Bits + Bips: Bitcoin Hits $75K as It Starts Catching Up to Gold

Summary

Unchained Podcast - Bits + Bips: Bitcoin Hits $75K as It Starts Catching Up to Gold

Host: Austin Campbell (Zero Knowledge Group)
Co-hosts: Rahm Aliwalia (Lumina), Chris Perkins (CoinFund)
Date: March 18, 2026

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Episode Overview

This fast-paced, in-depth discussion explores how macroeconomic currents, geopolitical upheaval, and technological innovation continue to shape the crypto markets—with a major highlight on Bitcoin reaching $75K and the narrative of BTC “catching up” to gold. The episode also dives into the explosive growth (and challenges) of prediction markets, the far-reaching impacts of the Iran conflict on oil and global markets, and a pointed debate about Ethereum’s future as it relates to real world asset (RWA) tokenization and chain-level decentralization.

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Conference Recap & Industry Pulse

[02:12] Chris Perkins: Attended the FIA Boca, a major derivatives industry conference notable for growing crypto participation.

• Historically, crypto at FIA has been turbulent—“There was a famous brawl literally between the SBF and Terry Duffy a few years back... crypto people pulled back. But it’s where every exchange in the world shows up, intermediaries show up, regulators show up.”
• Prediction markets are a hot topic: Kalshi and Polymarket seen as breakout participants; perpetuals and 24/7 markets dominate the buzz.
• Regulatory pressure is mounting, especially for prediction markets—“they’re running out of friends in D.C.,” with bipartisan opposition.
• Behind-the-scenes dealmaking is heating up, especially as traditional exchanges like Kraken and ICE prepare to enter the crypto vertical.

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Regulatory Crossroads: Prediction Markets

[04:59] Austin Campbell: To flourish, U.S. prediction markets must come under CFTC jurisdiction. A 50-state, patchwork regulatory environment “would brick a lot of these things because nuance between all of those will be catastrophic.”

[06:06] Chris Perkins:

• Insider trading is illegal—full stop. While hard to prosecute, “to the extent you blatantly use inside information & manipulate markets, you’re on the other side of the law.”
• “Sometimes we ignore common standards of law... Insider trading? Illegal. Manipulate markets? Illegal.”
• Highlight: “To the extent something’s on chain, it’s probably easier to prosecute.” [06:37]

[07:25] Rahm Aliwalia:

• “It’s illegal, but it’s happening. … People are front-running Congress. So yeah, people are saying, ‘hey, if they can do it, why can’t I?’”

[07:51] Chris Perkins:

• “The battleground is really gaming. … Kalshi is pretty concentrated on the gaming side. That’s going to be the battle: what products are allowed, which ones are not.”

[08:08] Austin Campbell: Court cases concerning state vs. federal jurisdiction are splitting, accelerating the likelihood of a Supreme Court showdown.

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Prediction Markets’ Bubble?

[10:32] Rahm Aliwalia: Despite bullishness on prediction market adoption, he's bearish on enterprise value—legacy operators & old-school exchanges (like Nasdaq) are entering, tamping down growth.

• “Private venture capital is a bubble … prediction markets are in a bubble too. … You should try to sell the stock if you can.” [11:16]

[11:34] Chris Perkins: Traditional gaming operators “are not just going to let that fight pass them by. This has been their turf.”

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Iran Conflict: Geopolitics, Oil, and Market Fallout

Situation Summary

[11:50] Austin Campbell: Updates on the Iran conflict:

• Week three of active hostilities; Israel expanding into southern Lebanon, Persian Gulf shipping disruption, UAE targeted, oil prices spiking.
• Trump applying pressure for NATO involvement.

Analysis

[13:34] Chris Perkins:

• Tactical: “US Military has been performing exceptionally well, taking out target after target… dominance.”
• Strategic: Real concern is the longevity of public support. “Trump’s got to find a way to keep that oil in check. … Crypto has stayed very, very strong—call desks report rising ‘short gold, long bitcoin’ trades.” [15:08]
  • “Real politic trust is breaking down. [That’s when]... real assets, commodities, are going to be in focus. That brings you to things like bitcoin, ETH, and the rest of the crypto environment.” [15:41]

[16:30] Rahm Aliwalia:

• Trump’s objectives: “If you want to understand how long this conflict takes, listen to what Trump says. … My read … is that Trump won’t stop until there is some control on the uranium.”
• Control of oil is “the bigger backdrop” to counter China strategically—“The two ways to compete with China are US dollar hegemony, [and] petrodollars.” [19:32]

[20:59] Chris Perkins: Points out Russia’s short-term benefit as the world’s attention is shifted, but believes the focus will return to Russia once the Iran crisis stabilizes.

[22:25] Austin Campbell: Disagrees: “I don’t think Russia is a big winner here... Russia’s options have already collapsed to the internal situation in Iran.”

[24:05] Austin Campbell: Cites historical precedent: “There’s plenty of historical models that show things are way more chaotic than you think. … If you look at the French Revolution… [the outcome could be someone we can’t anticipate now].”

Macro Implications

[25:13] Rahm Aliwalia:

• “The longer oil stays at these elevated levels, the more risk there is for an inflationary regime, which is terrible for asset prices.”
• “They really need to get the oil moving expeditiously… If they don’t, I think after options expiration this Friday, you’ll have more downside volatility.” [26:44]

[27:21] Austin Campbell: “Is that really hitting the American consumer, or just California? … California has been shooting itself in the foot on energy for decades now.” (Quote of the Episode - [27:40])

[27:54] Rahm Aliwalia: Market sentiment is risk-off and fragile: “This is not like, oh hey, let’s go up and to the right. This is not that kind of environment.”

[29:01] Austin Campbell & [29:36] Rahm Aliwalia: Forced deleveraging is likely driving much of the market action, with only “hyperscalers” (like Meta, Amazon) “releveraging” via massive tech infrastructure investment.

[30:51] Rahm Aliwalia:

• “Industrials are a bubble…. We’re on the right shoulder of the bubble.”
• Advocates reducing risk exposure and waiting for capitulation.

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Crypto Market Discussion: BTC, ETH, and the “Digital Gold” Thesis

[32:01] Chris Perkins:

• “We were bullish last Monday.”
• BTC at $74K
• “We’re hitting some resistance—where are you on bitcoin right now?”

[32:24] Rahm Aliwalia:

• Bitcoin’s run-up is fueled by MicroStrategy and STRC marketing.
• “When that marketing process starts to slow, then I believe the bid for bitcoin will slow. So I’d take chips off the table now.”

[32:55] Chris Perkins:

• ETH is “materially outperforming” amid a rotation: “The BTC:gold ratio is coming back... the catch-up trade is now on.”
• “And then ETH pops up and is like, ‘Hey, remember me?’ Outperforming at all.” [33:27]

[34:03] Chris Perkins:

• “A lot of sovereigns bought gold... now that things are settling, bitcoin’s starting to get a bid, the BTC:gold ratio is coming back. Maybe the narrative never broke down in the first place.”

[35:19] Austin Campbell:

• For many outside the U.S., BTC and Tether represent the only way to move money outside vulnerable fiat regimes—this is a key driver with global shocks.

[36:14] Rahm Aliwalia:

• “If you have a flight to safety towards US assets, that doesn’t help digital assets. It’ll turn on facts on the ground—Iran, Iran, that’s what the whole thing turns on.”

