← The Wolf Of All Streets
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- [00:03]
Dave
Well, good morning, everyone. Can people hear me? Things working? You're clear here. Okay, cool. Well, so we finally got an end to the long running saga of. It started as Trump was leaving office and Jay Clayton and one of his last moves started the case against xr, against XRP and Ripple Labs. And today we had the appeal withdrawn and the markets are higher. There's lots to talk about. We have the FOMC today. I think that probably the most important one people want to talk about is the Ripple one. Although to be honest, I mean, it's one of the most predictable ends to the story one could have imagined. You know, Eleanor Terrett, of course, talked about it a few days ago, et cetera. Anybody want to start with this and talk about what it, what does it mean or jump right to, you know, the FOMC and what does that mean? Because we got a lot going on. I mean, markets are definitely good today, but that could change, obviously any second. So I guess we shall see. Dave, would you say that for a long time the outcome on the Ripple case has been predictable since the start of it? This was always the case or did it actually look in the past? That would be my interpretation, that it looked like, oh, the forces of government are coming against Ripple for minting something out of thin air and calling it a security or calling it a commodity or whatever. It didn't always look so positive an outcome for them. No, no, no. I'd say from November 5th, when we knew that Gensler was going to be forced to walk the plank, it was pretty obvious. And considering the opinions expressed by both Commissioner Peirce and ueda, the acting chair, that seemed pretty, pretty clear. The only question really was were they going to wait for Paul Atkins to get into the SEC to see it, to see it all go away or do it sooner? That that was really the only question in my mind. But there's also a question of method. Right. And how all these things go. And they're actually doing more in this interim period with a 2, 2 non majority than I expected. I don't know, do we have any of our friendly lawyers up here? John Deaton can't join us till 11. And so, you know, hopefully he'll be able to join then. And, you know, he's been obviously in the, in the epicenter of all of this. Anybody else have opinions on that particular topic? Well, I'm, I'm happy to hop in if you would like, as I unfortunately talk to a lot of policy people on both sides here. I, I mean, I would agree with You I want to start by agreeing with the point that the SEC has actually done quite a bit. If you look at what they've been doing, they've methodically marched across almost all of the cases now where the allegations were what I'm going to call paperwork or registration violations. Right. If you look at what had happened with like a Coinbase, a Kraken, somebody like that, they were basically alleging you failed to register, you offered securities. But in none of those cases were they alleging like 4 fraud. Right. Interestingly about the Coinbase litigation, for instance, is nowhere did they really allege consumer harm, which was always an interesting facet of that one. And so a lot of those were dropped already. What makes the Ripple case a little bit more complicated and why we're not 100% out of sort of the waters here on this one is you have a ruling from a judge. And I will remind everybody, the judge does not answer to the sec. The judge does not answer to Ripple like judge's answer to the law, or at least they should. And in this case, I think the judge in the Ripple case has been relatively faithful to the law. And so dropping the appeal still leaves intact some of the underlying issues. And you're going to need to find a way to unwind that whole situation. So it's predictable to me both that Ripple is moving slower than some of the other cases because it had progressed further, and that they're going to try to find a way to call it, put the peel back on part of this onion. But I don't know if you can completely close the door in this case. All of this ultimately points back to the need for actual rules and clarity, be it like promulgated by the regulator or ideally coming from Congress at some point, because this is how we got here, is these horribly tortured interpretations by the SEC in the first place. But this is a step to unwinding what's going on with Ripple. It's not the whole story, is what I would caution people. Yeah, but from. Well, yes and yes and no. I mean, it is definitely not the whole story because of there was a settlement and we don't know, you know, what will actually happen with that. But do you think that there's even a slight chance that the Torres, you know, her opinion and what she said in terms of the notion that XRP traded on exchanges is the security that any of that stuff is going to actually go forward or anything's going to happen until we get a market structure bill and the sec, you know, and CFTC start figuring out, you know, who's going to regulate what? Well, I mean, so looking at this from a policy perspective, one way or another, we're on a collision course with needing to get up to the Supreme Court on this stuff if Congress doesn't act. And the reason for that is that you have multiple individually very intelligent federal judges operating on different theories of how or why tokens and, or arrangements behind tokens might be securities offerings. Right. Because if you're looking across what we were seeing in various cases, you know, everything from like the Terraform Labs case to Ripple to what was going on with Binance and Coinbase, the one thing that's true is you've got a lot of relatively informed people in the federal judiciary. Like we did not get a crop of judges where they're like 85 years old and still struggle with email for all of these cases and they can't agree. So Dave, one way or another, I think this is going up through the appeals courts whether we like it or not, or it's going to need to be acted on by Congress, otherwise you're going to have the really bizarro situation of like under federal law, which in theory is identical everywhere, we have different interpretations of how you can do business in say New York and California and like circuit splits of that sort are just catnip for the Supreme Court. So that's essentially where you end up if Congress does it act. Yeah, I, I, maybe, maybe I'm overly optimistic, but it feels to me like this Sec one especially once Paul's confirmed and that CFTC wants Brian Kintens is confirmed and throw in the occ when Gould is confirmed, you will have a regulatory triad that is highly unlikely to attack the industry and far more likely to try to work with it. But I agree with you, in the next four years, or actually next 18 months, really the pressure to get clarity makes sense. And I think that there's, you know, based on what we've seen in the stablecoin bill and we'll see how it goes when it goes to the full Senate, but I suspect you're going to see something similar. You know, I think that it feels like we're getting in the right direction, but what's important here, and I don't see any hands, as soon as I do, I'm going to shut up. But what's important here for people to understand, speaking to someone who co founded a company that had to grow and we did, we did grow, but understanding the things that we were not allowed to do because we couldn't afford 10, 20 million dollars in legal fees. That thread is mostly gone. Unless you're going to do things that are going to cause consumer harm, in which case the wrath of God will come down on you. Because this particular SEC is going to want to make an example of fraudsters and focus on that rather than, as Austin called it, paper pushing. Darren, I think you were first then Lou. Yeah, thanks, Dave. And I really just kind of have an open question which is really along the lines of, okay, the SEC is dropping this XRP