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- [00:00]
A
Well, good morning everyone. I'm trying to get through on two hours of sleep. So if I'm a little, if I sound a little bit ragged, so be it. Adam, I guess you can hear me. So the mic is working.
- [00:13]
B
Wait, what's going on with the two hours of sleep?
- [00:15]
A
Oh, well, I, I, I went full degen yesterday. I'm out in Vegas at the World Series of Poker. I played in a bunch of bracelet events, cashed a few times. I played, played yesterday in a deep stack event and at the same time was playing online on my phone in a to try to win a seat to the main event, this 900 person extravaganza, their 25 guaranteed seat deal. So I was playing both online and live at the same time and the live went well into the money lost in a brutal bad beat. But that didn't matter. I was still playing online and I sat there, I then had to go to the cage, cashed out as I was playing online and ultimately by one in the morning ended up winning my main event seat. So, and you can, Nice man.
- [01:06]
B
Congrats, dude.
- [01:07]
A
You can only imagine the, the adrenaline rush that caused. So try going to sleep, you know, after doing that and then waking up at 5 something in the morning to do macro Monday with, with, with Scott and Peter Schiff. So, so I'm a little ragged today, but so be it. That's what's going on. So anyway, but we have a lot to talk about this morning. You know, we have a the new manifesto from Michael Sailor and strategy which honestly I don't see anything surprising in there. In fact, virtually nothing. But the whole market is freaking out about this and coming up with lots of takes, some of which say sound ridiculous, some are reasonable and et cetera. So I'd like everyone else to talk about it rather than me. But my basal case has not changed. Strategy is a bet on the long term price appreciation of bitcoin. They have no direct need to sell bitcoin in the near future. In fact, they don't have to do a damn thing. They're under way less stress now than they were in 2022. And people who think that they are think the opposite. I think it's wrong. Now that said, they're likely not to be buying bitcoin down here at all, you know, for a while because they have absolutely no reason to do so or cash machine to do so. But you know, that could change as the price changes. So if they're not going to be the price supporter at this level, but they're Also unlikely to be the price trigger on the cascade. To the downside that everyone thinks. Jamie.
- [02:42]
C
Hey, Dave. Hey. Congratulations as well with the, the poker stuff. I was rooting for you, man. Yeah, we talked about this last week. I mean, we kind of like the idea of, you know, that the 32 Bitcoin was just like kind of dipping the toe in the water. And we talked about the idea of having to normalize that process. I mean, it would have been ideal if he would have done it maybe during August, September of last year when it was going up.
- [03:06]
A
Right.
- [03:06]
C
But it is what it is, you know, now that' that's what he needed to do. And he put over the weekend, you know, after they had the Peter Schiff space on Wednesday and then the, the lawsuit, the media FUD campaign that came out on Thursday into a nice weekend of low volume. And then, you know, but over the weekend he came back, he said, hey, listen, we're going to raise the, you know, the preferreds. We got, we got some reserve capital that, that stretches them out to 25 months. You know, they, they have a plan put in place for, for selling, for repurchasing some of the, you know, MSCR and the digital securities and you know, the dividends as well and a plan to a cap for. I think it's about a billion for, for bitcoin sales. So I mean they kind of covered it all and I think this is kind of like letting everybody know we have a plan, we're willing to do it, we said we were going to. And I think, you know, looking back, I'm thinking about just getting into the next quarter, the next, you know, the next month. And so that, that's what they're trying to do and get to that, that next bull, bull market, hopefully in another bull market. I think we all agree, well, maybe some of us agree that MSTR strategy will be fine. So I'm curious what you think about where we're headed with what he did.
- [04:31]
A
Well, I mean, there's nothing to be curious for me. I mean, if you believe bitcoin is going to rally, then MSTR will outperform in a rally. If you believe bitcoin is going to be sitting in the doldrums, it will underperform. Even if it doesn't, even if it doesn't rally, even if it doesn't go down, it will underperform in a flat and sideways market. That's just how it's designed. As far as STRC goes, STRC is high yield debt and its ability to pay is based upon Bitcoin's future price as opposed to corporate earnings. I mean, there's nothing else to say about that. That's what it is. But the notion of people who believe that we are in 2022, that there's going to be waves of forced liquidations and that's what everyone's saying. I think that's fantasy. I think we've had a lot of liquidations from 120 down to here. But this notion of waves of force selling, I don't see where it is. And it feels like you're locking the barn door after the horses have bolted. By selling it around these levels now, does that mean it can't go lower?
- [05:32]
D
Of course not.
- [05:32]
A
We've talked about that before. So, I mean, you know, it's, it's, it really is that simple. Oh, I thought Alex from River was up here. Alex, I mean, you guys were on a pretty large platform. I mean, are you seeing panic? I hate to put you on the spot, but you're here, so I figured it makes sense to ask.
- [05:49]
E
Hey, guys. Yeah, so no, I mean, we're not seeing, we're not seeing panic. Like every bear market, there's always a group of people that, you know, gets bearish on the, gets bearish on Bitcoin again, starts to, starts to check out. But overall, in aggregate, we're seeing net buys on our platform. Over the last six months we've seen more selling than we did last year, but it's still net buys overall. So in aggregate, our client base is not bearish in net. But absolutely, you know, it's definitely more bearish sentiment than it was a year ago.
- [06:30]
A
Okay, well, yeah, that, that, well, that makes sense. I mean, the price is a hell of a lot lower. Right. You know, and we, we've been talking about, you know, fear, you know, fear and greed indexes and everything being where they've been, it's been, it's crap. I mean, the sentiment in most of crypto is crap. I mean, you know, William, you know, you're a resident Ethereum bull. I mean, I can't imagine that that sentiment in the Ethereum world is particularly good these days either.
- [06:59]
D
No, I wouldn't say that. There are lots of changes going on right now within Ethereum.
- [07:03]
A
As you know, a number of groups
- [07:06]
D
are being formed outside of the Ethereum foundation and that's a good thing. It's a recognition that the foundation is not going to be the only steward or leader going forward. And by design, it's by intent, I would say wait a Few days or a few weeks before you form an opinion on that. Because things are unraveling as we speak. Even two weeks from now, the picture is changing.
