On The Brink with Castle Island - Weekly Roundup 01/10/24 (FDIC Pause Letters released, SEC v Coinbase) (EP.589)

Episode Date: January 10, 2025

Matt and Nic are back after a week off. In this episode: Southern District of New York grants Coinbase's appeal in their case against the SEC The Governor of the Czech national bank is considering Bitcoin in their reserves Do Kwon is extradited to the US E-trade is launching crypto trading The FDIC is forced by a court to further un-redact documents Coinbase asked for in a FOIA request We cover the FDIC's Pause Letters Content mentioned in this episode:  Fidelity Digital Assets, 2025 Look Ahead Bitwise, Benchmark Survey of Financial Advisor Attitudes Toward Crypto Assets Nick Anthony, Fair Access to Banking

Matt Walsh and Nick Carter are partners at Castle Island Ventures. All of these expressed by them or the guests on this podcast are solely their opinions and do not reflect the opinions of Castle Island Ventures. Guests and host may maintain positions in the assets discussed in this podcast. You should not treat any opinion expressed by anyone on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of their personal opinion. This podcast is for informational purposes only. Brought down by bad mortgage investments, Lehman, which has 25,000 employees will be liquidated.

The federal government loans American International Group, AI, $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 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 a Bitcoin. Welcome to On the Brink. I'm Matt Walsh. And I'm Nick Carter. First episode of 2025, coming off a. sickness. It was the first time we could not record. You were down for the count last week. Yeah, that's our first roundup we've ever missed, right? Everyone gets a sick day every now and then. That's an excused absence.

I think one sick day in six years is defensible. How are you feeling? I'm still sick, actually. But I was more sick last week. We got all sorts of stuff going around up here. Everyone at this company is sick right now. What is it? I guess it's 20 degrees in Boston as part of it. There's some kind of serious flu going around, actually. I don't know what it is. But the thing is we're just, we don't shut down the world for these illnesses anymore. We're not going to do that again.

Not anymore. Not anymore. But we're back in action. Thanks for bearing with us. I know people were looking for the episode last week. There were some complaints. My apologies, Brink Nation. It won't happen again. We're still doing it.

We'll take a sick day six years from now. That can be our cadence. Yeah, I mean, you don't even take vacations, let alone sick days. Well, I took one, but yeah, you know, there's work to do, Matt. There is work to do. It certainly is. Well, we had a podcast this week, nonetheless. I sat down with Dana Syracuse and Josh Baum over at Paul Hastings.

Some OG lawyers over there, Dana Syracuse, one of the OGists of the OG lawyers in the crypto space. So that was fun. Talked about stable coins, general legal landscape for companies in the digital asset space. Had a fun time with that one. It's a strong episode. Digital assets are completely puking. They're in the gutter. Yeah.

What do you make of it? I think it's driven by the rally in the 10-year. Markets are having a bit of a temper tantrum right now. So that affects everything. Bitcoin's at 92 right now. Well, not good for risk assets when the tenure is spiking like it is. Dollars very strong right now. But the other thing, of course, is that the U.S. government, the Department of Justice,

has got the idea that they're going to sell $6 billion worth of Bitcoin before Trump takes office. Yeah, so this is actually an interesting question to ponder. My understanding is that they won a case by some claimant that said that maybe they were owed the Bitcoins, because I guess they felt that maybe they had somehow been victimized on Silk Road and lost coins. And then maybe those weren't the government coins. This were the Silk Road's coins or the coins of the users. So that case was lost. The judge said, okay, the government's coins to do with what they wish.

But it's not clear whether they've been sold yet or not, basically, right? Yeah, it's not clear, but it's just hard to know now that the U.S. government uses Coinbase for custody and trade execution. So you can't really tag these wallets the way you used to be able to tag them. It would appear to me that the government has been active in selling Bitcoin throughout the past year. That's a guess. My guess is actually that these coins don't hit the market before Trump comes in office.

That's my official guess. Is that right? So you think that there's going to be some sort of an injunction or something or just the process takes a couple weeks and by that point Trump will be in office? Yeah, that's it. I think we're just going to run up. the clock on these guys. It's possible.

