On The Brink with Castle Island - Weekly News Roundup 4/10/20 (Bailouts, asteroid mining, and office plants) (EP.65)

Episode Date: April 10, 2020

Matt and Nic review the top stories of the week in the cryptoasset industry. This week's topics include: Fidelity connecting to ErisX The sad fate of office plants Gold mining on asteroids More crypto dollarization The class action suits against Bitfinex, Block One, and others Retail vs institutional buying of Bitcoin The best articles published this week and much more 

Brought 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 it 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 Concentive 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 a Bitcoin. Bitcoin. All right, we're back for another episode of On the Brink. I'm Matt Walsh. I'm Nick Carter. Nick, you know what I was thinking the other day? That plant that you have in your office, that cactus thing? Who's watering that thing?

Yeah, that plant's dead. You've had that thing since we were at Fidelity. That thing, it was a gift. Yeah, I think that one, it's yours now. I mean, it's been sitting in your office. So that's sort of your responsibility, actually. Man, well, that I forgot. It was like I took a bunch of stuff out with me on the last day.

Sort of like I was escaping that place, and I forgot your plant. Well, technically it is a succulent, so they're meant to survive periods of water. Yeah, I guess the question is, how long can that thing last without water? It wasn't exactly like the healthiest plant ever. As I recall, you used to feed it seltzer water. So it was probably in kind of bad health to begin with. Yeah, seltzer waters. Seltier water is fine.

There's a lot of abandoned house and office plants, which are just dying off right now. So that's the tragedy which is not been covered. I know. Well, people aren't talking enough about that. What a crazy week, huh? The world is upside down and left is right and right is left. Yeah, I don't even know, you know,

what thread to tug on right now because just so much insane stuff seems to be happening constantly. I was having a conversation with Matt Trudeau, who's the head of strategy at ErisX, one of our portfolio companies. So I was talking to him this week. And he sent me this great speech that David Foster Wallace made at, I think it was Kenyon College's commencement back in 2005, I think. And the way that he started the speech was saying there's two young fish swimming along.

They happened to meet an older fish who's going the other way, who nods at them and says, morning boys how's the water and the two young fish continue swimming and eventually one of them looks at the other and says what the hell is water and i thought that was really an awesome little anecdote because there are going to be millions of people who just say what the hell is money it's just something that you can keep on printing if you're the federal government i suppose so is the water inflation in this analogy yeah this is to be clear i'm not saying that I'm the old fish, the old wise fish. I think that the idea here is some things are just so glaringly obvious, but we just sort of ignore them. And it's pretty obvious to me that you just

can't keep doing this sort of money printing. It will catch up to you eventually. Yeah, I was reflecting on how the Fed and the media euphemizes constantly because they don't want to acknowledge that that they're directly intervening in the price of money and the supply. There's just this whole dictionary of euphemisms they use to veil the fact that they are directly interfering with the money supply for reasons they think are good, but it's still happening. But they just can't even admit it. Yeah, it's absolutely crazy. I mean, what's the logical conclusion to this? The thing that gets me is, once you, you normalize stuff like the wholesale buying of junk bonds by the Fed, you know, you lose your

moral authority to say, well, this entitlement or social program that the population might want, that's a bridge too far. We can't finance that. You have no ground to stand on at that point. You can't consistently say, you know, oh, no, we don't have the ability to finance this program. So if you're talking about student loans or something, in the aggregate, I believe the amount of student loans owed to the government adds up to about 1.5 trillion. Meanwhile, the Fed is committing to inject two trillion. It seems like every other day is another two trillion comes along now. So what can they consistently say to Americans who have seen this like corporate welfare?

How can they tell them that they don't deserve to have their student loans forgiven now, now that all fiscal and monetary restraint has completely evaporated? I mean, it's totally crazy that the Fed is now buying junk bonds. So the Fed is essentially bailing out the holders of those instruments, which is for illustrious companies like JCPenney and Clear Channel, all these companies that just got super levered up because their equity holders decided to try to pay themselves out dividends, but piling more and more debt onto this, a bunch of these junk companies are just LBOs too. So it's crazy. There will be a populist backlash to this in a very, very strong way, and I wouldn't be surprised if we start to see some action on the student loan front as a result.