- [07:40]
A
I think that the interesting thing about bitcoin, and in particular is people, every time I hear the sentence, well, there's no money to buy and the price is basically flat, and you hear all the news and the news is all bad, that feels a hell of a lot different. It reminds me of the meme, and we talk about that meme all the time. The one with $60,000 bitcoin, the guy at the table trying to sell it, there's nobody there. And the 100, the guy with 120,000, you know, Bitcoin for sale, and the line is out the door. It's always like that, right? Jamie's had a new hand. I can't tell. I'm hearing Mr. Roboto there. But. Yeah, I mean, it's always. It's always like that. But what. It is a fascinating scenario to hear. If you actually look through what Saylor put out this morning or what strategy put out this morning, it's more or less completely expected. I mean, it's what they would have to do as a responsible steward of a public company. Now, should he have said some of the things that he said over the years about Stretch being a bank account and being safe? Probably not. In fact, I thought it was a terrible idea when he said it at that time. But is he legally liable? Well, I guess we'll find out. I will say, however, that being legally liable is nowhere near the disaster that you think. We've seen examples of this. Jamie, I see your hand flashing me again. I don't want to ignore you. Are you there? Okay, I'm gonna go with. I'm gonna go with no, you can't tell. I like. You gotta love this platform. It just. It. It can drive. Can drive you crazy, but, you know, whatever. Okay. Yeah, he bound. Is bouncing up and down. So, you know, is anybody else have any other thoughts on. On that or. Because the. The other thing that's going on on the macro side is, you know, effectively, you know, stock markets continuing to be strong. The yen is. Is. Is weakening. Okay, good, we got David. Go ahead, because I was about to call on you. Exactly.
- [10:06]
F
Well, beat you to it. Thanks, Dave. I was just going to go back to the conversation that we were having a couple weeks ago, and. And I had mentioned that Sailor had broken the faith, and you told me that I was being a little too strong in my remarks, and obviously the chat Chart on stretch since then sort of reflected this loss of faith and credibility. But nonetheless, I look at the announcements that came out this morning, and if I were to be a stretch holder, I certainly would be encouraged. I mean, the board has put in place now a policy of having, you know, 12 months forward, dividends or payouts already, you know, secured. So I'm just surprised to some extent that I haven't seen stretch bounce more positively away from strategy. And obviously, looking at the retail exodus from Bitcoin, I am interested to see sort of the differentiation that may be coming about. I've been sort of surprised by how Solana seems to be showing some positive price action here against a pretty negative market backdrop. And I just didn't know to what extent, you know, people thought that the Solana uptake for, you know, whatever you want to call it, tokenized stocks, whether it's any one of a number of things, whether people want to care about that and want to comment on whether they might see Solana as having leadership in the crypto market from here.
- [11:37]
A
Yeah, it is. It's funny, Solana is a sponsor at the World Series of Poker because you can use Solana to do. To buy, you know, buy entry tickets in. I personally didn't need only Solana to buy anything, but, you know, there's a big Solana banner, you know, in one of the main ballrooms here, so it was kind of amusing to see all that. But, yeah, I think that there are definitely people out there looking for use cases and looking for. I don't like the word use cases. Looking for economics that could justify what's going on in crypto. And Solana has a good story, so I think that's why you're hearing a lot of it. Adam, do you think.
- [12:13]
B
Yeah, I would say it's a combination of maybe the least worst foundation. You know, I think most of these foundations really are terrible for the chains, but maybe theirs is the least worst and, like, something like, you know, sponsoring the. The World Series of Poker, you know, while maybe not, you know, mo the most attractive for crypto natives. We all get it. Like, we want Solana to be in front of real people, and it seems like a good opportunity. And. And I think we just have the mo. Solana just has the most kind of mouthpieces on the timeline. And that's just the way I kind of look at it, as well as the most users. I mean, you know, I'm a big eth bull as well, but, you know, Solana just has more real people. I'll put it that way, when you look at like what bases got going on and stuff, there's just more real stuff happening on Solana basically than any other chain. So I'm bullish Solana and I think people are kind of looking for this like wash out. Where can I get back in moment? I don't know if we've hit it yet, but certainly people are looking for that.
- [13:13]
A
Yeah, it certainly feels that way. Alex, is that a new hand?
- [13:16]
E
Yeah, I mean, I just have sort of a more general comment about how to think about these platforms. If anyone, if anyone's hasn't read John Pfeffer's An Institutional Investor's Take on Crypto Assets, I highly recommend reading that essay or paper from 2017. And fundamentally, and maybe this is a question to post to the audience, if you just look at the economic first principles of these smart contract platforms, even if they get pretty material usage, there's no really economic first principle that would justify really high valuations for the underlying tokens. And so I think like, I think like the high prices of these things have been a historical like market distortion. And I'm curious what people think about that.
- [14:09]
A
Well, I mean anyone who's been listening to me talk about this stuff, you know, I've gotten a lot of hate mail from it. So I could tell you that there could be value in a utility. So things that are utilities can have value, but the value that they can have is always lower than people would anticipate because substitution effects. Right. You know, let's say something is, is going to be worth whatever. If you can change and use something else, you're not going to get economic rent. It means that a lot of the expectations on people who have bought tokens are wildly high. Now that doesn't say that there's no value there and it doesn't say that current valuations are necessarily crazy for every token. But there are quite a few tokens where the current valuations are high. And then there's others whose communities think that they're going to be worth whatever. I mean, pick numbers. I mean, I always pick on the XRP army because the ones who say, oh well, I could buy Ripple or XRP and Nickel's in the audience. It'd be good to get him up on this because he's generally pretty rational about this. But the ones who talk about $10,000 per coin are implying market caps that are just insane. And I think that you're right, Alex. I think that there's a lot of that that's been the case for many tokens. Mikael, I see your hand up. I see you as a listener. Are you here?
