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Trump To Make Crypto A National Priority? | Crypto Town Hall
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Trump To Make Crypto A National Priority? | Crypto Town Hall
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- [00:01]
Scott
Good morning, everybody. Happy Friday. Welcome to Crypto Town hall. Every weekday, 10:15am Eastern Standard Time here on X. We've got quite a bit to discuss today. Let some more speakers get up on stage, but I think we can go ahead and just start because it's already 1020. The big story, obviously today, Trump to make crypto a national priority. Conjecture and articles from inside the administration that one of the first day executive orders will be Trump calling crypto a national priority. Yet another step in the utter bullish cycle of Trump and appointments and announcements coming forward as I tried to unpack this news slightly. And we'll obviously go to the few guests we have on the panel to discuss this and what it would mean. We all might remember the Biden executive order from a few years ago that ironically, people believed was bullish at the time because Biden was mentioning crypto and trying to get his ducks in a line. But at the time, Biden basically released an executive order that said, I want all of my agencies to get back to me with a report on their intentions with crypto. I believe it was in the 90 day period or something like that. And obviously we know how that went. This could be the inverse version of that from what we're seeing, that Trump basically saying this is a priority. Every agency needs to get me a report on how they intend to approach this industry with a more bullish slant. So that looks like what this would be. We also now, I think have had generally a lot of announcements about day one executive orders from Trump regarding crypto. So I think the fear that crypto will not be on the docket in that first hundred days is diminishing here. A lot to sort of unpack here. It's more of the same. But this is yet another escalation. Dave, I'll let you go first. What do you, what do you think of this?
- [02:08]
Dave
Well, I mean, obviously it depends. You know, I was reading, I think it was Fred Krueger's list this morning of what he hopes CEOs are. And to be honest, if that's what his expectations are, then I think we're in for a bit of a disappointment. Now, obviously, I don't think that he, he phrased it as expectations. I don't think that that's necess true because he included a bitcoin strategic reserve being announced and a bunch of other stuff that I think isn't on the table. But what is on the table is what matters the most, which is ending the hostility towards bitcoin, ending the idiot cases without where there's no fraud getting towards, you know, a safe harbor of regulation with ending regulation by enforcement. These are things that matter a lot. There are many other things that they can study. You know, they're, while they're studying eliminating the irs, I mean I, I floated this idea. I still think it is a rational idea. You know, studying the idea, one of the things on his list was eliminating capital gains taxes on Bitcoin. On crypto, I, I think that's unlikely to be an EO on day one. I think it would be unbelievably bullish if it were. But one thing they could do is study allowing payment of taxes using appreciated crypto where you can pay your taxes and get credit for what you own as opposed to having to pay taxes on it first converting into dollars and then paying it. That would be an interesting first step and that's something that they could do. They probably won't as I don't think they're going to get that specific on day one. But you know, look, my point has been all along that a Trump inauguration with the policies that I've just said, the good, you know, the obvious ones, eliminating regulation by enforcement, getting the sent in, getting Paul Atkinson, etc should be enough to put Bitcoin to a substantial rally Mode. Whether it's 125 or 150 at this stage, I don't know. But you know, we've been in a range 92 to 102 today. It looks like, you know, if it sustains these levels and obviously it's still pretty volatile, we could be breaking out of that range and that would mean that we might be starting something new come next week and so we'll see. If on the other hand we for some crazy way get a crazy God candle today, then yeah, you know, maybe Mondays to sell the news event, but we'll see what comes on. It really depends on the details and people keep forgetting that it's not obvious what those details are. That was your point and I think it's a really important one. That's right. We saw Biden's executive order and it's basically it was worded positively from crypto despite the fact that that personnel is policy and it was handing it to people make decisions that were anti crypto. In this particular case, any EO is going to almost certainly be worded positively and the people that are getting the, that are going to actually answer the EO with any studies are starting from a completely different pro innovation stance. So I think that it's bound to Be positive, but we need to see what actually happens.
- [05:12]
Scott
Yeah, there's a lot to unpack there. So first of all, yeah, that echoes my same sentiment. I know we agree on this, but I think what people want to see at this point is crypto on the docket. It doesn't really matter the substance. They just want to see movement in the first week or two and that it's actually as important as it seemed to be during the campaign. So, you know, the fact that we continue to get hints that this is going to happen I think is the most important part and that we see the follow through. What you mentioned today about the taking taxes in Bitcoin or allowing these assets, we kind of unpacked that a lot yesterday. But for those who weren't here, that is effectively Texas's proposal that obviously has not passed yet for how they would approach a strategic reserve is rather than having to, you know, print money or divert budget from elsewhere to buy Bitcoin, which could be very controversial, let people pay their taxes in bitcoin and promise not to sell it, basically being the idea, or, you know, basically make it tender for those kind of transactions. So if the United States allowed people to utilize their Bitcoin rather than selling it to pay the taxes, to actually pay taxes, if people would do that, that could become the core of the sort of strategic reserve if they don't sell it off. Because we are in an interesting situation worth noting. Another piece of big news that was yesterday and today, which we've discussed a lot here, especially you and I, Simon, is that the bitfinex packed coins United States, well, saying that they should be returned in kind to Bitfinex. So that's almost 100,000 of the coins states has left. That could be the core of that reserve. But I don't want to jump into that yet. I want to stay on crypto becoming a national priority, being named as such and what's likely happening with these executive orders. Mike, do you have any thoughts on this before I go to Simon?
- [07:01]
Mike
Oh, well, thank you. I have to. I'm just following in Dave's general direction.
- [07:06]
Scott
Can you guys hear him? Just so I know if I'm glitching. Sorry.