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Ethereum Foundation Mission & RWA Debate

[39:37] Austin Campbell:

• Introduces the Ethereum Foundation’s new 38-page mission statement emphasizing “self-sovereignty” and the new CROPS framework (Censorship-resistance, Open source, Free privacy, Security).
• Critiques the “trilemma”: “You can have decentralization, real world assets, or smart contracts—pick any two. … Trying to do all three is an untenable situation.”

The Core Disagreement

[44:21] Chris Perkins:

• “The EF is acting as it probably should act in a mature environment—a nonprofit shepherding network principles... The EF does not control Ethereum.”
• Draws analogy to the Internet: “Internet has no foundation, Ethereum wants to be that decentralized medium.”
• “Let the ecosystem be censorship resistant, decentralized, and have the apps be thoughtful in their controls. … I just think people have been way too hard on them.” [55:58]

[48:58] Austin Campbell:

• “I don’t have a problem with arguing for a decentralized chain. … My worry is that they don’t understand the trade-offs.”
• Argues: when you introduce RWA with smart contracts on a self-sovereign chain, without network-level controls, it’s a recipe for future market-wide blowups.
• Example: “If Tether gets hacked, they’re essentially the AIG who wrote all the CDS. Everything else goes.”

[51:36] Chris Perkins:

• “If a chain or an organization wants to roll back their chain… let them. But that’s not censorship resistant or self-sovereign.”

RWA Placement Recommendations

[57:19] Austin Campbell:

• Critiques private bank chains as “a bridge to nowhere.”
• Favors “public-permissioned chains” (Avalanche subnets, Stellar, Canton, Tempo) as more viable venues for complex RWA activity.
• Proposes a global, multi-financial-institution chain (akin to a decentralized DTCC) as an eventual solution.

[59:37] Chris Perkins:

• Highlights difficulty for institutions in navigating on-chain interactions with truly decentralized protocols.
• Celebrates diversity in the crypto ecosystem: “That’s the beauty of our space. … Ethereum’s big differentiator is that promise of decentralization.”

[60:33] Austin Campbell: Predicts that the chain which will ultimately secure RWAs at scale “has probably not been created yet—or if it has, it will look vastly different by the time we get there than it does right now.”

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Notable Quotes & Memorable Moments

• “California energy policy is stupider than some of the NFT projects were.” —Austin Campbell [27:42]
• “Sometimes we ignore common standards of law... Insider trading? Illegal. Manipulate markets? Illegal.” —Chris Perkins [06:37]
• “Private venture capital is a bubble... prediction markets are in a bubble too. … Try to sell the stock if you can.” —Rahm Aliwalia [11:18]
• “If Tether gets hacked, they’re essentially the AIG who wrote all the CDs. Everything else goes.” —Austin Campbell [54:55]

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Timestamps for Core Segments

• 02:12 — FIA Boca conference recap (Perkins)
• 04:59 — Prediction markets, legal hurdles, and D.C. politics
• 11:50 — Iran conflict: geopolitics, oil, and market impact
• 27:40 — California energy quip and market outlook
• 32:01 — Bitcoin at $74K, crypto market perspectives
• 39:37 — Ethereum Foundation, mission statement, and RWA debate
• 54:55 — The “AIG” moment for Tether and DeFi systemic risk
• 57:19 — RWA platform design and multi-chain future
• 60:33 — Final prediction: future of RWA and platforms

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Episode Tone & Takeaways

The discussion is sharp, opinionated, and grounded in first-hand industry, policy, and trading desk experience. The panelists are candid about regulatory headwinds, structural risks, and the realpolitik that underpins both global markets and crypto’s evolution.

• Crypto’s next leg up is tied to geopolitical stress and changed trust dynamics.
• Macro uncertainty breeds both opportunity and volatility—expect continued whipsawing until major risks resolve, especially those centered around oil and the Middle East.
• The race to build viable infrastructure for tokenized RWAs is still wide open, with no clear winner and significant design trade-offs remaining.

For listeners seeking a nuanced macro-crypto update and a brutally honest tech policy debate, this episode delivers.

Transcript

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[Austin Campbell]

Hey everyone. Welcome to Bits and bips, where we explore how crypto and macro collide one basis point at a time. I'm your host, Austin Campbell, High Scholar of Zero Knowledge Group, here with my co hosts Rahm Aliwalia, Master of Wealth, Leader of Lumina, and Chris Perkins, the Golden Hand of Coin Fund. We're here to discuss the latest stories in the worlds of crypto and macro. And we have a couple of those to go today. But before we start, just remember that nothing we say here is investment advice. Check unchained crypto.com bitsandbips for more disclosures. And before we begin, a quick commercial

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[Austin Campbell]

so before we get into the macro topics of the world, despite all of the turbulence, the conference circuit continues relentlessly in this space. I know DAS is coming next week, but Chris, you were somewhere interesting recently. Do you want to give us the download on fia?

[Chris Perkins]

Yeah. So I used to be on the board of fia and last week I attended their annual conference. It's called FIA Boca. It's kind of under the radar for crypto people, but I'm telling you it's the place to be. And the reason why is that derivatives, as we've talked about, are probably the most important asset, I would say, in the crypto space. As you're thinking about how the markets mature and it's been really weird over the years. It's kind of ebbed and flowed with crypto participation. There was a famous brawl literally between the SBF and Terry Duffy a few years back, and then the crypto people pulled back. But it's where every exchange in the world shows up. The intermediaries show up, the regulators show up. And this year, a lot of crypto people showed up. I mean, I met with everyone from Kraken. Polymarket was there. Kalshi. I'd say that the two, they were joking that the pretty girls in the room were Kalshi and Polymarket. But what were people talking about? Obviously, prediction markets perpetuals absolutely in focus. 24. 7 markets. Hyper liquid was like kind of a little under the radar, just starting to be talked about. I don't know about you guys. I was watching Hyper Liquid, you know, all weekend to see what happened to oil, you know, when. After we bombed carg. But yeah, super interesting times. And if anyone gets a chance, I recommend going. A lot of announcements, a lot of regulatory movement. What do I take away? I think prediction markets are going to have a tough go going forward. Why? Because they're running out of friends in D.C. a lot of Democrats don't like them. A lot of Republicans will side with the states. And so I see there's some volatility on the horizon. That said, they're the prettiest girl at the dance right now. Everybody wants to dance with them. And prediction markets are here, perpetuals a lot of focus on getting them in place in the US Some of the problems we have is outdated market structure. And like that kind of goes hand in hand with 247 markets. And so do we take out the intermediaries. Like I testified in Congress a while back, how do you make it all happen? What happens is there's no expiry. You know, speaking to Chairman Selig, you know, he's on a mission and he's going to get it done. And then 247 markets, man, like, if. If you, if you cannot figure out 24. 7, you'll be obsolete overnight. Many of the traditional exchanges have views. The other thing is like dance partners, right? Like Kraken is out there, you know, really pushing X stocks. You had ICE with their Okos X announcement. And so everyone's looking to, you know, who are their dance partners going into the future. I think a lot of deals were done behind the scenes, but yeah, definitely a conference worth going. Totally different than, than the, the crypto conferences that I've attend that I typically Attend, but I go every year. What do you think?

[Austin Campbell]

So here's my first thought, hearing all of that, the prediction markets thing, which I know are a booming topic, you know, in the world writ large. How do you think integration of those markets is ultimately going to play out in the United States? Because to me it feels like to get that right, we've got to have it under CFTC jurisdiction at the federal level. I think a 50 state framework for this is going to largely brick a lot of these things because the nuance between all of those will be catastrophic. We have enough regulators of financial products. But then the other part is I would imagine over time regulators are going to have views on what kinds of trading activity is permissible. For example, like insider trading problems, who can participate in markets, but also what kind of markets writ large are permissible. Like I saw a report on Twitter today of some journalist in Israel like being harassed and attempted to be bribed and then threatened with death because he wouldn't report that a missile landed in Israel when it hadn't and there was like millions on poly market riding on this. So curious as to how you think all of that shakes out.