- [15:34]
G
Yeah. No, I just jumped up because I thought that last question was interesting. I mean, I remember buying ethereum at like $40 and you could have said, oh well, that can't go high, it's a utility and it went high. So like, I don't know, I think like everything in the cryptocurrency market has like disproved that. I mean like Solana had a dollar and even if it's down from its local highs up to like 80 or 90, I mean it's easy to look at the peak and then draw down and say like, oh, like these can't go to high prices. But like, look at where the industry's gone over like last six or eight years. I mean, things are dramatically higher than they were.
- [16:10]
E
Well, I don't think anyone's saying they can't go to high prices.
- [16:13]
G
Well, they already did.
- [16:14]
E
That's not the argument. The argument isn't that they can't go to high prices. The argument is that the long term, sort of stable equilibrium is not a high price.
- [16:24]
G
But wouldn't you say, like since the inception of most of the things in the top 20, 25 over a long duration trend, they've, they've gone to high prices.
- [16:36]
E
I would say over the last 10 years we've seen a massive market distortion, largely driven by retail investors not understanding what these things are. And it's. And
- [16:49]
G
so you think the whole market has it wrong?
- [16:53]
E
Yes, I think the whole crypto market has been like a massive mal investment bubble for the last 10 years, with the exception of Bitcoin.
- [17:01]
A
So the interesting question here, and this is a great topic by the way, is whether or not it's all of crypto or most of crypto or some of crypto is that way. We were having the conversation with Peter Schiff this morning about the corollaries to the Internet bubble. You know, if you, when the Internet bubble happened in the, at the end of the 90s and I was there, I was at Salomon Brothers, you know, Jack, Jack Grubman's firm, et cetera. And I was on a program desk, so we saw all this crap going on. There were so many companies that came, and I mean a lot like what we've seen in tokens that just got hundreds of millions or billions of dollars of valuations that had absolutely. There was no there, there, there was no, there's nothing. And eventually they went kaboom. That said, the Total market cap of those sorts of companies today. Now, a lot of them, like Google, wasn't publicly tradable, but the total market cap of those companies is way higher, I mean, orders of magnitude higher today. And the thing in the crypto markets are, let's say a lot of these tokens are utilities. Will they be orders of magnitude higher than they are today? I would say probably not. Would the total value created be significantly higher than today? I think the answer is possibly, and I'm keeping Bitcoin out of that conversation. Ryan, I think I saw your hand and Adam's hand.
- [18:22]
H
Yeah, I finally have a hand again. I had a switch phone.
- [18:27]
A
That's great. Awesome.
- [18:31]
H
I found the combination. And we are so early on all this and, and we have to remember that the entire landscape of digital commerce is changing right now. As AI starts taking over more and more and agents start taking over more and more. Everyone and their mom is programming at a senior level, developers level right now. Everyone with Claude, they're building out all these apps and SaaS platforms and, and we're like six months into this, give it another year and we're going to find out the software is completely worthless as a, you know, as a user interface. We're all going to be switching over to speaking to agents and these agents are going to be building out, you know, shopping experiences on the fly for us and they're going to need some type of digital commerce. So the fast transactable utility token is going to take hold pretty fast. And whether that comes in the form of stablecoin or a new global issuance or new protocol, I don't know. The only magic that I see behind Bitcoin is its ability to stabilize power grid, which I've said that for years now, but doesn't mean that it's the magic bullet for commerce and the coming economy.
- [19:57]
F
Okay.
- [19:57]
A
I think Adam, was your hand was up before. I don't see it now. If not, then it's not.
- [20:02]
B
Let's go to Glenn.
- [20:03]
A
Okay, Glenn, I saw your hand up next and then back to Mickel.
- [20:06]
D
Yeah, thanks a lot. I wanted to add to Alex's point about the tokens, the underlying tokens not accruing the value, where I think about it is so what is a blockchain? A blockchain is like a combination of clearing and settlement, right? So if you look at the traditional financial markets, that's like the DTCC plus the nasdaq, right? So you can buy shares in the nasdaq. I think the DTCC is kind of owned by like banks and stuff like that, they've got like a cap on the profits that they can make. They're a utility. So like the stuff that, that, that trades through them, like through the DTCC and the NASDAQ is where the value is, but not the, the Rails. So that's why I think Bitcoin is unique because it's, you know, I mean it's a poor analogy, but it's a useful one. It's like digital gold. So it has value in and of itself.
- [21:25]
A
Yeah, I, I often say similar things and I thought, and the DTCC analogy is so incredibly important. You know, if you ask for estimates of what the, its actual market cap is because it's privately held, it's mutualized, etc, you know, it's somewhere in the 40 billion range was the last I heard. Now I don't know what that number is, but they process quadrillions of dollars of transaction volume. And that's not a typo, that's not a speecho, that's the truth. Quadrillions. And so the notion that a token, I don't want to pick on any individual one because a lot of them do this will say, well we could have processed this amount, it's going to be huge. So therefore the value will be so huge. Well no, the value is huge if the token economics pass that value through to the token holder. So if agentic commerce is using something and is paying a small fee and the holders of the token get that fee and agentic commerce becomes much bigger. Sure, you know that there's value there. Right. But you know, but I think that the DTCC is always, that's sort of my operating analogy, I think for understanding what things could be. But it changes if the token itself incentivizes its users by passing through that value and, or has economics that make it important. Right. So that's really where it's different because the reason that DTCC was formed and Wall street has done this many times is because the Wall street firms retain it because they have an oligopoly. In a truly competitive market, you don't have an oligopoly. And so, you know, we shall see. Now I see a bunch of hands, I think Ryan and then Mickle or if I'm correct me if I'm wrong,
- [23:10]
H
that's an old one. I have the curse of the nickel.
- [23:14]
A
Is that a new hand or an old hand? Because I saw Alex's hand.