case, but, you know, which I view it as a positive, but what are the chances that they just bring a new case? Right. And we're back to the courts again, you know, in just another form or function of this case. So for me, it's kind of hard to interpret when cases are dropped because I get a lot of news headlines about when cases are dropped and not so much about like new cases or. It kind of seems like by dropping these cases, we're not setting like a law or a precedent to protect these cryptocurrencies, but more along the lines of, okay, they're just going to try, they're just going to come at it from a different angle. I don't know if there's anyone on the panel that kind of has some context around when cases are dropped, but you know, overall I see it as positive, but I just don't know how to interpret it like the long term game hole here. Like I'm not trying to make, you know, a quick buck just on, you know, trading this cryptocurrencies. You know, I see this, you know, potentially as like a long term asset allocation. And having these cases drop, does that just mean they're going to come back stronger with better arguments next time and you're still going to need 10 to 20 million in legal fees just to be able to play ball in this space. What's kind of the thinking there? Well, I'll give my answer and then we'll see. And then I think Lou had his hand up, at least for this administration. You will not see the hostility that was there. The part that point that Austin made, which I've made repeatedly in fact, where John Reed Stark and I completely agree, is that this administration, the previous administration under Biden with Gensler, was probably the first SEC that actively went after and focused their resources in cases without alleged harm and without alleged fraud. You know, the last case that was like that was a Credit Suisse case back two decades ago where the allegate which resulted in at the time was a Record breaking settlement. It's kind of cute to think about it was like 60 some odd million in a settlement and that was record breaking. And in that particular case they didn't allege harm to the people who used it, but they did allege that there were people out in the ether who were harmed because they distorted markets. But even, even in that case there was some allegation. The fact is the SEC never used to do that. The Gensler SEC made it their actual policy. I don't think that comes back anytime soon. But that said, we need legislation and there needs, it needs to be clarity and it seems to me that it's moving in that direction anyway. Lou, you had your hand up? Yes. No, maybe. Yeah, yeah, sure. No, it was just actually following up question what you guys were just talking about in terms of, you know, both you and Austin mentioned the bills moving through Congress and the clarity that's needed. But you know, when was the last time that Congress actually passed any kind of meaningful financial legislation? Do we really think that now we've got a more functional Congress that is actually able to do something? I mean, look, we'll see, right? You know, the stablecoin bill, the so called Genius act is one that we know that the banking industry, which does pay a lot of, excuse me, does donate to or support the political campaigns of a lot of congresspeople is not happy about. But it seems pretty likely they're going to lose and that the Genius act will pass in one form or another. And then the next question will be taking up market structure. Now market structure will get much more contentious because there's many more disagreements inside of crypto and that'll be for a different panel probably in a different week anyway. Austin, what do you think? So I'm going to say one, I'm very optimistic on stablecoins passing overall. I think Gillibrand signing on and some of the work that's been done on the Democratic side to shall we say, undo some of the misconceptions created by Elizabeth Warren has been pretty effective there. You know, my gut is if they voted on genius as is right now, it would clear the 60 vote threshold in the Senate. So that that makes me pretty optimistic. The other thing I would say there is, I'm not so sure that you can say the banks writ large are opposed to the stablecoin bill. There are 100% banks that are opposed to the stablecoin bill. But an interesting trend that probably was not true two to four years ago is there are at least a subset of Banks, some surprisingly large ones looking at this and saying actually you know what, we're in favor of this bill. Right. We realize this is coming. We would rather get in now and compete than have this thing continue to be offshored or be boxed out of it. So I don't think the banking industry is monolithic on this. And I think that's part of why I'm very optimistic on it passing, right. Because like if you have big bank CEO one saying these things are evil and will destroy the financial system because they're trying to preserve their monopoly on deposits, but then Bank CEO 2 comes in and goes that's bullshit. Here's what we want to do with those things. That sweeps the legs on the bank opposition more effectively than anything crypto can say. So I do think this thing is going to move and you know, honestly, probably by the end of summer. Yeah, I mean I think that the former brokers that are banks are going to are supportive whereas the money center banks who make the most on float and think and the inefficiency are against it. The aba, the American Bankers association, based on their dissent that they wrote that you, you know, I've given you a lot of props already. Your takedown of their, of their criticism was brilliant. Anyone who didn't read it, you can check it. You know, Austin posted a long form, you know, takedown of that. You know, look, it's, it's basically like the, the every other technology that's ever happened, the incumbents don't like it. But when it comes to market structure there, interestingly enough, the traditional financial firms want a bill because they want to be able to compete. And that's the thing that people don't understand. So I used to be, I still am on the board of Security Traders association of New York. And I know that the brokers out there who have been stopped from competing in the world of crypto assets want to be able to compete. I'm pretty confident that ex organizations like SIFMA will feel the same way. So when that starts going the momentum, there'll be a lot more momentum than people realize from the, on the political side because once you get the Warren, we hate crypto. We want to stop everything out of the way. The stuff can move forward. So I mean, I guess we'll see. But you know, that's probably going to move into the fall by the time because it won't happen until after stable coins are done. Okay, anybody else want to talk about any of these things or we want to talk FOMC and Whether Powell's, his right eyebrow will move up while he's doing his press conference and whether the market will knee jerk in the wrong direction and get it wrong when we get to the press conference later. I would just say on both these issues, there's so much unpredictability and chaos in anything that you look at short term. Nobody knows which eyebrow he'll raise and, and he could raise both of them for all we know. And we don't know exactly how the regulations will be adopted and how the lawsuits will go. And so we're living in a time of greater optimism potentially, but also tremendous lack of clarity and consistency. And we just haven't had, I think, throughout the Trump presidency so far, much consistency in, in anything that we've seen. I live in Canada, and so we've got now a very crazy relationship with the United States. It keeps changing. Every morning we wake up to some new phenomenon here. And it's just, it's very hard to focus on anything that you would do short term. And you have, my view is you have to form long term perspectives on what, what you can rely on and what you can't rely on