[Chris Perkins]

Two things that I think about. The first is around insider trading and I think this is an absolute joke. Insider trading is illegal, always has been, always will be. Sometimes it's hard to quantify, but to the extent that you blatantly use inside information and manipulate markets, you're on the other side of the law. So good luck to you. And the CFTC did put out guidance and they said, guys, let me remind you, insider trading is illegal and we're going to catch you. So like to me that's not even a discussion like we, it's a random.

[Rahm Aliwalia]

Wouldn't you agree, Chris? I was pitched by a hedge fund and I said, what's your edge? I always say we have friends in D.C. what, are you kidding me? That's illegal. So I agree. I think you're saying it's right. But by the way, this fund was run by like some 20 plus year old kids. They have no idea what they're doing.

[Chris Perkins]

Well I think, you know, what do they say? Fafo, it's just a matter of time, right? Like the law is the law and like this is an issue that we've dealt with with crypto from day one where we kind of like ignore common standards of law and we're like, oh, it doesn't apply because I have this new shiny technology. Insider trading illegal. Fuse of prediction, Prediction markets illegal. You manipulate markets illegal. So I Think eventually people are going to come around and to the extent something's on chain, it's probably easier to prosecute. So that's one issue. Go ahead Rob.

[Rahm Aliwalia]

Just briefly, I would say it's illegal, but it's happening. Right. The day before the Venezuela raid, oil fuel services, energy stocks ramped up. You saw people ramping into energy before the Iran conflict. You see kind of the Pelosi act and people are front running Congress. So yeah, people are saying, hey, if they can do it, why can't I? You're seeing growth in apps that track what Congress is doing. So anyway, go ahead.

[Chris Perkins]

Yeah, look I, I don't even know what to do is to discuss. I did, I did notice that Trump did talk about the Stop Insider Trading act twice in the State of the Union. I think that's probably how he's trying to navigate ethics with the market structure Bill. But who knows. But the other point, Austin, that I think is going to be the battleground is really gaming. Gaming is kind of outside the cea and so like how we define gaming is going to be really key. To me that's the battle because like and Kalshi is you know, pretty concentrated on the gaming side. I think that's, that's the, that's going to be the battle. What products are allowed, which ones are not. And by the way, I've seen some amazing hires. Like I, I linked up with a buddy of mine who just took over the institutional BD role for, for Kalshi. World class guy, like world class. So good investment going on. I met with the Polymarket team. They're thinking about their business model, how they're going to expand it. I thought it was super exciting how, what are we seeing? We're seeing this massive collision, this intersection. How can I take what I'm good at? How can I take my distribution, my liquidity and extend it into new exciting directions? Hyper liquid right now is doing 30 something percent non crypto products. And so it's just so exciting to see these worlds coming together because I guess I'm the, I'm the bull on the show.

[Rahm Aliwalia]

I would say like I'd be bearish. Go ahead.

[Chris Perkins]

There we go. Here we go.

[Austin Campbell]

I'm actually like very bullish on prediction markets overall. I think the question is what they're going to cover because one of the things I've been keeping an eye on is what call she runs into in terms of like courts. And right now there's been a split. If you look at US States that are ruling on is Call she what's doing covered at the state level and essentially gaming or is it covered at the federal. Federal level and more like CFTC contracts? The answer from several different federal judges has been none of us agree. Right. So that topic is gonna quite frankly fast track itself to the Supreme Court. Because for those who are not like, deep into like US jurisprudence and law, the fastest way to get to the Supreme Court is to have different federal judges giving you different answers to the exact same question. Because at some point that needs to be resolved. Because it can't be that something is federally legal in New York but federally illegal in Arizona for the exact same conduct. It's like one law allegedly across the land. So, Chris, I think what's really interesting about the future here is which way does that case?

[Chris Perkins]

Unless, I mean, the other alternative is they slip something in through markups in clarity, which is something that they could do. It's not. It wouldn't be easy. Nothing in clarity is easy. But like you could make that the lay of the land if that's what it takes to get done. And we're going to see some final. And I don't have any information that this is going to happen or not happen, but you could see that. But go ahead, Rob.

[Rahm Aliwalia]

I would say, look, I'm bullish on usage and adoption. I was always a fan of the Iowa electronic markets to track the presidential campaigns was the only legal market for decades. But I'm bearish on enterprise value creation here. DraftKings is down 30% in the last three months. Genius Sports is down 50% now has a scorching hot Ford PE of 60 times earnings. So these private market companies are even more expensive than that. Now they're getting competition from old corners, including nasdaq that wants to show up like the high school kid that shows up to the playground and takes the marbles from the small kid. That's happening now. So I think in general, private venture capital is a bubble.

[Austin Campbell]

Prediction markets are in a bubble too.

[Rahm Aliwalia]

And you should try to sell the stock if you can.

[Austin Campbell]

This is also where I'm super interested how things work out on the gaming front. Because as much as prediction markets are on the way up, you know, the gambling and gaming companies are not just going to let that fight pass them by. This has been their turf.

[Chris Perkins]

Yeah, like we talked about this a little bit, even on the derivatives front, like hyper liquids edge right now is this 24. 7 reach. The big boys are coming and they're going to have that capability. So how do they extend that moat and Move faster when that's going to be table stakes before you blink an eye.

[Austin Campbell]

All right, well, let's move on from here because the world is moving extremely fast and we have a bunch of other things to catch up on. So we'll start with the one that we're always talking about now, which is Iran. So to give the updates on that front, we're in week three of the conflict with Iran. Today we heard that Israel has limited and targeted ground operations that will be occurring in southern Lebanon. Dubai International Airport, which for those who are not paying attention is basically the world's busiest airport, suspended all flights this morning after a drone hit a fuel depot near the airport. It's the third incident in Dubai since the war began of this sort. A missile hit a civilian vehicle in Abu Dhabi. Trump has been trying to bring allies in to deal with the Strait of Hormuz problem. He's saying that NATO faces a, quote, very bad future if allies don't come to help. Said the US Will remember countries that don't help and will help. I believe he said that the French were scoring an 8 out of 10 and that nothing is perfect. But this is France, so what did you expect on that front? And then ships have started to move through the Strait today with some degree of transit occurring. Two tankers carrying LPG to India, I believe, sailed through. And so Iran is now claiming that the blockade might only apply to enemy vessels. The EU is working on things. All of this, though, has led to oil spiking back up in price. So I'll start right here, is what do we think is going on with Iran from a geopolitical and military standpoint?