- [07:11]
Simon
I can hear him. But yeah, I think.
- [07:14]
Scott
Okay, I'm going to leave and come back.
- [07:16]
Dave
I certainly heard him and I wanted him to continue.
- [07:19]
Scott
Keep going. I'm sorry, Go ahead, Mike. I'm going to jump off and come back. We get these glitches all the time, so it's hard to post when you can't hear the guests. I'll be right back.
- [07:26]
Mike
As long as you can hear me.
- [07:27]
Carlo
Okay.
- [07:27]
Mike
Otherwise I can hop on with a different mic, but yeah, definitely. Dave, you deserve the credit for this one. But now we have a market that's shifted over to something that's completely unique historically compared to more fundamental and macro analysis. This is all about what is the Trump administration going to do to adapt this space. And you know, in terms of being crypto being a national priority, which okay, he's paying back the constituents help got him elected. We can't. We've had the mandatory bounce to pretty significant levels. We've had the mandatory 15% correction and we are seeing a, you know, decent consolidated bull market. The issue I have is I still see Bitcoin is is it potentially doing that transition where it's going to go up when the stock market goes down? And that's just a question of when. Obviously they're both approaching records now and that's what I think we'll see. But yeah, now it's about okay, we're buying the rumor, we're getting facts. But the key thing I want to point out is from compared to last year now we have one key level of Hopium for bitcoin and cryptos. Obviously it's a shift away from the pushback from the Biden administration. It's the accumulation of it's such all political now versus last year. We had the ETFs, we had the having, we had the record setting stock market, we had that paradigm shift of the former antagonist turned zealot Mr. Trump tilting towards cryptos which was way overdue. And thank you, it was great he did that. And then of course reaching that $100,000 plateau. Now what do we have to look forward to? One key thing, Trump administration make it go higher. Which idea is just kind of, it's kind of out of my purview to, to be able to analyze that.
- [09:09]
Scott
I think you do agree at this point that there are potential things on the horizon that could bitcoin flying but not macro in a vacuum flying.
- [09:20]
Mike
Let's be careful with that because one thing we have to remember is let's not past performance is not going to be indicative of future performance in this case. Maybe some of the alts like XRP blasting off recently and some of the other ones that we've got from the notes yesterday, from the Trump's announcement yesterday. But bitcoin's in the mainstream now. There's a lot of hard here, a lot of potential which has been my key focus since we launched futures in 2017. That's bringing in the hot money who are going to are about the volatility and that's the key thing that bitcoin needs for that potential continuation. As Dave points out a lot demonetizing gold it volatility has to go down. So the days of just being it for me, I would love to be able to make another comment like I did in 2020 that should just add a zero. I just can't do that now until I see some form of pullback in equities and maybe a little disengagement from the record setting stock market. But we have just too much involved now. Maybe obviously people buy and dip but there's just too many players for it to do what it has in terms of volatility. So 3 times the volatility s p 503 times the volatility gold should go down. And compared to its past the average was closer to seven to eight times the volatility. So that's a key thing we should expect but we'll see maybe the rocket, I don't know but as far as levels and things I think people better at that but I think they've nailed it. They've. They've really figured out got the fundamentals in what's going on with the Trump administration. I think I respect his views on that one.
- [10:49]
Scott
Yeah, there's a lot also to unpack there. Simon, I know you had some thoughts here. I do want to wait quickly, quickly before Simon, there was something I wanted to say to Mike just because in context of that that's important. I talked to Luke Stryers, the CEO of DARE a bit this week. It hasn't come out yet. When we were talking about the size of the options market and what that meant for crypto to your point about it being arbed away and becoming more mat my conversation with him and they are about 86% of the futures and options market worldwide was that we still are 10% there on Bitcoin. The availability of options and strategies and things that you would need for it even to be on par with any other asset on the stock exchange. So it just has not been fully institutionalized in that way for any institution to be able to utilize these strategies yet. So maybe we still have a big gap until what you're talking about really happens. Just an interesting thought because I happen to have talked to him about it. Go ahead Simon. Sorry.