because there's just too many contingent things that need to go all right for, for those things to happen. You know, there are some long term solutions that could make things a lot more stable for Canada. Yeah, it's very hard to move. You know, like, you can see an end state. I presume you're alluding to becoming a 51st state and. No, no, I mean, I mean, you know, we could also 51st state, but you'd also get the access to the United States market if you were a territory or an unincorporated, you know, unincorporated territory. So there are a lot of different things that you can do to get that kind of access. Sure. But speaking realistically, it's not, you know, you're, when you use the word you, it's a collective you. It's not my choice. It's not my choice. And it's a very, you know, it. There's not consensus on anything locally to begin with in the first place. We don't even need consensus to do it. We could do this unilaterally. We could impose it on you. It'd be, it'd be totally fantastic. It'd be super great, just wonderful, just super big league. Yeah, I know you're being sarcastic and just for the sake of everybody listening, there's, there's sarcasm. This is harder than it, this is pretty hard. And, and it's pretty shocking and it's an idea that just on its own will take a really long time to get digest, to get to the point where there isn't an allergic reaction to it from a large percentage of the population here. So it's a messy situation. And, and then I look at things and I say, well, globally, in America as well, everything seems messy, everything seems unclear, everything seems unpredictable. People are trying to make predictions about what will happen, but it's hard to put odds of greater than 50% or less than 50% on something. Right. Everything feels like a coin toss and it's really hard to make reliable, consistent short term projections when what you're doing is based off of the next four coin flips, let alone the next five coin flips. Well, Lyn Alden has actually made the point I thought really well, which is we'll see economic data that's now going to get be over the next month. It will be distorted by people who are rushing to get things done before they're worried about tariffs being put on. And when you get that kind of distorted economic outlook, it changes a lot of people's way of looking at the world. And so that factor is going on. David, you had your hand up first and looks like you got it up again. Yeah. I was just going to take this moment here that proposed that we form a 51st state which would be all the unincorporated territories of the United States, Puerto Rico, Washington D.C. and Canada. Just to add it into the mix. But on a more serious, on a more serious note, the point that was raised with regards to policy uncertainty and just the turbulent environment, arguably, you know, to feed it back into the FOMC meeting is probably going to leave us in a situation right now where things are going to be on hold coming out of today. That's kind of the consensus view anyway. But the other thing I think that might serve from an economic standpoint to prompt Congress to get off the dime here as far as passing laws are concerned is that, you know, what's going on with the current administration is starting to underscore doubt about why do we have the US Dollar as the world's reserve currency if we've got people who are not playing a bigger game here but are looking short term at one off tariff wins or losses. That's a much bigger picture and a much bigger thing, I think BC I think you had your hand up next. Yeah, cheers Dave. I pulled some really good points from Austin. Right. I kind of lean this towards the uncertainty factor and, and I think he made some really good points. You're looking at pricing in, you know, policy, nobody knows tariffs, nobody knows, you know, is it a negotiation tactic? Are they coming in? What are they going to be? So as you look at FOMC today, it's a really interesting one for, for Powell, right. I mean obviously the whole market is kind of hanging off his every word or like some of my co host said earlier, you know, an eyebrow raise. Right. So I actually my kind of specialty is intraday trading. Right. So it's been a real kind of roller coaster at the moment. It really has been this kind of sit on your hands and patience kind of plays out. But one thing that I think most of the traders here, and that's my kind of background will know is that the markets hate too much uncertainty. Right. And I don't think we get any of that cleared up today in the FOMC because it's just not going to kind of wash through with this. I think we're seeing some kind of early market kind of risk reactions today heading into fomc but I think it's a turbulent market until we get some more certainty put into this and that's going to be settling on the tariffs, knowing about the policy. Obviously it's no secret that the US had a lot of debt that they're going to have to refinance and they're going to want the bond markets lower for that. The dollar's on its way down as well. All of those typical risk on risk off indicators that we look at are all over the place at the moment which reflects the market. I don't know if anybody else is really thinking this. I imagine that there's some kind of legitimacy to it. But you know FOMC today we can see some volatility injected for sure but I don't think we get any kind of stability until we know about the policy and the tariffs. Andre? Yes. Hi, good afternoon. So my big picture on the Fed is similar to yours BC I think the Fed is pretty much stuck between a rock and a hard place, right. They face this kind of dilemma to either front run cuts in an anticipation of a recession, right. Or continue with higher for longer because of the spike in consumer inflation expectations. Right. But I think as, as you rightly pointed out Dave, I mean the market expects no change in March, right. If you look at Fed funds features or poly market kalshi, you name it, right. It, it meet no change, right. Higher for longer. So I, I also don't think we'll see a big tailwind from the Fed right in the near Term, right. It's more likely that they will be reactive, right? Reactive to a decline in realized inflation over the coming months. Like if you look at true inflation, right? What this indicator is saying and like this, the slowdown in, in the labor market, right. If you look at the University of Michigan changing employment and job cuts announcement, etc, right? But I think in this context, I think you have to take out your popcorn rate in early April when we have the next non farm payroll release, the next flurry of labor market data. And I think that's when you could see a window where the Fed reacts to this weakness in the labor market. They won't be able to hold off any longer. What does it mean for bitcoin and crypto assets? I think we, we talked about uncertainty, right? And if you look at all kinds of indicators, I think from a pure contrarian point of view, I think we are close to peak uncertainty or at least some kind of peak awareness with respect to recession, right. If you look at the economic policy uncertainty index, already close to this peak we saw during COVID right. Google searched, I just saw Google search trends for recession. It spiked up. It's already, yeah, at covet highs, right? Poly market odds not fully reflected in these poly market odds for a recession, it's only 41%. But that's like increasing awareness. And in my view this means, okay, it's already reflect, it's already anticipated, it's already like priced in quote unquote. Right? But yeah, we talked about macro uncertainty, but in contrast I think, and we just talked about this, right? You're seeing this decline in US regulatory uncertainty, right? So you see this peak macro uncertainty, but at the same time regulatory uncertainty, crypto uncertainty declining, right? So I think bitcoin and crypto assets, they're not between a rock and a hard place. More