[Chris Perkins]

First, CHRIS ON so there's different levels of warfare. At the tactical level, it's been just absolute destruction. The US Military has been performing exceptionally well, taking out target after target. I watched the briefings by Admiral Cooper and what they did is they moved past, like live munition sites. Now they're going back into the logistics and the supply chains. So, so very, very. At the tactical level, it's been absolute dominance. That said, the, the Iranians are effective with lowcost asymmetric capabilities. Things like mines, We've been talking about that. And mine warfare can be very problematic. Etc. The other thing that happened last week is that we, we set the, the, the 31st MU, which is a crack Marine unit. It's, it's called a MAGTA for Marine Air Ground Task Force out of Okinawa. I used to work with those guys and they're steaming over to Iran that Puts, you know, a marine infantry battalion about, I don't know, 1200 people or so Marines right there within striking distance. And they have a variety of missions they can execute. The one thing I was noticing was Lindsey Graham had this really interesting tweet around Card. The island of Car we talked about it controls 90% of of Iran's oil experts. We hit the military installations around it, but it sounds like we kept the oil intact, the oil rigs, etc. And at the end of that he talked all about carg and then he said semper fi at the end as the 31st MEU was sailing. So he's telegraphing that the MEU is going to do something to secure those oil assets. I don't know if that's planned or whatever, but that MEU will give you some extra capabilities. Now I think we'll continue to really dominate at the tactical level. They can't really fight us back that well. And you're seeing various other things happening. What I'm more worried about is just strategic level of war. And so if you look at Vietnam, we also did very well on the battlefield but ended up losing that public will to continue the fight. And so I think it's really important that the goals, the mission and we start showing continued success, the economy, et cetera. Trump's got to find a way to keep that oil in check. Now it's come down a little bit and then fundamentally, before I turn it over to you guys, I've really noticed that crypto has stayed very, very strong. I'd love to get your take, Rom and Austin, but it's, it's really doing well. I called around to the trading desk before I got on a lot of talk around the short gold, long bitcoin trade. And you know, I think this all feeds into this thing that we've talked about over and over again. Real politic trust is breaking down. Where do you go? Because real assets, commodity are going to be in focus. That brings you to things like bitcoin eth and the rest of the crypto environment. So it feels like between some short squeezing that's going on, it feels like crypto's starting to. It feels like it's bottomed and it feels like it's well positioned. But we'd love to get your take and happy to talk about any other thing else.

[Rahm Aliwalia]

We'll stay on Iran for a bit. So a couple quick thoughts. One is Trump often does what he says now we'll see about the whole third term thing. But he's Talked about tariffs in the past. He did tariffs. He's talked about offensive operations against Iran decades ago. He followed through on that. He released the Epstein files, granted a lot of redactions and the UAP files and all the rest. So if you want to understand how long this conflict takes, listen to what Trump says. What Trump said today was multiple levels here. One is he invited help from NATO, and he said, if we don't get help, we're going to learn from that. He's always questioned whether NATO allies would be there to support him. At the same time, he said, we actually don't need your help, but I just wanted to see if you would come to our help. That's what he said today. And he also said the UK offered to send two aircraft carriers now after the US didn't need the help, but not initially. The reason why I point this out is that the correction of last year really accelerated when Zelenskyy was ejected from the White House. People around the world looked at that and said, what just happened? My theory of the world isn't stable. I'm going to take risk off. And so if NATO is challenged, you could see something like that happen. He's opened the door to that to the public. So that's one. The second is, what are the objectives? Trump today said if Iran had nukes, they would nuke Israel, and not just Israel, but all of Iran's neighbors, including Saudi Arabia. Saudi Arabia. And by the way, the evidence is, look at what they don't. These missiles are attacking civilians, are attacking all of their neighbors, including two of their allies. So my read on this now is that Trump's objective is to control the uranium. That is the standard I believe he is setting. And he's also pointed out at prior presidents who didn't take action. He said he had a phone call with one of them who said he wishes he had taken action. My read of the situation is that Trump won't stop until there is some control on the uranium. You can get control either through control of the material or working with the political leader that you have some confidence in. But he also said, we don't know where the son of the ayatollah is. Last week, he said he was disfigured. He may be dead. So it's hard to see how you arrive at some negotiated settlement without a leader to deal with.

[Chris Perkins]

Rob, I hear you on the uranium, but I think you're missing out on one big commodity, and that's oil. He wants the uranium and the oil. Do you agree?

[Rahm Aliwalia]

Oh, I agree. No, I think the whole, the whole conflict, the bigger backdrop is actually about China.

[Chris Perkins]

Yes.

[Rahm Aliwalia]

The two ways to compete with China are US dollar hegemony, petrodollars are part of that. The pricing of petrodollars and also being able to choke China with oil. They have that objective in hand. It's imminent. They're going to, they're going to get that objective. But once they've gone this far with Iran, you're taking out the state leader in the first hour of action. Right? That was a coup d' etat move. You know, you can't walk that back and say, look, I got the oil, we're good, you guys keep the uranium here. Let's go check back in another presidential admin. He's not going to want the fallout from that to be on his hands. He's going to want, I believe, to control that uranium.

[Chris Perkins]

Yep, I think you're right. And by controlling the oil between that and Venezuela and our own domestic production, we're down to Russia that we have to deal with vis a vis China. And I do think it does put a pretty tight rope around China and it helps prevent what they're seeking to do, which is probably take Taiwan, buy some time Russia.

[Rahm Aliwalia]

How would you control it, Krista? Logistically, how do you control it? It's not easy to do. We talked with General Spider Marks last week. Someone's got to be on the ground, open up a cabinet, do a countermeasurement or put it on a, you know, Apache and retrieve it. Or you have to have someone you trust whose representations you rely on. We don't know who the heck that person is. So how do you achieve that objective?

[Chris Perkins]

You talk about uranium.

[Rahm Aliwalia]

Uranium, yes.

[Chris Perkins]

Yeah, I mean you can have the IAEA international spec. I mean, I'm sure there's ways to do it. I'm not an expert in it. However, I think that's part of the goal for sure. Like none of the, none of that neighborhood needs a nuclear armed Iran if there's a power vacuum. And look, what are they still looking for? They're looking for that strongman to take charge, just like the Venezuela model. And to Spider's point last week, it may take a little bit longer. But I don't think you're wrong. I think one thing that would be very interesting is where does this leave Russia? Right. I have a thesis that Russia started all this in the first place. They're getting their butts kicked in Ukraine. The whole world was lining up against them and they said, let's start A little bit of trouble in the Middle East, Iran, go for it. Like, let's get these guys off our back. I've always believed that. And I think that that's distracted a lot of the world's attention to the Middle East. So tactically, it gave them some, it gave them some room because all the world now is focused on Iran. Oil prices are up. Russia's benefiting from that. I think we even gave them the ability to trade for the next. I forget, month or so despite sanctions to bring more oil to the market. So right now, near term, I think Russia is a big winner. But I think medium term, the tide's going to turn because as we start, as this thing ends, I think the focus is going to pivot back on Russia.

[Austin Campbell]

So I'm going to go the other way on two of those points. Nice. 1. I don't think Russia is a big winner here. Right. Like following just Twitter.

[Chris Perkins]

I'm saying right now, I'm just saying here and now, like today. But, but long term, no, this is,

[Austin Campbell]

this not even today. I think one of the things that we're finding, like I've been following a lot of the Osint counts around the Ukraine and Russia conflict, one, I think Russia's losing ground again in that conflict. I think they're succumbing to some of the Ukrainian tactics with drones. I think they're running out of people who actually want to, who are qualified. And you're seeing, like, the degradation of Russian resources. So, one, I agree with you that this created a distraction for Russia, but I don't know that that was a good thing. And part of what it's done is sort of woken up some of the other European nations as to how big of a problem this sort of situation is. I think Russia's options have already collapsed to the, like, internal situation in Iran. Here's what I'm observing and what I'm starting to get more worried about as time goes on is we're seeing reports now of the IRGC going with Khomeini's son because he was essentially the guy they thought they could control, causing a rift with some of the clerics. Causing a little bit of a breakdown within the internal order. Exactly. Rom, as you were saying, like, who are we negotiating with? Who's really in charge over there? What's the situation on the ground, by the way, as both ourselves and Israel continue to just hit IRG Sea forces wherever we reasonably.