He won't have all of his appointments locked in at the 20th, though. No. But I think it takes a lot of coordination to solve these coins. And I think it would look very petty from the outgoing Biden admin if they did it. I don't think that that's top of the list in terms of things they really care about. But we'll see. So that's obviously contributing a little bit here to just the general risk-off nature. It's funny to just call it a risk-off market.

Bitcoin's at $92,000. I mean, take a breath. You know, it's not that bad, guys. You know, things are pretty good overall. Yeah. I mean, we got, things are looking up over here. Also, we got a lot of deals to announce this week. Tons of deals.

Yeah, one, first one from the Castle Island portfolio. Alpin Labs, Bitcoin layer to network building, ZK and optimistic roll-up on Bitcoin, natively settling to Bitcoin. They raise 8.5 million. million in a round, led by Cyber Fund, DBA, and we also participated, our existing investors there. Very, very excited.

Expect to hear more from Alpin Labs and Strata is the network. This coming year, as they emerge from stealth, they will be one to watch. So congrats to Sims and the team there. Yeah, big congrats to Sims and the team at Alpin. Next one up, Falcon X, the digital asset broker, they have acquired Arbulos markets, which is a crypto derivatives trading firm founded by Josh Limp. Congrats to Josh and the team at Arblos. Wow.

That I didn't even realize that it happened. Yeah. That was in our newsletter. You don't read our newsletter. I'm reading it now. Yeah. Awesome win for Josh. Congrats there.

Next up, we have an interesting deal. Backpack Exchange has acquired FTX EU, the EU arm of FTCS for $32.7 million. Yeah, I saw this was like kind of of a controversial transaction. People are squawking about this and the FTX estate is having some comments. Who knows?

Who knows what happened here? It looks like they bought FTXEU from the founders and are basically going to make the customers of that entity whole is the idea there. You know what people are upset about with FTX, Matt? That Sam stole all the money. That was part of it. The Suey sale. Yeah.

John Ray just sold. the sui for cost, right? And if you just held onto it, that thing went up. So the thing is, I'm not sure they would have been able to hold the suey. Also, it's not really John Ray's job to take like a venture outlook to the portfolio. The job is to sell the assets. Yeah, they're taking a venture approach. They're not selling any of these privates. We've got companies in our portfolio that have been trying to

buy back their equity for a long time, just no response. So, Sunil, Kavuri, and FTCX credit are posted. FTCS sold 890 million sui tokens warrants and equity to missing labs for 96 million in March 2023. These are worth $4.6 a billion. That's mind boggling. That's a tough one. That is a tough one for the creditors. That's a really tough one. Do you think Sam Bankman-Fried gets pardoned here? I don't think so. I think there's a zero percent chance of that. Yeah, I hope you're right. All right, let's go to another one here. Soso Value, which is a crypto data provider.

They raised $15 million from Hong Chan, Small Spark, and Marana Ventures. Then we have Rina Labs, a crypto AI infrastructure company. There is 3.3 million from Paper Ventures, light speed faction, and Eterna Capital. Then it's Star Power, a decentralized network of energy sources. They raised $2.5 million from Framework, Solana Ventures, and BitScale. Then we have ZK Candy, a gaming-focused all two, blockchain. There is 4 million from Anamoca, Spartan Group, and Floodesk.

Jan 3 is a Bitcoin wallet company. There is 5 million from Folger, Tether, Lightning Ventures, and others. Jan 3. So that's a little ode to the Bitcoin white paper. Is that what that is? That was the Bitcoin first Block Zero, Genesis Block. Okay. All right. I like what they did there. 16 years ago, or 15? And by the way, actually, we should mention a recording on Thursday,

Jan 9 is the official birthday of Bitcoin. That's right. Because I don't think you count the Genesis block because that one wasn't mined. But the block one was mined six days later, aka today, 15 years ago or 16, I don't know, 2009. Someone did the math 16 years ago.

I should know this, but the Genesis block, or the Bitcoin's usable in that? I know they belong to... Those are unspendable. Unspendable, right? Those ones are unspendable, yeah. And so I consider the ninth, the official birthday of Bitcoin, like the real day when Bitcoin actually exited the birth canal,

because that was when the proof of work actually hit. I guess it took... I think Satoshi set the difficulty pretty high for the hardware that Satoshi was using. out of prudence. And so it took Satoshi a long time to actually mine that very first block. Isn't that remarkable that it took like six days to actually for the difficulty adjustment?

