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Trump Pumps The Market! Strategic Reserve Coming? | Crypto Town Hall
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Trump Pumps The Market! Strategic Reserve Coming? | Crypto Town Hall
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- [00:00]
Host
Morning, everybody. Happy Monday. Welcome to Crypto Town Hall. Every single weekday at 10:15am Eastern Standard Time here on X. And what a Monday it is. We once again have Donald Trump absolutely rocking the crypto market for better or for worse on a weekend. Obviously, for those of you who may have been living under a rock or missed it on Truth Social, by the way, can anybody tell me what it's called when you post on Truth Social? I still don't know what it's called when you post on Twitter anymore. I still call it tweeting, but obviously it's called X and not Twitter. Are we xing? Are you truthing when you're on Truth Social? Does anybody know? I literally don't know. I think it's called a truth, but it's very subjective. So he's true Thing. Sure thing. Well, it's a nice, nice way to indicate that anything you post is the truth. But either way, he truthed that crypto strategic reserve would be happening for the first time, saying crypto strategic reserve, that it would include xrp, Cardano and Solana. This a part of the original executive order, not a new executive order as many people interpreted it. And then of course, a little bit later when he realized that he had not included Bitcoin in that said, of course the core of it will be Bitcoin and Ethereum. To my knowledge, that was the first time we'd really heard Ethereum being a part of it. So we have five assets effectively listed that could become a part of a crypto strategic reserve. Once again, we've had a lot of debate as to what the words mean. Right. In the past we've heard strategic digital assets, stockpile. There's a difference between reserve and stockpile. But at the core we have him basically saying that via his executive order from before. We are going to get some sort of crypto reserve that obviously will not just be Bitcoin, but will include Bitcoin, Ethereum, xrp, Solana and Ada. So that was just obviously one story this weekend. Another huge story that kind of happened at the end of last week that went undiscussed that BlackRock is officially adding IBIT to its model portfolios. So BlackRock within their portfolio ETFs and portfolios that have alternative assets saying 1 to 3% of IBIT, their Bitcoin spot ETF. That's absolutely huge news. Once again, sort of went, went unnoticed because of what was happening here. We also had Richard Hart basically having his case dropped by a judge. I made the mistake of favorably saying that it was another loss for the sec. The Hexagons got very upbeat for not being detailed enough about their God, King Richard Hart and how he had beaten it and all those things. But, yes, another loss for the sec. There's some nuance, obviously.
- [02:48]
Ran
I think that. I think that if you're going to add XRP to the strategic reserve, you should also add Hex, I think, and Pulsechain.
- [02:56]
Host
I think Hex needs to get listed on Uniswap first.
- [03:01]
Ran
No, I think just go straight into strategic reserve.
- [03:04]
Host
Yeah. So clearly, Ran, you're skeptical or critical of this move to have a strategic reserve that's including these various altcoins.
- [03:16]
Ran
Yes. I mean, you're a US Taxpayer. How do you feel about. How do you feel about your tax dollars being used to buy XRP and ADA and even Solana, which, by the way, I love.
- [03:35]
Host
Well, mixed, because I'm a US Taxpayer who would benefit from him doing that. But if I was a US Taxpayer who was not a crypto advocate, I'd be upset about it. But that leads to a bigger question, Ran, which is like, where's the brand? Just dropped a listener, Adam, back up. But where's the money even going to come from? So when it was a bitcoin strategic reserve, obvious, obviously, the most rational approach most people had was we'll just keep the bitcoin that we already have through confiscation and legal action, and we can transfer it and call it a reserve without having to print more money to buy Bitcoin. But many of the assets that he just listed are not already held by the United States government in any way, shape or form. So it would require either buying them or taking tax payments in them or something like that. Panos, you can give your thoughts first.
- [04:28]
Panos
Yeah, I mean, I'm not totally against other assets apart from bitcoin being in the reserve. Like, I think Ethereum deserves to be in there, too. But when it comes to XRP and ADA especially, it's clear that Charles Hoskinson and Brad Garlinghouse lobbied to get those listed in the strategic reserve. They were both having meetings with Trump when he first got into office, and it doesn't make any sense. Especially Cardano. Why is ADA in the strategic reserve? The technology sucks. The only reason it has a large market cap is because Hoskinson holds a large part of it and stakes it. I mean, I kind of understand XRP a bit more, but still, to me, I think it's really grifty, and I think there's a lot of lobbying going on with these American founded tokens. And, and that is the reason why they are being listed in the strategic reserve. There's no other reason why Trump would put XRP or ADA in the reserve.
