On The Brink with Castle Island - *LIVE* On the Brink x Galaxy Brains @ Pubkey NYC 11/9/23 (EP.474)

Episode Date: November 15, 2023

The boys join forces with Alex Thorn of Galaxy Brains for a special live episode at the Pubkey bar in NYC. In this episode:  Galaxy's Beimnet Abebe joins for market color Bloomberg's James Seyffart opinions on Bitcoin ETF prospects  The WSJ/Hamas affair Audience Q&A  With special thanks to the Galaxy team for organizing and Thomas Pacchia for hosting

Hello, I'm Nick Carter. Welcome back to another episode of On the Brink. This is a special off-cycle collab episode that we did with Alex Thorne of Galaxy Brains live at the Pubkey Bar in New York last week. Not our usual fair, an off-cycle episode for sure, and we tried to put some more evergreen content in there. We also had an appearance from Bemnata Beebe, and a special guest appearance from James Safert, who we just dragged out of the audience to a pine on ETFs. Thankfully, he was happy enough to do that. This was super fun. Hopefully we'll do it again soon.

So here is our live Galaxy Brains slash on the brink. Crossover episode. Let's dive in. Not down by bad mortgage investments, Lehman, which has 25,000 employees, will be liquidated. The federal government loans American International Group, AIG, $85 billion. This is a different kind of market, and the Fed is asleep. The federal government is stepping in. to stabilize Fannie Mae and Freddie Mac,

the two mortgage giants that have been threatened by the housing crisis. The Bank of England has pumped 75 billion pounds more into Britain's ailing economy with a new round of quantitative easing. You print a couple trillion dollars, and all of a sudden, people start to worry. So out of this worry, we have something called the Bitcoin. Bitcoin. All right. Well, thanks everyone for coming.

Really appreciate it. Very humbled to see everyone out here. We'll start it off. Welcome to On the Brink. Nick Carter. Welcome to Galaxy Brains. So this is a mashup of our two podcasts. It's the same.

We're just slamming them together, you know? We're going to cover, I think, most of the segments that we do on the two podcasts. I can't wait to have Bimette Abibi on. This is our second live podcast. The first time it was like a monsoon outside and you couldn't hear anything. Oh, that's right. Yeah. In Boston.

Where was that? Quincy. Quincy. Yeah, we did a lot. Boston Blockchain Week. Shout out DMK. Oh, yeah. That was just a couple months ago.

That was last year. Oh, you did last year's one. There was one a couple months ago. There was. So, you know, again, we're going to do most of the segments if you listen to the shows. By the way, I do have to shamelessly say, if you are not a subscriber and following these podcasts, take out your phone, subscribe. I'm not seeing anyone take out the phone. Everyone already follows?

You got a rate, like, subscribe. You're going to help us so the better content than some of the other podcasts can be diminished while ours is elevated. I like it. I like that. We got some famous podcasters in the audience, it looks like. I do. I see a couple. Well, should we just hop right into it with our friends?

Why don't we get Bimnet up here? I think there's lots to talk about markets. We start. We got Bimnet a Bibi. So if you don't know, Bimnet is one of our top traders at Galaxy and on Galaxy brains, Bimnet gives us the T on markets and macro. Thanks for having me. Thanks for having me.

So I guess I'll just ask, I mean, like, what is going on exactly? I guess we should start with crypto markets because Bitcoin has been on a tear. I saw that even Ether was finally catching up a bit today. What's your takeaways on that so far? Well, I think it's a big deal that BlackRock is launching a spot Ethereum ETF. They wouldn't be doing it unless they thought they were getting approval. And so the market's reacted pretty positively to that news. As we sit here right now, ETH is trading at 2130-ish, which is a year-to-date high.

And we've seen the ETH-PTC ratio bounce over like 9% today. And so it seems like you're getting a little bit of rotation, which I don't know how many folks in this audience actually like that. But we are starting to see, you know, ETH gain a little promise. dominance. And, you know, I think it really all is a function of Bitcoin for the most part, because it leads the way, being the, you know, largest market cap and the main sort of narrative and theme driving the market. But what you have to keep in mind is, you know, with some of these like lower liquidity tokens and, you know, lower volume things, you know, a little bit of flow can send price a lot higher on a percentage basis. And so, you know, I think that's kind of what

you're getting in the alt landscape and with Bitcoin. So how are you thinking about the Bitcoin ETF in terms of who needs to buy just for inventory. So just take demand from retail off the table, structural buying that needs to happen in order for these products to actually get to market. Yeah, I mean, there's a lot of wealth management platforms that are going to put clients into this stuff. You know, anecdotally, I was talking to somebody that had, that ran, I was doing private wealth at one of these, you know, bougie banks. And she had a client that had $100 million in crypto assets. And, you know, she couldn't really advise that person on the crypto assets because it wasn't

part of the platform. It wasn't one of the products that they had. And so, you know, once it becomes, you know, part of the product offerings at a lot of these institutions, and it becomes a higher fee product as well, which is really important, you know, a lot of the private wealth channels are going to push folks into it. In addition, like, I think what folks just have to keep in. mind is that, you know, when you work at a bank, like, your most important client is BlackRock. I don't care what bank you work for, for the most part, especially if you're a USG Sib,

BlackRock asks you to jump, you say how high. And it goes across the entire firm. And so they're launching a new product, and they're going to go to all of their various banking partners and be like, what are you doing to help me because I'm your biggest client? And so I think there really isn't an area of, you know, the U.S. financial system. that isn't going to be touched by this product because you've got the U.S.'s largest asset manager involved. Fundamentally, this is, you know, one of the best setups I've ever seen in markets

from the standpoint that, you know, I've said this line, you know, tons of times. So, you know, pardon me if, you know, this is repetitive for you. But the U.S. capital market is single-handedly the best capital market in history. Absolutely. America.

It's because they have the nukes. and they can print as much money as possible. But, you know, and then the ETF is single-handedly one of the best innovations, like, out there, and people just blindly and passively put money into these things, and it's part of the fabric of wealth creation in the United States. And so when you combine the best capital market ever and one of the best financial innovations ever,

it's going to lead to a pretty, you know, strong result. And then you actually just, you know, start to think about fundamental use case for Bitcoin or the value I think it provides in terms of you know providing a safe haven from just reckless fiscal spending and you know reckless monetary policy and so you've got fundamental catalyst financial innovation elephant in the room what's going on with Solana yeah I mean I think one to start the year one of my favorite things to trade is something that's been beaten down a lot right

something that's got base effects going for it. So if something goes from $100 to $1, that's a 99% decline. But if it goes from $1 to $1.50, that's a 50% increase. And so when you deal with things that have sold off a lot, like Salana did at the start of the year, you get the benefit of just the mathematics of it. And so early this year, it got the benefit of a base effect. And then, you know, recently I think it's just gotten, you know, the wealth effect from Bitcoin. The messaging from the Salana community is pretty simple.

They want to be the number three option, right? Bitcoin, eth, soul. That's their thesis. And honestly, simple stuff works. And so the Salana community has been pushing that. They've got, you know, bonk, all the meme stuff. And so they've got a strong community. There was a short squeeze.

