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- [00:00]
Host
Ray Dalio recently said that people should be allocated these 15% to Bitcoin and gold and similar assets. He should have just said bitcoin, in my humble opinion. But we'll take the wins where we can get them. This is a far cry from rick Edelman saying 40% allocation, but still 15% to gold and bitcoin, much higher than you would be seeing from anyone else. We're going to talk about this. Everything happening in the market and the news, of course, we've got Tillman and Andrew. But way more exciting than those two lumps on a log is Matthew Siegel, today's special guest from Banc. See you guys in a second. Let's do. That's dope. You might notice today that we've given ourselves nicknames. Tillman came in as bitcoin enthusiast, so I had to back it out and come in as an ETH maxi, which I'm not, but I wanted to make sure that that forever lived on the Internet as fodder for bitcoin maximalists.
- [01:09]
Tillman
Well, I am a bitcoin enthusiast, if you need to ask.
- [01:12]
Host
So I think, I think we tried to get Andrew to go XRP maxi and he refused.
- [01:19]
Andrew
I'm more of a vineyard vine maxi than I am an XRP max here. Right. So let's be be clear about that.
- [01:26]
Host
What would your maxi be? Is it Node? I mean, Hodl, you know, it's a Vaneck fund of some sort.
- [01:31]
Matthew Siegel
No Maxis get bloodied. But if I had to pick one. Yeah, it'd be Node.
- [01:37]
Host
Yeah, maybe give you. Give me the chance to talk about it because you actually came on the show. I think we even talked on Spaces when it launched. What's happening with Node and everything at Vaneck, obviously.
- [01:50]
Matthew Siegel
Yeah, I mean, it's been a. We launched the on chain economy ETF in mid May in a, you know, perfect timing, I think, for a crypto equity strategy. And we're going for a lower volatility approach to the space because a lot of the crypto ETFs are designed. Equity ETFs are designed to basically be buying the leveraged companies at the top. And we've seen over the cycles how leverage in bitcoin just, they don't really go together. So we're, you know, we've got a very wide investment universe. Any company that has a strategy to make money from digital assets is eligible. And when you, when you take that wide approach, you can actually include companies from every single sector, giving the fund a much lower volatility approach. And you know, we think that slow and steady can, can win the race in a, in a volatile asset class like this. So it has lower volatility than bitcoin. But beating bitcoin since inception, I hope can we can keep that up because that'll be a sweet spot.
- [02:54]
Host
How do you rebalance when 900 treasury companies launch a day?
- [02:58]
Matthew Siegel
Well, see, one of our processes here is that we are underweight. Leverage and dilution is the new leverage for this cycle. So when you look at the microstrategy weight in a normal crypto equity ETF could be 10% and we're at 3%. So it's just a much more diversified approach and we're not going to have a 10% position. Position in something that we think can have an 80% drawdown. And these treasury companies, I think, you know, it's totally conceivable that if there's a, if there's a bear market, the, the crypto treasury companies can go down 2x. What the. What Bitcoin goes down. So it's about, you know, risk management and position sizing.
- [03:41]
Host
Yeah, but we're like in a super cycle, there's never going to be a bear market.
- [03:45]
Matthew Siegel
You want to take off my hat and show my gray hairs or my no hairs?
- [03:49]
Host
I was gonna say, you're still beating these two. Telvin and Andre. Great haircuts, to be honest. But let's talk into the. Let's dive into the main topic here. We've got nothing on the screen for some reason because, you know, we just get these moments where things don't work. But here we go. We should be getting. Billionaire investor Ray Dalio urges 15% allocation in gold or Bitcoin says world on the verge of an economic heart attack. Tillman or Andrew, either of you can jump into this one. I mean, we've all heard Ray Dalio before, right. We know that he is. Believes that the fourth turning is coming and that we're going to go into mass economic collapse. He did say he likes gold better than bitcoin in this context. But what do you think, Ton?
- [04:32]
Tillman
Well, I think that there's going to be an infinite universe of opportunities to hedge against events like that. I think 15%, it doesn't surprise me. I think it was inevitable that we were going to see people come out and say higher and higher number. I think that that's probably just the beginning. I think that we're going to see in the next 15 years a lot more development in the space than we've seen in the last 15 years. Let's put it that way. I think a lot of folks are going to use bitcoin as a new means to financially engineer a path forward that really does a better job of mitigating risk and uses the hardest form of collateral as a debt mechanism. You know, it's the likes of. We've not seen before. So the question is, is like, who will find the sweet spot? What bet will be right? There will be a perfect bet, and then there'll be a, you know, essentially a bell curve off of that in terms of, you know, whether you're leaving too much on the table or taking too much off the table in terms of that volatility. The, the old adage is, you know, leverage cuts both ways. You're either the superhero and you're really have high leverage on the right side of things, or you are bust on the, on the bad side of things. And that's just the nature of every market. And I think bitcoin possesses intrinsic qualities that make it exceptionally fun to, to try to use it as a mechanism inside of engineering. So I think we're going to. This is just the beginning. I think 15% is probably the tip of the iceberg. I think we'll probably see 50% in the next, you know, five years.