- [05:30]
Host
By the way, that's my personal opinion. I pinned a tweet above. It was me. On November 23, I posted this very early, strong rumor, don't shoot the messenger, but hearing it through reliable channels, the strategic stockpile they're discussing is Bitcoin and xrp. This was right after the executive order. Not a joke. We will see. People thought I was nuts. Everybody said I was fudding, I was insane, I was crazy. But I had very clear information that this would be the case. And now it is. And people are obviously in disbelief here. Brian, go ahead. I might have a bad connection here. Yeah, no, I can hear you fine. I think it's, it's grifty to include these other, other currencies. I think that Trump got elected primarily on his promise to, you know, have a bitcoin strategic reserve. All these other currencies weren't involved. And then Ripple donated a substantial amount of money to his campaign, met with Trump and then suddenly he, he wants Ripple in there, he wants Solana in there, he wants, you know, Cardano in there. I think that if you're going to pick and choose, the best way to pick and choose isn't to pick and choose, you know, currencies that either donated to you or you are working with via your meme coin. I think it's just grifty and I think Bitcoin makes a whole lot of sense for a strategic reserve currency. But these other, these other currencies do not, I don't think Ripple stands out more so than any other, you know, altcoin out there. So it's, it's, it rubs me the wrong way and I fear, and I said this before, I fear that it's going to, it's going to further divide left and right when it comes to crypto, because they're going to, the left's going to use this as a way to, a means to attack Trump. Rightfully so, I think, but it's going to hurt bitcoin and the crypto community unrightfully so. Dave?
- [07:24]
Panos
Well, if you do a thought experiment and you say you start from a premise that the United States should operate basically a sovereign index fund in crypto with, with two simple rules. We're going to pick American based or non American based in the case of Bitcoin, because it's global assets and you basically Say okay, and I'm going to have a market cap threshold. What would you buy? And if you look at CoinMarketCap today you see Bitcoin, Ethereum, XRP. You're not buying stables so tethers out. You're not buying BNB because it's Binance which is I guess Dubai based Solana. You're not buying USDC because it's a stable Cardano. And then the next one down is Dogecoin which you know, which would be. And people would really have lost their, if they put dogecoin in so they cut their line at least the line so far above, above dogecoin. But what's the most likely scenario? The most likely scenario is they're going to end up creating something that's basically rules based so that it is unassailable when you make an announcement on a Sunday trying to pump your bags, which I do think they did, you don't.
- [08:38]
Host
I mean just to be clear, by the way, for people who missed it, Eric Trump literally tweeted what a genius move to do this on a Sunday. That's right. There's no nuance there.
- [08:46]
Panos
No, it's not nuance. But my point which is simple is if your thesis for doing this is I want to, you know, I'm the US government, I don't know who the winners or losers are gonna be. I do know this whole thing is gonna be worth a lot and I wanna make sure that whatever the actual utility tokens that are driving the new economy, we have a piece of. And so you set it by based on market cap now that allows you to justify the, the bullshit that Brian talked about. Now is Brian wrong? No, he's not wrong. Do we, is, is anyone listening to this think that it's a good thing that all the donors got their coins in and nobody else did? Well, no, it's not a good thing, frankly. I wonder where chain link is right? You know, I wonder where. And you know there are, there are others that, that one could talk about you know, going up and down the chain but truthfully when the dust settles on all this, if it's going to be sustainable and not a flash in the pan, it's going to be based on some sort of index of actual infrastructure tokens. Now talking about it today, but that's the way this stuff works. The way this stuff works is you float a trial balloon, you see where the objections are, you figure out the clever way around the objections and you do it. And I'm fast forwarding to you just you can bookmark this. You know, some of the things that I've said on this show, I wish I could find the clips because, you know, you call. It's a question of calling it. It's sort of like shorting bitcoin when, you know, you have a president who doesn't want it to go down is probably not a smart move. You know, things like that. I think one bookmark indexes are going to become a very big deal in crypto. And the US Government, anything they do is going to be based on some sort of methodology that they can defend. And that's the only way they're going to be able to get away with this because there are even people in their own party who are intensely skeptical of all this stuff. So just think of it that way.
- [10:36]
Ran
I think, I think I agree with you, but I think. Let's look at a couple of things here. I think, number one, we know Trump style, Trump style tries to anchor you as far away from, from the truth as possible so that the job to get back to the central point will be quite easy.
- [10:48]
Host
Right?
- [10:49]
Ran
So like he says, he said we're taking over the whole of Gaza, where, we're taking over Canada, we're taking over the Gulf of Mexico. Like, you know, he does all these things to anchor you at a point where you're very, very, very far away from where he actually believes that you're going to land up. And then the job of getting you back to where you need to be, to where we actually need to land up is quite easy, right? So I think that's one of the, the first things. The second thing is I think they need to differentiate between the need for a strategic reserve and the need to bring American crypto founders and to make America the crypto capital of the world. To me, there's a big line in between the two of those. The question of whether or not the US should have a bitcoin or a crypto strategic reserve. I can get behind the idea of having a bitcoin strategic reserve. Why? As even Peter Schiff says, you know, bitcoin may be Gold 2.0 and you know, right now the US has the biggest gold reserves. And you know, if, if the, the world moves to a digital gold standard, there is a strategic advantage of having a gold, a gold 2.0 strategic reserve. I can get behind that. But there's no reasonable explanation as to why they need to hold an eth, an xrp, a Solana, an ada, a, a strategic reserve. There's just no logical thing that that you can, that you can, that you can argue that they need a strategic reserve. Now, I believe that David Sachs is a very smart guy. I think that although he's got some political tendencies, he's a businessman before he's a politician.