But high level, you know, Soul's been an outperformer. But to be honest, you know, you could take a monkey and have them throw a dart onto a board filled with alts that are liquid. And odds are you would have done pretty decently well over the past couple of weeks. And so, you know, Salana's great and all. But it's really about identifying when to be in low market cap, highly volatile alts. And that's mainly a function of Bitcoin. All right. Let's step back for a minute. I want to before we have to move on, I want to ask you about the Fed and macro in general. I saw Jay Powell told someone to shut the effing door today when He was heckled by the Justop Oil.

He didn't like those protests. No. That's the best thing he's ever said. You know, this obviously, you know, the price of money, the cost of money is, and the rates are very important for investing. They influence how people look at the risk spectrum. Historically, Bitcoin and other crypto assets have been thought of as a risk asset, even though I think that will change over time, at least for some of them. Where are we going here?

I mean, when I pull up Bloomberg, it looks like they're talking about cuts in the spring. Absolutely. You know, for the better part of this year, I've been in the higher for longer. We need to take rates, you know, significantly higher camp. But recently what we've noticed in some of the higher frequency data points and some of the better leading indicators that we look at is a material slowdown in, you know, consumer activity and business activity and lending activity. And so I'm firmly of the view that we've seen the high in U.S. interest rates in the front end.

and, you know, that likely means that eventually you're going to start getting to cuts. I'd see the most important, like, recent data points with respect to the labor market, we've seen, you know, material softness in things like wages and, you know, certain hiring metrics. And I've got one guy that I talked to, that's one of the better guys I talk to, he's forecasting, like, a negative payroll number at some point within the next couple of months. And, you know, I think that would come as a shock to a lot of market participants. And so, you know, you're at levels of inflation that are okay. And so if you start to see the labor market crack, you know, the Fed's going to take their foot off the pedal pretty easily.

And then I'd tell you the most important thing that happened today outside of, you know, this Ethereum ETF stuff was the 30-year treasury auction today in the U.S. It was a very weak auction. The weakest auction we've had since November of 2021. We had this thing called a tail, which means that the bid, you know, the, you know, the, you know, the, the auction cleared six basis points worse than what was going in. And it tells you there isn't really much demand for all of the issuance that's in the back part of the U.S. interest rate curve. Like that people don't want to buy 30-year bonds in the U.S. right now.

It's a function of how much supply is coming. It's a function of is the U.S. really in a fiscally responsible situation where they're going to be able to pay you the notional amount on your bond 30 years from now. And I think it's quite telling because that's what the big macro types look at. If your country can't issue 30-year debt and finance itself pretty smoothly, that must mean folks are like a little concerned. And just to give people some context, the 30-year bond today, the amount that was being issued is about double the amount that was issued last year. And that amount is only going to continue to increase. And so fundamentally, like, the reason why I'm, you know, so constructive on Bitcoin, and I think everybody has their own reasons. But it really has to do with just the fiscal situation and it being untenable and a lot of

folks waking up to it simultaneously. And it's not just domestic, it's abroad. There's nobody, there's no rational actors, you know, from the fiscal standpoint. So maybe switching back to Bitcoin here. You guys have put out some great research from your desk, Alex, on the options market. So what's going on with the Bitcoin options market? It seems like this is changing week to week. Absolutely. Well, so Vol's, Bitcoin was pretty quiet recently, like over the past, like, three days, with the exception of today. And I'd say realize Vol was around 30, which is pretty neutral. But what we saw happen yesterday was it started to move like a percent every 15 minutes up and down, up and down. And what I like to call that is hypervall, right, when there's just, you know, no liquidity one direction or the other.

And so the implied voles in the options market are reasonably low. But when you look at the price action today, I tell you they're incredibly cheap. It screams like there's like huge buyers in the market. There's also huge sellers. And so it's not as, you know, squeezy as, you know, the setup we had a little bit ago. But it's an asset that I tell you, like, just taking a step back, If I saw something moving like crazy 1% every hour at its trend highs, I'd tell you that it's on the cusp of a breakout.

That's something like crazy is about to happen. And so fundamentally, I think you're supposed to own VAL in the asset. And I think this is one of those assets where you're supposed to own wings all the time. The small probability stuff that people don't think can get there, that's kind of what you want to own. And that's what, in theory, the next possible squeeze that can happen in the market. market is a Vega squeeze. For those that I don't know what that means,

that's kind of longer dated vol positioning in the market. And so if Bitcoin goes from being a 60-vall asset in implied to 80, and you have 100K of Vega, right, like that's 20 vols, right? And you could lose a ton of money if that happens. And so the market is not really set up for Bitcoin's vall regime to shift. We're talking like firms would go out of business if balls jump by like 20, 30 vols in the back end.

And that's not that crazy, given that you've got the world's largest asset manager about to launch a product. And so there's a real squeeze potential there. And then with respect to ETH, just briefly, there's nobody selling options in ETH anymore. There's not much of all supply. And historically, ETH has traded about 10 vols over Bitcoin. And so, you know, if you see Bitcoin Wall explode, like, explode, like, you're going to see ETH Wall explode. And the world's largest asset managers also just launching an ETH ETF.

So, you know, I think you're in a world where it's going to be spot up, vol up. Bimnet Abibi from Galaxy Trading. Thank you so much for coming on Galaxy Brains and on the brink. Great stuff, Matt. All right. Well, we talked about the ETF. There's been some news. I'm going to pose this to you, right?

So there was, according I think, to CoinDess, the SEC is reportedly talking to gray scale about, I guess, in this case, a conversion. Is that, that's positive, right? I mean, I think we all knew that all the sponsors were talking to the ETF because none of the sponsors are talking to anyone else right now. So it's fairly obvious. I mean, I guess the question is, if the SEC does not approve this ETF, how many man hours are being wasted right now talking to these sponsors? Yeah. How many taxpayer dollars are worth? wasted at the SEC in general.

Right. But they love to waste tax fare dollars. That's not a constraint for them. I do think the gray scale ETF is a really interesting case because they don't really have a deadline, right? So it's... They haven't refiled their 19 before.

So there is no clock, right? Like their rejection, their 19 before process ended with a rejection I think in July 22. And then that's what they just basically sued and won over. So now it's like that rejection was vacated. Yeah, I agree.

So it's like they haven't refiled though, so there's no new clock. One of you explained why the Bloomberg guys are saying it's 90% right now. I think the Bloomberg guys are pretty smart about the whole thing. They're here. Yeah, shout out to Eric Boutchunis, James Seyffart. Really have the experts in the audience here. Come on stage. I'm happy to, I'm happy to, I'm having, all right, come on up, James.

All right, come on up, James. All right, first guest appearance. All the experts are in the audience. All right. We're bringing up James Safart from Bloomberg. Bloomberg intelligence. Thank you. So James, I guess Nick's question is, you know, why are you saying it's 90%?