It'd been nice if it'd been seven. That'd have been pretty biblical of Satoshi. Yeah. It locks up six. You wonder if he had tried it and it just didn't work the first time and it just went for like a month and he said, I need to make some adjustments.

We probably know. Yeah, I guess we probably would know that, right? Yeah, so today is Bitcoin's official 16th birthday. What can you do when you're 16, I guess? Get driver's license. Drivers license. Yeah. Bitcoin's an adolescent, no.

Frontal lobe is still pretty immature, though, I'd say. It's reflective of the cast of characters that we surround ourselves with. Without a doubt. Okay. Next up, we have accountable a crypto credit analytics platform raised 2.3 million from Z Prime, Milton C Fund. They actually pitched at the Monad Madness Day that I judged. I thought it was actually a very solid pitch. So congrats to accountable. Nice. Next one up is NodePay. It's a decentralized AI training platform.

There is $7 million from IDG Capital and Mythos. And lastly, we have chain opera AI, decentralized AI agent protocol. There is $17 million from finality capital partners an IDG capital. All right. So where to start? A bunch of news. I guess we're going to do two weeks worth of news, which is good because last week there wasn't actually that much.

Yeah, nothing happened, basically. It was pretty quiet. It was one of the, the way Christmas and New Year's fell this year, it just, I think a lot of people took two weeks off. So my biggest thing that I was very excited about over the holiday was the fresh batch of releases from the FDIC as compelled by a court, Coinbase suing them and FOIAed them, and they've been very unwilling to reveal the documents regarding their pause letters to banks. And we finally got less redacted versions, not fully

unredacted, but less redacted. There's a wealth of information in here. Yeah. So I guess you were right about this being somewhat Nidig related, but it's much bigger than that. It seems like they they were telling banks to shut down all sorts of stuff. Figures project. definitely seem to be a part of that as well. Yeah, so John Iller, well, actually Jack Miller, his name on Twitter, figured out that one of these banks was NYCB, their member bank in the USDF consortium, which was a permission stablecoin issued by banks, so a fully whitelisted stablecoin, I believe. It was a tokenized bank deposit maybe. Yeah. So basically not really stablecoin, the way we think about them issued on the Providence blockchain.

there were, I think, three pause letters that pertain to this. In the pause letters, they don't tell you what bank or product it is, but there's enough information where you can kind of put the pieces together. Right. So I think three of the pause letters pertain to this. And this is what surprised me. I thought all the pause letters would be about the Nidig Bitcoin product, which I'm almost certain.

Obviously, they redacted that part. I'm almost certain a lot of the pause letters pertain to that. But there was more stuff. So there are 25 letters. The FDIC mysteriously found two more letters that they'd forgotten to include with a FOIA. I mean, very bad behavior. Bad behavior. Bad behavior.

Very bad behavior. They found two more letters. They're dated between March of 2022 to May 23. All of the FDIC regional offices, all these different banks. The most popular thing that they were telling these banks to not do was to launch these Bitcoin buy-sell applications through their online or their mobile banking portals, which we know was a program that NIDIG was running with the banks. Right.

So the FDIC totally stymied that. I mean, can you imagine how much further along Bitcoin would be today if all of these clients of all these banks were able to just buy Bitcoin natively in their online banking app? I mean, huge. In props to Coinbase for being the one that the entity that actually pushes forward with this FOIA requests because a lot of these banks were seeing ACH transfers from their bank over to Coinbase. And so they decided, wouldn't it be great if we're in that business too? And we give people the ability to buy and sell Bitcoin on our platform.

So it doesn't go to Coinbase. Meanwhile, Coinbase is the one that comes in and actually rescues them. Yeah, it's really, really remarkable because Austin Campbell had a good threat on this. Coinbase is the one pushing for this transparency. But arguably, Coinbase has been a beneficiary of choke point behavior. They have the banking access. They were not at risk of getting debanked. They benefited because the big banks couldn't do custody.