- [23:17]
G
It's an old one. But I'll just make one quick comment. You know, I see what people are saying in terms of like, oh, well, like bitcoin is like the only one that has XYZ characteristics. And I agree Bitcoin's characteristics are extremely unique. I just think if you get to the underlying reason why even like Satoshi created the bitcoin blockchain, it was for peer to peer payments. And not that I necessarily think that peer to peer payments are going to be the thing to dominate the cryptocurrency industry, but just the idea of having final settlement, being able to tokenize structured products, being able to do all the things that we're seeing really start taking off in terms of the emergence of tokenized fiat currency. Like all of these things are going to be done on other chains. And that doesn't necessarily detract from Bitcoin in any kind of way. It just means there's a lot of different use cases for this technology. If you look at a lot of the major crypto tokens, like, like I said, Ethereum, xrp, Solana, Hyper Liquid, and look at the long term price charts, I mean these things are up like tens of thousands of percent over the course of their history. So like, I just don't really see the argument for saying like, oh, these things won't appreciate in value. Like, does bitcoin have a larger market cap? Yes. Have all these things appreciated in value massively over time? Absolutely. Like, I don't know the historical context for saying that these things don't have a, can't have a high price when their entire history the prices have just been going higher.
- [24:43]
A
That's fair.
- [24:44]
E
Well, Alex, I mean, I would say you're misrepresenting the argument again. No one is saying the prices can't go higher. They're saying that the first principles reasons that the prices are higher are not what you're, not what you're suggesting. Right.
- [24:57]
G
The reason that, what does that mean though?
- [24:59]
E
The, the reason Ethereum's price isn't hot. Well, you're, you seem to, you seem to be proposing, oh, these things have high prices because they're useful. But that's easily, you know, that argument is easily countered because if you look at the top, you know, 20 market cap coins, half of them are totally useless.
- [25:18]
G
No, no, no, no, no. I'm saying the prices are high because people perceive value in them and therefore want to own the token.
- [25:26]
E
Right. But again, that has no correlation whatsoever to their actual utility.
- [25:31]
G
Sure it does. The more, the more utility it has, the more ingrained it becomes in society. The more people know about it and the more People feel like they should be invested in the token, then why
- [25:40]
E
is Dogecoin number 10?
- [25:42]
G
Because it has a high presence in society.
- [25:45]
E
Why is XRP number six? What is XRP used for?
- [25:48]
G
You can't directly link it to utility. Why is bitcoin number one?
- [25:52]
E
Because it's a store of value. It's not about the utility of, it's not about the powering some tech platform for smart contract computation. It's digital gold.
- [26:01]
G
No, what it comes down to, especially in the very early stages of this industry is like what makes people net want to be buyers of the asset. Like there's going to be different narratives that take off. Like I said, bitcoin has a very unique role being carved out as that digital gold asset. But there's going to be other narratives that get a tremendous amount of attention. Let's take a look at what's happening with hyper liquid right now. Like there's a ton of attention in terms of the utility that hyperliquid brings and a lot of people want to own the token. So I don't think you can put it into a vacuum and say only this is going to work. That's like going through the Internet and being like, oh well, it's only going to be search and nothing else is going to work like that. That just sounds comical. And if you take a look at the underlying use case of what's like really taking off with the technology, it's a lot of things outside of just storage and digital gold.
- [26:50]
E
Well, again, my point is narratives, narratives are what drive price. So we don't disagree there. Narratives are what drive the price. But the economic fundamentals at the end of the day have to match the narrative, you know, over the long term or the, or the narrative driven price rally will go away. Right. So if you have a narrative saying, hey, this new blockchain is going to be powered the future of agentic commerce. Well, at the end of the day, owning the token of that chain needs to give the owner of that token some right to the value generated by this agentic commerce or the long term value of that token is very low. Right.
- [27:32]
G
I think that right there was like your opinion.
- [27:36]
D
No, that's economic reality. Yeah, we know this from like hundreds of years.
- [27:42]
G
No, I, I own Tesla stock. I don't have a right to any of like Tesla doesn't pay me a dividend.
- [27:47]
A
I still want.
- [27:48]
E
You have a legal right. You have a legal right to future cash flows and future dividends. That it does, that it will pay.
- [27:55]
A
Yeah, I mean that is not the case. The way I I frame this point just just to be clear because I hear both sides of the this is token economics is extraordinarily important and yet because of the regulatory situation in the United States that existed there was no way for a token there was no way for any rational company or foundation or whatever. The fact that there were foundations instead of companies to me still is aggravating. But there was no way to pass through those token economics in a way that was of kind clear and that has to change and frankly I know for a fact that that's one of the things the SEC is really working on. They the notion that become being called a security was a death sentence for
- [28:40]
E
crypto was always this space was downloaded
- [28:43]
A
via spaces down.com visit to download your spaces today. Incredibly problematic because being a security is not evil Being a security is just there's laws that are old laws that are very hard to comply with and very expensive to comply with.
- [28:57]
D
And so Dave, what you're talking about are securities. You're essentially talking about businesses that offer a service and charge a fee for it. Right, but that's proportion to be There
- [29:13]
A
is a different One of the thing promises of crypto is a different model where instead of selling equity which is ownership or instead of sell. Instead of selling debt, you sell revenue streams from within the but would that
- [29:30]
D
pass the Howie test?
- [29:32]
A
But that's my point. The fact that we even have to talk about the Howie test is the problem. The problem is is we have securities laws that were written before computers existed
- [29:42]
D
and no, but the thing is that the thing is is that if it's a. If there's a company, if there's a group, an organization behind it, it's not a commodity. Right. And they're making promises about future revenue streams. That's exactly why securities laws exist.
- [29:58]
A
Exactly.
- [29:58]
D
So that people can't make false claims.
- [30:00]
A
But you're missing my point. I totally agree with that and I've talked with very senior people at the SEC who agree with this. They also understand that it shouldn't have to cost $40 million to bring something to market and it shouldn't necessarily exclude only everyone but VCs for being early adopters.
- [30:21]
E
But I think it's more interesting doesn't exist Assume this conversation is more interesting. Forget about regulations. Let's talk about the perfect world and what that would look like valuation wise for these things. And I still don't think it's that interesting.
