Unchained Ep. 972: Bits + Bips – How Stocks May Decouple From Bitcoin—and Why TradFi Should Love a HYPE DAT

Date: December 5, 2025
Host: Steve Ehrlich (guest-hosting for Laura Shin)
Guests: Owen Lau (Head of Fintech Research, Clear Street), Bob Diamond (former Barclays CEO, Executive Chairman, Hyper Liquid Strategies), David Seamus (CEO, Hyper Liquid Strategies)

Episode Overview

This episode explores two intertwined themes shaping crypto’s convergence with traditional finance (“TradFi”):

• Decoupling of Crypto Stocks from Bitcoin: Owen Lau discusses evolving fundamentals and market dynamics for public crypto companies beyond miners and pure-play DATs (Digital Asset Trusts), focusing on exchanges, stablecoins, and infrastructure.
• The Launch of the Hyper Liquid DAT: Bob Diamond and David Seamus share the inside story of bringing the Hyper Liquid Strategies DAT (ticker: PURR)—backed by Hype tokens—to Nasdaq, its similarities to early MicroStrategy, and why they see it as TradFi’s gateway to new growth.

Insights span macro forces, equity-market anomalies, regulation, new business models, and the future of on-chain finance.

1. The Realities for Crypto Equities in 2025 (w/ Owen Lau)

Market Overview & Macro Factors

• Macro factors (interest rates, tariffs, rate cut probabilities) drive short-term sentiment for crypto equities like Coinbase, Circle, and Bullish.
• There is still a high correlation between Bitcoin prices and crypto equity movements, which Owen views as signs of market immaturity but expects will eventually fade.

Quote:

"There are still a very high correlation between Bitcoin and the equities I cover... Over time my prediction is that correlation could break between bitcoin price and crypto equities." — Owen Lau (05:53)

Sentiment v. Fundamentals

• Network and business fundamentals are improving (growing adoption, diversified revenues), but sentiment and stock prices remain weak.
• Example: High volatility increases trading volumes and revenue, but stock prices drop due to negative sentiment—an anomaly versus TradFi.

Quote:

"You see that dislocation between the fundamentals and also the sentiment... I actually see more opportunities to get into these stocks compared to many others." — Owen Lau (04:25)

Diversification & Business Model Maturity

• Coinbase’s push to diversify with stablecoin and subscription revenue is starting to buffer volatility—but investors still peg performance to Bitcoin.
• Events like Vanguard’s entry underscore growing institutional interest:

  "We saw the news from Vanguard, Bank of America... maybe over time you can allocate from 1% to crypto, to 5%..." (07:03)

Infrastructure Investment & Time Horizons

• Companies like Circle are spending heavily to build new blockchains (e.g., Ark), payment rails, and B2B networks—leading to mismatches between current spend and future revenues.
• Owen views this “patient capital” approach as essential, paralleling early internet infrastructure.

Quote:

"You have to spend first and the revenue would come later. But it’s fine... I like companies investing in the future." — Owen Lau (09:23)

Key Timeline to Revenue:

• 3–6 months: Infrastructure build
• 6–12 months: Attract users
• 12–18 months: Start generating revenue

Bearish Market Climate & Opportunities

• Recent events (e.g., $19B liquidations, October 10th) created panic and algorithmic-driven selling, but human analysis reveals strong fundamentals (notably for Bullish, which Owen upgraded post-selloff).

"As a human being we can dissect and filter out this noise... we have to come down to our own analysis..." (12:05)

2. Prediction Markets, Regulation, and Exchange Strategy

Prediction Market Expansion

• Major exchanges (Coinbase, Robinhood, Gemini, Bullish) are eyeing prediction markets, following successes like Kalshi and Polymarket.
• Owen expects announcements from Coinbase soon (possibly at their upcoming system update event), potentially marking a major diversification move.

Quote:

"I think more and more brokers and crypto exchanges will launch prediction market offerings at some point... there is a high probability that [Coinbase] will announce something in two weeks." — Owen Lau (14:49)

Licensing & Regulatory Models

• New entrants must decide between partnerships (white-label) or acquiring direct CFTC licenses (like Robinhood and Kraken) for independent, regulated futures/prediction markets.

DAT Model Links:

• MCritical for both individual traders and institutions who need regulatory clarity before they can invest or participate at scale.

Circle’s Defensive Moves in Prediction Markets

• Circle is maximizing USDC adoption via partnerships and is considering running USDC natively on its own blockchain (Ark) to retain fee revenue and market share amid competition.