- [12:27]
Host
Right.
- [12:28]
Ran
And I think he's a very smart businessman at that. And I think that he's smart enough to know that you don't really have any reason to be adding altcoins into a street, into into a country strategic reserve. And you could even argue that bitcoin is a little bit of a stretch, but okay, that's a great stretch to be pushing. And so I think it's really a case of anchoring number one. And also I think at some point some kind of semblance of reality needs to be found.
- [12:59]
Host
Quickly. We're going to keep on with this conversation. I just want to mention, because it just broke. The US SEC has agreed to drop its lawsuit against Kraken. So a lot of people were saying when Kraken, because obviously it dropped coinbase, Robinhood consensus, you name it, Uniswap, all in the last week. Well, and of course, Richard Hart. Although I will get eviscerated once again if I say the SEC dropped their case against Richard Hart. To be clear, it was dropped by a judge in New York who said the SEC had no case against him. Just to be clear, lest I get killed in my sleep. But yes, they've now dropped their case against Kraken as well. Gary, go ahead.
- [13:40]
Gary
I just want to bring up some of the points that Dave made. I agree with a lot what he said earlier and also what Rand said. You know, these strategic reserve narratives are that says, hey, I've got a bag. I really hope the government buys my bag at a premium or pushes the price chart up so that other people get involved. That's going to be a certain faction that just it's a profit center. The narrative around the strategic reserve, if it does hold an asset, whether it's bitcoin or anything else, actually gets sold, gets traded, gets used in some political thing against a different country that's going to have the libertarians very upset that their asset that's held in a strategic preserved is used against the popular wish of the government that holds it. So these are political and branding games more than anything, in my opinion. And I can see the narrative around the stock market of the rise of Silicon Valley, rise of tech, the rise of NASDAQ and things like that, like you were saying earlier about indexes, I can see something like that. Being a positive in general, the idea that the Internet was spawned out of Silicon Valley or out of United States, that's been a great brand for 30 or 40 years. So I can see crypto benefiting because this quote unquote crypto leadership of the United States is bringing it to bear. So a lot of nuance to the explainer about why an asset or something like a strategic reserve would have a lot of types of assets. No one wants to be in pets.com no one wants to be in a failed startup in Silicon Valley. People want to be in the top 10 or rotate into that top 10. And I think it's just a brand move.
- [15:30]
Host
Lou?
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Lou
Yeah, I think I've got kind of a counter view. I literally 15 seconds ago just posted a story on Medium called the three Reasons the US Crypto Strategic Reserve is doa. Number one is the government is not our friend. Number two is Bitcoin is a threat to the position of the US dollar as a currency reserve. And I'm happy to. I'm sure lots of people have other opinions on that. But if you put that question into Venice, AI it says that the question whether Bitcoin is a threat to the US dollar remains a topic of debate. And finally and last is it doesn't really move the needle on the debt problem. Even if we buy a million bitcoin and at 10x's that's $1 trillion, we are debt is 40 trillion today. Doesn't move the needle at all. It's not worth the risk. It's not. I don't think it's going to happen. Last time I said something was doa, I went on CNBC the day Libra was announced and said it was DOA.
- [16:26]
Host
Also. I mean, some would argue that this will require legislative or congressional action to actually make it happen. But I haven't dug too deeply into what the actual mechanics of this RVA executive order. Paul, go ahead.
- [16:39]
Paul
I'm going to make an actual argument against why actually the not against, but why the actual other cryptocurrencies actually make more sense in the strategic reserve versus Bitcoin. So bitcoin basically is just the digital replacement for what we have, hopefully in Fort Knox as a strategic reserve of gold. Let's be real. We actually haven't used gold for settlements in decades. Everyone's been on the dollar. So if the US were trying to acquire Bitcoin as a strategic reserve as a complement to gold, it would imply that it would have some level of power for settlement. And exactly like Lou said, it's going to barely make a dent. Don't get me wrong, it's going to pump a lot of people's bags, but it's not really going to make a dent from the viewpoint of backing the dollar and making us more stable. However, the government does have a history of acquiring commodities in a strategic reserve. Think oil, property, real estate, wheat. Knowing these are important to some degree. I love cheese.
- [17:37]
Host
We have a cheese reserve. Do we have a cheese reserve? Yeah.