- [30:37]
A
Well okay, well but then, but then that's not a horrible but you can look at that in a case by case basis. You can't say that to the entirety of an asset class. You can say that there's a lot of complete crap. You could say that memes were created because memes didn't violate laws and people put money there saying, well, this community is going to have value. Okay, fine, how, you know, it doesn't mean it can't. But the how is an important one. I mean, I was, I thought, I forgot the guy. You know, the one, the famous Singapore, you know, presentation about the meme economy. When I saw that, I was like, how do I short this? And I couldn't think of a way of doing it other than, you know, because meme tokens make no sense to me. NFTs. I mean, I at least can kind of understand how an individual piece of art could be worth something. But I mean, it's interesting anyway. Ryan, is that an old hand or a new one?
- [31:30]
H
Sorry, it's a new one. It's such a fascinating conversation, honestly. And, and I think a lot of this is framed from a North American perspective. And we're looking at this from, you know, obviously our own perspectives in a lot of ways that we can't necessarily shake off. But we forget. Like when you mentioned first principles with a blockchain or a coin, it has to be globally accessible, meaning anyone anywhere in the world has to be able to participate. And this is the crazy thing. Why is bitcoin so popular? Because it was globally accessible that anyone with electricity could access it and get tokens. Why did Ethereum also get a good foothold? Well, first they did the pre sale and then it was globally accessible. Once again, Dogecoin is number 10 or somewhere in the top coins because it's globally known and globally accessible still. So that's the thing you have to look at. It's not a closed ecosystem. Proof of stake inherently becomes a closed ecosystem because the only way to get proof of stake coins is to have proof of stake coins or know someone that does that's going to let you in. Proof of work is globally accessible. And so from first principles, Bitcoin is still the strongest because it's the oldest and most well known and it's still fully accessible.
- [33:02]
A
I can't see if there are any other hands. I was gonna pivot. Is. I saw Mauricio. Is Maurizio up here? No, I saw him go in and go down. Can't tell. Sorry. Because I won't pivot. Scotty?
- [33:19]
I
I don't see him.
- [33:19]
D
Dave?
- [33:20]
I
Yeah, I don't see him.
- [33:20]
A
I saw him briefly. You know what I was gonna ask him about, you know, the same comment. But we don't have to go there. I mean, look, I think that the entire token conversation and the value conversation is the one that's been happening inside of Wall street firms with significant intent over the last six months to a year. And I think that a lot of what we're seeing with tokenization is because of real benefits that may not necessarily go to the token holders. In fact, large parts won't, some will. And it's that sort of distinguishing is what matters. And that's why it's interesting. Right, Ryan?
- [34:03]
H
Well, for token holders, I see things like. So like Venice is doing a raise and they have their Venice token. They're handing out warrants and they're offering a great return on the Venice token. But at the same time, if I own Venice Token, I don't own a part of the company. I think it's getting murky now. I'll say that we used to, in the crypto industry, we used to be so paranoid about that label of a security where we would get the utility token letters or the opinion letters. And I had spent hours on phone calls with Deloitte lawyers trying to explain to them, you know, that this was not a security. And. And now it's starting to get murky. I feel like we're less scared because of the administration and the current stance of the government, which, by the way, can change very quickly. So I think the waters are getting murky.
- [35:03]
A
Well, I mean, look, I have. It's hard not to pick on company on tokens. So I'll just say that the notion of a governance token I always thought was complete bullshit. I understood why people did them and the fact that people invested in them. Fine. So you could say this company is doing really great stuff and they have this token that gives you governance rights on the token, but it gives you no rights to the economics. To me, that always felt like total bullshit, with the one caveat that, well. Well, what if the company decides to empower the token? And so you've seen, at least in one case, I know of a company make kind of arm wavy. We have, we're setting this stuff up that node operators and things that accrue to the token will go to token holders, but no defined percentages, no understanding of the decision making, et cetera. And they're asking people to buy it. And it's actually a token that I own, although I don't own that much and I haven't bought any in, in years. I mean literal years. I mean like three or four, maybe even longer. I can't remember. But you know, it's. There's, there's. It's one of the ones with, with. With an army of supporters. So which one's that, Dave? Well, I mean, but, but the point is that these. The notion that, that you're supposed to buy something without knowing what you actually own and what rights you have and what economics is just. It's, it's.
- [36:37]
H
It's a casino.
- [36:38]
G
Well, Dave, this is a question I've wanted to ask you. Like what rights? Like Bitcoin's the largest asset in the market. What rights does bitcoin give you?
- [36:45]
A
Well, it's a different conversation. Bitcoin is. I tried to explain my mental model
- [36:51]
G
for bitcoin, but that, but that's a social construct you're putting in. At the end of the day, the codes.
- [36:57]
D
Bitcoin makes no promises. That's the whole thing.
- [37:00]
A
That's true.
- [37:01]
G
None of it makes promises.
- [37:02]
D
It's just codes.
- [37:03]
B
Wait, promises.
- [37:06]
D
Listen, if, if. If a bitcoiner makes a promise about Bitcoin that there is no Bitcoin organization, there's no Bitcoin foundation, There's nobody representing Bitcoin. Right. People can choose to represent bitcoin, but they don't legally represent, bro.
- [37:25]
B
You're literally describing dogecoin right now. You're literally describing dogecoin. There's literally no difference. They're both, they're both mined, you know. What are you talking about here?
- [37:36]
D
Well, the thing is about the, the security of the network, bro.
- [37:43]
B
Dogecoin, super secure, man.
- [37:45]
D
So script coin, Coins that do prefab of work, right? Then it comes down to the level of computing and energy securing the network and then you choose the best one. So that's why dogecoin is a joke.
- [38:03]
B
Are you saying those coin isn't secure, man?
- [38:05]
D
Come on, man.
- [38:05]
B
Look, look at the, look at the amount of.
- [38:07]
D
Compared to bitcoin.
- [38:08]
F
It's.
