Ethereum. And the reason is that it's all about network effects and going where the users and builders are. And the realization is that Ethereum is the defi powerhouse. That's where the stablecoin liquidity sits. That's where the defi builders are. And essentially new founders, new builders, when they come into the space, they have to make a choice, where do I build? And up to this point that you would always have to choose between Bitcoin and Ethereum and nobody chooses BTC because it's so hard to build on the infrastructure isn't there? Bitcoin has no defi infrastructure. Right. It's just not built for that. And that's where Bob comes into play with our hybrid design. We're looking to combine the best of Bitcoin and Ethereum. We connect to Ethereum in the same way that we're also connecting to Bitcoin. The idea is that you can deposit ETH and any natively minted asset on Ethereum onto Bob and you can always get it back to Ethereum. Well, at the same time you can deposit Bitcoin into Bob and you can always get it back to bdc. And that allows us to essentially provide tooling infrastructure the same way that Essentially you have it on base optimism, arbitrary Ethereum itself. So there is no more gap between building in the Bitcoin defi space and Ethereum. We've leveled the playing field. We have the same best in class infrastructure and tooling, but enhanced by tooling. That makes it better to work with Bitcoin. Right. So we have things that allow you to verify Bitcoin transactions, trigger bitcoin payments and ultimately one click deploy BTC into different DeFi applications within just one transaction and do that in a way that is native and does not require to trust in third party custodians powered by bitvm. So the goal is really to provide builders applications and essentially work with the big defi players to allow them to enter the bitcoin market and develop a bitcoin strategy without changing how they operate.
- [53:57]
A
And so what's the token role? What can you do with it?
- [54:03]
I
Well, the token is part of Bob's security model, right? It's a ranking mechanism. First and foremost we need operators to run the bit VM bridge, we need operators to run Bitcoin finality, we need operators to run solving to essentially facilitate one click bitcoin defi deployments and trustless swaps. And how do you pick the operators that are reliable? How do you decide who should be in the core system? And that's where the token comes in. It's also a piece that's super relevant for governance. We want to make sure that value ultimately accrues back to the dao. It builds a bit of centralized system. And the reason we believe in running this as a decentralized system is that Bitcoin means different things to different people. It's very hard to essentially determine how exactly people will use BTC without having a global presence at all times. And that's just not possible as a business more often than not. But if you have built a community, if you have users from all over the world that can make their voice heard, actively participate, build local communities and engage in the system and help direct Bob in the right direction and basically help form the vision and how we execute it. That's I think the hidden power that, you know, a lot of Web2 companies are missing out and a lot of existing today's bitcoin companies that, you know, operate either very locally or often build only for theory and for ethic and just for the ethos of being decentralized and trustless. They miss that input from the community, they miss the input from users. And by having a token, users get to own the part of the protocol and basically like have their sale of, you know where the protocol is heading. And I think we see this debate right now quite actively and actually quite heated with aave, with Axelar of how do you balance value accrual between private companies and daos? And I do think it's very, very important that DAO actually owns the protocol and that participants and token holders of the DAO are the ones to whom the value accrues. And last but not least for new features and some products of Bob, the token will also act as not necessarily a gatekeeper but as a fast track access with better access and lower fees.
- [56:33]
A
Perfect. So I guess as we come towards time, as you're building, you've launched, I don't know what time frame to put it on, but in the next two to five years, how would you generally define what success looks like? Which capabilities will be there? Will this be fully deployed? Will you still be building? How do you view it?
- [56:55]
I
Well, Bob's minion has been live for over a year. We've had the core infrastructure built. Defi applications already are live on Bob. We've partnered up and started working with some of the largest institutional players, including Anchorage Fireblocks, Cross chain players like Clay0 and Chainlink, DeFi players like Uniswap. The goal right now is to really first of all provide the best trading experience for BTC that is trustless, fast and efficient and that's number one. And that's going live actually this year and with more functionality going live early next year. And then apart from trading and allowing users to buy and sell BTC trustlessly, the next step is lending and using Bitcoin as collateral, but without trusting wrappers. And we just released today the announcement of the native Bitcoin vault stack. That's an open source piece of infrastructure that essentially lets you use Bitcoin as collateral without giving up custody and that's going live early next year. Initially operated by institutions targeted at institutional use cases with a fully trustless Upgrade coming in mid-2026 with BITVM where for the first time ever we'll have non custodial or self custodial Bitcoin lending. And success for us looks like that by the end of next year we have the full stack live and operational with all products that a bank would offer you, normally offered for bitcoiners in a truly trustless manner without essentially trusting us as an entity. And from there, I mean long term the goal is to. And that's quite an ambitious one, but long term the goal is to really have more BTC actively using Defi than locked up in ETFs.
- [58:41]
A
Right?
- [58:42]
I
Because that's when we can say, okay, we have finally unlocked Defi utility for Bitcoin. There is a way to use BTC without trusting centralized providers and users have a choice to do so. They are not forced to stay in tradfi when they have btc.
- [59:02]
A
So as we come to the end here, what's the best way for people to get involved in the ecosystem right now, to participate, to try this out, to be a part of the future of Bitcoin Defi?
- [59:12]
I
Well, I mean, best, obviously you can find all the information on our website gobop XYZ or follow us on Twitter. You can start already now by using the app, looking out for different Defi opportunities across different chains and use our gateway product to one click. Deploy your BTC into different Defi apps and explore what you can do on Bob, but also on Ethereum, Binance, March and Unichain Sonic and so on. And then stay tuned because we're releasing a new product before the end of the year with a referral program that will allow you to start testing and basically being part of this new release early on, it's going to be about swaps is what I can say. And yeah, otherwise stay tuned. There'll be a lot more coming in.
- [59:56]
A
Q1 and it's build on Bob. It's up in the title for those who want to give it a follow. And you can also give Alexei a follow. He's obviously on stage here. It's great, man. I'm really cheering for you guys. I'm very obviously bullish on the, on the future of building on Bitcoin and so I, I love that there's people like you in the space that are making sure that it's a more usable, robust ecosystem and asset. So. So thanks for everything you do and thanks for taking the time to join. Thank you to everybody else on the panel. It was another good one. You never know which days we're going to get into heated debates or find hot topics of conversation. I really enjoyed it today. And we will be back, of course, tomorrow at 10:15am Eastern Standard Time for another crypto town hall. Lexi. Thank you guys. Check out Build on Bob, give a follow to everybody else on stage and come back tomorrow. We'll be back at it. Thanks everyone. Bye.
- [61:20]
C
This space was downloaded via spacesdown.com visit.
- [61:23]
A
To download your spaces today.