And also, maybe get into this window concept here where there's a nine-day window. What are people talking about there? Yeah, so the reason we're so bold is because the court decision was so bold. They refuted everything the SEC has said for the last like five years plus. So in order for the SACs, to find some wiggle room and like thread some needle to like deny these things under the 19b4 process is going to be very very hard it's going to be very hard to deny these things under that process um you're fine all right cheers yes how to stop best service in new york right here frankie thank you so much

hey tip your bartenders tip your pubkey bartenders please tonight Oh, these are orange pills. I don't know the drill. They're giving us the orange pill. That's what it's called. What do they say about this drink? Wait, what's you doing? I didn't sign up for this.

Never had one of these. Yeah, who said that? Was it Bloomberg or somebody? We need to be lucid by the end of this show. Somebody said that, a journalist. They said that this is the worst cocktail in Manhattan. By the way, that's not true. It's actually pretty good.

So, James, you started to say that the order was such a smackdown on the SEC's prior reasoning for rejecting ETFs. So that made you bold in your call. Yeah, and also, like, it's just time. Like, we have Canadian ETFs that are operating flawlessly. We have European ETFs that are operating flawlessly. It's just so much better. We have futures ETFs that, granted, if you're trading short-term and you want to trade Bitcoin exposure or now Ethereum exposure,

those ETHERMES are great, right? You can get exposure. They're going to trade in line. They're going to move directly in line one-for-one over a couple days, maybe in weeks. But over a year, multiple-year time period, you're going to trail. Right now, year-to-date, you're trailing. 7.5%. If you were going to buy an

ETF and they said, yeah, the fee 7.5% up front, you're like, what? Are you kidding me? 750 bips? Yeah, yeah. Like, no one's going to buy that. I mean, Grayskills 200 bips and people are really upset about that for a good reason. But like, so it's just a better end situation for everyone involved if an ETF is approved. And the courts basically smack down everything the SEC has said.

We now have the coin-based SSA, which based on the court decision, honestly, doesn't really matter. Right, not even required, right? So you're talking about BlackRock, I think, was the first to file one where they moved the surveillance sharing agreement to the spot market of regulated sufficient size or whatever. But the court said that spot market was mathematically identical to the futures market, right? So you wouldn't even need that. Yeah, I mean, if you're going to make the argument that, like, you, you, everyone knows,

anyone who's been in finance knows that the futures derivative market is based off the spot market. And even if you don't know that, if you look at how Bitcoin futures prices, are made on the CME, they're based on the Bitcoin reference rate, which is based off of like eight spot exchanges. So like the whole process of them denying spot and allowing futures is just completely backwards and broken. And Gary knows it. Like it's blatantly obvious. Our view is that they've come around to this and they're figuring out of the way to do it. Honestly, I think the SSA is more a win for Gary Gensler politically because he can spin this as, yeah, we don't fully agree with the courts, but now we have this surveillance sharing agreement that we've been asking for for a

decade. And now we have a coin base and maybe others will jump on board. So like, there's a few other aspects there. So basically, Arkin 21 shares, the final deadline is January 10th. I will, and if, if for some reason or some way, the SEC, as you said, finds a way with all those man hours to like deny these things ended up 19B4 process and don't get called back into the court with the D.C. Court of Appeals, I am, I would be fascinated to read that decision. I'll have to eat a lot of shit for being wrong. But I would be, I would love to read whatever the SEC cooks up. to like deny these things at that point. So absent a Bidance, DOJ, like, complete, like, blow off investigation happening.

So, so what's this window we're in right now? Yeah, I've been hearing a lot about the window. Yeah, so. Are we in it? We're in the window. We're in the window. But honestly, this blew up way more than I intended. I feel like there's too much going on our tweets that me and Belchunas are putting out.

Literally every trader has you guys on alerts, I think, to be honest. Yeah. So. You're the main character. That's not good. You don't want to be the main character. Take it to me. Nick knows, yeah.

If I had to take advice from anyone on this topic, I think you're probably one of the best people to take it. Basically, when you get denied or when you, this whole process, there's all these delay periods. You've been paying attention. There's all these like, oh, this has been delayed or denied or what have you. After there's a delay period, specifically this one instance, there is a period where you can submit a public comment,

which a lot of people have posted some of those public comments, and then there's also this other period. But essentially that period ended yesterday. So the SEC wasn't going to make a decision. That coin telegraph tweet, granted, it went out, and I was like, oh my God, is this real? And then more research. Within a few minutes, I was one of the first people to say this is definitely fake. So I'm going to take credit for that.

But it was not going to happen because they were in the comment period. Like they're waiting for public comment. They have to wait for public comment as far as concerned. Gensler kind of skims on the rules a bunch, so I wasn't completely shocked. But essentially, that period ended. yesterday. So now all of a sudden nothing is up for comment. Their first nine filers can be basically decided on any point now between January 10th. What happens on Jan 10? Jan 10 is the ultimate deadline for ARC in 21 shares. Yeah. And why wouldn't they, my understanding of this

logic is if they're going to approve them eventually, right? All the other guys, most of the other guys are like in March or even a couple after that, the final deadlines. So they wouldn't like deny ARC and 21 shares and then in two months approve everyone else. is the thinking, right? Yeah, exactly. What's going to change between Arc and 21 shares on January 10th and BlackRock on March 14th or 20th? I don't know the exact date.

But the reason why it's an eight or nine-day window is essentially that hashtags in Franklin, Franklin Templeton, their deadlines for one of their date deadline periods where the SEC would have to delay or deny or approve is November 17th. Global X is November 21st. So if the SEC wants to do kind of like what they did with the Ethereum futures ETS,

which if anyone was paying attention, they lined them all up and was like, if you're ready to go, you can launch on this date and you can go. So if they want to do that with all 12 filers, there's like a window here before November 17th where they could do that, potentially November 21st.

But if I'm being honest, I don't think it's going to happen. I don't think the SEC's ready to do it. But if they're focused on doing all 12, they'll do it then. That said, like, there's nine other issuers before them, including Invesco Galaxy, where like, they could be,

a decision could come anytime between now and January 10th. But if they want to do all 12, the window is right now. Very interesting. Yeah, all right. That was great. What about, hey, well, I guess,

well, you saw the Grace, the Black Rock, like, Delaware court, like the construction of their, whatever it is, an LLC or whatever, the corporate filing. But then they also filed something else with NASDAQ, or was it the 19 before? Yeah, they filed a 19 before, like,

just after 4 o'clock today. So one of the things I wonder is, like if whoever that person was on Twitter, I follow them because they've tweeted. I saw you talking about this. I wonder if they like would have actually filed the 19 before today because if you look at the BlackRock, the I shares Bitcoin trust filing,

it was seven days before anyone caught wind of it as far as I'm concerned. I didn't see it until seven days later when they filed the SEC. So I wonder if BlackRock like would have waited the full like of week or whatever to put it out. Oh, but because it came out on Twitter. It blew up. I mean, everyone saw the price of Ethereum skyrocket on that news.

So I wonder if they would have put it out today. but either way, they filed. They officially are in the ETH spot race. So there's six people now that have filed for Ethereum Spot. All right, James Seyfar from Bloomberg Intelligence, our friend. Thank you, James. Follow him on Twitter, too. That was literally better than we.