Yeah, not just student loans, but any sort of more direct handout to individuals that people might expect from the government, they have no ability to resist that now. There's nothing they can say, which would be convincing at this point, because they have made it very clear that they're willing to. to open the pocketbook for literally any, you know, large corporation that needs welfare of some description. And the thing that gets me is, like, people talk about COVID-19 being, like, an exogenous shock, and, you know, it was like an act of God, and there's, like, nothing anyone could have done to foresee it. So this is why the government should step in and bail everyone out. But we're not going to go back to a pre-COVID-19 world. A lot of the companies that are now failing are failing because the market expects that the world's going to look very different post-COVID-19.

So to save those companies is wrong. It's like cheating, you know, the failure part of capitalism, which is half of it, you know. And by rescuing those companies, it's literally a misallocation of capital because they weren't suited for the new regime. They're like, it's like, you know, you're looking at a little ecology and the climate change. changes and all of a sudden, you know, the local polar bear population starts to die off. You know, at that point, you know, it's not worth trying to save them because their lifestyle is now incompatible with their climate. So it's the same here. Like maybe, you know, the tourism or the travel industry like is going to be structurally less significant than it was historically.

So trying desperately to save that industry, it doesn't, make sense because the industry has like had its I mean yeah that's just one example but it's it's it's sort of had this regime change where maybe it's not as fundamentally profitable as it was in the past that's right did you see um shamath on cnbc the fast money halftime report with scott wapner yesterday that was an awesome appearance that was so good I think I mean lots of people already had a ton of respect for chamath but he's absolutely shining right now I mean He has the gall to actually call this nonsense and this madness out. And I think we're going to remember who are the ones that spoke up were against these endless bailouts and this endless stimulus.

Yeah, I think we are as well. What's your latest prognostication on how much longer this lockdown continues? I saw Fauci's out there this morning saying that the death count could be 60,000 instead of 100 to 240,000. Oh, I have no idea. No, I think, you know, Vox would get mad at me for, you know, for being a tech bro having takes on the virus. Well, let's get into some of the news of the week. But before we do, let's do a quick read. This week's episode is brought to you by Zen Ledger, which is one of our portfolio companies. So this is the best place to get your crypto taxes done. And you've got a few more months to do your taxes this year. So take the time. to do them right and use Zen Ledger. They have fast customer service. You can contact them on the phone, actually.

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off. That's Zenledger. So a couple extra months to do your taxes. Are you still going to go right to the finish line on that one right to the day before? That's historically been my strategy for sure. I think actually paying taxes is now not, there's no moral case for it in light of the fact that the government can just print as much money as possible. Unfortunately, pragmatically, you know, you still have to do it. So I will do it with great reluctance. year. Well, use Zen Ledger and make it a little bit easier, I'd say. Well, a big week on the podcast front

for us continues to, you know, we're turning out these episodes here from our lockdown quarters. Yeah, we've had some really good ones recently. We had, you did, you interviewed Tom Jessup and Tom Chippus from Fidelity Digital Assets and Aresex, respectively. So the big news there is that Fidelity is now connecting to Aresex as a liquidity venue. So that's pretty exciting, and that's sort of, that's sort of as we expected where you have dedicated brokers, dedicated custodians, and then dedicated exchanges with specialization instead of the vertical integration that we've seen so far in the industry. Yeah, this was an exciting announcement.

Obviously, we knew it was coming for a little while since we're investors in ErasX, and Fidelity is an investor in ErasX too. And so the, you know, the strategic rationale for that investment is presumably, that Fidelity is going to need to connect to a variety of liquidity providers. And ERISX is the first central limit order book, so the first exchange that they've connected to for their service. So it's an exciting development. ErSX folks are working on some interesting stuff.