- [06:18]
Host
Andrew.
- [06:20]
Andrew
Yeah, so we've gone in the last 12 months from, you know, whispers across tradfi of, you know, maybe you should put 1% of your portfolio into, into bitcoin. And then it turned into black rock rock putting out white papers and, and research saying 3 to 5% makes more sense. And then, you know, in, on the wealth management side, you know, Rick Edelman, who's a paragon of that particular space, saying, you know what, it's probably more than that. How about, how about 10%? And then he, then he launches a 40 number, which isn't 40 is an interesting headline. But Rick's not out there telling his clients to put 40 of their money into bitcoin. He's just not. But still, we've gone from 1 to 3 to 5 to 10 to now. You know, Dalio is out there saying, you know, they're. There's a world where 15% makes sense. The way that I look at it is there's a kaleidoscope of asset classes that people with meaningful capital are told to allocate to, whether it's overseas equities, whether it's United States equities, United States debt emerging, market debt emerging. This, all this has their requisite percentages in any portfolio. And at some point, bitcoin and probably to a larger extent, crypto as an asset class will continue to move up rungs of what you should allocate to that particular asset class. I don't know what the numbers are over the last decade with emerging market debt or emerging market equity. Could be a lot, could be not that great. But my guess is that crypto probably outperformed an asset class like that. Right. So do we find ourselves in a spot where bitcoin and crypto ends up being about halfway up that proverbial ladder in the world of wealth management and tradfi and says, okay, this makes sense, that 10 to 12% of your portfolio is in a quote unquote emerging market type of finance. That is, that is crypto and bitcoin in particular.
- [08:41]
Host
Matthew, what percentage would you put it at if you were financial advising?
- [08:45]
Matthew Siegel
I think Ray Dalio has been reading Vaneck research here because we put out a piece in June 2024. We did this Monte Carlo simulation and it was aimed at allocators to try to get them to do 3% to Bitcoin. But if you read the piece, finally the Sharpe ratio of 60:40 Portfolio of equities and bonds. And then you start introducing, you know, a little bit of Bitcoin to see how the risk and return are adjusted. And you max out the Sharpe ratio right at 20% total crypto. And then we suggested a 3 to 1 BTC to ETH. So maybe Dalio's at 15 bitcoin, 5% ETH and he's at that 20 max. But that is a very volatile, you know, that's more than most people want. So most of our conversations with advisors and allocators are still kind of in the 50 basis points to 2 point to 2% range. And I think we'd need to see BTC volume here in the mid-20s for, for a year or so before folks would, you know, bump it up to that 5 to 10%. I don't think we're going to linger here for long.
- [09:52]
Host
20% works really well if you're not a human with emotions and you can just shut it off for 10 years and you know most people are going to puke that portfolio on the first 30% drawdown. Unfortunately, even though the math tells that they shouldn't agree. Since you're actively allocating, I have to imagine that you're looking very closely at this Justin Sunbach Tron Trx Treasury Company that's filing for 1 billion shelf statement with SEC. Are we going to get a Treasury company for literally everything Matthew?
- [10:23]
Matthew Siegel
Yeah, I think basically we will as long as bitcoin stays here in this kind of 117 to 121 range. Equity capital markets are very open. That's the biggest change here, I think to the markets is that the investment banks that wouldn't touch bitcoin and couldn't bank crypto companies are now doing both. And there's some amazing developments in the investment banking league tables. Cantor Fitzgerald is ahead of Goldman Sachs year to date. BTIG is ahead of Morgan Stanley. So the tier one banks are getting slipped by the aggressive tier two guys that are creating this, this capital formation phenomenon. I think it will continue to the smaller cap coins until bitcoin sells off. And then this stuff will close up completely.
- [11:17]
Host
Just unwinds.
- [11:18]
Matthew Siegel
Yeah, well, it'll just, there'll be no new companies.
- [11:21]
Andrew
Right.
- [11:21]
Matthew Siegel
And then we kind of will play in the existing sandbox. I think some of those will go under 1x M Nav. Then there'll be a bifurcation between who, you know, kind of draws a line in the sand and says, look, we're not going to dilute below 1 XM NAV. We may even buy back stock. Those will be the survivors and some of the others might be acquired. I'm just guessing, I was gonna say.
- [11:44]
Host
The big ones just swallow the small ones probably. Yeah. But when you look at like this.
- [11:48]
Matthew Siegel
Morning, there's bit, there's bit mine on the tape, the Tom Lee vehicle and they just authorized a billion dollar buyback. So you get in this weird situation with the doubled down.