That was great. That was off the cuff. That's what happens when we do it live. We're doing it live. We didn't know any of that stuff. No. Okay, so let's stay on the SEC for a minute. There was a really interesting Inspector General report from the SEC's Inspector General.

I believe it was the Inspector General report that among other things was talking about why they're having trouble hiring and retaining experts in the digital asset markets. It's because the report stated because they require any person at the SEC who works on crypto to sell all their crypto, all their Bitcoin. It's crazy. Can you imagine trying to understand Uniswap without actually using it? Like how do you actually, how do you academically wrap your mind around this industry without actually using it? You know, I have some tea as well. I was in D.C. yesterday. I flew in for this specifically. Let's go.

And apparently this holds for the entire federal government if you're regulating anything that touches crypto. Crypto specifically. So, yeah, it's not just the SEC. But you can own stocks and, you know, in boons and... But we have politicians that own Bitcoin publicly. But they aren't the regulators that are focused. So if you're in any way financial regulator, you touch crypto.

I don't know the answer to that, Thomas. But like, I don't think it's regulated. The federal, the federal, like, the transportation department can drive cars. They can. They can. They can own stocks. At the conference I was out yesterday against her site, he owns index funds. You own stocks.

That's typically what they do is they say, first of all, you probably have to preclear, certainly if there are individual equities. And this is true in finance. But if you own mutual funds or indexes or, you. Separately, you can move all, like, typically the presidents, when they're president, they move their assets into a non-discretionary account or an advisor. A blind trust. Right, a blind trust, yeah. I mean, there's plenty of solutions other than telling people to sell all their Bitcoin. Doesn't it seem like a quick fix for the SEC?

So you regulate registered investment advisors. They pre-clear trades. Just take what you already wrote for the people that you're going after and just adopt it yourself. I could see somebody saying, I care about the future of Bitcoin or crypto in the U.S. I'm a lawyer maybe or a financial lawyer. like, you know, I could, let me see if I can help the SEC, like, do it, maybe even do a better job, like, right? But, like, sell my Bitcoin to do that? Like, are you out of your mind? Sell my Bitcoin and then work for a government salary at the same time?

I mean, it goes back to what I said originally. I don't know how you understand the pace of progress in this industry without actually using the products. And just like maniacally on, like, Bitcoin Twitter, just like in crypto Twitter, but like watching things like days like today when people are like, you know, sharing laser eye jifts and like, like, like, and you just like, observe it and take it in, but you can't participate? It's the same thing that happened in New York Times. New York Times are the same rule. Nathaniel Popper, one of the most bitter men.

And one of the earliest journalists to cover Bitcoin. Early guys, wrote a great book, couldn't own Bitcoin, and so he's so bitter now. We were talking about this earlier. That's still one of the best books I've ever read about Bitcoin. What's this one called? Digital gold. Digital gold.

It was back in 2014. Yeah. Yeah, that was a good book. Okay, let's go to another related topics. So, um, is this stab 121? No, no, no. That's two, that's Sab 121, dude. It's too easy to, I don't know.

Brinker's too easy. Brinker is no. Strange arcane SEC accounting bulletin guidances. No, Tom Emmer, uh, I believe, is, I guess some changes happen in the Republican House leadership, but I think he's still the whip. He's a whip. He's the whip. So he's the second most powerful member of Republican House leadership.

He introduced an amendment to the government funding bill. that would defund the SEC's enforcement efforts until comprehensive crypto regulation is passed. Emmer's the best. So there's an appropriations bill right now that had a ton of amendments that got bolted onto it this week. Yeah. One of them was proposed by Representative Emmer. And yeah, it says that the SEC is basically shut down as it relates to crypto enforcement until there's a market structure bill passed in the United States, which, you know, frankly, is not going to be anytime soon, in my opinion. We might get a stable coin bill, and who knows,

I think these amendments kind of fall off the back of the wagon, but it's a statement. I heard some tea lately actually on legislative. It's all about the tea. I got tea. What is tea? Tea is Zuma for gossip. All right, thank you.

I am not a Zumer. Thanks for letting me. I learned that from the young folks on TikTok. Keep it let them breathe. I have been reviewing TikTok to understand how it is that these people operate. So the tea is that they're. is a swap deal in the Senate. The Senate Dems wanted to pass the safer banking act, which would basically preserve the ability of cannabis businesses to get banking and potentially be good for

crypto as well. And then in the House, the House Republicans wanted to pass the Stablecoin bill. And so there was a swap deal agreed under our former speaker. You mean Kevin McCarthy? McCarthy. So now he's out. So that was the deal. There was a deal. on the table. I see. Safer for stable coin bill. Interesting. However, now we have a new speaker, Johnson. He's never spoken about

crypto. Johnson hasn't spoken about crypto and he said something like, if you want to understand my views on stuff, consult the Bible. And so I did that. And the Bible, actually, I couldn't find anything on crypto in there.

I looked. I liked the tax collectors. Yeah. Yeah. So we don't know his views, but we still have Emmer as the number two, a big, certainly knowledgeable about digital asset policy and markets. We have Pat McHenry, charge of house financial services, not only a knowledgeable, but a straight-up advocate. I mean, I used to say when we were big on Clubhouse during COVID, he used to join the Bitcoin Club. Did he really?

I'd say, yeah, he's at the level where he could be, like, on the board of directors of a crypto startup. He's that knowledgeable about it? He's good. What did you say? You had an anecdote about him earlier we were telling me. I've been in rooms with McHenry where he's sitting down with people that built protocols of publicly launched tokens, and he's going head to head with them on how it works and the regulatory impact. So I think he's super knowledgeable. There's a lot of knowledge there.

On this stable coin thing, I think we've got to be really careful here. So there's a world where this stable coin bill gets passed, and it says you can only launch a stable coin as a federally chartered bank in the United States. This is what the Democratic side of the committee kind of wanted. That's what Elizabeth Warren wants. And so, you know, the problem there is banks are not allowed to launch stable coins. Right. So you say you can only launch a stable coin if you're a bank, but banks are not allowed to launch stable coins.

Right, because in the OCC, the FDIC and the Fed all say you can't do it. Yeah. So we need to preserve the state path is the message. Yeah, it's a Trojan horse, actually, the stable coin bill. If they don't preserve the state pathway, it's no good. In this country, we have two ways to charter a bank at the state level at the federal level. The Fed has tried to quash the state pathway this year. That's what they've been trying to do.

That's destructive for this country. We can't allow that to happen. We can't end up with a stable coin bill that's just federal regulation for stables. That's the current debate in the House, actually. Right. My understanding of, and I don't know where it is at the moment, but part of the dispute was about who would be the regulator

and would there be a state pathway, with the Democratic side of the aisle wanting it to basically be owned by the Fed, aka national Fed member banks and the Republicans wanting other entities like states at one point we were talking about non-banks right like why shouldn't a fintech be able to launch one well look it's not that we want something as an industry

that is above and beyond what exists today so if you just look at the traditional financial services world you have subcustodians that are established in banks you have subcustodians that are established internationally and so it's not that we're asking for special treatment it's that we're asking for equal treatment So let's, on a related topic, but moving on, talking about the banks and the bank regulators, let's talk about Operation Showpoint.