[Rahm Aliwalia]

And choke points now that would otherwise be controlling the protesters.

[Austin Campbell]

Correct. I, I wonder if there's Going to be a much more prolonged process of figuring out who's in charge of Iran before we get out the back end. Because, remember, you know, I, I think part of what colors are thinking is what's happened recently. So if you look at, like a Venezuela, we essentially kidnapped Maduro and another guy stepped in. But there's plenty of historical models that show that actually things are way more chaotic than you think. And there was no way to predict things at the start because, like, as a reminder for everybody, like, let's take a famous collapse in history. If you look at the French Revolution and you were in France at the start of that, somebody asked you, well, I want you to bet on the eventual winner. You're looking at, like, Lafayette versus the left, and like, Robespierre hadn't even emerged yet. But by the way, anybody you could possibly pick was the right wrong answer. Because there's this Italian dude named Napoleon who's going to turn out to be the right pick. And you're not even going to know that until many years forward. As I watch the fragmentation in Iran, is that where we're going, I guess, becomes my question.

[Rahm Aliwalia]

Well, it's a great perspective and I love the historical reference. It's like the core underwrite for markets is how long does this conflict last and when do the tankers move through the Strait of Hormuz at a regular pace? I would say the key information now is that this conflict will take longer than anticipated. There are missiles still striking from Iran. It's week three now. The, the percentage decline has been substantial. It's down 90%, but missiles are still getting through. And the, the commentary from Pete Hexseth isn't really focused on the straight of Hormuz yet. And as Chris pointed out, there are other primary objectives right now. Taking out the launchers, then logistics. The Strait of Hormuz is a topic, but it's not really addressed in these press conferences. So that's a big question. And the longer oil stays at these elevated levels, the more risk there is for an employee inflationary regime, which is terrible for asset prices. It hurts consumer spending. It makes it hard for the Fed to cut rates. Rate cuts are already being kicked out. It hurts consumer discretionary stocks. It's an input into the cost of all retailers. And that is something that I'm concerned about. So there is a material likelihood of a correction. They really need to get the oil moving expeditiously, like now, tomorrow, the day after. If they don't, then I think after options expiration this Friday, you'll have more downside volatility

[Chris Perkins]

at what point? So right now Trump's saying, hey China, you need this oil. I don't need it, I'm self sufficient. Get it out yourself. But to your point in time, it's going to hit the American consumer and so what does he do?

[Rahm Aliwalia]

Hitting now gasoline in California is $8.50. I think the last John Galt just left from Miami. So yeah, no, I mean it's hitting the consumer now.

[Austin Campbell]

I will pile in here to say is that hitting the American consumer or the California consumer? California has. Somebody who grew up in California has been shooting itself in the foot and then stubbornly reloading and continuing, continuing to fire on the topic of energy for like decades now.

[Chris Perkins]

That's the quote of the episode.

[Austin Campbell]

I mean look, I'm just calling it like it is. I know this is allegedly a crypto podcast, but like California energy like policy is stupider than some of the NFT projects were.

[Rahm Aliwalia]

Just to bring it back to Marcus. Like we had, we had four down days in the S and P which it's historically highly unusual not to get a relief rally, which is what we had today. And there's a lot of dealer pinning effects that happens before options expiration. And the rally today was kind of lackluster given the amount of the decay in the vix. So you should be cautious. This is not like oh hey let's go up and to the right. This is not that kind of environment. You know what I saw in the markets most of last week, what felt were like vwap sell orders. It was just consistent, orderly selling. So yeah, I don't like that there are opportunities that will open up and emerge. I think it's kind of remarkable that the S and P is only down five points from all time highs given the the trauma of news that's hit markets from multiple angles.

[Austin Campbell]

I mean a question that I will ask on that is how much of this selling is people like call it voluntarily de risking versus involuntarily de risking after the whipsawing and oil like there are rumors running around the street that several of the major hedge funds are down like billions of dollars on some of these oil trades. So I'm wondering if what you were seeing last week Ron, was people being forced out of positions, deleveraging, debalancing. Right. These sorts of things versus call it people who are otherwise liquid have no margin concerns.

[Rahm Aliwalia]

Yeah, well there's deleveraging happening, right? We had the deleveraging event starting crypto around 1010 of last year. But pick an asset class. Private credits deleveraging. Look at the gross leverage exposure that hedge funds have. They hit peak levels about a month ago. They're still in excess. So they're deleveraging. And good names are being sold off because they're deleveraging. It's not about the name the hedge fund has too much risk on. They have to deleverage the quant funds and their factors aren't working. They're deleveraging fundamental long, short. They're deleveraging. The only players that are releveraging are the hyperscalers that are issuing boatloads of debt like Meta and Amazon, including Oracle to go buy more data center, GPU compute from Nvidia who expects a trillion revenue between now and end of 2027.

[Austin Campbell]

So a question on that front then. If we're seeing everything sort of selling off in the manner that you're speaking, Rob, are we at the point now where people should just step back and let that go by? Are there sectors where you're starting to see value, where you would see, step in and start lifting things like where, where are we in this cycle? Because I, I agree with you. We're seeing things like private credit starting to turn.

[Rahm Aliwalia]

You know, the valuations are, are extended. You know, like I'm looking at industrials, which is a major component of the S and P. And you've got names like Caterpillar and John Deere that are like 30, 35 times PE&GE, Vernova and Teradyne. Industrials are a bubble. They're a bubble. It's not only a bubble. Bubbles are great. They're a great way to make money. You want to ride the bubble up and then get out when the bubble pops. But the bubbles also popped. We're on the right shoulder of the bubble. So there's some value maybe in home builders if you believe mortgage rates come down, but at the same time the 10 year is going up because inflation hurts stocks and bonds. They hurt stocks and bonds. You don't get the diversification benefit. So I think this is a time to get smaller in terms of your risk exposures and wait for a real capitulation. We actually haven't had that yet. Haven't had a real capitulation or value really emerges.

[Chris Perkins]

Where are you on crypto, Rob?

[Austin Campbell]

I was gonna last speaking last Monday.

[Rahm Aliwalia]

We were bullish last Monday.

[Chris Perkins]

We were all bullish, right?

[Rahm Aliwalia]

For those, we were right home, right?

[Austin Campbell]

4K. I believe all of us said if we were buyers, we'd be buyers of bitcoin. There.

[Rahm Aliwalia]

That's right.

[Chris Perkins]

We were right last year.

[Rahm Aliwalia]

You're at a key level. You're at a very key.

[Chris Perkins]

Yeah, you're hitting some resistance. Where are you, where are you on bitcoin right now?

[Austin Campbell]

So this is 74 right now.

[Rahm Aliwalia]

I was just looking up my, my view is that bitcoin is running on microstrategies or I guess it's strategies STRC issuance that is keeping the machine going. And they are doing a great job marketing strc. It's attracting new flows. They had record volumes last Friday. So when that marketing process starts to slow, then I believe the bid for bitcoin will slow. So I would take chips off the table now.

[Chris Perkins]

Okay, but then that's not. Is that driving into alts too? I mean we're seeing of all the darlings, ETH is material outperforming. So what's the correlation? Is that, is that just, is that just Tom Lee or retail saying, wait a second, Bitcoin. This, this correlation between gold and bitcoin, which we've constantly seen, Bitcoin always trails gold. And the catch up trade is now on. We've been watching BTC to gold ratios. That's starting. It looks like it's, it's, it's bottomed, it's coming back. And then ETH pops up and he's like, hey, remember me? Outperforming at all.