I think it'll be a fun couple months and maybe some more announcements to talk about in the future. So that was fun. And it was fun to talk to Tom just about what the strategy is, a Fidelity Digital Assets, who'd had Terrence on the podcast before. that was a really good episode. That was a very highly rated episode when we had Terrence on. A lot of people listened to that one. And so that was great. Tom's background was he prior to

Fidelity had been the president of Chain. And before that was at Goldman making technology investments for Goldman. So some in the crypto space, but mostly in traditional market infrastructure. So spent some time with both Tom Chippez and Tom Jessup talking about how crypto asset compares is what that market structure looks like. Obviously, there are a lot of differences, but in some ways, some similarities to other asset classes that have popped up over time. So check that episode out. And then you did one with Alex Trees, the co-founder of Zabo, which is another one of our

portfolio companies. So that was a fun episode as well. You guys went deep on a bunch of stuff and some prior assumptions, some prior blog posts that you guys wrote a couple years ago. Yeah, me and Alex used to work on this series called Cryptof Fundamental. back in 2017, just exploring, you know, the case for crypto from a bird's eye perspective. And it's been pretty interesting to see how we've been wrong over the last few years. And, you know, right in some respects as well.

So that one was pretty fun. Yeah, that was fun. I forgot that Alex worked on fundamentals with you. I obviously used to read that a lot. So that was, I totally forgot that he was your partner there. Yeah, it's a real throw. back. So in terms of news items, we have a new Bitcoin fund trading on the Toronto Stock Exchange issued by 3 IQ. These Bitcoin financial products just keep proliferating. They really do.

We need to see more of them in the United States, but TSX is a good place to get stuff listed quickly, but took a while for 3 IQ. I think this fund has something like $14 million under management, so not a ton. But this is on the heels of of Bitwise's announcement last week that they're going to take their large cap index fund and get that listed on the OTCQX markets. So more and more of these, I mean, people want this type of exposure.

They want to be able to buy it in their brokerage accounts. Many of the traditional retail brokerage firms don't offer the ability to buy spot Bitcoin. I mean, basically none of them do, except for like the Robin Hoods and squares. So these type of funds are really, appetizing for investors and they have QSips, you know, you can buy them in a traditional way, you can get data off of them pretty easily. So they make a ton of sense.

Yeah. And, and, you know, meanwhile, as the SEC continues to stall out on the Bitcoin ETF, we've seen plenty of these triple levered ETFs completely blow up and fold in the wake of the volatility that we saw in the last month. So if they ever try and, you know, know, justify their denial of the Bitcoin ETF with recourse to saying they care about investor protection. You just think of all those 3x levered or 4x levered ETFs, which blow up every week. Yeah, it's crazy. I mean, the fact that there's, the fact that that hasn't been addressed is really a shame. And, you know, if there was another commissioner similar to Hester Pierce in terms of worldview,

I think we'd be there. But it probably needs to happen with a new. kind of head of the SEC. So at some point that'll happen. Yeah, one day, one day. Um, we have Fold. If you guys are familiar with Fold, they are launching a debit card with Visa, which has Bitcoin cashback. So seeing a lot of these, but, um, Fold is a pretty solid team doing really excellent work. So pretty cool to see these products getting built. Yeah, that's cool. And I agree the fold team's great. I need that credit card with Bitcoin cashback. I don't need that debit card. I want the credit card.

That's the Fiat mindset, I think, right there. Why is that? I just don't like to use debit cards because if debit cards get hacked, then they take all your money. And if your credit card gets hacked, It's stolen. Then you just called them up and you say, well, all those charges at that gas station down in Alpharetta, that was not me. Yeah, but that's against the Bitcoin ethos, you know, personal responsibility, no recourse, you know. I think the Bitcoin ethos is stack SATs. So lever up that fiat, just put everything on the credit card, get your Bitcoin cash back. That's a speculative attack. Yeah, I was actually thinking about that. I think. some folks with student loans might be that they expect to be forgiven now.

You can think of various ways to conduct speculative attacks on the dollar now that we live in this inflation east bailout world. Yeah, for sure, for sure. Well, BlockFi is coming out with a credit card, so that's probably going to be the only thing that gets me to change off my fidelity

2% cashback card. Yeah, I would just do. use that. I've never once taken advantage of my credit card rewards. They're always like offering me target gift cards and stuff. I just have no time for that. So, oh man, 2% cash back on on the fidelity card. Come on. That's like the best thing going. If it was sats back, I would go for it for sure. Yeah, well, Sats back. That's that's the best. Hey, did you see last Friday after we did the podcast, there was this barrage of class action lawsuits that were filed in New York. They were against a bunch of token projects and exchanges.