- [11:59]
Host
Yeah, yeah.
- [12:00]
Matthew Siegel
Like some of the bitcoin miners will have ATMs and buybacks open at the same time, which is a bit schizophrenic from a tradfi perspective that you're both issuing stock and buying it back on. You know, but they're going to basically just trade their own stock within a, within a range. I do think it's helpful to have some valuation support of because why else would a minority shareholder buy, you know, a company below 1x nav? Doesn't make too much sense.
- [12:26]
Host
So interestingly though, when you see an announcement that says, you know, Justin sun backed billion in trx, can we just assume that he's found some tax efficient way to basically exit $1 billion of his own TRX into this vehicle?
- [12:40]
Matthew Siegel
Yes.
- [12:42]
Host
Well, I'm just being clear because we have two conversations here. You have Cantor Fitzgerald that's effectively like pivoting their entire business now that Howard Lutnick's gone and his son Brandon is running the show. To crypto, much like the Trumps have from real estate to crypto. But then you have these vehicles that people are. It's probably not backed by Fitzgerald or something. That's simply a way to move money around in a tax efficient way. And then hopefully you get the. Now the premium.
- [13:08]
Matthew Siegel
Yeah. And there's some diversification to it too. So they'll. And I don't know the details of this individual and I don't want to. Yeah, I want to mention about an individual. But like that he. Some of. Some of the folks are essentially swapping discounted coins in return for discounted stock and diversifying and assumption that you get.
- [13:30]
Host
It at a multiple and you effectively get an exit from something that you can't borrow against into something that you can borrow against. And yeah, it makes a lot of sense when you think about it.
- [13:40]
Matthew Siegel
I don't think it's necessarily an exit. I think it's. Some of it is truly just diversification. Holding it in equity form rather than token form.
- [13:49]
Host
Yeah, I mean that makes a lot of sense, especially for people at a certain age who are estate planning in certain countries and things. I mean that was the whole Galaxy 80,000 exit. Is that the one line they wrote about who the customer was on that 80,000 bitcoin sale was that they were diversifying for estate planning? I mean I would love to be in a position where I can diversify 9 billion for my estate planning. It's just a small part. You got to wonder how much more bitcoin that guy has or Galaxy, who knows. But it's pretty wild to see how many things are. Are happening here. I'm gonna go on to this story because I think this is absolutely huge and I didn't see many people talking about it. PayPal to roll out pay with crypto feature for merchants. According to Frank Keller, you have globally 650 million users that participate in the 3 trillion market of cryptocurrencies. And PayPal wants to give smaller businesses access to this customer base. PayPal is going to allow businesses to accept more than 100 cryptocurrencies at checkout. Importantly, when you dig into this, the vendor will have the option to have this converted to cash or their local currency on the sale. They don't need to Accept coin number 97 on coin market cap as payment and hope that that keeps up with the dollar. These are. Maybe this announcement in and of itself isn't huge. We saw Square do this. But Andrew, like this is just another massive step in the obvious direction, correct?
- [15:11]
Andrew
Well, it's you know, a lot of times when you still have some quote unquote of crypto non believers, they'll go to. Well, well, all right, other than number go up, what is the use case? Well, PayPal is showing it to you right there. I think what's interesting about that particular announcement is it's you know, 100 tokens. Right. So it's, it not, it's not just Bitcoin and Ethereum and maybe one other, it's a, it's a bunch of them. Right. So you know, I, I'd have loved to been a fly on the wall at PayPal in those meetings making those types of decisions decisions, but I think what they're trying to do is no different than most of the organizations that are hovering around crypto at this point. How many users can we grab, right? How many users can we, you know, collate around any particular crypto and folks that want to use it for some reason? So that, that particular announcement is like you said, it's bigger than people think because of one, you can send, you know, whatever it is, you know, token number 79, you can send it and, and use it as quote unquote currency. Right. You know, send iota, you know, and.
- [16:23]
Host
Your arrow, your arrow Finance or your BitTorrent to buy some or.
- [16:28]
Andrew
Yeah, or send Pendle or Jasmine coin. So again, point is, is that there's you know, these are quote unquote use cases. And you know, I, I think I linked to a, a Matt tweet yesterday that we are, we are again on the precipice. And, and this PayPal story is just another in a long line of, of announcements that shows that crypto is absolutely hurtling and dragging tradfi with it to make changes in really, really broad, fast ways. And so PayPal is accepting payments in things that even sound absurd to the guys on this call who have been in this space for forever while at the same time we're, we're mere 18 to 24 months away for their, you know, there's going to be trading 24,7 stablecoins. The genius act is going to push that forward. All of these changes are coming and you're seeing large, large, large institutions get there a little bit quicker than we thought they would. What Matt just said about some second tier investment banks being ahead of Morgan Stanley and Goldman Sachs in terms of deal flow this year, that is a huge deal because Goldman Sachs and Morgan Stanley will want to catch up. And even if they have to hold their nose and play the game with bitcoin treasury companies or eth. Treasury companies or who knows what treasury companies or IPO adjacent to crypt. Whatever it happens to be. They will do it. They absolutely will do it. So the wave to me is just starting and I, you know, I don't think we've gotten to bubble territory. I think we've got some real space and room to run here as a, as it, as it relates to tradfi doing a lot of stuff. Never underestimate the ability for, you know, investment banks, banks and just traditional finance to be wildly creative in ways that we didn't think they actually would be. We're going to see that here over the next six to 12 months.