- [11:51]
Simon
Yeah, I always I guess on the spaces that normally have a lot of American people I always just try and Remind people that of course, all the attentions on the Trump administration has been one of the largest events in this cycle to bring in the next wave of volume now that we're at a $2 trillion market cap. But this is a global story. And this global story has shown that this used to be a China story. And America saw a massive opportunity when China started messing around. And so even if America started to mess around, which I just can't see, under this administration, it is a global story and a massive opportunity for another country, another jurisdiction. And you just got to remember that while America is the largest capital market in the world, this is an opportunity for other countries to have a strategic and a competitive advantage. And remember that bitcoin is apolitical. The whole point of this was to give us freedom from the state, freedom from the ability to have to put our money in a bank, freedom from the ability to have to beg governments every time we transact, and freedom from the criminality of the Federal Reserve and the central banksters which are debasing everybody's wealth and driving everyone into capital markets to protect themselves in the first place. So that story does not go away. It's never gone away. And in the 14 years I've been promoting bitcoin, it has been the same story. And it will continue to be the same story as more and more people recognize it. Now, the next phase of once you're in crypto, it tends to be very sticky, especially when you can pay your taxes in Bitcoin and you don't need to mess around with the bank and then the bank shuts down your account and then you're trying to get it over to the government and you're messing around and then you've got your gains and everything. So if you can just simply stay in your bitcoin and the government wants your Bitcoin, then the massive amount of efficiencies that come from that and the ability to hold their money in a long term huddle play as well and benefit from the same thing that individuals is. More and more people will recognize this, more and more corporations will recognize this, more and more tax authorities will recognize this, more and more fund managers will recognize this, more and more corporations will recognize this. And eventually more and more governments and central banks will recognize this. And that has always been the bitcoin story. Now what's really interesting in the Trump administration as it was talking about things like, okay, we don't want to go down central bank digital currencies, unpack that a little bit more. He Said central bank or the administration said central bank digital currencies because the CBDC is taking the profits from the dollar's creation and handing it over away from the banks and over to the Fed. But it didn't say that you can't do a government issued digital currency. And so treasury, once it's got its Bitcoin strategic reserves, there's nothing to say, look, we've got all these Treasuries, why don't we just directly issue a blockchain asset? And that's exactly what JFK did in 63 when it issued a digital dollar and said it's convertible into silver and essentially led to his assassination. That's a different story. But all of these options exist right now. And in an environment where there's going to be confrontation between what the Fed wants and what the administration wants, the sky really is the limit in terms of the options and opportunities. So you know the debates around let's increase the debt ceiling. We know that everything's going to be inflationary with fiat currency. We know that tariffs are going to be inflationary. We know that replacing illegal immigration with legal immigration is going to be inflationary. We know that the Fed lowering rates is going to be inflationary. We know that a nationalistic agenda of bringing back manufacturing base into America is going to be inflationary. So all roads lead to inflation. And the question is where does Bitcoin sit in that and in the disruption that all of that creates, the opportunity to financially engineer because the government's going to need to borrow a lot more. And why do you need all of this middle people in the middle like banks and central banks when they're exerting so much control that we're moving to a world that's more and more centralized when really what people need is more and more decentralization. And that's the trends that we're all going to experience. And the reality is, I think it's.
- [16:41]
Scott
Important to note that actually there was an article, I think it was today that the sense the incoming Secretary of Treasury is very outspokenly against the cbdc. Now I'm not saying that it can't come four more years down the road or that we haven't seen. Obviously people come in line with policies. We were all very bullish on Gensler's FCC chair because he thought blockchain at MIT and we know how that went. But percent of all people coming into the treasury is very outspoken against the CBBC and on record before taking the job. So that's good at least for the time being.
- [17:20]
Simon
But Scott, people need to recognize who that is a nephew to that is saying the Federal Reserve stay away from banks ability to create money. We want banks to create the dollar. We don't want the central bank to create the dollar. But there's nothing saying that when we want to borrow more, we want to create our own blockchain asset independent of the Fed and independent of the banks. All of this is a fight for who profits from the dollar's creation at the moment is the private banks. And they're saying Fed stay away from that. We want to keep it with the private banks, but we can compete.
- [17:53]
Dave
Dave yeah, I think to amplify something Simon said in terms of the Fed in particular, there's been a lot of debate about whether about Fed independence, et cetera. And I thought the cent yesterday had a brilliant turn of phrase. He basically said the Fed's open Market Committee, in terms of setting interest rates, should keep their political independence. And it was very specific about choosing the words. Now, what that means is extremely important. It is very clear that this administration is not happy with an outside with regulatory power and the ability to influence other organizations outside of themselves housed outside of the administrative branch of the United States. For those who don't know, the Fed is a private company that has an appointee by the administrative branch, but they're not accountable to them. And so that plus Cynthia Loomis talking about going after the FDIC for if they in fact get rid of any of their documents, I mean, the Fed will be on that list too. For Operation Choke Point, there could be some very interesting political realignments here. I wouldn't surprise me to see a bill if not end the Fed, but end the Fed's regulatory approvals basically bring back the ability to have a Fed master account approval into the government in an audible fashion. Because what we saw with Custodia bank was so reprehensible and pretty much undefendable by any rational way unless you keep it private and keep it opaque. So that would be a very big deal. And that kind of will allow for the sorts of at least initial disruption that Simon is talking about. I mean, getting rid of the entire US Banking system, probably that's not on the table, but getting the Fed as a roadblock might very well be on the table.
- [19:48]
Scott
Carlo, any thoughts? I'm waiting for Carlo to come on and say good morning. Scott we're not getting him. Matt, do you have any thoughts on this morning?
- [20:02]
Matt
SCOTT yes, indeed. I think we're first of all, I'm I'm never been so optimistic on our future financial system. It's impossible to take everything that Dave just said and, and really squeeze all the importance out of it because it is a sea change in how we're, we're transacting and just the, how the banks have been allowed to go. This kind of very, almost totally in the dark approach to banking. I mean, as someone who had their account taken from me, you know, there was no feeling quite like it. It felt very Soviet in that we just knew there was no recourse. We sent demand letters to financial institutions saying, you know, do this or else. And yet, you know, there was never any response. It felt like you were screaming into the void. And to make all of that a thing of the past is incredibly optimistic and just something that I get very excited about. The other thing is that we're also going to see defi actually be usable for something. So many clients and so many people in the United States who I talk to have, have just kind of, we haven't really had anywhere to go with this. We've thought, wow, these Rails are great. They're obviously the most efficient thing anyone's ever seen is going to totally change how we trade, how we interact, how we buy and sell units of value. And finally, it looks like, you know, for anybody I know, I have notifications set on President Trump's wallet and I see what he does or with what his agents do with their tokens, and it just makes me incredibly optimistic because I did not know that President Trump, for instance, was buying and selling AAVE and that he was this dialed into the Ethereum ecosystem, for instance, and is apparently very familiar with all of these things. I can't imagine any other president doing this.