- [38:09]
B
Come on. It's really. Come on. You can't say it's not secure. You can't say you can attack the network.
- [38:15]
D
Come on, man.
- [38:16]
B
I mean, I agree it is a joke, but you're making an argument for bitcoin as a joke.
- [38:20]
D
So I'm gonna choose. If you've got, if you got to choose between two identical things, why are you going to choose something that's 40,000 times inferior?
- [38:29]
H
Because it's faster, it has more transaction throughput, it's easier to mine.
- [38:35]
B
It's got A better meme.
- [38:36]
D
It's a store of value assets. We perform better transaction throughputs and all us, blah blah, blah. It means nothing in terms of value.
- [38:48]
G
Yeah, but over the last five years you would have made more money holding dogecoin than bitcoin, which is like not an argument that I think I would
- [38:54]
D
like because don't understand any of this.
- [38:58]
G
But what, what's your purpose of being?
- [39:00]
D
Doesn't mean there's real value there.
- [39:02]
G
Yeah, but it made real money.
- [39:04]
H
You know, just because of this, I'm going to build out an agent wallet to only transact in Dogecoin.
- [39:09]
E
What was the five year.
- [39:09]
H
So the future agent money is going to be Doge?
- [39:12]
D
Yeah, go for it. Go for it.
- [39:13]
A
You'll be able to, you'll be able
- [39:14]
I
to buy Dallas Mavericks, you'll be able to buy endless Dallas Mavericks gear. So you'll be good to go.
- [39:21]
A
Yeah, well maybe, maybe you'll also be able to hitch a ride on the SpaceX rocket, you know, if Elon decides to tweet about Doge again. But you know, we'll see what's the
- [39:30]
E
five year return of Dogecoin?
- [39:31]
D
It's just ridiculous. Like the level of like, like, you know, people can kind of contort their minds to believe whatever is in their own interests. Right. And if you look at things objectively, you know, if you just step back, things become a lot more black and white and a lot more obvious and the blurred lines that we've been talking about today. Right. Suddenly become a lot less blurry when there isn't self interest sort of projected onto evaluating all of this stuff.
- [40:03]
A
Well, but the point, Glenn, look, I'm much closer to your point of view on this than the other point of view, just to be clear. But to be fair, I mean, my mental model on bitcoin is the world needs a store of value. And gold does not have the characteristics that the world needs for a store of value. It needs to be verifiable and digitally native and a whole bunch of other things. But bitcoin is trading at a small fraction of what that would be. So my mental model is it trades like an option on that store of value. Now if you start looking at others, litecoin, dogecoin, other mined coins, etc. And say, well, what are their option values? Well, they're even farther out of the money is the way I would look at it. And yes, they're going to ride bitcoin's coattails just like they have for the foreseeable future. So that's the way I look at it, it's much more like that.
- [41:03]
D
Yeah, well, yeah, I would agree with that. But like the option value on dogecoin is like the probability of dogecoin becoming the world store of value is infinitesimally small compared to that of bitcoin.
- [41:19]
E
Well, sorry, I also just want to clarify something. Dogecoin. Someone said dogecoin. You would have been better off holding dogecoin over the last five years. Dogecoin is down 75 over the last five years and Bitcoin is, is up 70. 70 something percent over the last five years. So I also just want to clarify that that was just like not true at all.
- [41:36]
I
Yeah, facts matter, I guess.
- [41:38]
H
Good point. You have to go about seven years because we had that spike up to like 75.
- [41:44]
E
The Dogecoin hash rate, by the way. Like, you know, like we had enough hash rate amongst, you know, sort of hobbyist river clients to 51% attack Dogecoin, you know, a few years ago. So it's, you know. Yeah, facts matter here.
- [42:04]
H
Yeah, you have to remember dogecoin is way more agile than bitcoin. They can fork the network and change the.
- [42:13]
D
These arguments are so old and so tired. These adjectives that mean nothing.
- [42:18]
H
I mean, I know more about dojo,
- [42:23]
D
you know, it's. It's more agile. What the hell does that mean? It's like it does. The marketing drips out of your mouth.
- [42:32]
E
Well, agile. Agile is, is not a, is a, is a, is a bug. Not a feature when you're looking at something to prevent preserved wealth through time.
- [42:43]
I
Guys, guys, I hate to say it, but Ryan is a. Like, has been long described as a bitcoin maxi as one of the earliest bitcoin miners. I think he's just having a philosophical debate here, but I can promise you that he agrees with you at the core. I just want to make clear I've known Ryan a long time and he's not pushing anyone to buy dogecoin here, like in the remotest even.
- [43:05]
H
Oh, Scott, you're spoiling my fun.
- [43:06]
I
Sorry, man. I know, I can't. I literally just can't. Like, I can't. As a friend, I can't hear people yelling at you as if you're like a Doge promoter.
- [43:15]
D
I'm sorry.
- [43:16]
A
Ryan and Mike McGlone talk about this though.
- [43:18]
H
Seriously? No, well, I, I did run actually one of the original Doge mining pools and I, I wondered why it existed past the six month launch point. And the fact that it's existed this long, it has staying power from just sheer will not to die. And for whatever reason, it's going to stick around. So I think in another hundred years we're going to have Bitcoin and possibly Dogecoin on its coattails for all the AI, Ethereum might still be in there too.
- [43:53]
G
I think at the end of the day, people just need to ask themselves and I think either of you is fine. Is the only purpose of crypto and the tokens as a store of value or will there other be other use cases? Because like as soon as you subscribe to the idea that there will be other use cases, I think there's going to be other technologies that are important and that are going to have a really large presence in the future. And I think a lot of the things we're already seeing is already showing that there's going to be a whole bunch of different use cases for this technology. Just like in the early days of the Internet there was a whole bunch of different applications for that. But. But I guess we'll see.
- [44:28]
E
They just want to do a lot of value.
- [44:31]
D
Yeah, that, that's the whole point. Right. It's not about whether these technologies will have value. Right. I mean it is about whether they will have value. It's not about whether they'll be useful. Right. Like there's loads of technologies that we use all day, every day that don't have much value.