I feel like there's some dust is settled since Showpoint 2.0, I should say, right, with the collapse of Silicon Valley Bank and Silvergate and then whatever happened at Signature. It's kind of like, we're going to talk about some people, where is this person? It's kind of like what happened at Signature Bank, right? I still feel that we haven't gotten the full story there. I agree. Where do we stand on this? It's been a bit quiet, I think, since the big for a couple months.

I mean, frankly, you know, the people involved at Signature and Silvergate haven't spoken out because they're afraid to. But what happened in Signature was a travesty, specifically Signature. And what we had was the two Stablecoin Fiat clearing settlement network, San and Cigna, were destroyed through the banking crisis. And the OCC did not allow them to be sold. in that process of acquiring the bank assets. Subsequent to those banks going down, all the other crypto-focused banks were then harassed. Customers, Cross River, MVB, bank prov,

they're all under immense pressure from the federal regulators. They're not allowed to have their crypto-focused deposits go about 15%. That's still the case today. So basically, being a crypto-focused bank is de facto illegal in America today. it's kind of possible to get a bank account as a crypto startup, but if it's anything complicated, an FBO account, anything like an exchange would need, it's basically impossible. So Operation Chokepoint 2.0 is not over.

However, the Safer Banking Act could potentially alleviate this if the language is tightened up. So that's something to watch, actually, the Safer Act. Go read that. You know, it's funny because it just drives more capital into Tether at the end of the day. So, hey, we hate Tether, but let's enact this Choke Point 2.0 thing. and just drive all the capital into tether tether and us cc were pretty much a parody in november

22 right now tether's at 86 bill and us dc i think is 23 bill it's down like 50 percent so basically all they've achieved is pushing capital in the the charts are effectively inverse if you look at the supplies there one is up and one is down only how is that what you know bank regulators want how is what my question with the stable has always been you talk about bimnet Bimnet's point about how there's not the same bid for U.S. debt that there has been in the past, right? They're issuing more of it, but meanwhile, also a lot of the buyers of it are not buying it. Some are selling it. Some sovereigns are selling, right?

Tether is like the 22nd, if you believe they're holding. Yeah, they're top 25. Yeah. Owner of U.S. debt. So it provides a marginal buyer for U.S. debt. It obviously extends the reach of the U.S. dollar dramatically. I don't mean literally the tether should be the one, but the stable coin is a killer app. Hamas had a million dollars of tether, so we have to destroy the whole thing.

Let's get into that then. That was the next topic, because Nick, you were very vocal in pushing back on this big article. I'm going to ask you to tell the story of what you got involved in what happened, but I'll set it up with just saying the Wall Street Journal published a story, we'll call it four or five weeks ago, three or four or four, whatever it was, saying that Hamas had received significant donations. and funding through cryptocurrencies. And they cited two firms

elliptic in Bit OK. And then subsequent to that story, Senator Elizabeth Warren wrote a letter to the, effectively to the White House or to the federal government saying, yeah, saying basically like, look at this big problem, like, what do you need from Congress to do?

Right. And citing, exclusively citing the data in the journal story. But then things got fishy. Some of the community started squinting at that data a little more. closely and saying, wait a sec, like, is this even right? Yeah, sometimes if you just tweet about stuff hard enough, you can actually change things in the real world.

Let's go. That's actually a true fact. We're tweeting pretty hard. I loved it. You can tweet like crazy, because the story actually was that I had torn a ligament in my foot, playing Padell. So the Wall Street Journal claimed 130 mil was raised by Hamas. Raised is what they said. Based on the Israeli intelligence published a list of addressing.

on Bynance and Tether, mostly Tether, that they wanted to freeze. TetherTron. TetherTron. We love TetherTron, number one crypto killer app. And as it turns out, that included a lot of ancillary firms that weren't strictly HMAS affiliated. Elliptic had written a piece about that saying the number is 130, roughly, along with this other firm, but OK. The Wall Street Journal cited them. I actually can't fault them too much, but I think it's always morally good to cyberbullied journalists. I have no regrets.

And then Elizabeth Warren cited them. So this is like game of telephone where we just got further and further away from the truth. In the end, I couldn't actually tell you what the real number was, unfortunately. Well, have you been tweeting hard enough at them? I don't, like, tweet and error. I don't think they like me very much.

I don't know. I don't sure they don't. So, word of magnitude, single-digit million. So you started asking for better data and really questioning this hard. Elliptic corrected the record. and then the Wall Street Journal, to their credit, actually issued a correction, which never happens.

But since, too, you also started a crowdfunding exercise to say, you know what, we have a broad crypto community. Like, there are tons of, I mean, you got Zach XPTs and other people that are... Yeah, he actually DM me, but he didn't contribute. Yeah, so you asked, you said, look, use the open source data, use the block explorers, use whatever you have, we'll give out bounties. Was it 21 bounties?

Yeah, so I was going to do 10 grand, so $21,500 bounty. people then send me another 40 grand. Yeah, like other companies in the space. Like for no reason. They said, this is great. We want to help fund this. And the whole thing was on a coin base wallet. I don't recommend it.

On my phone. But you... But I hadn't backed up. It was just a wallet I had hanging on my phone. It's like, is this like financial management? So, yeah, I'm like a serious venture capitalist. So I had 50 grand on my phone. If I'd drop my phone, that money would evaporate it.

Completely. I was like, oh God, I got to. give out these bounties as fast as possible. I got to get rid of this shit. But you've gotten a lot of great submissions. Like a hundred people submitted really serious, intense analysis. So where did we land? Like, what's

the sort of balance of what the open source world is telling us about that? Kind of confirming what Elliptic said in their attraction, which was, it's a very small fraction of the total 130 that had anything to do with Hamas. We don't have the precise number because it's kind of unknowable, unfortunately. I wish I could

give you the precise number. Yeah. I don't have it. But you think single digit million? Single digit mill, possibly less. Yeah, I'm still pushing chain analysis, Tierra um, lip tickets out of it. It's also a stabb at it because, remember, they published, I didn't know this, but Nourage from Coin Center, resurfaced

this when this happened. Roiders wrote a story in like April of this year in the headline of the story was that Hamas is effectively begging its people to stop sending crypto because they're getting caught because it's highly traceable. I mean, and that should

The context you can't admit is the Al Qasam Brigades, which is part of Hamas, specifically said, stop donating Bitcoin to us because the donors are being targeted. Right. Well, it's not just that. I mean, yeah, it's really intelligence, knows how to use blockchain explorers. As it turns out, blockchains are public records that are indelible. Okay, let's, this is great. By the way, Nick's feed on Twitter, I'm sure most have seen it.

It's filled with these awesome stuff. He's got a great roundup. medium piece I figure where you you wrote something so I wrote everything up in a medium yeah check it out please read it it was a it was an exciting time because also I was in Washington a couple basically when that was happening a couple weeks ago Coynest had a state of crypto policy and regulation summit and this question like was right it was important work to be done because this was resonating at a time around Washington we pushed back well yeah in fact in the hearings in I think it was in the in the

Senate the the the there were a certain folks that are pushing back. So, like, you know, even if it seems like everyone's against you, like, we can change things. I think the thing I also... If we tweet hard enough. Yeah. It's possible. The other thing is, too, is like, I mean, nobody wants terrorists to have funding.