Quote:

"[Circle is] trying to have more partnership with many platforms so that it can drive the adoption of USDC within the trading ecosystem... [and] launched Circle Payments Network to disrupt overseas remittance..." — Owen Lau (19:58, 21:32)

• The cross-border remittance market represents a $40T+ opportunity—even a 1–2% fee cut is huge.

3. The Regulatory Frontier

DEXs, Tokenization, and the “Clarity Act”

• Ongoing debates about regulating DEXs as broker-dealers, especially for tokenized equities.
• Owen sides strongly with the “clear rules over agency-by-enforcement” camp to unlock innovation and capital flows.

Quote:

"We do need a clear regulatory framework for the whole ecosystem... What we don’t want is, you know, we don’t have any clarity." — Owen Lau (22:53)

Outlook for 2026

• Owen predicts an “Altcoin summer” will follow regulatory clarity, emphasizing how much capital and business model innovation hinge on these legal frameworks.

Quote:

"My expectation is just like Genius Act... hopefully Clarity Act or Market Structure Bill get passed next year, then we'll see another maybe inflow of both like capital and also people coming into this space." — Owen Lau (25:04)

M&A and IPOs

• He’s skeptical of exchange operators buying up struggling DATs, seeing more value in using capital for building core infrastructure and B2B bridges.
• For upcoming IPOs (Kraken, Blockchain.com, Fireblocks, Chainalysis): key for success is “solid company, positive EBITDA, long-term vision”—the moment hasn’t passed.

4. DATs, Hype, and the Launch of TradFi’s Altcoin Gateway (w/ Bob Diamond & David Seamus)

Why Launch a Hyper Liquid DAT (PURR)?

• Access: U.S. institutions cannot easily buy $HYPE tokens directly (not listed on Coinbase, Kraken, or Binance.US; only real liquidity is on HyperLiquid’s exchange/Robinhood).
• Valuation: Strong cash flows, high yield, and robust growth opportunity—rare for “crypto” assets.
• Historical Analogy:

  "This is sort of like MicroStrategy 10 years ago, when lots of institutions really had no other ways to get bitcoin exposure..." — David Seamus (31:50, 47:18)

Liquidity & Economic Structure

• Hyper Liquid generates over $1B in annual free cash flow with only 11 employees; >90% of this flow is used to buy back and retire the native token, akin to corporate share buybacks.
• U.S. stock market listing (Nasdaq: PURR) offers “highly liquid opportunity” for American equities investors.

Quote:

"In my mind this is a way to be an investor in the whole ecosystem around Hyper Liquid, not just Hype, the coins... We found a very elegant way to create liquidity for U.S. equity investors..." — Bob Diamond (41:08)

Mechanics of the Listing

• The deal combined $300M in cash plus 12.6M HYPE tokens, secured via direct, in-kind contributions from investors (e.g., Paradigm).
• A “double dummy” structure ensured all investor shares are tradable from day one, avoiding common lock-up selloff issues.

Treasury Management in an Altcoin DAT

• Focus on prudent, tradition-grounded risk management.
• HYPE tokens are predominantly staked (via Anchorage) and earn yield greater than company’s operating expenses.
• Exploring further yield opportunities—but warn against the “crypto timeframe” trap.

5. Hyper Liquid Ecosystem: Growth, Challenges, and Vision

Performance & Stress Test

• HyperLiquid’s exchange performed flawlessly during extreme volatility (October 10th liquidations), with zero downtime—the only major platform that ran “exactly as advertised.”
• ADL mechanisms (auto de-leveraging) operated per protocol, sometimes frustrating users but reflecting inherent risks of perp trading.

Quotes:

"The blockchain that was built by Jeff and team behaved and operated exactly as advertised. Not a second of downtime, incredible liquidations and transactions and volatility and volumes." — Bob Diamond (60:02)

"I don’t know another exchange in the world that can say [it had no downtime during stress]." — Bob Diamond (61:09)

Business Model & Competitive Edge

• HyperLiquid sits atop daily fee rankings, outpacing Solana and Ethereum in most datasets (Artemis Analytics).
• “Permissionless” listing and the HIP3 builder model lower entry barriers for new perp markets—compared to options, perps are simpler and more scalable for both retail and institutions.

Quote:

"If you believe that hyper liquid is going to grow the way it is, if you believe that it has a place in the future... getting an entry through ‘PURR’ wouldn’t be just a great way to do it right now." — David Seamus (47:18)

On-Chain Real World Assets (RWA)

• The next frontier is tokenized stocks, pre-IPO markets (e.g., SpaceX purps on Ventuals), and a pipeline from firms building on HyperLiquid’s EVM (Ethereum Virtual Machine).
• Perps are seen as easier for retail than options, and tradable for any asset—Nvidia and Tesla stocks coming soon.