- [17:40]
Paul
And so these are things that the government thinks are generally important for the functioning of the population. If you think about all the other assets, we don't quite know yet whether or not the programmable chain will be eth, it'll be Solana, it'll be ada. But if this actually does, if Defi does actually replace a significant chunk of Wall street in our financial ecosystem, there's two main reasons why the government would want to acquire these different assets is number one, this is in effect a form of the oil that was a story of Ethereum. This is the oil that powers this new financial ecosystem. And it would behoove the government to actually have some amount of that to be able to pay for the fees that might be the new financial ecosystem. But second, and this is something that I haven't heard people talk about is that with the exception of Bitcoin and xrp, all these other assets are proof of stake. And so from the government's point of view, if one of these chains actually becomes widely used as part of our financial ecosystem, they would want to have a say in the direction of governance of these tokens. Now, it's ironically not the thing that we want to hear in the crypto ecosystem. The government is now going to be staking and potentially determining the direction of governance of these different chains. But if we think about it from the viewpoint of an international play where many different countries are owning and staking these tokens, it's in their best interest that they have some say in the governance and the direction these chains take versus another country. Taking that the same way that we internally with the different factions of crypto holders, want to make sure we have some stake and that there's not one large staker, like a coinbase, well, take that and expand it out now into the nation states. That is a core interest. If one of these chains really does take over finance. And so I think there's multifaceted reasons for them to be acquiring this. Aside from just number go up, we.
- [19:41]
Host
Got a lot of hands up. Darren, you've been waiting patiently. Then we'll go to Cam and then Dave.
- [19:45]
Darren
Yeah, thanks. Can you hear me okay?
- [19:47]
Host
Yeah, I sound great.
- [19:49]
Darren
Okay, great. Yeah. So, you know, I'm not going to buy into the pessimistic view here. This is overall positive for the industry as a whole. You know, I think we don't know what the makeup of the coins is going to be within the reserve. Right. So some of these altcoins may be a very small percentage relative to market cap. So, you know, I think that that's one aspect that's not being talked about is just the percentage makeup within the reserve itself. And then I think Paul makes a really good point of the potential petroleum reserve that we have. It's strategic, right? So it's not just oh, you know, oil number go up, you know, it's seasonal, it rises and falls relative to production. It's also, you know, in coordination with international players as well. So, you know, I would just say that this strategic reserve will fluctuate.
- [20:47]
Panos
Right.
- [20:48]
Darren
We may have, you know, more coins in the reserve at one point in time than another. They may sell off, they may buy. So it's not just, you know, government blind buying at any price. Right. There's some strategy behind it that I think is a nuance that is important to understand, you know. And then just from, you know, the other news with IBIT being included in the alternative portfolios for BlackRock, as somebody that comes from a traditional financial background, you know, I've been laughed out of rooms for recommending bitcoin into client portfolios, even in small percentages. Right? So this is really a wake up call for traditional finance to be able to see the merit of having cryptocurrencies in a diversified basket of portfolios. If the US government is considering it, then traditional finance should at least be taking a look at it. And I think BlackRock making that step is almost as important, if not more important, than the US government making purchases. And then finally, my last point is the US often leads in innovation. And I think that having the US have a strategic reserve will then force other countries to consider having reserves of their own. Whether that's in Europe, whether that's in Africa, whether that's in Asia. The preponderance of other countries strategically allocating to cryptocurrencies I think is another knock on effect that we're not talking about enough.
- [22:28]
Host
Yeah, the blackrock news is absolutely huge to me. As I said at the beginning, Darren, and I'm glad you brought it back around because we long on this show would sort of joke, hey, what happens when BlackRock recommends to every RIA in the country, hey, you should have bitcoin should be 1% of your portfolio or they just said 1 to 3%. Right. And this takes time to bubble through the system. But to your point, I think what blackrock says with regard to Bitcoin is almost equally or more important than what we get signaled from the United States government, especially when now the reserves are muddled. Cam, go ahead. Yeah, well, the S in strategic reserve really is the important word. And we need to figure out what is their strategy, what's the idea that they have behind holding these assets. To my mind, a country with a $36 trillion debt shouldn't be using taxpayer money to buy these assets. But if they particularly look at the staking assets, maybe you can make a case if they operate a staking node and they sell off X percent per year. But are they going to become an active participant in these global computer blockchain networks? That would be an open question. What would the use of that be?
- [23:44]
Ran
There's kind of two that come to.
- [23:46]
Host
Mind potentially that would be of interest.
- [23:48]
Ran
One, if the government is going to.
- [23:51]
Host
Push US Dollar stablecoins, clearly there's an interest in the government protecting the dominance of the dollar. That seems like a potential option for them. And then two, more for the taxpayer. If you could pay your taxes on digital assets in native currency, that would become an attractive feature. That would only be really attractive, I think, if they're actually holding those assets.
- [24:18]
Ran
But yeah, if anybody has ideas about.
- [24:20]
Host
What other strategic options there could be, I'd be interested in hearing take got lost going around the horde. Dave, you're next.