- [22:05]
Scott
Yeah, just to be clear, I mean, that's not him. It's the wallets controlled by World Financial, a project that he's endorsed that is affiliated with his kids. But I'm just saying, to be clear, you're not wrong. Everything you're saying is true. But I don't think we can take the jump to President Trump has any idea what any of this is, but the very fact that it's something that he's endorsed and they're actively moving around it and he has launched that token and NFTS says what you're saying anyways.
- [22:32]
Matt
Totally agree and thank you for the clarification. These, you know, I'm sure. And he does need to be more clear about it, to be fair. He needs to actually tell us who is behind the scenes working these things. But that, that's even remotely possible, that we're even talking about it is, is just wild. It, it also heralds a new era for privacy, in my opinion. I think we're actually going to actually see that that tokens are, are fungible by their nature. And the previous administration wanted to, to blacklist tokens themselves. They wanted to blacklist rails, they wanted to blacklist addresses, they wanted to make sure that certain tokens were not tradable ever, ever again. And we may see a revision of that way of thinking as well. To me, that's, that's immensel basically says that a future is possible which for many, at least the last four years, we've been thinking that some of these things simply were not achievable now.
- [23:30]
Scott
Carlo, you're here. Good morning. Morning, Scott.
- [23:34]
Carlo
Thank you for having me up. Hey, I'm sorry I could not get my mic button to work. Jumped in, jumped in. A little late, but I, I, I have to agree with the sentiment. I mean, we're, we're, we're in a, we're in, we're in a condition and a situation right now that is frankly new and novel for crypto. That we actually have a administration that is supportive. I cannot see better tailwinds. And I'm curious to see, Scott, from the trading perspective, what this weekend's going to look like, because you're going to have all of traditional finance basically shut down effective Friday, 4pm and then you're going to have the degen community in crypto trading on the FOMO in anticipation of this inauguration all weekend. And what is that going to do to altcoins and Bitcoin? And then what's that going to look like on Monday when trading reopens again? Look, I fully expect a correction because people will inevitably complain that he didn't issue enough executive orders first thing and he didn't make crypto a priority within the first day or 100 days. But you've got to really zoom out and look at the bigger picture here, that conditions could not be more favorable for this sector. And as an attorney practicing in this sector, I'm excited to see renewed interest in coming back onshore and doing things here because this administration that is leaving office effective Monday, between what they've done with Elizabeth Warren and her agenda and the choke point 2.0 and the FDIC, which is just stunning, and I hope we see investigations into that and the debanking of this sector, I've never seen the United States be more aggressive in trying to push an industry out of this country and to push an asset out of the consumer's availability. So I'm really curious to see what congressional hearings pop up that are going to look into what motivated all that because I really think we need answers.
- [25:39]
Scott
Yeah, I agree with literally everything that you just said there and I think we're going to get them. To be honest, it seems very clear that these are priorities and I think we have even beyond doge and just we'll see now of searching for transparency from what's been happening in the past. So I think Operation Chokepoint 2.0 is finished. I think these cases that the SEC has brought against the industry outside of ones that maybe are outright fraud and under their purview are probably done. And we haven't even seen what happens when they start to care. The Chevron was overturned, right, Carlo? I mean now regulators can't even do the things that they could in the past.
- [26:24]
Carlo
Oh yeah, I think we're going to see a tremendous reset button with respect to how regulators have been approaching very heavy handedly and without really clear mandate from Congress kind of defining their own agenda. I think Congress is really going to pull the reins in on a lot of these regulatory agencies and Chevron's going to be clear legal justification for doing that.
- [26:51]
Scott
Have thoughts specifically on this? I mean, it just seems like all systems go. I know that that sometimes is a signal, Mike, for you, as we've discussed, but I mean it just feels like the environment is entirely changing. I know you focus obviously on macro markets, but without looking at stocks or the treasury, we can admit that the industry itself seems poised to actually be able to show what it's worth in this country for the first time. To be honest, Mike, my biggest fear right now is that we get sort of this all systems go and all of the clarity and we end up having another Sam Bankman fried or something.
- [27:31]
Mike
Well, it's, it's delightful to see. Certainly you look at it from five years ago. Like I said, I deferred Dave, on this. It's just the technology. When I saw it going to the dollars, the base layer and dollars and accumulating treasuries and Trump not figuring that out, his first administration, that was just silly. So it encouraged me to write about it. So because, you know, I, I know what I write gets into the public domain now. It's just obviously it's so widely known when, you know, the average person asks me about it and buys it. It's just as a contrarian, it's part of my curse. The Key thing I look at now in terms of the macro, think of what's happening in terms of what's happened with markets this year in the Fed, we've seen pretty substantial jump in commodities initially, but that's somewhat speculative. You get the speculators getting in there. We get the stock market going up, crypto's going up. We had this significant massive wealth creation in the stock market last year. And cryptos and what's happening, inflation staying sticky as the Fed cut rates. That's not kind of. And yields, bond yields are going up. So the Fed's out of the picture now. As long as risk assets keep going up, Fed's done. They cannot ease anymore. They found out the risks of that. So this to me is the macro. Now if we can get to that point where we get a little bit of more back and fill in these very expensive US Stock market, which according to my main colleague Jean Martin Adams has been top of and she's been really bullish for years, we get a little backup in that. And bitcoin holds in there. Now that's a key sign for, for people like me to write a bite, say, oh, it's really showing those divergent strength things right now. Maybe it's doing it. But right now we still have all these risk assets going up. But the thing is every day they go up. Like you even see it in Fed fund futures today. You take that easy. Not in the market. And particularly I like to end with this. In a market environment like this, when inflation's sticky, we have massive wealth creation and commodities going up. That's an environment the Fed's supposed to hike typically. So watch out. It's getting to that strange. Now we have to see something's got to break.