I don't care whether it's dollars or Bitcoin or anything. But here's the thing. It's like, Binance and Tether are actually pretty good about freezing. Tether has frozen thousands of bad wresses. Like, Tether is like crazy. Like, Tether is not like a decentralized stable coin, right? They freeze. So like we've actually been quite effective at interdicting these flows,

earmark for terror organizations. All right. That's context you have to include. Let's move on a little bit for, we've got a couple more, and then we're going to bring Thomas from Pubkey up here. And then we'll do a Q&A. And then we've got a Q&A coming. But first, Thomas from Pubkeke, that's his name.

Not yet, not yet. And one second. I want to go really nerdy into Matt's top question, top topic, one of his top topics, not his only top topic. Market structure. one thing I saw is that CME open interest on Bitcoin futures surpassed Binance. So literally, CME is the largest venue for Bitcoin futures in the world now. What else you're thinking about it?

Does that mean anything? What does that mean to you? I don't think people have a full appreciation for how fast market structure is changing as it relates to institutional flow coming into this industry right now. So within the past probably six months, you've seen the launch of three ECNs, which are electronic communication networks, similar to how FX is traded. They do not take custody of client assets.

So it's typically a tri-party custody arrangement where the trading is separated from the custody. So we're seeing a lot of activity in that category. We're seeing a lot of makers, a lot of takers on board to some of these venues. I think the net net is that Binance is still the largest player by a long shot. But I think it'll look a lot different a year from now.

I think there's a lot happening behind the scenes here. obviously it would help if U.S. banks were allowed to custody crypto. It's kind of crazy that BlackRock is launching an ETF. Why aren't? They probably want. Can you explain briefly why they're not? Sab 121. Sab 1-21.

Boom. But yeah, I think the net net is that the market structure is shifting here pretty quickly, and obviously CME is a big part of it. Yeah, there's a lot of volume. And I tend to think that that volume on CME is from a lot of traditional investors. Let's bring them up. Thomas Pachia. Uh, friend.

Pockia. Founder of Pobke. So I have one question. What do we say? Are you founder? What's your title? What's your Pubkey title? A Pleb.

Pleb. Pleb. Pleb. Welcome, Thomas. Just trying to do a thing day by day. Day by day. Day by day. Over under.

SBF. We're going to do this. We're going to do this on. First, tell us about Pubkee. A little commercial for Pubke. To be clear, we are recording this and we're going to run this on our feeds. So to be clear, this is the part that they're going to cut.

Pubkey's just a bar, right? It's not a Bitcoin theme bar. I bristle at the description that it's a Bitcoin theme bar. It's not our identity. I am. It's in our DNA. It's not our identity. Because nobody talks about the internet.

Nobody talks about electricity. I think that that's where Bitcoin is ultimately going, right? It's in our DNA and we talk about these things. We create a forum. for these things, I think the concept of third places, right? Yes. So like home and work, a good friend of mine, Drew Armstrong is the one that like deeply ingrained

this like our early like philosophy at Pubkey, deeply indebted to him and his business partner at Cathedral, AJ. You know, these concepts of third places as we went into COVID have become more and more important. So your home, the office, RIP offices.

And then the third place is, we're talking about like churches, right? Like, you know, community centers. But people have to pay you money to be here. Huh? Which is very convenient. What? People have to pay to be here.

You have to pay to go to church. Look, I mean, rent is expensive and so are taxes. I mean, if we're living in the real world, like, yes, it's an operating business. But, like, we want to create it. We want to facilitate a community that feels like they're, you know, at a place that they believe. long and that they want to be.

You do a lot because in this room. It's not like we have dues like the university club. Like, you know, women don't have to come out of a cake. You guys do a lot of meetups. You have a lot of people. I mean, us being one that's happening now, but you do lightning, mining, right? Like you, you help support the community in that way. So every Thursday we have Bitcoin programming on a monthly basis.

We have monthly mining, monthly lightning. We have a mystery bag. In 2024, we have a couple of partnerships that we're not quite, quite ready to announce yet. But these are really, you know, systemically important issues of the day that we want to help elevate. And particularly being in New York,

New York is a bit derided. I think that New York City as, you know, an entity is the only thing that's been declared dead more frequently than Bitcoin itself. It's not dead. We're not fucking dead. Let's go NYC, baby. It's fine.

Everything's fine. I also wanted to say, though, that the bartenders here are excellent. They actually make great cocktails. They're all talented. And the food, which, unfortunately, we shut down during this show. We shut down on the food. The food is incredible at Pubkey. Shout out, no food.

All right, listen, but I have a question for you guys. And then I want to help. Before we go into Sam. I want to help. I want to help do the Q&A. I have a question, though. On the over under, over under. And I'll tell you, I'll leave.

What was their podcast? That was bad boys. Those bad boys? Hasu is not a bad boy. He's a good boy. He's a good boy? He's a good boy? I'm probably,

I'm not. We like Hasu fan. I'm sure he's fine. I haven't received a direct apology yet. We do have to talk about FTX. Or is Kyle. We do have to talk about FTCX. Okay.

My question is the over-under. I think that SBF walks free alive. No. Outside of prison. No. Two years max. No. Oh, what?

Two years max? 35. No. What are you guys talking about? It says 20. I have to caveat it in this post-Ebstein era. I got a caveat in live. Walks free.

Two years, Max. I would guess he gets, I'm literally making this up. We'll call it 30 or 35 sentence and is out in 15 to 20 would be my guess. But in federal, you have to serve 80% of the time. You can't get out early. Is that true? Yeah, it's not that good behavior. Oh.

Plus he's not going to be a good sentence. I'm guessing he'll get sentenced with about 30 to 35, is my guess. But, I mean, he is up for 110. It's technically the full amount of all seven counts. I mean, it's going to be like a scooter liby. So I guess who cares. Pardon. Who cares about SBF? President Vivek is going to pardon him.

Where is Sam Truvico on all this? Yeah, where is Sam Trubuco? Maybe a little Mark Rich. Where is Sam's traps? The only thing that I can think about, because I'd be curious to get your thoughts is, you know, there's this Chinese money laundering bribery case that they were not able to bring because the Bahamanians would not have extradited him.

Is that why it happened? Yeah. So they could only charge him on... That's weird. They found out about it later after they extradited him. They got to the bottom of it. Presumably it was Caroline Ellison that... The Bahamanians said that they wouldn't send him back

if that issue was one of the charges? The Bahamanians said you can only charge him with what you're telling us you're going to charge him. Right now. I see. And subsequently, they found out that Sam Trucco, SBF, and the whole rogue band of misfits bribe Chinese officials. The FTX crime family. So my guess is that

Trubuko is state's witness right now and he's the star witness of the next trial. Is bribing Chinese officials worse than bribing U.S. officials? I don't think it's a good look. But there are top guy. Yeah, it is illegal. As Americans, there are top guys.