like rock macro and a very soft place, right. With huge potential tailwinds. So I think as this macro uncertainty declines, right. Recession becomes fully reflected, will start to rally significantly. Meanwhile, I also think like at least until April, there will be more volatility, more chop solidation. Right? Choppy sideways market. Darren? Yeah, I think I would just add we're talking a lot about the US policy towards cryptocurrency and the global reserve currency. But I think we should also talk about the globalist agenda, right? And I think the left within the US has been particularly aligned with the globalist agenda for cryptocurrencies. Specifically when you talk about global reserve currencies and the special drawing rights or SDRs of the IMF or International Monetary Fund. The SDRs have been kind of a proxy global reserve currency from a basket of currencies from the participating member states. Most notably the inclusion of Chinese yuan into that SDR basket, which was a big deal. But when the US Urgently needed additional reserves in order to lessen the strain on the dollar, countries like France asserted that it could not be a new currency designed to replace gold, but merely represented the possible extending of credit facilities. And so I think that's the important thing here to consider is a globalist agenda behind a global reserve currency, the ability for that currency to extend, you know, confidence in credit facilities. And you know, if there's a strain on the dollar and they're looking for a new currency to replace gold, I mean, this isn't just going to happen overnight and, and it's going to be, you know, cast in, in, in, in votes based on the IMF board of directors. So just another, you know, kind of wrench here is like, hey, we're talking a lot about U. S Policy, but there's a globalist policy behind all of this as well. In terms of the reserve debate, well, I'm thinking most of the, you know, you can, whatever deity you want to thank that globalists, with the exception of the UK who just rejected the incumbents, have been getting thrashed at the box, at the box office, I mean, at the, at the ballot box. God knows the US is basically telling the globalist agenda to go F themselves and it feels like the voters in Germany and other places are saying the same thing. So hopefully that will help, that will happen. We see what's being proposed with the CBDC in Europe, this notion that the savings of Europeans should be able to just randomly be confiscated to fund a war effort. I mean there's a lot of stuff going on, on here, but I do think that bitcoin is the opt out. I mean, you know, and you know, we talk about that all the time, but what really matters is liquidity and you know, in the short run, right? You know, that's what matters. Because if bitcoin were trading like why the long term buyers are buying it and we have this bifurcation in the market. Make no mistake about it, the price action is set on momentum and set by the traders, people like B.C. and the long term investors are accumulating. They've just been able to accumulate it at lower prices, but they're still accumulating. All the data shows that. So you know, the people who are accumulating it are like me. I mean, I'M not going to sell any Bitcoin unless I need cash. And that seems unlikely right now for a while. Right. You know, unless the price goes dramatically higher because I think it's at a 90 plus percent discount and a lot of people agree with that. So you know the price. But people like, like me who don't trade very much don't set the price. The price is set on the margin anyway. Tomer. Yeah, I agree with a lot of what you said. The one thing that I'd raise a caution about is what will happen in ballot boxes in Western Europe and Canada to bring us up again. The swing against globalism. And the trend may not be reflected in the polls as much as in the actual ballot box as much as, as one would think. Like I think a voice is raising. There's a lot of things being called out, but there's still a huge percentage of the population and more so outside of the United States than within it. That is, that is very liberal minded and may not have, you know, is very split in what it feels, but may not have tipped over to what would be reflected in the ballot box and is very volatile. Like we're facing an election here soon and the polls have been wild even to the point of like Trudeau was at 12% popularity when he resigned and so it looked like his party might not even get enough seats elected to remain an official party. And now they're ahead in the polls as of the most recent poll, which again, it's hard to find anybody who said that they were going to vote conservative and is now voting liberal. So it's hard to trust the polls. But I'm just saying the liberal world, the liberal west has made a lot of consistent calls to increase liberalism and, and, and they're less radical and in swinging back out of it. So it may be, and maybe a couple of election cycles or who knows exactly what's going to happen. But again, hard, like everything's in this hard to predict situation. But I completely concur. If you don't want to gamble on an unpredictable ballot box, then don't gamble and buy Bitcoin, which is completely predictable and vastly underpriced. Yep. So. Whoops. So as we, as we approach this meeting, one of the things we were talking about, you know, David, you know, two wheels who just joined, you know, we were chatting on X this morning about the impact of momentum trading and what does that mean and how will that impact it? You know, you were making a point. Why don't you make it before or you know, I, or anybody else comments on it. Sure. I just for purposes of background, I come from a very fundamental bottoms up, you know, investment history and philosophy. I was a distressed and restructuring investor and trader activist investor in a lot of situations in my previous life, in my tradfi life. And so, you know, technicals have always been, you know, important to me in terms of just having perspective. But at the same time, the only way I know how to really invest is, is through fundamentals. And, you know, I talk, you know, every day on the daily finance show with a lot of technical traders and, you know, they'll show charts and they'll talk about momentum and strength and weakness and so forth. And I think, you know, the existence of those folks, I, I think maybe rightfully so in the crypto space is even greater, and I say rightfully so because what fundamentals are in crypto and, and fundamental valuation at this point is still an evolving story, you know, in stark contrast to, you know, I'd say generally accepted metrics and valuation, you know, methods in, in the case of equities, you know, whether it be cash flow or EBITDA or market cap or earnings or whatever. And so, you know, the thing I find is you can't be oblivious to the fact that there's a lot of technical trading that goes on and they are sometimes the strongest forces in the market. But at the end of the day and. Right, and it means the end of the day, I don't know when the end is, but fundamentals eventually win out. And the question is, can you hold on for that long as a fundamental investor? And it seems to me, and I was at one of the get togethers last night after the DAS conference in New York talking to folks that come from a traditional finance world and are now incorporating AI agents to go ahead and aggregate data, very interesting data, not your typical type of data that we've been used to in the equities world of like, how many shoppers or how many cars in a parking lot of a retail store in order to go ahead and gauge how earnings are going to be more like data in terms of chats between people, sophisticated traders as it may be, and going ahead and aggregating all that in order to go ahead and predict and put trades on and, you know, if we're going more and more towards, you know, people relying on the same things in order to