- [24:31]
Panos
So two things. First, I just saw a tweet. Now I just lost it again. I think it was CoinDesk said that Citi just came out with a report this morning which said two things both I think are accurate. One is that this strategic reserve idea will add legitimacy to the asset class, which frankly, I think is a very underrated part of why it matters from a price perspective. But two, that more rules around the inclusion would be helpful, which is a nice way of saying what I kind of ranted on this morning on our macro Monday show, which is selected as an index and what I talked about a little bit earlier, that's kind of the rules. But the answer, the point that CAM was just making. I also think that it's highly likely that one way the US will get into as the strategic part is operating mining and node operation on networks that they believe to have strategic importance and mining in particular, because one of the largest infrastructure projects that pretty much both parties know needs to be done is strengthening our electric grid. Because of its vulnerabilities, it's not capable of supporting electrification of cars, et cetera, et cetera. And we have finally gotten to the point where the scientific community has more or less kind of agreed that bitcoin is a major way to help stabilize grids. And so, you know, understand there are a lot of strategic options here.
- [26:01]
Host
Lou.
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Lou
I just wanted to counter what Dave said, that I don't believe it will add legitimacy. This guy who's making the decision, Trump put out a coin himself. Did that add legitimacy to the crypto ecosystem? So why the same guy just doing something with another coin help the legitimacy? I mean, I get, you know, most presidents, it would help, but I don't think, you know, this president, you know, I think he's already has the credibility he has with crypto with, with most of the world.
- [26:35]
Host
Gary.
- [26:37]
Gary
I mean, it's. These are going to be brand partnerships or they're going to be detrimental to brand. It depends on who holds and how it gets played out. For sure, any particular president or team or whatever for four years is going to be replaced by another in four years. So long term vision is what's necessary for the industry across the board. There will be some interesting plays when it be taxed every time that they trade from one coin that they love for a different coin or token or NFT or something along those lines. So I wonder if there's going to be some development and it does have different assets. There will be marketing about this particular asset if you're participating, if you're a brand partner. If basically things are copacetic between popularity and price, then no taxation because you trade in one particular token or another. And then there will be the sequester game. Basically the origin of bitcoin's story is that you invest into mining hardware and overheads and things like that so that you earn a yield in bitcoin that is sold into the open market. So I don't think it's necessarily going to be priced that if there's a strategic reserve that it sells into a market, whether it's a bull market or a bear and holds. It's simply going to be brand marketing both for politics and for price.
- [28:06]
Host
Yeah, and this is something I said this morning. The it's interesting that these are falling under a strategic reserve when we just had the idea of a sovereign wealth fund floated to me. It seems like the United States, if it's going to have a sovereign wealth fund. That's where they should be speculating or trading or, you know, adding these assets that are not Bitcoin. That would make a lot of sense to me, but it doesn't make much sense to me to do it in the manner that they're considering now. Lou, did you have something to say?
- [28:34]
Lou
Oh, no. I just wanted to say I don't understand how they can call it a sovereign wealth fund when generally that means that governments are taking their wealth and investing it. We're not taking. We don't have any wealth. All we have is debt. So, yeah, for a southern wealth fund.
- [28:50]
Host
To happen, we'd have to like find $7 trillion or something to even make it worth it in size to allocate to buying those assets. Although many people have pointed that the sovereign wealth fund could start with TikTok or something. The United States make a deal with TikTok and acquiring half the assets and basically having ownership in companies in that manner.
- [29:12]
Darren
Yeah, I mean, if you consider Facebook, Apple, Netflix, Google as sources of wealth within the United States, I think there's expanded definitions of sovereign wealth fund. I think the US has plenty of wealth to go around, but whether they just have 7 trillion in cash sitting around is not exactly the case. But to say that the US is devoid of wealth simply because they don't have 7 trillion in cash on the balance sheet is just a false thing.
- [29:41]
Lou
I'm talking about the US Government. So if you think the US Government has tons of money, why do we even need to have a strategic reserve? I thought the whole idea of this is because we're deep in debt and we've got to do something to address it. I thought that's the whole reason for the strategic reserve.
- [30:00]
Darren
No, I think the strategic reserve is similar to oil, where it's something of strategic importance. You don't want, say, China or some adversarial country like Russia acquiring all of the bitcoin in the world. And then that puts the US At a disadvantage in the future. And then to say that the U.S. the government is broke is just false. If you just take a flight over the United States and look out the window, half of that is public lands anyways. Right. So there's plenty of wealth to go around. To say that the US Government is broke is just a false statement.
- [30:45]
Host
I mean, to some degree. Dave, I think you had your hand up before, but couldn't some of this. If we're talking about sovereign wealth fund or even bitcoin on the balance sheet as a Strategic reserve asset. Can't some of this be just shuffling assets from one place to another, from one agency to another?