- [29:20]
Scott
Yeah, that obviously makes, makes a lot of sense. Simon, any thoughts here as we wrap up sort of this side of the conversation?
- [29:33]
Simon
Well, it is the question of all questions, like there's no doubt we, we've only known Bitcoin in a quantitative easing market with a little bit of tightening and then a pivot of a strategy. So we don't know any different. My personal belief, and that's why there is such a premium to those that get the bet right, because it is based upon Bitcoin still being a speculative store of value that follows a four year cycle regardless of what central banks do in the long term. And when central banking has a massive pivot or there is a very large systemic event like what we had in 2008 that led to Bitcoin's creation Then what happens? And that is why there's asymmetric returns, because people that don't want the asymmetric returns would just say, that's gold story. And others are saying, well, we think this is bitcoin story because it's both a technical play that benefits from central banking and quantitative easing in the good markets, but it's also the solution and a risk off asset long term, probably not short term. And the solution of owning your own money, spending your own money and being able to protect yourself, regardless of what the central planners do. And I think that plays out. But some people won't believe it until it actually happens. And probably at that stage, all the asymmetric returns are gone at that stage because it will perform in a similar fashion to gold, but with more scarcity.
- [31:06]
Scott
Yeah, it's funny, we all arrive at Mike's conclusion of bitcoin becoming institutionalized and less volatile. We just, I think, have a very different idea of where we are on that spectrum. Is that fair to say, Mike?
- [31:22]
Mike
Yeah, it's, yeah, exactly. But it's, it's, you know, it's great how it's in the macro. But here's a key thing I find that's unique about where we are this year. A couple of years ago it was, you know, so, you know, fringe. Even people at, still, people at Bloomberg pushed back on it. Now we have, to me, it's now the most significant risk asset on the planet, potentially in some ways is much or more than Dave likes to push back at me when I say this, when I say beta. The US stock market S&P 500, meaning Bitcoin, has to go up now because if it doesn't, it will signify somewhat failure from the Trump administration. That's where you have to put yourself as this tactical trader. How Benjamin Disraeli thinks what says what we anticipate seldom happens. We are all completely, completely, and the whole world is completely onto this bullish mantra now for cryptos and bitcoin, everything, which means me to think, okay, I have to look for cracks, chinks in that armor. But that's why it's got to go up, because if it doesn't, what's the Trump administration going to do? What's it going to signal for markets? And, you know, that's why I put my trading hat on, a tactical trading hat.
- [32:26]
Dave
All I have to say is if you can buy something that is trading at an 80 to 90% discount based upon where you believe its value is, it's a good thing to buy and you can talk about the volatility as much as you want. Obviously volatility is bi directional most of the time, highly volatile assets. You see, when volatility spikes, it's generally in down markets. Bitcoin is bidirectional and that is different and it matters. What this administration is looking to do is there's a lot of people who have made nice bets on the notion that bitcoin is going to demonetize gold, which is a, that's where I get to 80 to 90% discount. Now it could be that all financial risk assets in a financial meltdown will go down, but bitcoin has that extra buying at a discount and that is literally the play. And so it is important to understand that this administration now has the tools to help make that a reality and probably the financial reason to want that reality to take place and looks to benefit from it. And to me, those that, that's a, that's an alignment that is very powerful. And I think that's, that's why I think those of us like myself who see at least getting halfway there to like a 250 range seems, you know, if not baked in the cake, but highly likely. And, and yes, you know, markets are stretched. But you know, all you have to do is understand that markets are also manipulated. I mean, there's no way the long bond, the long bond just backed off, you know, 20 some odd basis points in two days because of a CPI print on data that we don't really, you know, don't know how well it gets constructive. And as you say, there's revisions to all of our employment data. I mean, it really is an interesting world we're living in. I mean, all I say is follow the money. If they have the incentive to make something happen, then that thing will often happen unless there's a reason they can't do it.
- [34:35]
Mike
So I got this tilt on Dave a little bit. One thing that Simon touched on and Dave touched on a little bit, first of all, this is in the middle. One thing I love about cryptos is they're right in the middle of this epic Cold War 2.0. And yes, I'm American, I admit it, but just by the basis of us not messing with our system, by the system, we're crushing it with China. But you saw that we went through that. We beat ourselves up, we went through court cases, went through Gensler, and we've completely tilted over to adopting crypto. Can you do that in China? One person has to make the decision. And when Dave mentions longbond let's just talk about longbond right now. It bumped up to near 5% last week. Let's look over at China, 1.88% Japan, 2.2% Greece, 3.95% Portugal, 3.5% Germany, two years in a row of negative GDP, 2.7%. That's where I tilt over to long bond. And that's why I keep saying this. When we get that first 10 correction, the S&P 500, which we haven't had for almost two years now, then we'll get the big test of how to really reallocate risk assets. And that's why I think the long bond might be the next big trade. Yes, I've been wrong, but we still haven't had that normal correction, normal little reversion to this massive wealth creation. US stock market. I'll end with this. Last year, US stock market added almost $12 trillion in terms of market cap. That was almost 40% of GDP. That's the most in history. A lot of little wealth being created there.