- [18:34]
Host
I mean, should I be worried, Tillman, when I actually look at this chart? First of all, now I'm an Arrow enthusiast, in case some of you were wondering, because I like number 99. So we can be concerned that the top 100 coins all have over a $700 million market cap.
- [18:50]
Tillman
Listen, there's a lot of excitement in the space, to say the least. I, I, you know, market caps don't mean anything, you know, that, you know, at the end of the day it's what, what liquidity can be pulled out of that market cap. And some of those coins are very illiquid and some of them are highly liquid. And I think that's the, the beauty of the, the last 15 years is that we have kind of seen what works, what has a primary place from a use case perspective. And some of the coins that, like Bitcoin and like Ethereum, Ethereum and Solana are coming out with absolute clarity as it pertains to their use case. And that's why retail, and that's why Wall street has really piled on and found it a firm foundation by which they can build on. And if you look at kind of the price of Bitcoin, you can have, you can correlate it to a lot of different things from a power law perspective. But the one that I find most interesting and the one that I think has the strongest correlation and the least deviance deviation is the wallets over a thousand dollars. So if you just look at PayPal and you say, okay, what does this mean? Well, it means a lot of integration. It means a lot of new users, it means a, not a lot of new wallets over a thousand dollars. And that means price go up. And so what are we seeing? Well, we're seeing that the crypto space as a whole has a utility to Wall street in the fact that it allows them to get new Users as a, at a rate that they've not seen before. And it allows those users to be more active than they've ever seen before. And it allows them to project a bright future of growth like they've not been able to do, you know, in recent years. And markets are, you know, traditional markets, some of them, some of the futures markets are surprisingly thinly traded. And if you look into the crypto space and demand that's there for it, the depth of liquidity, not only from retail but now from corporate balance sheet companies, treasury companies, sovereign nations, you know, all the wallets are just getting bigger and bigger that are attached to those buys. The depth of liquidity is getting bigger and bigger attached to the market. And that I think is indicative of its intrinsic advantages over the traditional markets. It's highly liquid, instantly settled. You know, there's a new coin that can be popped up any day of the week that represents a new brand that has new growth potential. Like, there's just a, a lot of sizzle around this stake and I don't think it's going anywhere anytime soon. I think we're actually in the beginning. I, I liken it to this analogy. We just got over the Nevada state line and we're in the first gas station and we're all huddled around 5, 10 year old slot machines going, this is incredible. Can you imagine what we could do with this technology? Vegas isn't even there yet. Like, we, we haven't even seen the ecosystem that is going to be built off of this vertebrae, in my opinion. So I think we're, we're right there. We're getting to watch it.
- [22:07]
Host
I think we lost Matt right when I was about to ask him a question. Bye, Matt. Bye. We'll miss you. I wonder what he was, I think he actually left so he could come back with a cool title.
- [22:19]
Andrew
Yeah, he's a, he's a, he's a pinky enthusiast. Pinky Pengu, Pengu something. I don't know.
- [22:28]
Host
Those are pudgy penguins. Do not.
- [22:29]
Andrew
Yeah, pudgy penguins. Yeah, pudgy penguins. They had a pudgy penguin at there when they were ringing the bell at the nasdaq.
- [22:34]
Host
That was bitwise. Bitwise is a. I think bitwise still has a pudgy penguin as their, as their Twitter math back.
- [22:43]
Andrew
I don't know.
- [22:45]
Host
You came back. I thought I was like, dang, Matt got a really important call or he.
- [22:48]
Matthew Siegel
No, no, I just suddenly my, my screen went poosh. But I did have like a couple things to say on the, on the PayPal discussion because I noticed PayPal's down five bucks in the, in the pre market here on another squishy earnings. Like, I feel like that company is just, you know, not gaining market share in any of its many businesses and it's in a highly competitive space. And when you look at the, the amount of balances that customers keep on their Venmo or Cash app, it's, it's relatively low. So they have doubled the, the PYUSD market cap, the PayPal stablecoin from 500 million to a billion this year. But it's just not really moving the needle. Like I'm much more interested in someone like Interactive Brokers ibkr, which yesterday for the first time said that they are looking at rolling out their own stablecoin to make it easier for customers to move balances on and off the platform. They're going to be widening the number of coins that they allow customers to access and probably going to do so at much narrower spreads than Robinhood and coinbase. So here's $100 billion company making some aggressive moves after legislation was passed. I think they're going to be a price leader in this space and really help onboard some of the smaller institutions who've stayed away from touching coins.