- [44:50]
G
Yeah, I mean I keep hearing that, but like that's a lot.
- [44:53]
D
Doesn't mean they accrue value.
- [44:55]
G
But that's what I've heard by that. Like that's what bitcoiners always say. They say stay out of the stock market, stay out of AI, stay out of all the.
- [45:02]
A
Like it's always, it's always,
- [45:06]
G
it's always only invest in bitcoin and meanwhile like look great performing asset. But there's a whole bunch of other things in crypto in traditional markets that have outperformed bitcoin. So like not everyone wants to jump on this vision you guys have of like, you can only invest in bitcoin. Like there's other things that are pretty produced great returns over that time period.
- [45:25]
D
You can't characterize all bitcoiners in that way and then use that as a straw man arguments.
- [45:32]
E
Yeah, like I would never say, I would never say.
- [45:35]
D
Nobody's saying don't invest in the stock market or don't invest in anything but bitcoin. They are saying don't invest in things that have very little value.
- [45:44]
G
Which is your opinion. Why? Just that's what I Put on the ultimatum. If you don't think those things have value, then clearly don't invest.
- [45:51]
D
Give them on this call is their opinion.
- [45:54]
E
I mean, I mean the fundamental thesis is blockchain platforms that are trying to be tech platforms for some abstract sort of future of finance may have widespread adoption, but their base token, there's no fundamental economic reason that their base token should accrue much value. It's more like even though it has been.
- [46:16]
G
So you think that's. So you think that stops. I think it keeps going. And that's just a difference of opinion, Right. I think these things amassing value over the course of their history, they'll continue to do that. You think it stops happening. So that's the difference of opinion.
- [46:28]
D
Okay, look, look, Michal, if. If it doesn't matter if the economics don't flow to the token, right, then you could create a Tesla digital token, right, and launch it on Ethereum or Solana or whatever, right? It's got no connection to an actual share in Tesla, right? But people just like Tesla, right? Of course it matters if the economic value. Unless it's a commodity, a scarce commodity, a store of value, right? That's different. That's like gold. Gold also doesn't produce any economic value. Right? But if, if it's based on transaction throughput or agility or whatever we want to call it, right, Then it has to earn something from all of that activity.
- [47:18]
G
No, I mean, I don't think so. I think you're just, you're just speaking about what you think the future will be.
- [47:24]
D
I mean, like, like a postmodern philosophical argument where things just have the meaning, you ascribe to them. And if I argue with that, then you say, oh, well, you're just saying stuff about the future. There is a way that the whole financial industry and economics and everything and money works. We can't just overlook all of that just because you have a different opinion on the matter and things can suddenly just have value just because.
- [47:53]
G
I mean, I'm not saying it's one or the other. I'm saying if. If you see a future where this technology is useful outside of the idea of only being a store of value, then I think there's a lot of technologies that are going to win. If we move into a big world where all of crypto, if all of crypto is useless and we're just looking for a new digital gold, then obviously only Bitcoin is going to win.
- [48:13]
D
Like, so give me an example today of what, of what you're describing Where? Stable coins.
- [48:23]
G
Stable coins.
- [48:24]
D
I think economic value to its hold.
- [48:28]
E
Glenn, you're dominating the conversation a bit too much. I think you should let some other
- [48:32]
A
people, people talk more.
- [48:33]
D
Sorry, go ahead.
- [48:36]
A
Well, it's actually, it's fun for me because I, I, I, I always come back to value to token holders. Right. Which is, I think the point, I mean the issue really is where the rubber meets the road is will the tokens are there. Tokens which will pass through economic value to holders based upon how they are utilized, realized. It's that simple. And the answer could very well be yes. It's not a uniform no, which is why no one will call me a bitcoin maxi. But I look and think and sound a lot like a maxi on many of these issues.
- [49:11]
B
Yeah, I think Dave, I mean we've talked about this a bunch of times. I mean if you guys were tracking the, I don't know, Ethereum foundation or sorry, the, the, the Dow for the ENS names this past week, there's this whole kerfuffle about basically, you know, them moving away from a Dow and, and taking all this value, which is literally like a quarter billion dollars of value, and putting it under the ENS Foundation's control, you know, but that whole structure was set up as a way to kind of skirt, you know, legalese and just kind of protect themselves against
- [49:47]
H
a
- [49:47]
B
non clear legal framework in the U.S. right. And I think what we're all hoping for here is that we get past this where you can actually push on this value to token holders and you know, where it goes or if that's even possible in the future. I don't think if any of us are certain, but we're hopeful to get past that point where you can actually push this value forward. And companies that actually have a token will be able to directly push value rather than just do whatever the flavor
- [50:13]
H
of the day is.
- [50:14]
B
Buybacks buy and burns, you know, the kind of current system, you know, that we move into some sort of system, but we're not there yet. Right. And so, yeah, I don't know, that's just kind of where we are right now. We're in this weird kind of middle ground.
- [50:30]
A
Yeah, I think that's fair. Alex, is that a new hand?
- [50:32]
E
Well, yeah, I was just gonna say, I mean, are we, is, are we just talking about putting your company's equity on chain? Because if you have a right to a cash flow and you want some protection against someone taking that away, then aren't we just talking about putting the company's Equity on the blockchain, like.
- [50:52]
A
Well, well, be careful. The, the word, the word equity means ownership, right? You could.
- [50:58]
E
If you don't have ownership, what's your protection?
- [51:02]
A
Well, I mean,
- [51:05]
E
because the owners could just stop paying it.
- [51:07]
B
Well, look, Dave, I mean, a lot of companies are doing this right now. I mean.
- [51:09]
A
No, but if it's on chain, then no, it can be programmatic. Right. You know, if the gas that's collected, there are ways of doing it. For example, one of the old examples in the world of crypto that people use just to understand it is if. Let's just picture a hypothetical world where Bezos, instead of doing convertible bonds to raise the first $2 billion to build out his first set of just in time delivery and distribution systems, he sold Amazon prime memberships in perpetuity. Right. And had that digitally secured, he could have done that. That's just selling revenue forward. And that value of that prime membership could go up over time, as in fact the price has gone up over time. He could have done that. That is not equity. That's just one example of a possibility of how one could sell revenue forward using a, using crypto technologies. Now, no tokens are doing this, but the point is, you can see.