- [35:56]
Scott
Listen, just as we kind of move on, I want to mention something that kind of is in line with all of this news we're getting from Trump. Beyond the fact that there's some rhetoric and we're all holding our breath, waiting to see if it meets expectations, it's very clear that a lot of companies in the industry are moving forward as if we have clarity and things have improved. I mean, I don't know if you saw, obviously we had Exodus Wallet. We didn't really talk deeply about it, but they listed on the stock exchange, we have Etoro announcing that they're going to basically IPO at a 5 billion-ish valuation. I mean, Phantom just raised 150 million at a $3 billion valuation. I mean, a lot of things. And of course, you know, whether it was true or not, the idea of other assets being strategic reserve assets, I think that that's nonsense. It was just the New York Post sort of having fun and paying lip service. But the idea that we're very, very likely, if you look at the odds of getting XRP or Solana or even doge ETFs in the coming year, it is factually regardless of what we think will happen to price or the correlation to anything else, it factually is seemingly all systems go for the industry in the United States. And I can tell you that anecdotally, a lot of people who have left are telling me that they're re establishing offices here. One example, I had a conversation on the street with Frank Holmes, the CEO of Hive, the first publicly listed digital bitcoin miner, and they just moved from Canada to Texas. Right. And he very clearly highlighted regime change and the reason that he was willing to make that decision. So I think it is really, really important to note that this is happening in the industry, which I think lends a lot more credence to the idea that we will see these orders and this thawing and, and all of these things. So I don't know if anyone has any final thoughts on that. I'm going to chat to Lingo in a second. But if anyone has any further thoughts, Dave, go ahead and then we'll. We'll move on.
- [38:10]
Dave
Yeah, you left. You left off the one other piece that that's, I think is massive, and that is the, let's say, the top 500 broker dealers in this country, all of whom, or many of whom have financial advisors that are out talking to clients who cannot make a penny off of bitcoin over the course of the next year, every single one of them will have the ability to offer that as a service, or the vast majority will, and that is a very big deal.
- [38:39]
Scott
Agree. And we see Morgan Stanley coming online. Go ahead, Simon.
- [38:42]
Simon
Yeah, and just wanted to do a bit of a shout out to the Exodus team on that one, a proud seed investor in that one in the 2016, and they've gone to now float a billion dollars, but they almost had their IPO canceled because they were getting ready to go public. And in the Biden administration, the SEC and Gary Gensler, at the very last minute, after months and months and months of work and spending millions and millions on legal fees at the very final hour, said, no, you're not going public. And. And now moving into the Trump administration, they've pulled it off. They rung the first bell in the New York Stock Exchange and expect to see more and more companies. So just wanted to shout out to the Exodus team, they've always done great work.
- [39:37]
Scott
Awesome. Yeah, that's a great shout out. And what a process, right? And there's one thing is once you get listed, even if we get regime change, they can't unlist you. You know, you're pretty much good to go. So it's great to see these sort of barriers being broken down. I think we're going to see a lot of companies in crypto listed publicly in the next four years, I would imagine. All right, guys, so wrapping that part of the show up, I want to move on to HM and Lingo. So you guys know you always Hear when there's a quote unquote sponsor that Mario's team gives the big caveat. Well, this is not a sponsor. It's just something that I have invested in myself personally and think is awesome and worth highlighting on the show. And so when it comes from me and I'm interviewing him, that's generally the gist. I think it's important when we have a forum like this on Crypto Town hall to tell you about the things that are happening in this industry that they think are, that we think are awesome. So I really just invited HM up here so that I could talk to him for 15 minutes, ask him about the progress that they're making. You can see Lingo coins also on, on stage right now. What's up man? How are you?
- [40:40]
HM
How are you doing? Thanks for having me.
- [40:42]
Scott
Yeah man, I'm good. So HM and I, for guys, for context, we've hung out a lot in actual person, the kind of people that I usually invite up to talk. So listen, we're kind of at this point in the cycle where I think we're going to see a lot of new things finally launching and we're going to start to see what's going to stand out in this part of the cycle. And in my opinion, and I've continually said this, and this is why I'm excited to chat with you, RWA is going to be the biggest narrative. Even though it's kind of AI Agents right now, I think I feel like AI Agents is the in its first bubble, you know, and RWA has had years to start to mature and I think this is the moment when we're going to see it. So maybe just give us the TLDR on Lingo and what I'm even talking about here, then we can dive deeper into it.
- [41:30]
HM
Well, I'm not hating on AI agents. AI XBT has been talking about us I think every day since the last five, six days. So that's cool things happening there. But yeah, dude. So with Lingo, the ambition is to build the world's most rewarding token. We want to have the token that is optimized for community, basically because when you look at the top 300 tokens on coin market cap or 200, the number one thing they have in common is, is not tech and half of them don't even have a product. It's really about community. So everything we've done from engineering the business model to the go to market and the ultimate vision is geared towards making the world's most rewarding token aimed at community. So in RWA in general, it's mainly institution focused. We are kind of RWA for the people.
- [42:25]
Scott
How is it structured? So when you talk about RWA for the people, how does the token work? What's it backed by? Because it's very novel and very real.