So Coinbase custody benefits. Any startups that were struggling because of choke point, because of the SEC harassment, that is to the benefit of Coinbase. So Coinbase is beneficiary of this stuff, but they kind of put that aside, and they still went to bat for the broader industry. So I just can't praise them enough for putting their resources into, getting to the bottom of this when their their like cynical motive would have been to just not care. I mean, because it is ultimately to their benefit. I think it's a very honorable thing

what they did. And I think, you know, you could be skeptical and you could say, look, they want to grow the pie for the industry, which I think is also fair. It's going to increase all sorts of other parts of their business if more banks are able to come in and just make the industry more stable. but I agree with you. I think they've done a great thing, a great service for the industry here by pushing on this. And also just some of the maybe softer things that they've done.

So Brian Armstrong coming out and saying, we will not retain any law firm that hires any of the people that were involved in this choke point behavior or the culture of harassment at the SEC. So you jump ship from the enforcement division of the SEC into a big law firm. Don't come and pitch us

on representing Coinbase against the SEC, basically. Yeah. It's been very commendable. The analogy I draw would be like if open AI was busy, like, suing the government to make sure that open source AI could exist. Yeah. You know, it's just it doesn't make a lot of corporate sense, but it's a great thing for them to have done. You don't often see the beneficiaries of regulatory capture fighting against the regulators. Right.

So well done. I found some interesting stuff in these letters. So it wasn't just Bitcoin buy sell. There was a letter about a bank that had bought crypto assets and NFTs, actually. Yeah, what was that? I need to know what NFTs. I really, I need so desperately need to know what NFTs. It was probably the tungsten cubes.

Probably the tubes. I need to know if they were buying like the slimy snail NFT or manic monkeys or whatever. Just that part I need to know. So hopefully we got the full letters. There was one bank that wanted to hold Fiat reserves on deposit for a stable coin issuer. The FDIC said no. I mean, crazy. Perverse, frankly.

There was a bank that wanted to issue a debit card with Bitcoin rewards. They wanted to issue loans against Bitcoin. I mean, these are products that exist in the startup ecosystem. It's just that the regulators didn't let the banks do it. It seems crazy again. And you had banks that wanted to use public blockchains to settle intra-bank client transactions. that was also disallowed. So anything creative or interesting

these banks wanted to do, they were disallowed from doing it. And I think there's a very important point to be made here. The anti-choke point people are always saying, no, the banks just de-risk crypto because they don't like crypto. This proves that the banks

were, at some banks, at least 25, who were interested in doing crypto stuff, they were specifically told no by the regulators. That's crazy. So what happens now? How do you hold the FDIC accountable? Well, Groomberg has stated his intent to resign on the 19th,

which is 10 days from now. We will get a new FDIC chair, which I'm told is, give me one second. Travis Hill will take over at the FDIC, at least on an interim basis. and what I'm told is that the new FDIC is going to want to air the dirty laundry with Grumberg and, you know, strike a very different direction from Grunberg's regime.

And so I believe that all of this will come out, actually, at the FDIC specifically. But they weren't the only agency that was implicated in this kind of debanking campaign. The Fed will be much tougher not to crack. And we're not going to see as much turnover there. So there will be investigations and hearings in both the Senate and the House, by the way. And I would expect the Fed to be a prime target because they were also responsible. That's what the bankers involved have told me was that it wasn't just the FDIC handing down these prohibitions or informal guidance on banking crypto. It was the Fed as well.

So let's just say hypothetically that the San Francisco Fed went to a bank or two and told them you need to stop what you're doing here. You need to cease and desist your crypto activities. What I'm telling you is under confidential supervisory information. So you are effectively under an NDA. You can't talk about it. The Senate and the House do these investigations. How did they get those bank executives to actually tell what happened? They can't.

They can't. So how do you break open the box that is Fed confidential supervisory information? The Fed is an air quotes independent agency. They really abuse that, in my opinion. And so you would have to get them to agree to a waiver of the CSI doctrine if you wanted bank executive to testify about Fed guidance to the banks, which they'll not agree to. So you need Congress to, I think, subpoena.

the Fed. So we're going to have to have that happen, I suppose. I think that will happen. I think that will happen. So I think we will get to the truth of it, but I think they will fight bitterly to stop the truth coming out. What a mess.

Did you see that John Donenberg, Elizabeth Warren's, you know, person who's recently been at the White House working on economic quality for Biden, used to be her chief of staff. He's now the, what is he, the head of Senate banking staff for the Democrats? That's great.