On the front lines. But the story was something what, like some amount of customer money on FTX was seized by. Tether. So Tether, FTCS. Tether was seized by Chinese. It was like a billion dollars. We don't know why it was seized, yes.

There was a lot to learn, but it was seized by Chinese authorities, and then Sam bribed them to get it back, is what we're told, right? That's just the allegation from this. That's just responsible stewardship of customer funds. Sometimes you got to pay bribe. Why did they ban Bitcoin mining in China when they did? What was the deciding factor in your opinion? That might have been right around that.

You know, you have a lot of like, you know, overarching. overarching macroeconomic issues. And I think that that's something that we just sort of like lost over, right? Yeah. Why did it happen then? Yeah, that's a good question. Which is, I think it was Beijing consolidating power relative to the periphery, which they do periodically. Beijing consolidated power then?

They didn't have it before? No, they were. Yeah, that's what they've been doing. But the regional administrators were making too much money based on basically bribes from the miners. So was it a capital flight issue? I've also heard high power transmission lines, right? Because, like, the coast. China built a huge network of high voltage transmission,

which meant that all of a sudden, these weren't stranded pools of electricity in Yunnan and Sichuan. And all of a sudden, you were a rival in consumption with the Chinese industrial sector. I blame Cardano. I think Cardano was the problem. I don't know what Cardano is. I don't know what that is.

Can I open this up for Q&A? have anything else you want to hit? One more topic, I think, before Q&A is... Cardano. I mentioned this in the rap, but I said the Fidelity Mafia. All four of us worked at Fidelity. On the stage, Thomas worked in Fidelity. Shockingly.

I took the bullets. It was like a first man through the door situation. Matt in particular was working on Bitcoin very early at Fidelity. I joined in 2015. Yeah. When did you leave? Huh? 2017?

Oh, okay. Like early 2017? It sounds better when you say it that way. Huh? Yeah. Like, we extend. the early and the later. Matt, though, I mean, look,

Fidelity has Bitcoin ETHs. They have Bitcoin in ETH custody. They have, um, I saw the FMR hired ahead of crypto and token research. They've got Bitcoin on Fidelity.com now, Bitcoin and Eath. They've got,

uh, the 401k product. I mean, they're, they're deeply live. Like, wasn't it just like you and like a couple of dudes that like Abby's the macro like seven years ago?

Okay. Okay. Good job. sir, sir. I definitely don't take any credit. Perhaps it's Patagonia vest man about Fidelity, if you allow me. I don't take any of the credit for it. I remember when I was graduating business school, I had a couple job offers, and I remember

interviewing with Fidelity, and it wasn't the highest price offer, but I remember telling my wife, like, everyone I met was super smart, and everyone I met, I feel like I could, like, hang out with. So just looking back on that journey. They were chill? That's what you're saying? Yeah, everyone was just like a really good person. Yeah.

And it was a great culture. Do they win this game? Like, can they beat Black Rock swoop? I mean, when we talk... Fidelity is the third largest asset manager in the world. Black Rock's the first. Like, and Abby's been on this hobby horse for almost a decade or however long. Fidelity's more crypto-native.

I think Fidelity's going to clean up in this market because it takes so long to get up the learning curve. And it came from the top of the house of Fidelity. So obviously you're going to have runs like the three of us that are interested in crypto and Bitcoin back in the day. We're like, oh, we used to work there. Wait, how many people in this room worked at Fidelity? Because I know there's a bunch of others. There's more. We're Sam Nick.

How many people are related to somebody that works at Fidelity? That's the easiest way to get a job there. But I think there's a lot of things that just take a lot of time to learn. And so you see these new financial services firms that are coming into the quote-unquote blockchain industry. And they're talking about like tokenizing private blockchains. And it's like, yeah, we talked about that in 2015. and we got rid of it. Right.

So there's a learning curve here, and they're just so far up. And I don't know. It's great to see. And literally, there's the largest retirement plan administrator in the country. They offer Bitcoin exposure there. They're one of the largest brokerage platforms.

They offer, I mean, they really have actually built it out through all their channels. It's why. Let's slow down. They're not sponsoring this podcast just yet. I used to work. We got to leave a little room to run here. It's a Q&A.

All right, let's get to the Q&A. Who do we got? Thomas, thanks everyone for this. We got David Hoffman. He's actually the biggest podcaster here. Subscribe to his podcast. It's not even close. You already are.

All right, David, keep it to Bitcoin, though. So there's a... What do you think is Solana? I think there's a renaissance in Bitcoin building going on, perhaps led by our shooting star, shining star, Nick Carter here. At least in the VT space. Like, there's optionality with deals coming from venture capital. to build on Bitcoin, which is exciting.

That's new. That's one of the newer things. But I'm wondering your guys' takes about the actual value capture of these potential deals. Because it's been one of my philosophies that the Bitcoin philosophy is to more or less remove things that are not value accretive to BTC specifically and removing the app layer

or the surrounding infrastructure layer around Bitcoin because what is Bitcoin other than BTC. And so I'm wondering you guys' opinions about the actual value capture eventually. deals around Bitcoin in this space. Well, that's a great question. Bitcoin has a platform.

I see some Ordinals folks in the audience here. Shout out of Ardinals. Let's go. Ordinals are what, 50% of block space today? Yeah, more I saw actually today. Let's go. Let's go.

I mean, fees are absolutely ripping because ordinals are also having For blocks, full hearts. Shout out my clear money. I said ordi. I don't know why they did that. But, you know, so there's certainly ordnals, businesses, I think conventional

business models. There is Z. pull-ups being built in Bitcoin now. Yeah, there's two that I know of, Chainway and Kzar Labs, both trying to... AlpinLads, shoutouts, still install, and the investors. There's this bit VM thing that... I don't understand it. It's...

Someone's smarter than me explaining to me. There are people that are trying to build on Bitcoin, yes, absolutely. Look, I think there's been a sea change in the culture around, you know, builders in Bitcoin. I think there's a lot of new folks building in Bitcoin that are unencumbered by, like, the ideological hang-ups of yesteryear. And I see a lot of conventionals. I see a lot of conventional operating businesses being built there.

I don't know if you guys have someone out there. We're just going to make the blocks bigger. I started running Bitcoin XT. There's a lot of stuff to do. So you're saying what? It's a reversion to the narratives from 2015 and 16? No, I'm actually quite optimistic about it. I just don't know that there'll be any hard fork to include any of the logic that needs to happen.

We might need a soft fork or two. Yeah, I'm not super bullish on there being a hard fork to incorporate something. I will say. What about those sweet, sweet dividends? To the miners you mean? No, I mean, like, you know, I would like to know how layer two labs, for example. Yeah, with drive-chains. You know, they raise money, right?

VC money, angel investor money. Like, you know, what do they expect to get out of their investment? Is it a contentious hard fork with dividends? Are they fees on an ongoing basis? I think this is an open question. But there's a lot of L2s that collect tons of fees. Sure, but like it's different. Like, you know, Bitcoin is like a little bit different.

Right. They raise money on the idea. We're talking about like Bit 300, Bip 301. We only need to turn this into a technical flame war or anything. David has really highlighted the, like the tension though, right? Yeah, for sure. This is a very good question. Yeah.