And it included the likes of Bonance and Civic, Block 1, Tron, Bitmex, Ku-Coyne, a bunch of others. And I think the common thread from the analysis that I saw was that there was a claim in these class action lawsuits that a bunch of these organizations issued unregistered securities, so aka ICOs, and or they facilitated the trading in those unregistered securities. So kind of a bloodbath over there. Yeah. If you look under the hood, there's something like three common claimants across all of these cases. And my guess is that a lot of them end up being thrown out, to be frank.

It's kind of like a shotgun approach. I think the objective here was to get more claimants to join the class action suits with this press bonanza. The weird thing is that you not only have to prove, you know, that you have standing, But you also have to prove harm. And it's kind of strange in the case of like an ICO where the token just went up from the point at which you bought it because you weren't explicitly harmed, even if it was done in a violation of the securities law framework. So it's kind of interesting in some cases where it's very hard to prove that there's harm done before the statute of limitation expires. But we do have a very relevant coming Monday. We have Brian Klein, who is actually representing Block 1 on the other side, on the defense side of one of these lawsuits.

And so he's going to tell us about litigation crypto. Yeah, I can't wait to hear what he has to say. He's really the most powerful attorney in this space for sure. Yeah, probably the most decorated in terms of some of the litigation victories he's had here. Right. It's interesting what you're saying about people coming forward. There's not going to be a lot of people coming forward because if you think about the types of individuals that are participating in a bunch of these ICOs, like, what are you actually going to do? So you're going to say, here's my Ethereum address. Here's my proof that I sent money into this unregistered securities offering this ICO. But if you do that, you're going to be doxing yourself and you're going to be showing that, oh, and actually I participated in like five others. And by the way, I've been not paying taxes on any of these things, and I've been moving money around, and maybe I bought some weed on a dark marketplace.

Like, who in their right mind, if they have any of that stuff going on, is going to be volunteering their Ethereum addresses so that they can be chainwalked? Yeah, the set of people that were frequent participants in ICOs and the set of people that believe in formal legal recourse, those Venn diagrams, like, hardly overlap. So that's always been a problem with these class action suits.

Token holders are like globally scattered, super fragmented, and the quote-unquote cap tables of these tokens are really, you know, distributed. So it's very hard for coordination to actually occur, which is why we so rarely see, you know, token holders banding up and, and, you know, join these class actions. and like holding these token firms accountable. Yeah, and speaking of unregistered securities offerings, did you see Polo is now launching a token sale platform?

So that seems like it's about three years too late, but they're going to start with Tron's new stablecoin project, it looks like. Yeah, I think Tron's stablecoin is called USTJ. Like I think it might be called, it's named after Justin's son, which is pretty interesting. Oh, nice. It's awesome. Yeah, he likes to name things after himself.

So, yeah, Polos balances, you can always just assess the performance of an exchange in terms of looking at their Bitcoin and Ethereum balances. Polos has been dwindling from the time of the acquisition of circle steadily. So its heyday was really 2016, early 2017, and it's been declining ever since. I mean, but in its heyday, man, that thing could pack a punch. That was a hell of a venue. It was super fun. They just took on a bunch of, not even just technical debt, but like debt in terms of support cases. Like they had a support queue, I think hundreds of thousands of tickets open that that circle had to take charge of and close.

Man, I would love to have one of the polo guys on this podcast and just talk about what it was like. like to run that company when things are just going crazy. You want to talk about exponential growth and just hyper freaking craziness. That must have been awesome. Just being a part of that. Everything's breaking. You're getting more users sign up than you can handle. Your volumes are going through the roof. They're making a ton of money. That must have been quite a ride. Those guys have always been very low profile. Yeah. And they made a great trade. though. They got out at just the right time. Well, if you're listening to this podcast, we'll have you on under an assumed identity

and we'll muffle your voice. We just want to hear the story because it's an awesome one. Exactly. So Marco Centauri joined Cracken. Yeah. He has left blockchain.com and he's the new CLO for Cracken. So good hire by Cracken. Cracken just keeps on hiring a bunch of OG crypto people. And Marco is best known for inventing the SAF. So that's obviously a little bit controversial. He did that when he was at Cooley. But he's been in this space and really prominent as an attorney for a very long time.