- [30:59]
Panos
Yeah, there's, there's, there's a few possibilities here. I mean, look, the Federal Reserve was allowed to buy mortgage backed securities. I mean, you know, governments can do a lot of different things. You know, as you know, it's not fully fungible, but there's a lot of wiggle room. The second thing that people need to remember is we have a Social Security fund that's going to go bankrupt and it will get talked about and it will be discussed that perhaps it should be invested more like CalPERS does their, you know, California, you know, whatever, or any of the retirement systems at the state level, how they invest their money and they do not invest their money in just basically in short, in the bank. And there's lots of different ways and lots of different things that could, that could happen there. The third thing is, as someone said earlier, it is if they do what Texas was talking about in their proposal, which is whether they'll do it or not, who knows? But and allow people to pay their taxes in appreciated crypto without having to pay, you know, pay capital gains taxes. On top of that, you have a natural way of accumulation which gives them flexibility to say, okay, do I want to hold it, do I not want to hold it, what do I want to do with it, et cetera, et cetera. So there's a lot of flexible ways that things could be done. And to be blunt, we have no clue what the administration is talking about. But the people that are running it, whether it's besent or sacs, et cetera, these are smart people and they understand what we're talking about here. And I don't expect the blunt instrument that crypto Twitter thinks will happen. I doubt we're going to see market buys of any of this stuff. And certainly if there is a market buy of any of this stuff, it's going to be done slowly, algorithmically, methodically, and you're not going to know about it until months after it's done. It's not going to be even what Michael Saylor does, which is his. Although this week he didn't buy. So really strangely, actually the week that probably made.
- [33:02]
Host
He deployed his 2 bill, he deployed his 2 billion. You know that.
- [33:06]
Panos
Yeah, maybe he doesn't have endless, it's.
- [33:08]
Host
Proof he doesn't have endless powder. Right. He just wanted to get that 2 billion into the market.
- [33:12]
Panos
Right. But perhaps, maybe he's going to learn from that. We'll see. But that's a totally different topic. If we weren't going crazy today, I think that we probably will be talking about that.
- [33:24]
Host
And then also for those who may have missed it, there's a Digital Asset Summit. I don't want to use the wrong wording, but I believe that's what they called it happening A crypto roundtable at the White House on March 7th. So this announcement that he made on Truth Social yesterday about the strategic reserve, meant to be sort of a part of this summit that's coming on the 7th. So if you didn't think that things were crazy enough already, that is about to happen as well. I'm glad we have James. We have you up here, Meta Lawman. I want to talk a little bit more about this breaking news with the sec. I know you obviously have dug into these cases in the past. We wasted a lot of breath there because they're all being dropped now.
- [34:08]
James
Yeah, that's right. If you don't mind, I would like to just point out something on this Strategic Digital Asset Reserve. I don't believe it can be accomplished by an act of the executive. And so that means you need an act of Congress. And the Strategic Petroleum Reserve was established by an act of Congress in 1975 because many of us who were alive back then were greatly impacted by this Middle east oil embargo. And so there were very, very long lines that people experienced trying to get gas for their car. And so there was this tremendous support for the idea that we need a strategic reserve to protect ourselves against a future shortage, whether artificial or some other reason that we've got oil on hand because it was really important. And that was an act of Congress. And pretty much all Americans could see the rationale here. I just find it really hard to see a road to the passage of a bill in Congress, even if the President pushes hard for it. And I feel that way, even if the entire crypto community was in one voice clamoring for exactly what the President posited yesterday on Truth Social. These five assets. If we all uniformly contacted our senators and congressmen and said, we really need to do this, remember how much education was required to explain to legislators what bitcoin is? So now you got to explain these other tokens as well and explain to them the rationale. But of course, we know that'll never happen. There is no unanimity among the even the crypto community, which would have to push hard together to get this thing over the line. What would happen is, and what may happen is that Certain Maxis are going to say, look, we don't even think there should be a reserve of Bitcoin or anything else, but if there is one, we don't want those shit coins in there. And let me explain to you what's wrong with this one or that one or the other one. The Congress people don't know what to make of that sort of input. You know, if they hear there is no unanimous support for this idea, even from the people who are supposed to benefit from it, then I just really don't believe it's. It's going to happen.
- [37:05]
Host
Yeah, it just shows that, you know, we, we did an exceptional job, I think, of lobbying as an industry for, you know, major change. But when it comes to the nuance, it's going to get very muddled and it already is. Right. But I want to do. James, while I have you, I do want to talk about the sec, because we have all this news about strategic Bitcoin reserve and what assets will be there. And quietly, what's happening at the sec, I think is probably bigger for the industry than any of it.
- [37:34]
James
Well, yeah, I mean, the exchanges are out of the woods, you know, and what. What's interesting is Binance should be next. You know, Binance, that was a more complicated case that the SEC brought against Binance with allegations of manipulation of the market. Whereas, you know, Kraken and Coinbase was just a. We think these tokens are securities and you don't have a license to trade securities. And. And now it is the view of the majority of the commissioners that these tokens are not securities and therefore there was no violation. And therefore the SEC did not have jurisdiction to bring the cases in the first place because they only have jurisdiction of cases involving the issuance or trading of security. So this makes sense. It's what we expected. I think people need to remember that elections have consequences. And if the election had gone the other way, these cases would be full steam ahead. And more so I think that all of them, virtually all of them, are going to have to be dismissed or settled because it is the view of the SEC today that these aren't securities and therefore they lack jurisdiction to prosecute cases against the issuers or traders of those assets. So I expect all of them, virtually all of them, to be dismissed.