go ahead and move markets, markets are going to, you know, are going to move very predictably. And the ability to go ahead and outperform markets is going to become more and more difficult over time. Pressure on managers in terms of fees they charge is certainly going to happen, I think, but that's always been around but you know, more and more. So the confluence of the tech along with an asset class that doesn't yet have the firmest of footings in terms of fundamentals, you know, leads to very, very strong advocacy for the fact that the technical traders control the market. Well, I mean I spent five plus years at Two Sigma, which even when I left in 2015. Was it 15? Yeah, 2015 or 16, I can't remember, they had like five petabytes of data. And we're doing things that a lot of people are now, you know, now they're starting to, and obviously where they are today is probably substantially behind that or ahead of that. The, the real thing with, with hedge funds and momentum trading is it gets very crowded very fast. And so it, success in that requires a lot of discipline. But if you're in the market and you understand that those trades get crowded very fast, that's what causes a lot of volatility. Because when you get these crowded trades, when they come off, it creates significant tail. You know, the, the left tail can, can be, you know, the, the we would phrase it to be, would be asymptotic into the bad side. And I, I could explain this in, in more detail if anyone really cared. All you really need to know is when too many people are following momentum or factors like that and momentum stops, you get sell offs that are big. And when too many people are following momentum on the upside, you get FOMO blow off tops. Bitcoin has always been vulnerable to both and it seems a little bit less vulnerable to the downside because this correction, as many people have pointed out, has been very shallow. And my friend Mike McGlone likes to say Bitcoin is a three times beta to the Nasdaq. And when the NASDAQ falls, Bitcoin wants to fall triple the amount. Well, that's not actually what's been happening and it's for a bunch of reasons. So my point is watch momentum. But if for some reason the downside momentum in the market turns to sideways or even certain sectors going up, you know, that kind of frees the, the crypto market, certainly the bitcoin market to unlink for a while because it's done that multiple times over the last few years. So I guess we'll see. So anybody else want to talk about any of these things really a lot? Eladio, I was about to call on You, I know you care about the macro. Hey, how are you doing, Dave? Bottom line is with Bitcoin again, I come from the same background that David comes from a David, a traditional finance background in Wall street for, for close to 30 years, except for the last six years where I decided to open my own shop. The bottom line is I looked at Bitcoin as the asset to invest in. It is the gorilla. It is the Apple or the Nvidia or what. What mag7 is to what the max7 is to all cryptos. XRP to me, and I keep saying this to me is, is, is what silver is to gold. That's what XRP is to, to to Bitcoin for whatever reason, again, whether it's the lead, whether it's the, the idea that it does use less energy both when it's in transactions or it loses less energy as a whole. The only caveat is, as we well know, 40% believe of the whole float is owned by one entity, which is Ripple. And when you look at Bitcoin and you look at Michael Saylor, you get the feeling that Michael Saylor and BlackRock are trying to do the same thing that Ripple have is to corner the market. I'm a little bothered by the rigged system of Bitcoin. The minute you limit the supply of anything that's rigged, so rigged in a good way because a lack of supply implies that when demand increases, it's going to go up. But I see Bitcoin more as a biotech in that it's become a binary news announcement vehicle. And we got to take out, really, we got to take out the drop from 21 to 20 to the time that it started rallying out of the equation entirely because there are a lot of things that happen that aren't going to happen again. Gary Gensler isn't going to get, isn't going to leave the SEC again. The ripple, the lawsuit of the SEC against Ripple isn't going to come back here. I know there's still something ongoing, but let's face it, the Trump administration at least owes that to crypto people for voting for him. Because the Trump administration totally outmaneuvered the Democrats in terms of Bitcoin, in terms of monetary policy. I've said it many times, Bitcoin is the derivative of the QQQs. Patrick Karim, who does extensive technical analysis has confirmed that and pretty much Michael Kent, all Wall street people, we know how it trades. We see the correlations. It trades like a risk asset and a derivative of the QQQs the next risk asset would be semis. Semis are also a spear of risk. They're leading indicator. The correlations don't work beautifully or perfectly. They're messy. So you need to go out a little longer in timeframe to see the correlation between traditional assets and in Bitcoin. But there's no question that if the Fed comes out today at 230 with a dovish announcement, well, the tariffs are really slowing the economy down. So we might become more accommodative if those words are uttered. We're going to see a technical rally that could even bring bitcoin back to 100k or close to there. I'm a little worried about the next earnings numbers that are coming in from Wall street because I feel that the currency dislocations are a big problem still for companies. So unfortunately, I do believe that Omlee is correct. I think there's a good chance we could see that high. Worst case scenario, we might see that November 2021 high in the mid-60s as a low point. Even if we see 100k here in the short term, I don't think we're out of the woods with the correction. I think that Bessett, the Secretary of treasury, is deliberately trying to put the brakes on the economy. I mean, for goodness sake, he was on all the political shows and he couldn't stop talking about that. The main, real, the main goal is to fix our fiscal situation as much as we can after 20, really, what has been a whole 25 years of recklessness from all political parties. What I find ironic is that the most leftist president we had was actually the most fiscally conservative, Barack Obama. I can't make it up, but the fact is that when we spend, when we debase the dollar and when the Fed prints money, it reduces the value of the money because it does the opposite of what Bitcoin. Bitcoin has a limited supply. When the Fed prints money, it's doing the opposite. It debases the dollar so risk assets go up. And everything in my opinion is tied to Fed liquidity. So the words that Powell has to Honor today at 230 matter more than anything else. We know we're not going to lower rates today. We just know that they're not going to lower rates. So the rhetoric is what is going to determine if we have a technical bounce from yesterday's sell off, which I believe we have been having for the last week. Having a market that is trying to bottom in the same way that Bitcoin seems to be trying to bottom, at least in the short term. So that's the best I could do. The Trump trade war, in my opinion, is a tool to extort things from our enemies and to slow the economy down. That's their goal. They need the 10 year to go down so that we could refinance $9 trillion in the next two years and not do it at 4 and a half and 5%, but hopefully do it at 3 and a half and 3.75%. Because if we continue towards this trajectory, by 2050, half of every dollar that we spend in the budget of the United States of America will be to pay the interest on the debt that we're amassing at an alarmingly fast rate. There's a ton of there that I could respond to, but I'm going to let Lou go first because you had your hand up for a while and then Tomer Sure. I got to say I don't think