Yeah, he's getting a top. job on the Senate banking committee on the Democrat side. Talk about not draining the swamp, huh? Yeah, Donenberg is, he's a bad guy. I don't know how else to put it. Certainly not a friend to the industry. Okay, we'll say that, not a friend to the industry. So no real change in attitude or outlook from the Warren camp, at least.

Well, I guess at least they don't have the votes on Senate banking, right? So that's the That's the tough part about knocking Sherrod Brown out of existence as a politician Is that in his place a new one pops up and it's Elizabeth Warren Yeah, it's a bit of a hydra But look, we're still making progress I mean people think the trick point sub is over It's not even close to being over

We need to get to the bottom of this thing There's a lot of work to do but within a month Within a month there will be hearings So there's a lot on the calendar Yeah, it's going to be a busy Q1 and Q2 for chokepoint hearings. All right, let's talk about this SEC case because I actually think this is a big one. SEC is suing Coinbase for being, as they think, a unregistered securities platform. The Southern District Court of New York has granted an

interlocutory appeal on the issue of whether or not digital asset transactions in the secondary markets are subject to U.S. securities laws. This is kicking this case to the Second Circuit, which will now hear the case. My two sense on this is that effectively the second circuit is now going to be opining on whether or not the Howie test applies to secondary market trading. If you look broadly at the number of cases that the SEC has brought in the industry that are hinged on this argument, it's a lot. So you have the DRW case, you have crypto.com, you have all these NFT platforms,

you have Gemini, Paxos, I don't really understand how any of those cases can go forward until the Second Circuit has opined on this. So, you know, if the SEC loses this at the Second Circuit, I think it completely negates the SEC's interpretation of how Howie Test relates to the digital asset industry writ large. And I think you could make a strong argument that if you had someone who was at the head of the SEC who kind of saw that, they would just probably stand down on these cases. You're going to completely blow up the whole fiction of why you're going after. Do you want to lose that now?

That's what's going to happen, is my sense, is that Coinbase will win this at the Second Circuit. And then I would think every single one of these lawsuits would have to get dropped. Yeah, this is a very interesting and welcome development, I would say. although we are reaching the real limits of my legal expertise here. Not a, yeah, I guess we'll caveat that not a lawyer. So just looking at this, though, this is the core issue, right? So if the second circuit is going to hear the Coinbase case,

that core issue applies to like 50 other cases. How are those cases still going forward? Well, so there's this thing called Starre desecis. Have you heard of this? No. It's a Latin word that means term that means to stand by things decided. I don't know if I pronounced it, right? Probably didn't.

But so stare desicese means that lower courts have to follow what higher courts have to say, or at least vertical star indices. And so it's important that this got kicked up to the higher court because that authority, those decisions cascade down to courts under. So this being a. elevated is very consequential. Right. So that has implications for all these other cases that are pending under the second circuit.

I mean, just a lot's going to happen at the SEC here over the next 11 days. Gensler is out on the 20th. You'll have an acting head of the SEC. They will be able to do things. I would imagine Atkins will get approved pretty quickly here. He's a non-controversial pick, certainly. He'll get through probably before anyone else. I would think, actually.

So I think things can start to move here in short order at the SEC. Yeah, it feels like we've been holding our breath since November. These appointments have been trickling in, but we don't know about the confirmations. Some will, some won't probably. And we don't know what the day one EO is going to look like. We're going to get so much information in 11 days. I can't wait. All right, switching gears here a little bit.

the information is reporting that Morgan Stanley's e-trade platform is exploring launching crypto trading on that platform. So not really a surprise. And I would say expect to see a lot more of this. Behind the scenes on a bunch of these platforms is that a number of them did a lot of work. Like there's probably a choke point equivalent for what happened with some of these retail equity brokerage platforms over the past few years where a number of them had all. RFPs out to custody providers, trade execution platforms.