- [42:37]
HM
Sure thing. So if you take a step back and you look at the macro picture, 2021, Bitcoin adoption was twice faster than the Internet. And so we looked at that and we were like, if this adoption rate halves, we're reaching probably a billion people by 2030. And if this happens, it's anywhere from 2 to $7 trillion invested in this industry in, in, in 7, 9 years. And if that would happen, it would probably be the most amount of capital ever injected in the history of the world in the shortest period of time in one industry. And so we looked at that, we were like, okay, if two to seven trillion dollars will come in, in that space, it will either come from institutions or retail. And what was shocking for us was that we, we did not see many projects, projects building specifically for retail. And so we were like, the thesis was very simple. We were like, if we take the top three problems that, that hinders retail adoption and we fix those, then maybe when that billion people comes in, they will be interested in a project that fixes the main problems. And so for us, the biggest problems were one that crypto is really hard to understand for most people. Like, it feels like you need a PhD in white paper analytics to understand what a project is. It's really not great for mainstream people. The second issue was that it's not perceived as being tangible. It feels like fake Internet paper money when you speak to most people, not in that space. And then the third issue is community loyalty. Because when you look at the mechanisms that fuels community loyalty, it's often some form of dumping tokens. It's either staking protocols that gives a high apy, but ultimately this means you're dumping tokens, or it's airdrops, which ultimately means you're also dumping tokens. And so we look at that, we were like, if we build something that is very easy to understand for most people, that is tangible and that has a way where community loyalty is sustainable, then maybe we solve some real problems. And so what we've done, it's been three and a half years already that we're building. Lingo is everything we were doing was around these three problems. So number one, lingo is really easy to understand. The way it works is you buy lingo and Then you get free stuff. You can get vacations or Nike shoes or gift cards, or you can get bigger stuff like a cybertruck or a studio. It's very, very easy to grasp from normal people. I hold this token, and then as a reward for my loyalty, I can win small stuff or big stuff. But the way we finance this is also how we make it tangible and sustainable. The way it works is that the model is very similar to McDonald's. You know, like McDonald's, on the front end it's a burger company, but on the back end, it's company. What they do is they leverage.
- [45:37]
Scott
You glitched, by the way. But I want people to hear that. He said. He said real estate company because it just glitched. Yeah, go ahead.
- [45:44]
HM
Yes, sorry about that. McDonald's, really, it's a real estate company. I think it might be the biggest or one of the biggest real estate companies in the world. And the way they've done it is they've leveraged the volume generated by selling burgers to acquire assets. Except the difference is that the shareholders own the assets. And so for us, the model is very similar. On the front end, it's a rewards token. But then the more people trade the token, the more we charge transaction fees to acquire your assets. Now, these assets generate cash flow every month. And then what we do is we use 100% of the net cash flow to subsidize rewards for the community. And by doing this, you create a virtuous model where the more rewards you give, the bigger the community grows organically. The more the community grows organically, the more the trading volume is stimulated. And the more your trading volume is stimulated, the more assets keep going. And, and then the more assets, the more rewards. More rewards, Bigger community. Bigger community, more trading volume or trading volume, more assets. And that's how we've engineered the model to. To grow exponentially over time.
- [46:47]
Scott
What kind of real estate deals do you guys primarily focus on? Like, is it kind of a lot of franchise models, obviously, as you said? Actually, I was looking at buying Dollar Generals, for example, but people don't, you know, it's the franchise, but. But you don't actually own a Dollar General. You buy the land, you build them the structure, and then they have a triple net lease, and they pay every expense, insurance, rent, everything to you. Basically locked in for 30 years, 5 to 6% cash flow, great business. So Dollar General themselves doesn't have people that are franchisees per se, and they don't actually own that real estate. McDonald's is different. Right. So like what kind of deals are you guys focusing on to get that sort of predictable cash flow and what is that sort of cash flow level? Sorry to go deeper on this, but it's really interesting to me.
- [47:36]
HM
Yeah, for sure. So we, we don't focus on actually sourcing and managing the assets. What we do is we partner with funds like Stewards Capital that deployed over a billion dollars in their lifetime. So we want to be great at what we do, which is the tech, the, the brand and the, the community. And, and make sure that the, the token is as rewarding as possible. And then we let institutions that have done that for decades to manage the assets. So as long as we do a reasonable 5 to 7% yield, we're happy. So we really focus on making sure the token is as rewarding as possible. And so to give you a rough rejection, since we did TG, since a month, we did already $1.3 million in fees that will go to acquiring assets. And if you go on defi llama, if you divide that by 30 days, it's around more than 30k, around 40k, which would put us in the top hundred projects in terms of fees generated. And that's just the start, right? So if God willing, everything goes well, let's say you have a hundred million dollar market cap with a 1% on chain daily trading volume. At the end of the year you should be able to acquire from anywhere from 10 to 20 mil of assets. But the key is that this stacks, right? So it's like let's say you do 10 to 20 million year one, but then next year you do the same thing. So it's like from 20 to 40 and then 40 to 60 and then the more your community grows, the more the assets keep stacking. And what's great with that is that tomorrow it's a bear market. No one is trading anymore. Well, you have millions of dollars of assets generated that are up for one purpose only, rewarding the community.
- [49:23]
Scott
Yeah, it's brilliant. You know, to be honest, like I was very late to, I think, understanding the power importance of community. I think you and I even talked about this at the very beginning. Like any project that I talk to anyone I meet, I'm always dismissive that it like just my default setting is 99% of this is either garbage. You're just going to go to zero. Right. And you very much broke through that by kind of convincing me about the importance of community. I have a podcast coming out Sunday with Luca from Pudgy Penguins and he Reiterated a lot of what you're saying. And we had Luke Kerner on here yesterday who said that what's really even important for a layer one is community. Right, so how, how did you decide that that was really the main focus? And how passionate would you say your community is and how fast are they growing?