- [24:08]
Host
I think it's literally impossible at this point to keep up with the small stories. That should be huge stories.
- [24:14]
Andrew
Well, the interactive brokers is not small interactive brokers.
- [24:17]
Host
No, I know, but I'm saying it's a small story because there's apparently bigger stories that are in the news. I hadn't. That was not even on my radar. I mean, this one is if I asked partners with Circle to offer bank stablecoin payments. Matthew, I know you got to go in a couple minutes, so I'll let you jump in on this one. We had the news, I think it was last week about PNC and coinbase. Right. Clearly everybody wants in on stablecoins one way or another. But this seems to be the new approach is just partner with a stable coin issuer or coinbase. So we can say as a proxy stablecoin issuer and don't build it yourself. And we have bank of America and Citibank and others building it themselves.
- [24:53]
Matthew Siegel
Yep. I mean, so if Circle stock is going to work, they need a lot of announcements like this where other branded companies are using them on the back end in like a white label type of fashion. And then it'll come down to the economics how much of that of the interest to Circle keep versus their partners. It's a much More competitive space. We're also competing in IT with Agora, the AUSD stablecoin, which we're looking to white label. And I think what you'll see is Circle having to pay up for these types of deals, bringing their margins down and making it tougher to justify the stock at these levels. But it's good to see them winning these deals and I think they're going to win a lot more.
- [25:39]
Host
Coinbase makes more money on USDC than Circle, right?
- [25:42]
Matthew Siegel
If it stays on the coin.
- [25:44]
Host
Yeah. It's not like we don't have some sort of precedent for that sort of activity. Listen, as you mentioned, you guys have a stable coin that you've built and you're working on generally what happens to this Cambrian explosion of stable coins if we go back to zirp, if we have zero interest rates and they can't just buy treasuries and make 4 or 5% passively. And what happens if, you know, we have zero interest rates?
- [26:08]
Matthew Siegel
Well, if we have ZIRP and Bitcoin's at a million dollars, not financial advice, then, you know, the balance of stablecoins will also be quite a bit higher. So I still think bitcoin, like, moves the entire space, creates wealth in the space and then that some of that wealth gets parked in dollars. Like, we'll see if that. I guess it's decoupled a little bit, but I still think that's the. The base case.
- [26:33]
Host
Makes sense. Matthew, any final thoughts before I let you go in one minute?
- [26:38]
Matthew Siegel
I wish I had a clever name like, like you guys, but I will think of one for next time.
- [26:42]
Host
And you had your chance on the comeback. I know, I know.
- [26:45]
Matthew Siegel
Good to spend time with you while.
- [26:47]
Host
While you guys were. I'll let that go. Thank you, guys. Give Matt a follow. One of the best in the space. Appreciate you, Matthew. Thank you.
- [26:53]
Andrew
You changed it to Tillman Enthusiast.
- [26:56]
Host
I figured out how to change them without. I figured out how to change it without leaving. You go over to people and then you click on the three dots and this is. See, guys, I have really bad adhd. I'm sure you've all noticed that. Who are here. I can do seven things at once. Yeah, you're gonna literally do my taxes while hosting a show. But today I was doing a deep dive into how to change my name while you guys were talking about.
- [27:18]
Andrew
Gracious. That's outstanding.
- [27:20]
Host
Well, I need it to be an Aero Maxi at least for 30 seconds so that somebody could clip that.
- [27:25]
Andrew
Yeah, Tillman Enthusiast is. That's. That's really? That's really well done.
- [27:31]
Host
Today. You know, last week Tillman fell off a dock or something.
- [27:35]
Andrew
Yeah, he did.
- [27:37]
Tillman
I. I couldn't show you my bruises. They were pretty bad though.
- [27:42]
Host
You find creative ways to take take L's.
- [27:46]
Tillman
Yeah, yeah, it's. It's called getting old. That's a half the man I used to be. There was a very small little gap. I had to jump and I thought for sure I was gonna stick the landing and.
- [27:58]
Host
Oh, you did.
- [27:58]
Tillman
I missed the whole dock and went straigh water and like landed on rebar. Like not rebar but like red, red iron that holds the boat so.
- [28:08]
Host
Oh, that could have gone so much worse.
- [28:11]
Tillman
That's what me and my kids and my wife have been talking about. Don't do as dad says, not as he does, you know.
- [28:17]
Host
Yeah. Or just do it better than dad because. Correct.
- [28:20]
Tillman
That's exactly right.