[Rahm Aliwalia]

That's just correlation.

[Chris Perkins]

Right?

[Rahm Aliwalia]

China created the bid in gold and other commodities followed suit. China's not buying other commodities. Something to know. The commodities are showing weakness now too. Look at the DBC, etf, look at gold, silver or copper. It's an unusual state of affairs that we have right now in markets.

[Chris Perkins]

You have.

[Rahm Aliwalia]

This is a higher volatility, higher risk market. Better to wait for the fat pitch that it'll present itself at some point.

[Chris Perkins]

Look, I still think that there's opportunity here in the crypto side because to your point, with the dollar decoupling, a lot of sovereigns bought gold and when they bought gold, gold went way up and bitcoin didn't move. And then the bitcoin maxis are like, oh no, my store value. What happened? This whole digital gold narrative is breaking down right when it never did. And now that things are settling, they're like, wait a second, now bitcoin's starting to get a bid, The BTC to gold ratio is coming back. Wait, maybe the narrative never broke down in the first place. And I do think that's a tailwind on the east side. It's just again the fundamentals. The fundamentals of an institutional crypto market with a really weird, a delightfully weird asset. It's infrastructure, it's a tech company, and it pays yield and it's ultrasound money. And they're starting to get their head around it a little bit. And so I do think that that's going to be the tailwind on the east side going forward. Of course, we're having. Austin and I are arguing over the role of the EF going forward, which we can talk about a little bit. But I don't know, I feel like it's still a decent setup for crypto. I said it last week, I was right. But it sounds like you're neutral now.

[Austin Campbell]

Rahm.

[Chris Perkins]

You're coming, you're pulling back, you're pulling back.

[Rahm Aliwalia]

I'm more bearish than neutral.

[Chris Perkins]

Bearish.

[Austin Campbell]

I also want to throw a dart on this one that I think is maybe something we don't see very effectively through the US Markets lens, which is to say, one of the things that you've got to think about from a non US Person's perspective with Bitcoin is that this is your way to get your money somewhere that is not exposed to your currency current system. If we're seeing increased geopolitical shocks out of places like Iran, which could bleed into Russia or bleed into China, and you're somebody who's there, this is about the time when you're supposed to start buying bitcoin, if you believe that thesis. So. And tether, actually. Yeah, tether supply expanding would be another thing to keep your eye on. Like if I keep an eye on this, you should see bitcoin price going up, but also tether supply expanding. Yeah, but I, I would be watching for those signs as a countervailing factor to US Market forces here.

[Rahm Aliwalia]

Yeah, I would look at US Dollar also, like US Dollar strength. And if you have a flight to safety towards US Assets, then that doesn't help. Digital assets. We'll see. You know, it's. It's going to turn on facts on the ground. Iran, Iran. That's what the whole thing turns out.

[Chris Perkins]

Yeah, 100%.

[Rahm Aliwalia]

And it's reading what Trump's plans and goals are. I'm saying that on the margin, it looks like the conflict will last longer. Based on his comments, what would Worsh

[Chris Perkins]

do in this situation? Let's just say we had Worsh instead of Powell. What do you think would happen?

[Austin Campbell]

That's an interesting question. I mean, in this situation for the United States, you're gonna expect energy prices to go up. But the problem is cutting rates doesn't really help you the same way to supply shock. That was kind of the lesson of the Federal reserve in the 70s, right? You got to make sure not to cause even more inflation by doing that. To be honest, this feels kind of like the situation where the Fed sits on their hands, right? Because they're like, we can't cut our way to more oil. We don't want to cause inflation elsewhere. The thing that actually, I think would contraindicate that statement chances the job market starts cratering.

[Rahm Aliwalia]

It is, you know, it is a great point though, Chris. Like, it has been strong and resilient. It's like a change of character. There's no doubt about it. Right? So, like, it's hard to have conviction. I would say one way or the other.

[Chris Perkins]

I think, I think if Worse was in the seat, it would be different. It wouldn't be, I'm General Powell, I'm on an island. It would be Secretary Bessant, let's put our heads together. What do you have? What do I have? And I think maybe there's some of that going on already, maybe not. But I think it'll be much more coordinated approach, which should in the end be beneficial for the economy, I think.

[Austin Campbell]

All right, so on that note, talking about things that are beneficial for economies, we do have to go to a set of second ads from our sponsor and then, Chris, you and I can argue about the Ethereum Foundation.

[Chris Perkins]

I can't wait.

[Austin Campbell]

First, a word from our sponsors.

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[Austin Campbell]

All right everybody, welcome back to Bits and bips. As you can see, ROM cleared the floor so that Chris and I can now argue with each other because the Ethereum foundation published a paper, a 38 page document, defining what it is and what it is not. The EF describes itself as Ethereum's first steward. They are now one of many, but like Julius Caesar, remained the first citizen. And the central principle is self sovereignty, that users must have final say over their identities, assets, actions and agents. They've introduced a framework called crops, which is about censorship, resistance, open source and free privacy and security. They call these sort of the indivisible whole of Ethereum's development. And their explicit goal is eventually to make the foundation unnecessary. I read this and Chris, I know we're gonna disagree somewhat on some of these topics and thought to myself, ah, so they are going back towards their cipher punk roots and making themselves an unappealing landing pad for real world assets. And I think this is a view that's probably been a little bit misunderstood, so I'm gonna give credit. I had dinner over the weekend with one of my smarter friends who's a trainer on the street and talk this issue through. I want to try to pose my objection through the following framework which is that you can think about sort of the asset structure on blockchains in the form of a trilemma. And that means you can have decentralization, right? And like call it permissionless behavior. You can have real world assets and you can have smart contracts at various points on this, but what you can't do is have all three. Three. And what I mean by that is the problem is not a chain that wants to be permissionless or self sovereign in the way that the Ethereum foundation talks about. Like Chris, you and I are both fans of Bitcoin and like support that as a technology in the world. So I don't think there's a disagreement there. I don't have a problem with the concept or existence of smart contracts. I don't have a problem with the existence of RWAs. I think the problem is when you try to do all three of these at once, once as somebody who's run one, you put yourself in an untenable situation. What I mean by that is let's actually take tether since we were just talking about them currently there are depending on where you look anywhere from billions to tens of millions to hundreds of millions to billions of tether in most major, like call it protocols that are being used in crypto. If you looked at Uniswap and AVE alone, there's a ton in there. And then we have a chain that does not have like validator network or even coordinated protocol level controls, nor are those enforced. And of course you have Tether as the real world asset issuer. So the hypothetical that I worry about here as somebody who's had to be the paranoid person is what if somebody compromises Tether's smart contract keys, right? If the North Koreans mint a trillion dollars of tether, well one, there's obviously not reserves to back that. The answer that you always get is, well, the issuer could just drop another contract and that can be the real tether. To which I say, except you just blew up all of defi, right? There's no effective way for AAVE to respond to that. There's no effective way for Uniswap to respond to that. The borrow lend protocols are gone. Any AMM pool that had tether in it is gone. And so what I've been trying to communicate to people, people is if you want to have this permissionless sort of ethos behind everything, which again, I do not object to that on a standalone basis, you cannot introduce the layered complexity of smart contracts with real world assets that are going to need to be responsive to call it non chain concerns in a way that like the ETH token or Bitcoin does not. And that is the root of why I thought this statement was actually very negative for the future of Ethereum as a platform for real world assets. Because I think the first time we have a grenade like that go off and people realize how severe that problem is, you're going to have a flight of RWA off a platform like Ethereum and two chains with a lot more call it command and control and permissioning conditional on you wanting to have the smart contracts. If you want to bring ETH back to a state where it's like now you can do one way sends and the transaction chains are not commingled, fine. But Chris, is this not. I'm gonna say it in a way that'll give us both a little bit of trauma. The 2008 interlinked like counterparty credit problem, if something like that happens, I have

[Chris Perkins]

no idea what you're talking about. All right, listen man, I'm getting a lot of heat because I think that the Ethereum foundation is acting as it probably should act in a mature environment. Right. They're a non profit organization and wouldn't. I've been on boards of many non profit organizations. Many of them try to do something for the public good. In this case they're saying, hey, we're going to, you know, be the shepherds of the principles of this network. But I mean, who's the foundation of the Internet, Austin? Do you know who it is?