Quote:

"Hyper Liquid is actually doing it. We have US equities trading in per form on Hyper Liquid. We're actually doing it and we're three years old." — Bob Diamond (78:10)

Competition and Regulation

• No illusions: Competition from Binance (Aster), Robinhood, and others is inevitable and healthy.
• HyperLiquid's defensibility comes from first-mover advantage, active builder ecosystem, and focus on growing TAM, not zero-sum market share fights.

Quote:

"Competition makes everyone better...if all Hyper Liquid ever does is what they're doing now, the valuation is compelling, but there are so many opportunities." — David Seamus (75:59, 67:38)

• Regulatory “tailwinds” (emphasized by Bob) are finally giving TradFi the signal to fully engage with blockchain.

6. The Future: Long-Term Vision and Investor Takeaways

• Multiplying Paths to Growth:
  • Shelf registration hints at further capital infusions (in sync with premium trading); focus remains on increasing per-share book value, not zealotry.
• Structural Shifts:
  • In 3–4 years, expect integrated digital-traditional finance, global regulatory harmonization, and emergence of true “digital banks.”
• Early Days:
  • Both Bob Diamond and David Seamus stress Hyper Liquid/Dat launch is just the beginning.

Quotes:

"We're in this to create a listed opportunity for US Equity investors to invest in an ecosystem that is at the very, very early stages of being one of the dominant institutions in the digital space, and that's Hyper Liquid." — Bob Diamond (82:28)

"This is a super competent, super hardworking management team. Not just in crypto terms—in any terms... In the future, more and more people are going know what Hyper Liquid is and they're going to be wondering why they didn't get in sooner." — David Seamus (83:42)

Timeline of Notable Segment Highlights

• 01:45 – Owen Lau on key market drivers for crypto equities
• 04:25 – Sentiment vs fundamentals, “dislocation” examples
• 09:23 – Infrastructure investment; revenue mismatch in blockchain
• 14:49 – Owen on exchanges/prediction markets (Coinbase, Robinhood, Bullish)
• 19:58 – Circle’s playbook in prediction markets and stablecoin adoption
• 22:53 – Regulation: need for clarity, risk of “enforcement by agency”
• 25:04 – Clarity Act/Altcoin Summer prediction
• 31:45 – Bob Diamond: “Hyperliquid is the most exciting thing in the digital space today”
• 47:18 – Seamus: “This is like MicroStrategy ten years ago…”
• 60:02 – Bob Diamond: HyperLiquid’s stress test performance
• 63:31 – Seamus: Looking beyond DEXs; real-world asset trading and builder ecosystem
• 75:59 – Competition and the focus on growing TAM
• 82:28 – Bob Diamond: Long-term vision for giving US equity investors access to on-chain finance

Memorable Quotes

• Owen Lau (05:53): "Over time my prediction is that correlation could break between bitcoin price and crypto equities."
• Bob Diamond (31:45): "We think that hyperliquid, quite frankly is the most exciting thing in the digital space today."
• David Seamus (47:18): "This is sort of like MicroStrategy 10 years ago when lots of institutions really had no other ways to get bitcoin exposure than through MicroStrategy. That's kind of where we are right now on Hype."
• Bob Diamond (60:02): "The blockchain that was built by Jeff and team behaved and operated exactly as advertised. Not a second of downtime, incredible liquidations and transactions and volatility and volumes."
• Steve Ehrlich (67:48): "Sometimes it just comes down to sort of the ux. I mean Robinhood is so good at it. People don't appreciate how complex the type of products are that they're buying."
• Bob Diamond (82:28): "We're in this to create a listed opportunity for US Equity investors to invest in an ecosystem that is at the very, very early stages of being one of the dominant institutions in the digital space, and that's Hyper Liquid."

Summary Takeaways

• Crypto equities, while maturing, still shadow Bitcoin; regulatory clarity and diversified revenue models are breaking these patterns.
• Building in crypto requires patience—revenue often trails infrastructure spend by 1–2 years.
• Hyper Liquid DAT offers TradFi direct exposure to altcoin cash flow, with robust tokenomics and capital discipline.
• The next S-curve is on-chain trading of real-world assets, with DEX models and permissionless listing as accelerators.
• With increasing regulatory buy-in and a focus on real business fundamentals, the “crypto stock” era is just beginning.