there's been anybody that I disagreed more with. Audio other than that that Besson is deliberately trying to put the brakes on the economy. I don't think so that he can fix stuff. I think he just wants to break it. But you know, the bigger point for me, you know, the what's going on with terrorists? By definition, globalism is equals growth. You know, that's what Adam Smith wrote a couple hundred years ago. That's what every economist believes. So anti globalism, which is obviously spreading, is going to slow growth all over the world. And in the short run, from a liquidity perspective, obviously not good for anything, including bitcoin, which has a higher beta than everything. But in the long term, no government is solving our problems full stop. That's my belief. And the only thing you can trust is that governments are going to continue to destroy their economies. Doesn't matter whether they're Democrats or Republicans in the US or Labor Conservatives in the uk, everything's going to shit. The only thing you can believe is bitcoin. And while in the short term bitcoin might be a derivative of qqq, in the long term, obviously it's traded massively better over the last 15 years and it's going to continue to trade massively better over the long term. Yeah, I'll be super quick because I agree with everything that Lou said and I don't want to waste time repeating him. I think of Eladio's views on bitcoin. I got a lot of text messages saying please push back on what he was saying. So I won't go into too much detail, but I Think this view that it's binary or that it's limited in its growth potential or that the supply cap are downsides are a misinterpretation of its fundamental value proposition. Because if, for example, you relaxed the supply limit, you wipe out a tremendous amount of the certainty that it delivers to people, which is that it's got a limited supply and fixed in scarcity. So the world has to adapt to Bitcoin rather than Bitcoin needs to be changed to fit with presumptions of what happened before. I'm going to have to drop. But I don't mean any disrespect in that comment and I really appreciate the invitation to participate in this. Thank you. Yeah, I mean, I want to be clear about one thing, a lottie, before we respond to that, is that I want to clarify two things. First, when I talk about globalism, I am not talking about what Lou said. Global free trade, global freedom is a good thing and causes growth. Governments that want to have a global command and control economy at the global level, which is what the WEF wants to do, is what I'm talking about as a bad thing. So it's one of those words that get tossed around a lot. But central bank, digital currencies, controlling what people can eat, controlling what people can spend their money on, that's what I'm against. And that's what I think would be a horrendous thing. I'm not against a world where there's, there's free trade and human ingenuity is allowed to flourish. I also want to point out one other thing, Eladio, and I've said this before, and maybe I'm the oldest person on this panel, but every economist that's basically gotten a degree in the last 30 years has only grown up or had professors who have grown up in a world that was marked post Nixon getting off the, you know, breaking the back of the gold standard. And so they believe that debt is the only way to grow. And you could go back and look at it. But if you look at the Industrial revolution, which had sound money, yes, there was more cyclicality, absolutely. Boom and bust cycles were more severe. There's no doubt they were less engineered. But the overall rate of growth under a sound money policy was dramatically larger, dramatically larger than we have today. So all the people who claim, well, you can't go have a sound money standard because you won't be able to finance with growth, you know, they literally only lived in that world. Keep in mind the fiat experiment is only 54 years old. Right. You know, it, it, it's not the only the, the, the length of human history. And so there are a lot of people on that are listening to this who are bit bitcoiners because you realize that a world that starts moving towards sounder money and has assets that you can understand and create, predictability is not a bad thing. Whereas the central banks of the world, most economists believe you need inflation. The idea that inflation at 2% is somehow a great thing. No, it's not. Why is inflation at a positive number a great thing in reality? Deflation allows you, if it's created through technology, allows you to consume more and live better. All of these things and these assumptions that underlie it are important. Anyway, a lot of you, now you can respond, you know, I don't know who said that he disagreed with what I said. I did agree with some of the things that he had to say. I will say I don't like creative labels that are intended to started as something that was supposed to be good for the world. Globalism has turned into a situation where countries are giving up their sovereignty. When Janet Yellen proposed that the whole OECD countries, all 30 countries, have the same corporate tax rates, that is globalism. That was giving up our competitive edge on 2017 when we lowered our corporate taxes and it was an instant windfall for profits. It's funny how everybody talks about raising tariffs is bad for inflation, but nobody talks about lowering taxes is great for inflation. Because when you lower taxes, aren't you doing the opposite of what tariffs do in decreasing the actual input costs for companies? But getting back to globalism, I'm not a bear when it comes to crypto. I'm telling you it's a scam because it has limited supply. Anything that has a limited supply is intended to only go in one direction, theoretically. And that to me is a counter to the opposite of what world governments are doing. So I agree with the guy that disagreed with me. Governments aren't going to change their ways in terms of spending and overspending and essentially debasing the dollar in order to make up for policies should be much more, my opinion, capitalist and rational. Nobody it's their budget or their credit cards or their balance sheet unless they go bankrupt like the United States of America has. And Janet Yellen in my opinion, has done more to damage our fiscal situation than any other treasury secretary in the world. And I don't understand why so many people think that you have to be a Princeton or an MIT graduate to understand one simple concept interest rates are too high for the United States of America to find $9 trillion. They're just too high. We can't afford it. So we're going to have to lower the rates. And it doesn't take Bestet who's run a hedge fund and he's, and he's, and he's a pretty smart guy. He doesn't have to be a rocket scientist to lower rates. If you lower rates, it'll be good for bitcoin, it'll be good for risk assets. Correct. Because more liquidity, it means that the velocity of money is going to increase. But I can honestly tell you that bitcoin is an asset that I think could go to 150 like Tom Lee says. So I'm not a bear. But to, to not say that now it has become more of a binary oh, when is the next country adopted as some type of little reserve? That's what we're left with after all the headlines of the drops of the lawsuits of the end of the anti crypto government of Gary Gensler. How much of the appreciation of crypto was only a function of the fact that the new incoming administration was at least talking a talk that they were more pro crypto. I will say I don't think Trump understands crypto at all. And I think that meme coins, all meme coins are a scam. Zilion, why don't you respond rather than me? No, I agree with the gentleman. All meme coins are a scam. They're not a scam. But I mean it's really funny. I had a meeting with quote unquote meme coin advisors today. That's a new, new profession right there. And I, I was, I was, I was completely amazed how these