Just one of the first attorneys that really saw that this was going to be a huge opportunity and jumped on it. So Cracken's doing some really cool stuff. It looks like maybe they're going to ramp up some M&A efforts. I think they've got a bank that's kind of underway. So exciting to see what's going on with that company. fully distributed organization too so they were out of the curve on that adjusting well to this environment for sure um exactly well speaking of people that are not adjusting well but a bunch of crypto hedge funds blew up uh over the past couple weeks um including actually a crypto hedge fund of

funds called cambriel capital so it looks like most of these funds blew up uh right around the same time was March 12th when all those cascading liquidations were happening on Bitmex and the whole the leverage bubble burst so to speak. So we'll probably see some more funds shut down in the coming weeks, but it seems like it's all stemming from that March 12th price shock. Yeah, I call it the 12th, so it really was a catastrophic day. I think some market makers went offline. Like liquidity has like structurally declined since then. I was just sitting there. I remember we were texting back and forth.

That was like, what, 11 o'clock at night when that started to happen. Man, I wish we had 24-7 markets for buying Bitcoin. Well, I know that there are 24-7 markets, but like getting U.S. dollars into the system is a challenge at 11 o'clock at night. Institutional 24-7 markets. Come on, let's go. Yeah. Yeah, stable coins. I've heard of M&A deals settling stable coins now.

So, you know, that, like, all you need is the institutional players to start accepting stable coins. And then dollar liquidity can flow 24-7. Yeah. Well, that's a great point. We definitely need that to happen. Hey, so I know this is not crypto news, but Trump signed an executive order this week. That is, it looks like it's going to open up the. ability for U.S. companies to begin mining operations on the moon and potentially on asteroids.

So there's all sorts of details on some of the global treaties that are sort of being either violated or ignored here, but it seems like it's a good thing for U.S. companies that want to start doing some of these activities. And I assume that a lot of people maybe Googled this after they read this article, but is there gold on asteroids? And for those of you who are asking that question, the answer is yes. And there's actually nickel and cobalt and platinum and rhodium and a bunch of other cool stuff up there. So I don't know how realistic it is to get Bruce Willis up there with Ben Affleck and just start mining a bunch of gold on asteroids. But is like, is this happening? I don't think it's economical like at all. But, you know,

it is like it is a true physical fact that there's a whole bunch of gold out there. and we just have access to the localized gold. It's interesting, though, like, part of gold's appeal is actually the fact that it's so distributed in Earth's crust. Like, if you think about it, if gold was just under the, in the bedrock of a single country, then gold wouldn't have been a great monetary asset because its supply would have been too concentrated. That country could effectively perform seniorage. So the world was kind of lucky that gold was super well distributed in the Earth's crust,

but of course, you know, maybe in 20 years, who knows, we'll develop cheaper, you know, asteroid mining capabilities and then gold's relative abundance will come back to haunt the gold bugs. Yeah, it's sort of crazy to think. So, I mean, there's one thing to, like, get up on an asteroid and start mining it. That seems a little bit far-fetched, but maybe that'll happen in the next, maybe it'll happen in our lifetime. Who knows?

Seems a little bit of a stretch. But what if one of these asteroids like hits in the middle of Montana or something? And then, you know, we go and we find that there's just a ton of gold on it. Is that a, that's a crazy thought. But that would be a shock to the system, huh? I don't think they, like, stay intact when they smash into the Earth at, like, 25,000 miles per second or whatever. So I don't know if you can actually recover much of the fragments. I could be wrong.

I mean, there's, so it's pretty clear that we're. are way outside of our circle of competence on asteroids, but there's one thing I'm very, very confident in saying is that there's no Bitcoin on those asteroids. I'm just throwing it out there. There's no Bitcoin on the asteroid. So, yeah, so if your gold investor, your tail risk is obviously that a gigantic, solid gold asteroid hits Montana. I think that's something you have to consider. I'm not saying it's guaranteed to happen, but it's definitely in that problem. ability set. It's definitely in play.

So you don't want to be short that idea. You might want to be exposed to the potential store of value asset that is not on the asteroid. I'm just saying. But what if we, I mean, potentially we could encounter a more advanced civilization that has their own version of Bitcoin, which is maybe even a harder asset. maybe it only has 20 million units. So that might be an effective form of Bitcoin inflation. I know.