From Pubke's perspective, whenever I see like, you know, Udi or somebody say that like lightning is completely broken, Pubkey, as a bar, as an operating business, we trained up all. All of our staff, all of our bartenders are equipped to accept Bitcoin over Lightning as a form of payment when the bar is busy. Right now you can go to the bar and you can pay in Lightning and it's not going to disrupt a thing, right? And it works. On-chain settlement, right, waiting 10 minutes, you know, 20 minutes, two hours when the like, you know, base layer is congested, it becomes a little bit more like complicated. But Lightning does work. We haven't had one single failure.

One single failure in a year of running Lightning as a form of payment at Pubkey. Okay, let's do two more questions. Let's just do two more questions because I know we've been here long. Someone here then. Yes. Can we get, uh, yes, guys. As we know, there's a lot of concerns over the stable coin bill. I would like to know your view on the Wyoming stable token.

And could this be a way that politicians could actually see the benefits of blockchain technology. but yeah we'd like to definitely hear your V on that RV I support it we did an interview on our show with Chris Rothfuss of Wyoming about it my understanding is that it's not like fully baked in Wyoming I know they had a job rack out to be the stable coins are but I think the worry is that they would

butt heads with the Fed if they issued a stable coin it would be potentially a very significant revenue driver in Wyoming if they did it matter So for those of you who aren't familiar, so Wyoming has proposed and actually passed legislation that would allow them to accept deposits from customers and issue a stable coin. And so they would be able to capture the net interest income on that stable coin. I think it would be an enormous revenue driver for the state of Wyoming if it actually launches. So the question is, can that launch on a public blockchain and what's the legal entity that needs to launch it? So there's a lot of open questions.

I would use it. Oh, for sure. I would use the Wyoming. incredibly popular. It would spur a lot of competition, I think, from other states. Yeah. What's the state flag has a buffalo on it, I think? I don't know. Great question. One final question. Delaware is just asleep at the wheel. On there? Top, can we?

Where? Can come up? Which one? Come on. Oners, anyone. Anyone, whoever stands at first. Two more questions. All right, two more questions. Keep it go. Dose moss. Cool. Dos Moss. Hi. How do you anticipate the market to respond to the Fed interest rate hikes, specifically the institutional market about stable coins? Like what I mean is there's no yield on stable coins.

Yeah. Oh, perfect. Yeah. Well, it's changing. So the stable coin supply has been contracting because you've been in a high rates era and stables don't pay. So USDC supply has been selling off. inversely with rates rising, as you know. Tether is different because tether holders can't redeem, right, or don't want to. But the stablecoin market gap is actually stabilized recently,

which is indicative of crypto yields returning and interest bank stable coins and tokenized treasury is emerging. Right. So I think the effect of yields on stables has actually been deadened recently because there now are ways to get interest banks, Cablecoins, or investors. I won't chill it. There actually are. There is about a dozen. I don't like to say RWA, but I'll say there are real-world asset-backed stables that pay yield. There is back finance. And also, I mean, the main issue is kind of dumb if you think about it, right?

People think that in the U.S. a yield-bearing stable coin would be a security. That's the core issue. Well, the SEC certainly. Yeah. So. Last question? Maybe. Sure.

Sure. So Frank from Southie, long time listener. Frank from Southie. Castle Island, shout out. Stephen Lynch's district. And we're a little nervous about the turkey problem in your district. So can you give us an update on how the turkeys are faring? So I said this earlier, I think it was some guy in Abington, Massachusetts, in like the 1970s, that reintroduced wild turkeys.

They had been gone for like 50 years from what I understand. and I have a next-door neighbor that probably consumes 25 budlights a day and just sits in his backyard. That's slander, Matt. I don't think he listens to the pod, but he feeds the turkeys. So it turns out that they just walk across the street

into my yard. I've got this huge turkey problem. I've got two kids and there's poop all over the backyard. They're aggressive, right? They're really aggressive coming up. It makes me want to move back to Southie, actually. You could hunt the turkeys. Well, I mean, when I lived in Boston and came there were turkeys there too though this is a genuine problem and they're the thing is Elizabeth

Warren doing anything about this what's your favorite dive bar and Southie your favorite dive bar and Southie that's good I used to spend a lot of times not a dog bar but I spent a lot of time at Lcoe um L Street Tavern is kind of where we used to hang out when I was run out of college Kino at the bar yeah there's Kino yeah that's the die bar let's go not Southie but shout out the town oh the town out the town that was my next Love the town. Yeah, same. Sam, Sam, Sam.

That's awesome. Any other questions? All right, let's wrap. Anders. Hey, guys, yeah, pretty simple one. You guys talked a lot about the ETF approval because that's going through all the news. And historically in most industries,

when ETFs are approved, it actually marks a local top for a short and median term price. And I believe the research that I did in 2019, it's a little north of 80%. I don't want to, like, quote myself exactly on that percentage, but I knew it was north of that. Is there a reason

we think that might be different with this asset class than other asset classes when he I would direct your attention to an asset name of GLD, Anders. 2004, approval. Gold, I believe, went up after that. I know, that's the one I got. But I think it's a good example,

Anders, because there was no investment-grade gold product in the world, period. Right? Like, you could buy gold. You could call up the big banks or the big broker's firms and trade through their metals desk and they would like park the gold for you at literally at a bank. But like just like that, there is no investment grade, widely accessible Bitcoin product that literally financial advisors can use. Right. Like we did research on this and we found that there are 47 trillion in AUM currently at wealth managers at banks and broker dealers and on RA platforms like Fidelity Pershing Schwab. None of those platforms effectively allow today. any of these existing, they don't allow the trust, they don't allow the cash settled ETF, so they literally don't have access. Someone was saying this earlier, right, about a wealthy person owns all this crypto and their advisor literally can't even talk to them about it. That to me is the issue. It's about net accessibility. So I don't think there's going to be like a giant flood, you know, 90% of people aren't going to buy the Bitcoin

ETF. But we said if 10% just do 1% of that, as those platforms turn it on, then it could be, 14, 26, $38 billion in inflow is one, two, three years. The cost to carry for Bitcoin is zero. If you look at hoddle waves and the ability to take self-custody, there's a different dynamic that's being thrown into the mix here. For the record, I'm going to sell the news on the UTF guy. I'm actually with you. In the immediate term, sell the news.

Yeah. No, but I do think there is a large part of the asset management and, sorry, wealth management market that structurally does not have. of access. Under promise over-deliver strategy. I hate this. Manage expectations. Give me the bull case.

What's the price of Bitcoin? I mean, the bulk case that financial advisors can't get paid right now for putting their customers into Bitcoin and they're going to make a ton of money when they rotate them into one. We have kept everyone long. We have shut down the kitchen and it will reopen as soon as this ends. I really want to thank Thomas Paki for hosting us at Hubkey. And thanks for coming out, guys.

Thank you, everyone. Train the kegs. Train the kegs. Thank you so much. Castle Island Ventures, Galaxy Digital, Alex, Nick, Matt. Thank you guys. Have fun. All right.

Tip your bartenders.