guys completely accepted that pumping and dumping is a like a common practice of. It's like new data. Basically you need to take it as like a new best practice of the crypto industry. So I find it this amazing on, on the political side of my political comment is going to be very, very short and very down to earth for me. As, as someone that went to London School of Economics and, and I've seen a lot of production of career politicians. Probably all my class of that year became either career politicians or worked in organizations etc and some of them became entrepreneurs. I really see it this way when you, I feel that to the, the career politicians and the, the if when they run a country, when they run a place because they don't have a stake in the economy, their policy is basically kind of maximizing for their position. So they tend to you know, to have like inflationary, do not care inflationary kind of spending etc because they, they, they reason in a budget terms. Right? They have a budget, they need to spend it all. If they don't spend it all that year, they're going to get less best next year. Right? And when you have a country that is run by business people then they understand the principle of scarcity and other other things. So they tend to build basically countries that are. Look more like a companies and that more efficient etc. So this is my. And the world is turning now to understand that basically you can see Europe which is completely run by career politicians and, and a lot of my classmates basically and, and United States that is waking up all of a sudden and adjusting its move to really remain a powerhouse. That's one comment. Yeah, so that's basically what I had to say. And yeah, definitely meme coins are very scammy. And yeah, what can I. But it is what it is at the end of the day it boils down to how much activity there is in a network unfortunately in crypto because we're still in crypto playing with our bar mitzvah money, the real money. We're waiting for it. You know, institutions, we have a great infrastructure right now. I mean we literally you can leapfrog. You're going to see countries, hopefully the UAE very soon kind of run the international financial market that is natively kind of accepts and adopt these rails and see what they can do with it. Maybe they will go faster than other financial centers, who knows. But the idea is, is basically yeah, the, you know, the crypto, the infrastructure built in the crypto space is basically right now, you know, functioning on gam on speculation, gambling, very shady activity, etc, but the underlying infrastructure is there and the underlying infrastructure is, is showing that you can raise money faster than anything else. You can even raise money on the basis of a meme. You don't even need to have a business plan or anything into the future. So, so that's, that's a demonstration that you can, anyone can access capital introduction access capital and, and, and you can borrow, lend, do all type of things. So, so I think that again this is a common view that I. I repeat all the time. But I think that we're going to see really the kind of the iPhone moments once we're going to start having legislation in the US for, for stable coins once we're going to start seeing international stable coins issuers using that legislation in order to issue local Denominated, I mean, emerging market denominated stable coins within the regulatory framework of the US and having the protection there, private issuers. So I basically think that the private issuer model is going to go much faster. You're going to be much useful, much make much more impact than of course, central bank controlled digital currency, which is basically a bunch of BS in my, in my point of view. That's all I had to say. Thank you guys. So, so yeah, I mean, look, John Deaton was able to join us and obviously has spent a lot of time on the XRP side. But you know, rather than talking about memes, I mean, I've always said, and have been saying for some time since the election that the real trend in 2025 that will emerge will be real utility. And understanding what the potential of that utility is. Now, XRP is probably one of the best performing cryptos because people believe, you know, a lot of people think there's a very polarizing opinions on it about utility. But today, you know, the SEC dropping the case, I think, you know, we started talking about it. But John, you're in the middle of this, so you know, what does this mean to you? Are we done or, you know, can, can you, you know, take your victory lap now or is there still work to be done? Well, I, I mean, what's interesting about the case, and thanks for inviting me, is that, you know, we know the SEC has dropped the case. Stuart Alderoni, Ripple's general counsel, tweeted out shortly thereafter that, you know, Ripple is considering, you know, what to do next. They had a cross appeal because there was obviously a finding that institutional sales, I mean, when Judge Torres cited XRP holder affidavits that I submitted declaring XRP itself not a security, that's all that I cared about. You know, when I went after the SEC and intervened in the case, 80 of my net worth was in bitcoin. But everybody, you know, some in the bitcoin community call me a coiner and XRP guy and I'm like, listen, this is pure government overreach. It's a digital token. Ripple may have sold it for in violation of the law. Just like any asset can be packaged, marketed and sold as an investment contract. But this is pure government overreach. And eventually, you know, when they went after Coinbase and Kraken and everybody else, they realized that, you know, it was the, the boot of the government, the neck of the industry. So it's a good day. I think that Brad Garlinghouse happened to be in New York City at the digital asset Summit he was on stage and talked about the industry is underestimating the tailwinds that, that we have and I agree with that. I think that that bitcoin and some of these major odds are probably the most asymmetrical trade of my lifetime. That doesn't mean that I met for 10 years but certainly in the next couple years with everything. Garlinghouse said that you know stablecoin market cap is going to 10x in the next 5 years and thinks that's an underestimate estimate. So it's a good day for the industry. Cointelegraph said 83% of institutions plan to increase allocations to crypto in 2025. Brad Garlinghouse said that you know the U S market is now opening up to the industry for the first time and so out to see a mass wave of adoption. I think the biggest news, Dave Banks, tier one banks are getting into custody and I think Garden House even mentioned that he sees the tier one banks all moving into you know, custody services. So it's great news for everyone. It's good for the industry, you know, that we're moving forward. Zilian, you had a follow up? Yeah, just a quick one. I remember in one of the conferences this is very early on Brad would come in, you know, with a suit and well dressed etc and you know he was in the middle of all these anarchists and back in the day it was very fashionable to have like these bitcoin guys with this very long beard. I don't know if you remember these times but the, the, the and he would start by saying look I am a real company, I have real people basically I have real people, I have employees, I have a mission statement, I'm trying to do that. And the, the, the, the Maxis would reply no, he's just a marketer trying to you know, hide his lack of technical skills. And look, I mean XRP has done a great work, I mean even like forget about like the actual underlying technology etc, that's, that's another debate. But the, the, just the, their capital allocation has been great. I mean they've been buying, I'm, I'm following a little bit because I know some of the companies that they've been acquiring etc to really kind of of evolve the ecosystem and really work on, on a, on, on a far reaching mission