That would be tough. Yeah, that would be catastrophic. But you have to remember there's a social layer that sits on top of Bitcoin. It's a shared fiction. So a bunch of good reading and stuff to recommend over the weekend. In no particular order, I really liked math. Max Bronstien's latest piece, so crypto dollars and the evolution of Eurodollar banking. I thought it was one of the most fascinating pieces I've read.

It's very much in line with stuff that you've been talking about for a long time around how stable coins and generally just public blockchain technology is enabling people to have exposure to U.S. dollars that, you know, people that don't usually have ability to get into the U.S. banking system. And, you know, Max is saying we could be on the cusp of this. one of the greatest dollarization events in world history enabled by this technology. So I'm sure you really liked this piece. I saw that you were thanked at the end for some input that you'd given,

but I thought this was an awesome article. Yeah, this is clearly happening. First, it happened to help traders move money around exchanges. Then it was some early adopters like Chinese export businesses that needed a way to move fiat around. in a way to circumvent capital controls. And then it was remittance, informal remittance channels. Cryptodularization is clearly happening.

You know, it could be with Bitcoin as a collateral, in some cases with die, with ether as a collateral, or just with stable coins linked to dollars in a bank account. But the key phenomenon here is the fact that you can hold, value in kind of a bearer asset way outside the confines of your local banking system. So you can rely on the assurances of a foreign bank or in the case of Tether, kind of a shadow bank, or in the case of something like USDA, just like, you know, the regulated banks that they interface with. And so this is pretty much a new thing. And it would be shocking to me if this

didn't continue to proliferate and have an effect on the world, especially as we potentially have a wave of sovereign defaults here. That's something I'm certainly expecting in the next couple years. The U.S. can maybe escape default by because the world has like an insatiable demand for dollars, but the world does not have an insatiable demand for like rubles and and pesos and so on. So we could be seeing another wave of defaults and currency depreciations here and the dollar shines in that situation. Yeah, and I thought Max's point on, you know, would we maybe see another Plaza Accord style sit down with world leaders to re-peg currencies?

That was an interesting thought experiment. That's certainly something that we've talked about. I don't know if we've talked about it on this podcast, actually, but that could happen here. And I think we will see those sovereign defaults. I think that the dollar is just eating up everything. right now. I mean, the dollar is, you know, I talk about Bitcoin in the future being the apex predator of money. The dollar is the apex predator right now. This thing is an unstoppable force, and it will result in these regime collapses. And if you can get a digital wallet into someone's

hands in a oppressive, you know, in a country that has an oppressive dictatorial regime where they're manipulating their fiat currency, and it's just essentially worthless. And those people can just opt into U.S. dollars. I mean, that's going to accelerate this to a massive degree. I think we're going to see regimes crumble as a result of this technology. It's not going to because of Bitcoin. It's going to be because of just U.S. dollars being made more accessible. But keep in mind that Bitcoin was the catalyst for the creation of this crypto infrastructure rails. Bitcoin is the reason why we have digital wallets at all. And Bitcoin is, In many cases, Bitcoin is the sort of bridge asset, which allows people to import dollars.

That's certainly how it happens in Venezuela. So if you're interested in these themes, we have a crypto dollarization miniseries. I think it's really good. We have Jeremy Aller on there. We have the founder of Egold. We have an entrepreneur who is intimately acquainted with these OTC Rails in Venezuela. We have Larry White, who's like one of the absolute key thinkers on dollarization on free banking. That episode got a ton of great feedback. Check out the miniseries. I think it's really great.

Yeah, I think it's awesome too. We'll have to have Max on and do another chapter on it. I think he's been putting out some great content. And hey, you had a good piece for CoinDesk that came out last Friday. Corporate America knows the bailout is baked in. That kind of got me fired up. Yeah. Well, you know, the way I figure is like, this is like our generation's Iraq war in the sense that 20 years from now, people are going to be judged on whether they were pro bailout or anti-bailout the same way that we judged politicians who voted in favor of the Iraq war. And like, if you look around, there's a ton of pressure from the press, from like the influencers on FinTwit to be super gung-ho pro bailout like yeah you know like we can't let companies

fail that's like people's bank accounts so it's difficult to take up a position of being against the bailouts and people like totally accuse you being cruel and heartless but ultimately I think it's the healthiest way to operate so this is my case against the bailouts and I think it's it's a moral issue as well as a pragmatic one we just have to let capitalism work and if we suspend capitalism than then the engine that the powers this country is broken. So I'm pretty fired up about all that stuff.