And some of them actually built out full-scale ability for buy and sell on Bitcoin, ETH and other assets, and then had to pull the plug. And it was largely due to, my understanding is it was largely due to conversations with the SEC. So I think there is a bigger story there around the SEC. And now I think you're just going to see a lot of these things dusted off. And I guess the question is, who stands to benefit here and how do you implement it. So will E-Trade be building custody themselves? Will they be trying to build out some of their own trading platforms or do they just white label someone on the back end to custody

the assets? Yeah, it's very, very interesting. I think you'll see the floodgates open here, although there's already a bunch of brokers that offer it, but E-Trade, does E-Trade like the first online broker back in the 90s? They were pretty early. Remember it was like E-Trade, Scott Trade was around back then? Yeah. Discount brokers were big in the dot-com era. Other dues items, Doquan has been exurgited to the U.S. to face fraud charges relating to the collapse of Tara and Luna.

Trial set for January 2026. Wow. That's a long time. That's a long time to wait. He looks good, though. He's got a new haircut. Looks kind of jacked. So, you know, he's been working out in Montenegro Prison.

What prison is in? It's a good question. Do you think he's in with the same cast of characters in with Sam and Diddy? I mean, Brooklyn MDC, that's getting crowded, huh? You got Sam there, you got P. Diddy. You got Avi Eisenberg, I think, is it at that prison? Sounds like a terrible place to be. Micro Strategy bots in Bitcoin.

They acquired 200138 Bitcoin for 209 Mill. They have a new plan to raise up to $2 billion. capital via preferred stock sales and Q1 of this year? Well, this is kind of interesting, right? So this is, they've been doing common equity at the money offerings. They've been doing converts. So they've basically become the largest player in the convertible issuance market. And now they're getting into the preferred stock game, which is, you know, preferred stock.

That's a pretty big addressable market, right? If you think about the profile of that, it's not a common equity type of return necessarily, but pays a dividend and sits senior to the common. Kind of smart. Although I guess continues to maybe risk the loss of control to Sailor if he keeps doing that. Maybe it's non-voting. Maybe it's a new type of instrument that you can, I haven't read the actual prospectus on it,

but doesn't have to be voting shares. I guess you'd have to have enough money to pay the yearly dividend on it, but they're raising so much money in these at the money. offerings, you think that wouldn't be an issue. They've got a ton of cash. So on the sovereign front, apparently the governor of the Czech National Bank, Alice Mitchell says he's considering investing in Bitcoin as part of the diversification strategy. That was probably on the bingo card for a lot of people making their predictions for this year was more sovereign adoption. I don't know if there's any truth to this, but

I guess not that surprising that other nation states are getting involved. What type of balance sheet we're working with over here at the Czech National Bank? Let me... This is like a $20 million purchase or is this a $200 million purchase? Chad ChbD says they have

3.4 million CZK What is that? On the balance sheet. 151 billion, apparently. Okay. dollars good goodly amount well here's what we do we introduce these guys to the department of justice in the u.s that seems to want to unload six billion the little oTC trade there yeah just do a swap keep that off the books yeah entirely don't need to take books yeah okay more power to the checks

um there's been an interesting development with the irs uh defy broker rule um defy education fund Blockchain Association Texas blockchain counselor suing the IRS over their rule that requires DFI front ends to collect user information. Well, this one's going away, so I wouldn't get too worked up about this. This will be a, what is it called, the Congressional Review Act? This will be overturned in short order, I would imagine. Yeah, I mean, that one is not orurable, so that one is going to have to stop. That's just saying open source software needs to be governed with KYC and it's completely unworkable.

The fact that that was actually written the way it was written after all the hoopla and all the comment letters, there was 10,000 comment letters to the IRS on this. And it's like they didn't read any of them. It's like you're proposing something that doesn't actually work the way the technology works. So I want to direct your attention to a new paper from Nick Anthony over at Cato, Center for Monetary Altru, alternatives called Fair Access to Banking. Good paper. Nick is an excellent academic and pundit. I'm going to put in the show notes here. Talks about Chokepoint, Chokepoint 2.0. Talks about the Fair Access to Banking Act and why he actually doesn't support the approach in the Fair Access Act, which you will hear more about.

As we have this choke point hearings, I'd expect that legislation to be reintroduced. He doesn't like that legislation. Has alternative proposals on ending debanking. So I'll post that one for you. I'd love to take a look at that. Let's put that in the show notes. Fidelity put out their 2025 digital assets to look ahead report. Is it quite a beefy report, dare I say. We will also put this in the show notes for you. I have not read that yet, but the X is a buzz with people excited about this report. Yeah, I leafed through it. It covers all sorts of stuff. But yeah, very, very well done by the FTAF team. What do you think happens first this year?