- [50:12]
HM
The way we figured it out, I think it's just first principles thinking. It's looking at what makes sense and why. Why fundamentally, why are people buying tokens? Why, why are they in this, in this industry? And ultimately I, I think, and I might be wrong, but I, I think that this whole movement started because our generate. Sorry for my language, but our generation is by the system, I mean the older generation, around 50% of boomers could afford houses for millennials, it's around 30%. It's projected to be even worse for Gen Z. And so people were looking for a way to emancipate financially with bitcoin. And this whole movement started and fundamentally that's what it was all about, financial freedom. And so we just decided to, to look at why, if you succeed financially, what do you do with those gains? And a big part of people, they want to buy cool stuff. And so we just decided to skip that money part and go straight to the cool stuff. So that's the thesis behind it. And then how's the community doing? I mean, look, we, everything I told you about the business model, it was just theory. Like the maths made sense, but we had no idea whether this would work or not. Three years ago, RWA was not cool. Like no one was talking about RWA. It was defined NFTs. But we were quite surprised last year when we launched our first campaigns. We had 15 million tweets in six weeks. I think we had the biggest social finder space last year. And so we were quite surprised that people really liked the model. And then again, that's great pre tge, but you never know whether there's real adoption or not. So since tge now our staking rate is nearly at55.0, which if I'm not mistaken it's probably in the top 98 percentile of projects. So so far it seems like the community is, is, is staying loyal because it's very easy for air job farmers, for example, who live in Nigeria to, to cash out. Three of our community members made 50k imagine. And they are staking. So so far it seems to be going well.
- [52:31]
Scott
But you found basically the perfect marriage between a boring use case that was unhyped and the most exciting side. So RWA on the back end and real estate and 5 to 7% yields which in crypto like you say that and people roll their eyes.
- [52:46]
Simon
Right.
- [52:47]
Scott
And creating an incredible community led by rewards. And then you also have sort of this massive network seemingly of celebrities that are involved as well. Right?
- [53:01]
HM
Yeah. I'm kind of hesitant to speak about celebrities because we've seen what happened before. Right. With all the people like celebrities doing like unethical shills on Instagram. It's been a rough time. Yeah. But for us it was key to try and. Because if the goal is to. Is to solve for mass adoption companies that did that really well have managed to create big global brands. If you look at the Nike Playbook or the Red Bull Playbook, they've worked with a lot of celebrities but. But the right way. Right. So you. We. We've been grateful to be able to to to on board over around 100 celebrities. You have foot top 100 football players, soccer, rugby, tennis, DJs, actors, singers, some big. I think we have the this after monster energy drink. We are the second company with the most amount of UFC ambassadors. And so what's interesting there is that we've never paid any of these celebrities. Actually we have the contracts we have with celebrities is. Is a two year cliff. So which is a testament of their commitment. Right. Because they're not looking for quick cash. They want to help us build a brand. And the idea is to create a global brand. Hopefully if this succeeds. Kind of like a Red Bull, but an Ike for utility tokens. We've never seen the Nike or the Red Bull of utility tokens yet we've seen it for exchanges like binance or crypto.com and so this is one of the goals that we have is to establish a global mainstream brand for a utility token going forward.
- [54:45]
Scott
Love that. Listen, anything else I missed before we. We have to go. Anything you want to tell people about that's coming up. Your vision. I I mean I guess like to even just talk about like the ultimate vision of what this looks like if everything goes perfectly. I always kind of ask that question. But you know, in five, 10 years if this goes exactly perfect, what does this look like for you and for the industry?
- [55:10]
HM
Well, the dream, the ultimate dream for us if everything goes well, God willing is that you are driving around in a major city and you see these huge billion dollar buildings except for some of them that are existing not for a bunch of shareholders. Like you're driving around in this billion dollar buildings that are generating cash flow every month just to reward the community, like that would be a different world. We've never seen this before. And so that would be the ultimate dream. You're driving around this billion dollar buildings and they are here just for one purpose, rewarding you.
- [55:43]
Scott
And then just in the, I guess, shorter term year to what's coming, like roadmap, what can people expect and how can they. More importantly, like how can they get involved? We obviously have Lingo coins on stage. I would encourage everybody, as I do with all of our guests, but follow them immediately and you'll be able to keep up. But like, what can people look for and how can they participate?
- [56:04]
HM
Well, very soon we're launching on Solana. We've been grateful to be. To have amazing onchain stats with base. I think at some point this year we were the number one project on base after Uniswap. And so now we are very excited to present our value offering to the Solana community. That's very short term. And then we have a flagship rewards product coming very, very soon in a few weeks. In the meantime, if people want to get involved, you have a Twitter here and then you can stake even, even like something small, $5 or $10 of lingo where you can start accumulating points and then you'll see how the rewards ecosystem builds in and maybe you'll win some rewards and you'll see the experience. And obviously, obviously, we're always keen for feedback. If there's things we can do better, feel free to join us on Discord and meet our community over there.
- [57:03]
Scott
Yeah, I can't stress enough how important it is. We all talk the talk, but if we want real mainstream adoption of crypto in this cycle, we all have to actually participate and try it and get our hands dirty and play around with it. I think that what you just said is the most important thing with both lingo and anything else you guys are passionate about about. Like, this isn't about investing in a token and seeing the market go up and down. It's about actual use cases and things that we can use and build on in the future. So, you know, I think is really important that people actually try it out and talk to talk. Once again, guys, please follow Lingo coins here. Give HM also a follow. He's at Rahm. See him up on stage. Man. When am I gonna. When am I gonna see you next? You got. You gonna be in Paris for Paris blockchain again or token 2049 in Dubai? I'll be at both. We're doing some big things, probably going to do both.
- [57:56]
HM
And maybe I'll see you in at the roundtable also. But yeah, looking forward to, to catching up with you, man, this year.
- [58:04]
Scott
Awesome, man. I'll see you very soon. Guys, thank you so much for listening once again. Check out lingo. Great conversation before that, obviously about what's coming. Crypto ball in D.C. is today. I know. And the inaugurations Monday. Things are about to get wild to strap in. And we'll be back, obviously, on Monday on Inauguration Day with a show at 10:15am Eastern Standard Time. Thanks for tuning into Crypto Town hall, guys. We will see you on Monday. Peace out. Have a great weekend.