and that is very important to have serious, this is the power of execution. For me this space lacks immense power of execution and I think XRP has that power of execution A Serious mission statement and, and really, you know, having the SEC on their back etc and these litigations, etc kind of try to, to stop them a bit. But XRP has a lot of things to deliver for this space even outside of their, the main functionality. I think just having someone in the space that has like this corporate culture of the delivering kind of the future is very important. And yeah, this is great news for them. Dave, let me just add because I know XRP is such a big controversial thing, but one of the amicus briefs that was filed, it just sort of shows you the utility of crypto in general. It has uber of the air basically if last minute you want to fly to, you know, from Miami to San Francisco and you can rent a jet. But they had a problem. Banks are closed on Friday. It's called the Friday evening problem or the weekend problem. And you have to pay for the pilot, the fuel, the landing fee, all of that up front. But banks are closed on the weekend and so they started accepting xrp and so people could, you know, on a Friday or Saturday in three to five seconds make a payment in xrp. And that's the kind of things that can, that this industry brings. From a utility perspective, Brad Garlinghouse today talked about how he's trying to put together like some kind of summer event, his personal life or I don't know if it's for Ripple, but he made a payment through Swift and partly part of it was lost. And so, and he's sitting there, you know, frustrated as a guy who's supposed to be company replacing Swift, talking about how his Swift payment is lost or they're trying to track it. And so there's lots of things and I think we're finally going to get into, you know, the utility and whatever the best asset. Let the market decide, you know, if, if XRP is going to zero, fine, just let the market decide that, not the government, you know, and that's, that's my whole issue. Well, you and I have talked about this before. You know, I agree with that. But I think that under. People underestimate what stablecoins mean in terms of opening up the financial system on the weekend. It, you know, everyone talks about, oh, bitcoin is the lead sled dog. You know, it trades the only thing that's open on Saturday and Sunday. Well, why do you think that is? That's because people can trade it using basically tether for the most part and as well, you know, with leverage, et cetera, et cetera. The reason you can't trade Tesla over the weekend. The reason you can't trade Nvidia over the weekend very, you know very well is because all of the US systems rely on the banks and rely on a batch settlement cycle. NASDAQ just announced they're going to go to 20, 24, 5. So they'll trade 24 hours. But even they can't pierce the weekend because of the banking side. There's a lot that has to do with this. It does matter quite a bit. And people underestimate the impact of that in terms of efficiency gains within the financial system. And it's not just private planes. It's pretty much everything. Yeah. And I think that the fact that Ripple, despite having XRP ripple created that stable coin RL USD and I think, you know, Garlinghouse is right, I think Jeremy Allaire is right and I think tether seals. Right. That that stable coins are going to drive adoption in a way that, that people are underestimating, I believe. Yeah, I just, I just a lot of you. Okay, why don't you go and then, then we'll try to get one or two more things and then we'll try to wrap up again. You know, it's funny that Mario asked me to or his team asked me to be on this. I'm more of a finance guy. But, you know, I'm so behind on crypto that I didn't even see that, that the headline an hour ago came out about the SEC dropping and here's the point I'm trying to make. So now that, that the final lawsuit is being dropped against Ripple by the sec. Okay. And by the way, if elections don't have consequences, I don't know if you heard that, that, that Trump is trying to, I think democratic people in the FTC elections have consequences. So now that Ripple is no longer in threat and they've survived so much. And anybody that's a bitcoiner that thinks that ripple is just, I mean, not ripple, XRP is a joke. They certainly survived a lot, let's be honest. Can we acknowledge that they've now survived. Well, now they're joining that binary biotech news. You know, like the FDA would say, oh, well, we had this great study and we're going to stay well again, I keep saying that that's what crypto is, unfortunately, or in this case, BTC and the larger players are subject to or held by the next announcement about adoption because we're not going to get any more lawsuits that drop. So now Ripple's entering the normal field where it's going to have to react to to adoption news in order to or strategic reserve news in order to move and rally unless something changes. I think you're. Look, I think we could have a deep dive conversation. Maybe you and I should do a one on one podcast about this because it's an interesting point, but I do think that the notion that you need to have governments buying Bitcoin or that there's no adoption news coming for XRP or Solana or frankly ether potentially is naive. But I do agree with you that these assets trade like an option. I invited Mikkel up because I think it would be. I think it is somehow poetic for him to have, you know, like one of the last words today. You know, given everything that he's been dealing with and all the nonsense. So Mikkel, what are your thoughts today? Yeah, I mean I'm sure all the obvious thoughts have already been stated. I just wanted to bring something up that I'm not sure enough people know about. And John's far too humble for him to toot his own a horn here. But one of the entire reasons that this issue of XRP being a security or not was even brought front and center was because John was actually able to get that amiki status in the case and bring that issue of the XRP holders front and center. This case was always centered between the SEC and Ripple. But as you guys talked about, it had huge secondhand implications on xrp. And by allowing that decision to have to be made or not have to be made, but bringing this whole situation to light in front of the judge and Judge Torres feeling like she owed it to XRP holders to make it clear that XRP was not a security in her ruling. It was one of the coolest things about this entire process. And as much as it's been a drag on the market, I mean this last four years have been absolutely fascinating for me in terms of the case law and how all of this have played out. But I can't understate how important that was. We've got a determination now from Judge Torres that XRP itself is not a security. And that was absolutely instrumental and was really only happened in my opinion because of John Deaton's contributions for the XRP community. So that's just a little interesting story. I'm not sure people who followed the case that closely really knew about that little side event, but to have that determination is absolutely massive. I think this is where a lot of people in the XRP community thought this was going to end up regardless. So for me it's just kind of. I knew this was coming. It was the timing. But how it actually got to this point. I mean, there are there will be documentaries made about it. And John Deaton is absolutely an unsung hero in this entire thing. Well, we know Bryan Cranston is the lead, should be the lead to play him in the in the movie. But I guess we'll see. But I think, you know, on that we are we are at time. Unless somebody else raises their hand, they have something they have to say. I think we'll call it for today. And we'll see you all tomorrow at 10:15 on Crypto Town Hall. Thanks. And thanks, Mickle, for the kind words. Everybody, have a great day. Thank you, guys. Take care.