Do we get an ETF that has Ethereum staking in the product, or do we get a Salana ETF first? I think we get both, but I would say staking ETH ETF would be closer on the horizon. That would probably be easier to get through, right? It'll be interesting to see how the SEC starts to think about approving other ETFs, because the prior SEC was really pointing to a lot. the futures market and the fact that CME had a product for BTC and Eith. They don't have one for Solana, but I would argue you probably don't need one.

So I guess we'll have to just revisit our prior assumptions on how these ETFs can even get approved. Yeah, that just seemed like a kind of like arbitrary way to, you know, process ETF applications. I don't think there's any real legal requirement that there be a futures market first. So yeah, I do think we will see Solana this year. Yeah, I think we will. I think we'll probably see a few other ones too. I mean, I wouldn't be surprised if you have a Doge ETF. Can't say I'll be a buyer of that one.

I thought you're a big Doge guy back in the day. Oh, yeah, that was my first crypto asset. It's crazy. The guy who started that just punted out of the whole thing. Oh, yeah, what was his name? He worked for Adobe, I think, right? Jackson Jackson Palmer

Jackson was it Jackson Palmer Jackson Palmer yeah He uh Yeah And he ended up hating crypto I mean wouldn't you if you got rid of all your doge And that ended up You could have been in like a trillionaire

Yeah but Charlie Lee sold all his like coin He stayed friendly with the industry Yeah I don't think Charlie Lee I think he did all right I think he did all right Yeah he still goes to crypto events even though I think he's basically out.

I remember I went to the MIT Bitcoin Expo in like 2014 and Charlie Lee was there. And his presentation was they had just done some integration with like Expedia. And he was like, I booked my flight and hotels to this conference in Lightcoin, a currency that I invented. I was like, that's wild. That's kind of wild. Invent money. It's always handy when you can do that. There's one more thing I'll direct your attention to bitwise.

released their survey of financial advisors in the last couple of days. Obviously, they're a portfolio company of ours, asset manager. They said more than half of financial advisors has made the... The FAs say the election has made them more likely to invest in crypto. And they said 96% of them

have gotten questions about crypto. 99% of those FAs that have made allocations for clients plan to hold or increase it. Interesting. I mean, makes sense, right? I mean, if you're a financial advisor right now and you're getting asked questions about

crypto, how can you afford to be dismissive? Matt Hogan at BitWise says, the early days are not over until its market cap reaches gold, which is 9x from here, by the way. Yeah, and gold might keep on going up too. That's true.

Gold was up 30% this year. Yeah, gold's also roofing. Yeah. Do you ever listen to the Macro Voices podcast with Eric Townsend? Yeah, that's a good one. He just had Luke Roman on, who's on a lot. And Eric Townsend is no fan of Bitcoin and crypto. Yeah, it doesn't seem like he's gone to the bottom of the ocean to understand it, to be fair.

But he kind of turned around a little bit. He said, look, I change my opinions when the facts change. And you have to look at this incoming administration and realize that this is not going away. Yeah, the facts have changed. I will say about Grumman, his newsletter is the only newsletter that I read front to back every single week. Is that right? FFT. He's great.

It's the only one. Yeah. He loves to make clean. Yeah, he's really become a true, I don't know, a believer, understander, a good explainer, ability to decipher. it for people that might not be in it every day. He's a big SBR guy too. Yeah. I am not.

But we're going to find out. We're going to find out. Are we getting an SBR? We're going to find out in 11 days. I wouldn't be overly worried if the U.S. just dumps this $6 billion worth of Bitcoin and sends it back to 70K. Just don't worry about it, guys. Yeah, I mean, come on.

Like, we've had such a good year, you know? It's just, it's... Like, if you look at these bull markets, like, you see pullbacks like this. This would be a completely ordinary pullback to see it in a bull market. They all have, all these bull markets have had 30% pullbacks. It doesn't mean it's over, but, I mean, Bitcoin is behaving like a global macro asset at this point. I mean, just trades in line with what's happening in the tenure recently. comfy and spot all right so i think that is it for the week we will be back next week with a couple of

episodes happy 2025 to everyone have a safe and healthy weekend and we will see you on the minute