- [28:21]
Host
Because your legs work because you didn't play football for all those years. Okay, well back to the, the talk about markets and everything else that's, that's going on. I would like to ask you actually the same kind of question. Just continuing that stablecoin conversation because they're amazing when they want to buy Treasuries and treasuries are at 4 or 5%. But you know, one wouldn't be that.
- [28:43]
Andrew
Once the thing that that crypto is going to have to figure out and they're going to have to deal with and they're going to have to adjust to is that once you, you know, once you effectively co op the tradfi world, you're pricing, your pricing power essentially goes to almost zero. Like you, you don't have the ability to generate outsized fees in, in that space because, because fees are, it's just, it's been ground down to almost nothing in the space. So you know, crypto's going to have to figure that out. Stable coins are going to have to figure that out. What, what does their business model look like? And you know, in the end it's like no other industry you'll have, you know, three, maybe four that completely dominate the space. So they have a smidge of pricing power and that's what everybody uses. But we're a long ways from that. There, there, there's there's a, you know, a gold rush associated with what's happening in the cross pollination of the two worlds that we could spend three hours on the next podcast talking about. Whether it's exchanges, whether it's banking licenses, stable coins, PayPal, whatever it happens to be there's an, we could never stop talking about it. The, the. What's going to happen over the next two years as these sort of industries collide?
- [30:01]
Tillman
Well, and there's always another lever to pull. There's a new train that leaves the station every day and it's. And you can get on the opposite side of every trade, right? There's two sides to every trade. And you know, if there's cheap money, which I think probably we can all agree that there is going to be a lot of cheap money that we see in the next two years. Interest rates are going to fall. Printing presses are going to be, you know, active. That's going to allow for that money to find smart homes.
- [30:38]
Host
Right?
- [30:39]
Tillman
That, that's just a consolidation equation. And it takes time for that money to consolidate, consolidate to its rightful owners based upon free markets and based upon goods and services being traded. All of the means and mechanisms by which cash and liquidity gets injected into the market and saturated down to its fullest extent. And we're, we're about to see that. That, I think, means the number is going to go up for a long period of time. The sustainability of that has always been in question. It always will be in question. It always is a dance of, you know, growth and sustainability because those are competing interests. You cannot go up forever. And so what is a controlled upward move look like and what do those drawdowns look like? The stablecoin, I believe, has so much growth potential attached to it and us leading the world. I think it strengthens the dollar regardless of whether it's.
- [31:43]
Host
Nobody wants a peso back stable coin.
- [31:45]
Tillman
That's what I'm saying. And I think that if, if the financial ecosystem that is the United States rallies behind the stablecoin technology, we're going to see a resurgence in desire to bank in America, I believe, and to do deals in America. And, and, and what I think is the most hopeful thing, based upon what we've seen in the crypto space to drive economic growth, is the amount of capital dollars that are looking to find a home in this space. I mean, you could have told me a year ago that the inflows would have been in the ETFs, what they were. And I would have said, no way, it's too much. You would have, you could have told me a year ago that the inflows and the amount of debt capital that's been raised in the treasury side of things would have been what it is. And I would have said, not a chance. Way too high of a number Every single number that you can attribute as a KPI to the growth of this industry is going up at a rate that is unpredictable, that not even the brightest minds in our and in Tradfi and our space can go. You know what this is? This is, this is the growth curve that we can expect over the next two years. And so when you have the President of the United States and their entire family pivoting, like you said, from real estate into crypto and building a financial firm that is rooted and built on crypto, you know, you kinda gotta wonder if we're at the beginning phases or at the end phases of this bull run. And I think we're probably at the beginning phases based upon that indication. And, and I think, you know, I would expect a lot more mergers and acquisitions, I would expect a lot more growth capital being injected by VC firms. The 90% of the TradFi market still doesn't even understand what anything is behind Bitcoin and they really don't even understand what bitcoin is. So we got a long way to go is the point.
- [33:45]
Host
Yeah, there's a really interesting article. Before we dive into arch public stuff. Wall street is rewriting the rules of bitcoin trading. I said something effectively like that recently and it didn't go great for me because I use the word co opted which is why Andrew, I said don't ever say co opted on my show. It's triggering but really, really interesting. You look at these charts, I mean the bulk now of trading is happening. There's a chart here somewhere during US hours. Like yeah, never been as dominated before. A lot of this is because of the options action on ibit which is really unprecedented. Here you go. It's highly unusual for an ETF to develop an option market of this magnitude ever, let alone eight months after launch. So it seems that Wall street or at least Wall street hours and firms don't have a grip on bitcoin per se. They said a seizing control of bitcoin center gravity, but definitely have a grip now on bitcoin trading. And I think Gemini kind of proved that this week. I mean not Galaxy. Sorry.