- [39:08]
Host
Gotta love that. Chris, you jumped up on stage. Mm. Crypto. Any thoughts?
- [39:13]
Chris
Hello, my man. Yeah, I don't know. I missed out on a lot what you've been talking on, so I don't exactly know what the topic is besides what I can see in the title. Thanks for having me, man. What's the verdict? Now here I hear some people are saying the Reserve is not coming despite what was yesterday. Yesterday announced or.
- [39:34]
Host
Yeah, that's, that's sort of the nuance here. And others are more equipped to talk about it. But, you know, there's some debate as to whether it can be done by simply executive order, as James sort of just laid out, and how that would be done or whether it can be, you know, requires an act of Congress.
- [39:51]
Chris
I mean, look, I'm, I'm, I'm a trader and an ex economist and taxi driver, so I am not the one to, to judge whether this is feasible with an executive order alone. I think the Reserve itself, probably, yes, but then the funding needs Congress approval. Right? That's, that's how I understood it recently when I made some research. I think Arthur Hayes was posting something. He was saying, hey guys, this is just empty words. Yes, the Reserve might be coming, but we need a Congress approval for, for the funds. Right. If that's the case, maybe it's a combination in between the executive order, which was signed. Right. And then the, the, the Congress approval, which we have yet to wait for, which I still think the Congress is mostly Republican. It should be quite influenced by Trump. Right. But correct me if I'm wrong. I mean, I think there's a lawyer here in this space, so maybe I can get corrected if I'm wrong. I'm still quite bullish and positive on this whole narrative and I still think it's happening. But, man, I'm coming from a whole different position than someone who is maybe a US based lawyer, maybe.
- [41:06]
Host
Sorry, I glitched, James. I mean, you kind of broke it down, but any further thoughts there? As our lone lawyer on states. Rare to only have one lawyer on stage here.
- [41:15]
James
Well, it could be correct that the executive could create a wallet, but you can't buy anything to put in the wallet without Congress authorizing the funds. So to me it is the same thing. There is no digital asset reserve, in my opinion, without the establishment of, without an act of Congress and without unanimity from the crypto community lobbying hard to get this across the line. It's hard for me personally to imagine that happening.
- [41:49]
Host
Yeah, I mean, James, it's worth noting really quickly. Sorry. It's worth noting that Lummis is struggling very, very hard, from all indications we've heard, to get any backing for the idea of a bitcoin strategic reserve at the Senate level. I mean, there's a few senators who, who obviously are already pro crypto, but there's a. Clearly a huge education gap. Not that they're maliciously against it, but then many just don't understand it, don't understand why it would be an issue. But even just rallying support in the halls of the Senate for something that the President has talked about and has backing has been problematic. It's a big jump to imagine them, you know, approving funding for buying these other assets. Go ahead, Chris. Or Daryl, you can jump in.
- [42:35]
Chris
Yeah, I just, I just wanted to ask maybe to the lawyer again, how unlikely do you think that this is not going to be possible?
- [42:42]
Host
What.
- [42:43]
Chris
What speaks for the argument that the Congress would not approve that, as I have the understanding that the Congress is majority like Republican. Right.
- [42:56]
James
Well, unfortunately, our system is very much affected by lobbying, and the lobbying by people who contribute to campaigns is heard very clearly by the legislative branch and the executive. And so what I'm saying is that without unanimity among this crypto community, and I can tell you there is not, there are many in the crypto community opposed to the idea at all. I don't think they're the majority necessarily. And then there are many who attack the other tokens that are not their favored token, and we call them sometimes maxis. When that kind of interseen warfare is presented to Congress people, they're not going to know what to do with it. They're not going to stick their necks out when they're hearing from some constituencies within the crypto industry that they don't want this. And you see that a lot on Twitter, where Bitcoin maxi say, I would much rather have no strategic reserve at all than have one that includes these other tokens. And so generally speaking, what to get legislation done that an industry wants, whether it's the cattlemen or the insurance people or realtors or whatever, they speak by a association that speaks with one voice and has money behind it to contribute. And here we appear to be very fractured. And that's why I have that view.
- [44:47]
Host
Gary.
- [44:49]
Gary
Yeah, the real crux is, is this going to be something that's bought? You know, like you said something about oil and other reserves. You know, during wartime you need to have fuel for machinery and so forth. Right. Or during economic war with opec, like was commented earlier. So a strategic reserve has a purpose, and that usually means that you have to buy it off of the open market, like from suppliers. Now, we have seen in this evolution of crypto a lot of donation, a lot of sending of tokens to an address that's known whether it's Vitalik and then he dumps meme coins or whatever it may be simply for marketing, simply for branding. I would be more in supportive if for example, again not throwing ADA under the bus at all, but if Charles is deciding to donate some percentage of his founder allotment, that would be a different animal than saying to the general public, especially the political blowback of printing money to buy any crypto asset for a strategic reserve. That's really the question. Is this going to push people's bags up because it gets bought by an endless money printer or is it going to be something that simply is held in reserve and used for marketing purposes of a token?