- [52:13]
G
But Dave, that would still require like him to issue it on like a layer one. So like, I totally agree with you. That's right, but that's just like, like Alex was saying, that's just a company using cryptocurrency technology to issue a centralized token. I think the question that's interesting is, is there any value in native layer 1 assets that allow a chain, like you said, to allow the issuance of one of those products on it? And can that be a ground for commercial activity? What is then the value? Or is there any value associated with the layer one technology that allows that platform to exist? I totally agree with what you're saying, but I think we all understand that Bezos can't issue that token on Bitcoin. Is the value where that token is issued accrued down to the native layer one token that allows that activity to happen?
- [53:05]
A
Yeah, I think that's.
- [53:06]
I
Well, Poly Market, polymarket is named Poly because it's built on Polygon and you know, the Polygon tokens done well.
- [53:13]
A
Right?
- [53:14]
D
Yeah, but, but is that, is that the same phenomenon as before where there's no actual economic value following from Poly Market to the token or. And it's just like retail investors investing in the story? Right?
- [53:31]
B
Well, I would, I would layer on that, you know, just to Scott's point, With polymarket that you don't have to hold the native token to trade that. That on Polygon and that.
- [53:40]
D
That's the kind of.
- [53:41]
B
But even if you did. No, but I mean think about it. With Solana you have to have to trade meme coins with the NFT boom. On eth, you had to have eth, right? You don't have to have it on Polygon. And I think that's one. I mean, yeah, I think it's a big gas fees.
- [53:56]
H
You still have to have the native chain token to pay gas fees.
- [54:00]
I
Isn't it a race to the bottom, Ryan? I mean even if you do right then if everything becomes fast, cheap and zero and we've already priced these assets so far above their valid utility price, how can they ever catch up? The problem is that even for the old ones I can get it for a new one. And listen, I'm not even that bearish. I'm just saying as framework, if all these things traded on speculation and found some certain price that people have bought these things at, but the actual value, even if we are assigning them utility is fractions of a penny per transaction. They can never catch up to where they're priced even if they're being used for every transaction.
- [54:36]
H
On Poly Market what were touching on is. So in the, in the past we've, we've all been looking at a single chain with multiple usage usages, right? So we have Base and Ethereum and all these EVM chains where it's like, oh, it's one chain with a bunch of apps and then we're building out ecosystems. What we're starting to touch on and scratch on now is a single use case chain where polymarket inevitably became a single use case chain because no one uses Polygon for anything but Polymarket it or very little. You know, Matic and these other. It used to be used for NFTs and before Solana came along. What we're going to start seeing is a splintering of all these different chains where it's a single use case chain like hyperliquid where a company will roll out its own layer one chain because they get to control the throughput, they get to control the issuance of the token and they get to control the economic return to the holders in the network. And we're going to find that you're going to have thousands and thousands of chains that are very company specific rather than these Omni ecosystems.
- [55:45]
B
By the way, just to correct, because we are talking on facts here, you don't need the native Token to pay for gas. Polymarket picks up your gas fee.
- [55:52]
H
Just to let you know, that's a new one. Because when I was originally on polymarket, I had to have anyways the local currency.
- [56:00]
B
No, I get it, you're an og. Yeah, they went gasless a while ago. I'm not sure when, but yeah, yeah,
- [56:07]
D
I wanted to go back to something because it. What I'm hearing a lot of is like it's possible in the future that. Right. So it's like, well, I mean, if I come up with an idea for a company, right, like that sometime in the future, maybe, possibly I will do. Right. That has a very different value to something that's like actually in reality, you know, generating that value and you can see it growing and all that kind of stuff. And so the thing is, all of this just sounds extremely speculative to me. It's like early stage. It's like precede V VC kind of conversations.
- [56:55]
H
But we're all headed towards the future and if you're going somewhere else, then please let me know. But we're all.
- [56:59]
D
No, but what I'm saying is, what I'm talking about is people are investing in this stuff based on all arguments that we've, you know, be making today, which is that, oh, I'm investing in XRP or I'm investing in Poly Market or whatever. But you're not. Right. You're just buying a me that has no tie to the economic value being derived by those things.
- [57:27]
A
Let's put a bow on this though, because yes, I agree with that statement. I've made that statement myself many times. But the fact that people are in crypto is because they see how much money VCS make. And you know, our favorite example of this, and you can. And Scott probably, probably is laughing because he knows where I'm going to go. Our favorite example of this is the person who has been called the world's greatest investor because he literally said yes to every VC deal that he was shown, which was our friend Sam Bankman fried, because he has all these stakes and all this stuff. And so a lot of people went into crypto on the theory that, hey, you know, let's, let's get in on this new set of technologies. I have no idea what the hell there is. So I'm just going to spray and pray. And there's a lot of that. There's no doubt there's a lot of that. And a lot of that will, of course, will unravel and some things will do well and we'll see how that goes. For what it's worth, that's my point of view.
- [58:27]
H
I think what's being spoken of, of an economic benefit of actually being on a chain to the actual holders of the token. I think the emergence of these compute tokens and the economic impact of owning compute through a chain, I think that's going to start shifting the narrative and kind of answer this in the very near future.
- [58:51]
A
Okay, Scott, you have anything else you want to say? Because I know I want to crawl back into bed.
- [58:56]
B
Go to bed, dude.
- [58:58]
I
Enjoy.
- [59:00]
A
Okay, well, we'll see you all on next on Wednesday. Yeah, and I'll be in the correct time zone, so, you know, we'll see.
- [59:09]
I
Make your life a little easier. And won't be playing poker till 4
- [59:11]
A
o' clock in the morning. Yeah, that too. Bye.
- [59:14]
I
Bye.