- [34:51]
Andrew
Yeah, there, there, there's going to be. This is one of the reasons why we're, we're going to end up at you know, 24, 7 type trading because they're going to want more and more and more of this. Right. So it, you know, this is an entirely new business line for them, let's call it. And as, as movement goes away from crypto exchanges and into places like this more and more tradfi institutions are going to want to get their hands on. There's a reason why JP Morgan came out last week and said, yeah, you know, we're, we're actually giving some real thought to lending on crypto. They didn't even say lending on bitcoin, they just said lending in crypto. Right? It. It. Because, because we're in this bubble of crypto and so we see all these, we see all these things get announced one after another after another, another one. It's, it's like Scott Milk or adhd. We're just trying to keep up, right? And, but, but, but when, when you hear JP Morgan talk about crypto lending and then a week later is going to allow people to pay with 100 different cryptocurrencies. There's, there's a little Venn diagram going on there, right? Like, they see that there's opportunity of scale associated with not just Bitcoin and let's call it Ethereum, that there's, there's lots of money across this asset class that they just haven't tapped into yet and they're going to figure out ways how to tap into it.
- [36:22]
Matthew Siegel
It.
- [36:23]
Andrew
No, there's, there isn't a, a tradfi institution that isn't looking at the volume on IBIT options and saying, holy smokes, okay, we didn't see this coming. What are we going to do about it? Right, what are we going to do about it? And it's not going to slow down, right? It's just simply not going to slow down. So I, I've said for six months now, the stuff that we're going to be talking about on this show in two years is going to be radically different than the stuff we talked about in the previous two years. Like, radically different. And it's going to have to do with one traditional finance and what they've created, what kind of monsters have they created around this asset class? And then who are the new creators that have become significant players in this space that have either gobbled up Trad5 companies or have been gobbled up by tradfi companies? It's just a, it's fascinating, honestly. It really is fascinating.
- [37:24]
Host
I changed my name again.
- [37:32]
Andrew
Making salient points that are very important and you're just playing games.
- [37:36]
Host
I did it right at the end. I did it right at the end. Hey, do you remember Hot Shots part two?
- [37:40]
Andrew
Yeah.
- [37:43]
Host
That'S, yeah, whatever.
- [37:44]
Andrew
I don't think the Hot Shots part one. Right. Thus how it was funny.
- [37:48]
Host
Yeah, maybe. Who knows? Got to Talk about this as we get into the Arch Public stuff. We softly totally preempted the announcement last week, but it's official red light. Holland teams up with Arch Public for Bitcoin strategy. So just wanted to ping that, that that's happening. Treasury company that I have been advising to buy Bitcoin now officially using Arch Public to do so. We're going to see that trend, I think happening massively. How do we get more of these guys to use you? I think I saw today that Galaxy announced that they had like 40 of these that they're executing for.
- [38:21]
Tillman
Yeah, yeah. I think that this is the mega trend that we're just starting to see the beginning of. I, I think again the interesting piece to me is, is that there's going to be highly leveraged versions of this and then unleveraged versions of this and the unleveraged version versions of this are where we're focused because it's real cash. It's not debt money. It's real cash that's attached to noi, not net operating income that is constantly being poured into Bitcoin purchases and, or some other treasury purchases or, or balance sheet purchases. So that to me is a big distinction. We're excited about that distinction because there's a lot of companies that are making money that are going, we want to use Bitcoin specifically as a savings bank, as a savings account. And that has so much upside potential with relatively small downside percent potential if done correctly is at a proper percentage against your, your net profits. It can be exceptionally powerful for any business. And I think that's going to be a wave that we continue to see. And we're working with several companies right now that are going to be deploying this. The, the announcements will be very similar to this, but I think that the, the wave has just begun and when you start to look at a company side by side with another competing company, the one that has crypto on their balance sheet in some form of treasury and or balance sheet holdings, I think wins the day. I think they're the more competitive, more attractive firm to invest in. So I think that's the main thing that I'm seeing is this advantage that it gives you in, in raising money, both debt capital, but also, you know, securities backed capital and, or NOI backed capital.
- [40:14]
Host
So I saw a whole bunch of tweets on Arch Public and around Arch Public about a very specific coin and topic which is sui. Yep, I know you guys have the SUI strategy. That's how we called pigs where I'M from.
- [40:29]
Andrew
Yeah.
- [40:32]
Host
But here, imagine harvesting SUI volatility for more SUI and more bitcoin, right? And you have the harvesting right here and it shows this amazing chart. I saw Todd, who we like to like, mock because he can't defend himself, who works with you, say that he had like accumulated 10% more Sui in one week. That doesn't mean he had his portfolio go up. He literally has 10% more of the coin than he did before. Correct. How you can use the algorithm. Please tell me to not to use SUI to end up with more SUI and more bitcoin. And SUI goes up.