- [46:10]
Host
Chris, did you have any further thoughts there? I know you were asking some, some questions, but does that give clarity to what you were you're asking about?
- [46:18]
Chris
It gives clarity. I'm still not sure if I, and I already said that about the regularities, exactly how Congress approval works and these things. I don't want to comment on that as I'm really not an expert on that. But listening to the reasoning behind why the gentleman thinks that it is not going to be passed, I'm not so sure yet because the, the, the lobby of those who are bitcoin maxis who don't want to reserve even though bitcoin would be included. And actually as he set the foundation of this, of this reserve, I think this is very small and that is people who are not really so much in power as, I don't know, the Trump family having worked LibertyFi and many other people I know actually who are literally lobbying. I met them at MicroStrategy for this reserve, including the Altcoins if you ask me. I mean I'm holding most of my money, 80% of my net worth just in bitcoin. And honestly speaking, I think, and I'm not a bitcoin maximalist, but if I had to decide for one asset only, I would say bitcoin. And if you ask me how I want the reserve to look, look like I would say the best would be bitcoin only. But I don't care if there's Ethereum in it. Solana, Cardano, whatever, like I'm okay then I'm gonna, I'm gonna buy some Solana, some Ethereum. It's fine. I'm, I'm, I'm fine with that. Even though I would wish for another outcome. And I think this is the majority of the bitcoin maxis would think like this, whereas this group which does exist he mentioned is rather small and in my opinion, also not really powerful. So I don't agree, even though I am of course not an expert from the law perspective, after listening to the reasoning, I would not agree. But of course, just time will tell.
- [48:12]
Host
Yes, Dave, go ahead.
- [48:13]
Panos
Yeah, so I think game theory is important here. I mean, I understand what James is saying and I don't disagree that it's challenging and you got to get through stuff through Congress. And it's funny. Nick Carter made a funny tweet about President AOC and selling whatever Trump buys. But I think that you dramatically underestimate the power of the executive. I think we've seen it. The fact that the Federal Reserve and the treasury conspired to buy a lot of stuff during the global financial crisis. They've managed to do a lot of things and the executive branch has a lot of power. Yes, it could be undone by the next president. But riddle me this, what happens? Let's just fast forward, play out the game theory. Let's say they acquire 10, I don't know, $10 billion market cap weighted index amount of crypto, establish, you know, whatever extra mining of bitcoin have, you know, figure out, you know, you know, something like that. And then in the next campaign when it's JD Vance against, you know, God forbid, aoc, one of the campaign issues is should we sell the strategic reserve? What do you think the crypto industry is going to do with that when that becomes a campaign issue? Because it's a great way to make it into a campaign issue. And I think people are. It amazes me, given the 4D chess that this whole thing has been played. I mean, if there's one thing we could all agree on, whether we hate Trump, even Brian will agree with me if he's still up here. Here on this is Trump is really good at convincing somehow his opponents to take really unpopular positions. Buying a using the executive branch to buy bitcoin and market cap weighted basket of crypto would be a great way to force the Democrats to potentially want to be oppositional and say they're going to sell it, which would make them exceedingly unpopular among the exact demographic hurt them the last time. So you got to consider it that way.
- [50:20]
Host
Just a few things of note. I don't know if it's considered breaking, but Trump has said that he has a huge investment announcement I believe is exactly what he said at 1:30 Eastern Standard Time today. So that's in two and a half hours. So we'll be watching for that. And then of course, many noting that March 7, which is Friday, is going to be a huge day because we have that round table that we discussed. But also on top of that, unemployment data and a Fed speech. So we have a lot of things to look at this week. Powell speech that. Cause I think tremendous volatility. Yeah.
- [50:53]
Panos
I think the investment. Whenever Trump talks about investment, I think he's talking about some large company making an investment in the United States, not the United States making an investment like.
- [51:02]
Host
This off bank announcement, like something I.
- [51:04]
Panos
Don'T know what, but I think it'll be external.
- [51:07]
Host
So somebody like the AI announcements that we had, you know, basically correct.
- [51:13]
Panos
I have no knowledge of it. It's just that generally when he says that he's talking about someone making an investment into America from outside.
- [51:22]
Host
Yeah, that makes, that makes perfect sense. I think we've largely unpacked the biggest stories of the day. It's going to be interesting to see what that announcement is. And then as the week progresses, I guess how prices react to the news that we got over the weekend. And as we start to see the sort of logistics of trying to actually get these things that he's announcing done, it's going to be a crazy couple weeks. So we're gonna go ahead and wrap. Come back tomorrow, 10:15am Eastern Standard Time for the next Crypto Town Hall. Everybody give our amazing guests a follow. They're on stage because we love them, because they're smart, because they offer great perspective and we have them back consistently, as you'll notice. So give them a follow so that you can great insights in between these shows. Until tomorrow. We will see you guys. Have a great, great day tomorrow. Crypto Town Hall, 1015.
- [52:16]
Panos
Bye.