[Austin Campbell]

Say more.

[Chris Perkins]

No, there's no foundation of the Internet. Yeah, right. You got different organizations that contribute to the. But it but is a truly decentralized medium. Nobody controls it. The EF does not control Ethereum. The EF does not force EIPs through by design. Do they have influence in the past? Yeah, probably. But in time I would see them being more and more removed, focusing on those ideals and the direction and advocating for what they want out of this ecosystem that's controlled by the community itself. You know, one of the things I was thinking about was like with Nick Carter, we talked to him about, he's like, you know what, BlackRock's just going to take over the validators. Right? So who are the core developers today? They're a very diverse mix. Right. And in time that that composition is going to change and that community of core developers will help shape the network. But like, what are the roles and responsibilities here? You have a lot of. And again, it really starts as like, what is Ethereum trying to do? What is its core differentiation? In my mind, it wants to be incredibly robust. Haven't gone down in 10 years, guys. More than that now. Like very important robustness, decentralized, censorship, resistant. Like that is their moat. As you start introducing some of the things that you talked about, those are great. And you know, if you're Solana high throughput, high tps, you're Canton, hey, I'm going to do something private and it's going to be more controlled, more permissioned. These are all awesome, like in no way, shape or form. I try to be an eth Maxi. I'm just saying that their moat, Ethereum's moat, is a really awesome one. And it's, it's the new Internet. It's, it's that settlement layer of the new Internet. Fully decentralized. Let them have it. Let the ef, you know, and like, and they're like, well ef, EF needs to ship. EF needs to ship. I don't think so. Like, yeah, like it's, it's a nonprofit, guys. What has, who has to ship? Tom Lee has to ship. You know A has to ship all these people that are building on Ethereum, those are the folks who are shifting and then they have to work with that community to, to, to direct the network in a way that, that appeals, you know, for all. So like again I, I think that people have been very hard on the ef. I think the EF is doing great things. It is over and over again, you know, helping to shape those ideals and like I don't know, I, I, I, I think that's my case man.

[Austin Campbell]

I so I'll say I do agree with you that people who think the EF should be shipping or like explicitly building are misguided on the role that they're supposed to play within the E ecosystem. I think you and I are aligned on that. Like it you don't want in the case of something that is supposed to be a public good like the non profit foundation being the ones responsible for shipping everything you want to have for profit entities doing that shipping. Now that works a little bit different on a chain like say a tempo that is explicitly created by a for profit entity. I think we can all agree that's a different model. I, I think the heart of my criticism is that I find the EF to be talking out of both sides of their mouth and I'm not sure they understand they're doing that. Which is to say I don't have a problem with arguing for a decentralized self sovereign chain to exist. Again I'm very pro bitcoin. I support that. I support some of the privacy coins. Like I firmly believe there is a time and a place for that sort of thing. I'm also a fan of real world assets like guys, I used to literally run a stable coins like reserves and risk and like disclosure everything right? Okay, fine, totally down with those. I'm a favor of smart contracts. Like you and I both agree there's a huge amount of automation and tasks that can be fixed in traditional finance using smart contract technology that are profoundly broken right now. I think what I'm worried about is they don't understand the trade offs that their own stuff stance is making. Which is to say if you want to be like using the CROPS framework and focusing primarily on self sovereignty and that external forces do not have control of the assets. I think you also have to say you shouldn't be putting RWA that have external control of those assets in smart contracts that will cause cascading failure.

[Chris Perkins]

I'm totally confused right? Because today if you have a stable coin and you know this. Yes you can Issue it on chain. Yes, but the assets are off chain. They're, they're in a custodian and you have freeze and seize.

[Austin Campbell]

Correct.

[Chris Perkins]

What's the issue?

[Austin Campbell]

So my issue is that exact problem that you have explained. So theoretically there's two ways for this to become a problem. Number one, I have this asset. I have the smart contract. Let's use Paxos as an example because I was there. This is not a knockout Paxos. I'm just familiar with you've got USDP. So I've got, I don't know at the time, $2 billion of reserves in a bank and I've got 2 billion tokens on chain. It should be one token per dollar in the bank. Fine, easy to do. My concern is somebody compromises my smart contract keys and now there's 20 billion of USDP and I still have the $2 billion in the bank. Now what, how do we remediate that in a way, break a bunch of other other things.

[Chris Perkins]

How is that unique to Ethereum? I totally agree that cyber. I've talked about this a million times, cyber robustness. Yes, people criticize solidity as a language all the time, but absolutely security robustness, very important. Whose fault is that? Is your question? Is that Ethereum's fault or is it the issuers whose smart contract wasn't designed the correct way? I don't understand why this isn't. Why is it okay to put it on Solana or catch can't honor whomever.

[Austin Campbell]

Well, let me start by saying I didn't endorse Solana on this one. The contrast that I'll actually draw to that one will be something like JP Morgan's Onyx, where the answer to what you do if that sort of break happens is you freeze the whole thing until you fix it. Right. So what I'm saying is without the willingness to enforce any level of validator controls around these sorts of products, you're going to have a problem sooner or later. Right. Like the buy bit hack is a good example of ETH not interdicting that contra. So let's give an example of somebody with the other way. And although they could have done a better job and stopped all of it, they stopped most of it. If you look at the Cetus hack on swe, they actually did push through a validator patch and bring those assets and got them back. And I'm specifically saying when it comes to real world assets, if you don't adopt a framework where you're willing to have network level controls, it's A matter of time until breaks happen where bad things will occur. Well, and Chris, let me finish the point where bad things will occur and you're not going to be able to find a responsible party who can fix the damage. Because to me that's the key to getting into the smart contract.

[Chris Perkins]

I understand what you're saying. You're saying you want to have systems where you can roll back the chain is what you're saying.

[Austin Campbell]

Specifically if you're going to have a bunch of interlinked smart smart contracts. Because here's the problem with usdp. As soon as that hack happens, where you go from 2 billion to 20 billion, it's not that Paxos has to freeze it and drop a new contract. They can do that. That's easy. You've saved all the USDP holders. Congrats. You just every single uniswap pool with USDP in it you ave if they took it as collateral, morpho is exploding. Like any pool that had this as a composed asset is now broken. So unless they are all linked with you so that the moment you deprecate a contract they freeze everything and have a liquidation like methodology, you have a problem. That's my point about the network level controls for these things where the interaction with the smart contracts in the RWA is what creates the problem. Because I like, as much as I would like to say things won't get hacked, things are going to get hacked.