- [41:08]
Tillman
Yeah. So volatility is happening in every market, right. It's. It's like the rising tide. The tide comes in and it goes out, period, the end. And so if you sit there and you fill up your cup of water when the tide comes in, then you're able to do that with zero effort. And then when the tide goes out, you're left with water and there's no water around you and it looks like magic. Well, guess what? Every one of these coins has exceptional volatility, sui having even more than bitcoin. And so as that volatility is bouncing around, if you aren't managing a buy buy sell strategy against that volatility, you're leaving a lot of that movement potential on the table. And so our, our strategy allows you to input essentially a take profit mechanism that monitors where your, your entry price is or, or where your cost basis is. And when you are in profit and a move to X degree happens that you're able to sell off a certain percentage of that profitability and take some money off the table. And that is what ends up not only producing cash off of those trades, because every trade that is taken because it's in profit is a profitable trade. But then if it doesn't take the trade, then you're ending up with more sui because you're buying on those dips and you're doing it in a way that you're going to be accumulating on a very healthy cost curve.
- [42:40]
Host
But are you setting it basically so you have these SUI instances and it trades the volatility on sui, but you also set an instance where it takes some of the profit and mixes the buys for SUI and bitcoin, hence how you're getting more bitcoin in sui.
- [42:54]
Tillman
That's right. So you can either roll the profits into buying more sui or you can roll the profits into buying more bitcoin. I think Todd is, you know, I think he was putting up an example of him rolling it in into getting more sui.
- [43:06]
Host
Yeah, he loves sui. Somebody said there was a great comment here.
- [43:10]
Tillman
Well, listen, the people have spoken. The reason why we added SUI was because it was by popular demand. People were literally commenting left and right saying, please add sui. Please add sui. And we, we, number one, have launched with Kraken. So if you are a Canadian customer, you will see a marketing campaign geared towards getting you on and using our free program and using our free platform to. To set up instances.
- [43:38]
Host
We hired Terence and Philip to do the campaign for Canadians. It's going to be amazing. Yeah, so tell me, buddy Guy. Hey, guy.
- [43:46]
Tillman
We're live with that right now. So if you, if you are cracking customer and want to use our software, please reach out and we'll get you set up. But then we will be launching in the States here August 1st. So exciting times over at Arch Public. We got a lot of stuff going on.
- [44:03]
Host
Todd loves SUI like Sloth loves junk love. Chunk. We all know, obviously we all like know the Goonies here. It's a great comment, incidentally. Probably the best south park was the one with the Canadian royal wedding. Did you guys ever see that one?
- [44:17]
Tillman
I'm not a South Park. I miss that.
- [44:21]
Host
We're not gonna talk about that. All right. Anyways, but okay, so you can harvest the suey volatility, obviously to increase your stack there. And the proof is in the pudding. I mean it literally. People are doing this every single day and talking about it. You should really get Terence and Philip to do your ads for Kraken like the cartoons from South Park. You might not know what that is, Tillman, but trust me, it's the funniest Canadian joke there is of all time. So how can people sign up here? We got archpublic.com.
- [44:48]
Tillman
Yeah, go to archpublic.com, click on our get free, get started free and you can download our software and start trading.
- [44:55]
Andrew
Trading.
- [44:57]
Host
Andrew, any thoughts here?
- [44:59]
Andrew
Exactly what Tillman said. Go to the website and listen. We, this tech that we've built, we want to make it free to everybody and we want everybody to experience it. We want people to experience, you know, buying when. When something goes down in the middle of the night and then when it top ticks, they're selling. When emotionally they wouldn't be able to do either. When people have that experience, it, it dramatically changes the way that they. The way that they evaluate trading and our tools. So yeah, we make it free to everybody and love to love to have you as a customer.
- [45:41]
Host
I was about to bring up Terrence and Philip. I had the YouTube up there, and then I realized I already have one warning. And if I get one more warning.
- [45:48]
Tillman
You'Re gonna get strike for.
- [45:50]
Host
Which is ironic because it would be a YouTube clip that I'm playing to get my. My band. YouTube bans you for taking something that's publicly available on YouTube.
- [45:59]
Andrew
Yeah.
- [45:59]
Host
Don't call me buddy Guy. Not your friend, buddy. Yeah. Absolutely. The best. Oh, my God. Canadians are so funny. I'm gonna leave it with that. I love you guys up in Canada. You'll be happy with Kraken. Matt Siegel was amazing. Andrew Tillman. Thank you very much. Tillman. No more boating.
- [46:16]
Tillman
No more voting for me.
- [46:19]
Host
You're not gonna do it. We need you. You know, too many missed. Too many missed Tuesdays because you're trying to relive your youth. Glory of your youth.
- [46:27]
Tillman
Exactly. That's exactly right.
- [46:28]
Host
Yeah, dude. All right, guys, thank you. We'll see you next Tuesday. Everybody else, obviously, we'll be back tomorrow. See you then. Thanks, guys.