Yeah, now that I can tell. You're going to be writing more about that for CoinDesk? Well, yeah, they make me write every two weeks now, so I have to come up with something. Thankfully, I have no shortage of things to say. Yeah, that's good. That's good. A couple other things I read this week that I thought were worth pointing out if people want to do some reading this weekend. Bitwise has a really good April rundown.

So they did an extensive blog post on just the performance of crypto over the past month. I think it's called April 2020 crypto and atomic crisis. So check that out. Flipside crypto did a really cool analysis into some user activity on the leading stablecoin. So they tagged a bunch of wallet addresses and exchanges and whatnot. They tracked USDT, USDC, and die, and just showed how those were being used. And I don't know if, excuse me, I don't know if you saw this one, but CoinDesk put out an interesting blog post this week, which is called on crypto markets and Bitcoin's value proposition. And they had some interesting nuggets kind of dropped into this blog post.

So one is just a reminder. And I think we said this on the podcast last week, that gold dropped 30% in 2008. and then it was up 3x over the next three years. So this sort of speaks to the role of Bitcoin in this most recent sell-off. Obviously, it sold off as if it's a risk asset, but so did gold. So did a bunch of other stuff. Other interesting data in this blog post, Coinbase has seen a 6 to 7x increase in trading volume

across all assets listed on their platform during the past few weeks. And they've also seen a 2x increase in user signups versus their steady state. And lastly, during the crash period, 67% of the customers on the Coinbase platform were actually hitting buy as opposed to sell. So really interesting data here. I think that Coinbase obviously is the largest retail platform for this stuff. And it seems like users are getting more excited about this space. It's always interesting seeing retail express a long opinion and then institutions express the short opinion.

I think Bitcoin will be the vindication of retail here in the long term. Yeah. I mean, what's your thoughts on the institutional narrative during this time period? Well, I mean, you know, it's certain, like, crypto has like at least partially institutionalized. I think some of the really sharp sell-off we saw was risk management. And some of these funds realizing they didn't want as much exposure to crypto, especially as they realized things. we're going to get ugly in financial markets. Whereas it seems to be the case that retail buyers of Bitcoin are still optimistic.

Still auto-DCAing into Bitcoin. So it's kind of a tug of war there. But, you know, I'm feeling pretty good about the coin right now. All these other monetary authorities are shambolic. Yeah, I mean, I got to tell you, there is a recession going on. And some of these exchanges and brokerages are just really choosing not to participate in that recession. Yeah. I mean, crypto seems insulated in a way.

I mean, I do think this will accelerate the collapse of like the token industry, which is fine by me. But there is certainly, there seems to be plenty of uptake of, in fact, crypto exchange volumes have gone up. So crypto so far has has been. been mostly exempt from, you know, most of the chaos. All right. So I think that's all we have for the week. Next week we'll have a bunch of interesting podcast episodes coming out. So Brian Klein, that'll be a good one.

And then also have Bob Davis, founder of Lycos, who's now getting into the crypto space, has made an investment. And we'll talk about that. So that'll be a fun episode. We'll have our banter back next week. Maybe a couple surprise episodes. Who knows? We've been really cranking out these podcasts.

Yeah, and Brian Klein, you know, probably one of the most high-powered litigators in the crypto industry, got a lot of headlines recently. I really enjoyed recording that episode, so I think it would be great. All right, any plans for the weekend? What do you got going on in the lockdown bunker? I've been playing a lot of Civilization 5, so, you know, we are named after that game. Our fund is, so it's only right that I play it. Yeah, little known fact Even wasn't known to me

CIV Yeah, that's what it stands for We had an LP actually ask us If that's what we were named after it But yeah, I guess sort of to each their own It's sort of open for interpretation, yeah Yeah, certainly could be any number of things Really fun game

But yeah, aside from that You know, where I am is still really not that Strictly locked down So you can still go outside Without getting arrested, which is nice All right, everyone We'll see you next week. Thanks for listening.