[Chris Perkins]

Look, hacking is a massive issue. I've been proposing policy solutions to that. Like everyone write your congressman, give me my privateers back. But look, I think if a chain or an organization wants to roll back their chain for those protections, let them do it. And that, that's, that's fine. That, that's not, that's not censorship resistant, it's not self sovereign and like they're welcome to do that commercially. I don't know if you can have Ethereum roll back. The validators are too diverse. There's a million of them. Right, so what does that mean? That means that as people build on that chain. By the way, I was watching I love Face the Nation. I was watching it this weekend and wouldn't you know it, the foreign minister of, of Iran was there chirping away, talking about how he felt on Zoom, like using the Internet that he think no one could shut down. You can't show up, shut down Iran mining bitcoin any day more than you can shut them from mining gold. Like if it's in their country, they can do it. Right? So I guess the Point is, when you're dealing with an ecosystem like Ethereum, do we need to invent and to ensure like if companies are putting their assets onto that chain, should they have controls? What do you have for securities? You have a transfer agent, right. Where you're tracking who owns what. If it gets hacked, you can address it through the transfer agent. Is that a perfect solution? No, it's not. Why? Because if the bad guys move too fast, they track it, it gets swapped into Bitcoin and off it goes. But what I would, I think you're throwing out the baby with the bathwater. Let the ecosystem be censorship resistant, decentralized, and have the apps be very thoughtful in the controls that they put on to ensure that there's robustness. But I don't think that there is,

[Austin Campbell]

where I'm saying, I think the EF is talking out of both sides of their mouth is to put forward the statement that they put forward without also addressing that and proposing those kinds of fixes and quite frankly saying, hey, you should probably. Like, as weird as this sounds, if we're going to preserve these principles, you should be doing less with smart contracts on this chain because you're going to create like a ticking time bomb if you do not. Right. This is the classic like if Tether gets hacked, they're essentially the AIG who wrote all the cds. Everything else goes.

[Chris Perkins]

Look. Yeah. And again, I think the onus is on those folks who deploy the smart contracts to make sure that. And you know, I think cyber is going to be, there's, there's a, there's some real big challenges coming up with, with, you know, the way that people are going to be able to replicate your voice and your likeness. There's also some, some defense, amazing defenses coming in. Agents are going to protect us. So it works in both directions. But again, I think that something that's fully censorship resistant, open source, private and secure, I think there's, I think there's a need for that in this world. Particularly if you're sitting there in Iran and you're looking for, for access to dollar liquidity. You know, you're in a developing world, you know, if you start entering into these systems and if you can censor them, they will be censored. And so I do think that, I do think that there's a role in the world for something that's censorship resistant. My two cents.

[Austin Campbell]

And again, I don't disagree with the censorship resistance. I'm totally for that. It's the layering of all these concerns to create like the Jenga Tower of.

[Chris Perkins]

But like the EF doesn't control Ethereum. They don't. Right. They're a nonprofit that tries to steward and set goals and yes, they're influential, but they're not. If they were in control of it, it wouldn't be decentralized. So I just think people have been way too hard on them.

[Austin Campbell]

Yeah, I suppose my complaint with them is I feel like you've kind of half assed your mission statement. Right. If anybody from the EF is listening, to be clear about that one, which is to say if you want to go that hard down decentralization and self sovereignty, which I again I'm gonna continue. Yeah. And fine. Then you also need to go a lot harder on. Don't build like castles on top of a swamp on this sort of thing because when it breaks, nobody can save you. And if it, by the way, if it breaks repeatedly, nobody's going to use it, which is going to be a big problem. And the other one is that's exactly how you attract the kind of regulatory attention that makes your life absolute hell. Because you know what will like cause a Biden era overreaction is going to be if Americans lose like hundreds of billions of dollars,

[Chris Perkins]

100%. We have trillions of dollars coming on chain and these ecosystems become very strategic very fast. So okay, where are you putting your, your real world assets then? Austin now, now you got to answer the tough question. I'm fine with Ethereum. Where are you putting yours? So fine with a bunch of them by the way.

[Austin Campbell]

There. There are a bunch. So I'll talk about models that I currently find pretty promising for this sort of activity. So one I a little bit like my friend Obed who although we argue about this topic, let's pick something that we have in common. Private bank chains are a bridge to nowhere. Those are useless. Don't build them, stop building them. Because if I have to JP Morgan give the sales pitch to Goldman Sachs of hey guys, take all your trades, your customer info and all of your technology and put it on something I unilaterally control. That's not even a discussion. And vice versa. So stop with the individual private bank chains. That's stupid. What we should be looking at is one of two things. What I'm going to call public permissioned chains, which is to say open access by default but with way more controls around getting in and out. Some good examples of those. Avalanche has done some things with concurrent L1s or subnets or whatever they're calling them that I think are super interesting.

[Chris Perkins]

I think Avalanche is super interesting.

[Austin Campbell]

I think Stellar's one validator set for real world assets is super interesting. And by the way, not enough people look at Stellar their technology because they've been thinking about this for a decade. They are a very interesting one. Things like Canton and Tempo that again, you could have a little bit of a hard, harder boundary and validator coordination. These are ones that I think are more amenable. So it's not just where do you put the RWAs? But when can I do complex things with them? Like if I just want to do one way sends, Ethereum is fine. It's building these piles and piles and piles of interlinked things. So those I'm optimistic on. The other thing I would be optimistic on, but has not evolved yet, Chris, would be what I'm going to call a global version of dtcc. Because I know people talk about Ethereum as decentralized. But let me propose this model. If the thousand largest financial institutions globally got together to run a single chain, given how geographically and like philosophically diverse they are, that they would actually be surprisingly decentralized in many ways.

[Chris Perkins]

Yeah, DTCC is working with a number of chains. I don't know if they're all public. I know I know who they are. I think the really funny thing is, is that it's very hard if you're a DTCC or big institution to like potentially onboard Ethereum because you're like, wait, who do I talk to? Like who, who's going to build this for me?

[Austin Campbell]

Who I sign the SLA with? Right.

[Chris Perkins]

Which is like awesome because it kind of proves the point and the value add. And I think that, you know, there's a bunch of folks who are like stepping into that void right now, but it kind of proves the differentiator in the use case. So look, I think all those projects that you mentioned, you know, Avalanche, Canton, they're all doing great things. And that's the beauty of our space. You can, they're programmable, you can customize, you could, you know, you, you can overemphasize tps if you're Solana or you know, even SUI is out there, that they're all doing really interesting stuff. But my point is that Ethereum's big differentiator and the reason why it's number two in crypto is because of that promise of decentralization. Now it's also interesting, that was the guiding light for many of the early adopters of crypto. Now the folks that are coming in, a lot of them don't they don't follow that same ethos. So it's gonna be super interesting to see how it evolves. But I guess we will leave it there.

[Austin Campbell]

I. I was gonna say I will actually give a prediction to end the show, which is, I think in the future, as people go back and look at episodes like this, or look at the exact point in time we're at in crypto, we will be perceived by them is about how we perceive the 90s for tech, which is to say, I am more certain than not that the chain that ultimately most real world assets will go on has probably not been created yet. Or if it is one of the current ones, it will look vastly different by the time we get there than it does right now.

[Chris Perkins]

But we had great music and clothes back in the 90s, so. So we're going to leave it like that.

[Austin Campbell]

All right, so if we're going to drop the mic right there, let's actually do that. So we'll call it here, everybody. Thank you again for joining us for this episode of Bits and Dips. We'll be back in one week to discuss more about how the worlds of crypto and macro are colliding. Until then, everyone, thanks, brother Sa.