On The Brink with Castle Island - Weekly Roundup 01/31/25 (Senate Debanking Hearing, Powell's pivot, Tokenized Securities) (EP.592)

Episode Date: January 31, 2025

Matt and Nic are back with another week of news and deals. In this episode:  Should we revisit Basel rules on Bitcoin?  Jay Powell evolves on banks serving crypto  Are banks going to offer crypto custody post SAB121?  Gensler joins MIT Sloan Should crypto firms boycott MIT?  The Senate will hold a hearing on debanking next week  Choke Point 2.0 is getting caught up in conservative debanking  Where are we on DeSci?  Is tokenization finally going to happen?  X is adding payments to the platform with Visa  Truth Social is launching Truth.Fi Christine Lagarde says the ECB will not buy Bitcoin  Is the Czech Republic buying bitcoin?  Kraken turns back on staking Apollo is launching a tokenized credit fund on Ethereum and Solana Fairshake raises another $116m for the midterms  SBF is asking Trump for a pardon Elliott says crypto is in a bubble Content mentioned:  Blockchain Association Unveils Digital Asset Market Structure Principles

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 is 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 the Bitcoin, Matt Walsh. And I'm Nick Carter. Busy week, huh? Not as busy as last week. I think that was the biggest week in crypto political history. It really was. That was the fastest I have seen things change in this industry in quite some time. Maybe in the country too.

We're still reeling from that one. It's really like, it's an incredible development to see all of these trad five players now scrambling. Now that sub 121 has gone. Yeah, I was talking to a journalist earlier and they said, well, none of the banks said anything after Sab 21 went away. I guess banks they wouldn't be moving the same week

they'd take a bit of time to move do you know what it takes to get a press release done at a bank it's don't expect them to it's not like a startup where you just decide you want to say something and you put it on X yeah but expect some banks to enter the custody game expeditiously here

for sure the next phase here that we're going to start talking about I'm not ready to go deep on it today is the Basel rule That might become my new thing. Once I was obsessed with Sab 121, I might start aiming a little bit higher. Well, you do have a hole in your life now that Sab 112 is gone. So you need a new thing to complain about.

I mean, I would just be thinking about Sab 121 and just how dumb of a rule it was. I would just find myself in the middle of the night thinking about Sab 121. And I need to replace that with something very esoteric. So what is the new interest? The new interest might be the Basel rules, which is more than what? Basel rules, which is more of a global issue and not the U.S. issue, but how the banks, like bank accounting treatment is really, I know you know it's a passion of mine, but the banks are going to be able to custody, but do we want them to be able to do more than custody? That is the

question. Okay. I will admit I'm not up to date on this at all. Well, the risk waiting for the TLD is that the risk waiting for things like Bitcoin from a Basel perspective makes it very unappealing for the banks to get into some of their more traditional lines of business because they would have to hold a lot of capital against Bitcoin. It's kind of the same type of idea as Sab 121. But that's if they're holding the Bitcoin on balance sheet. Yeah, themselves, which you would need to if you wanted to enter certain types of lending businesses, stuff like that. So I don't want to get too greedy here, but let's start aiming bigger as an industry. Yeah, Jay Powell also talked about risk ratings a bit in his press conference. I thought his

quote was kind of mind-boggling in the presser. Jay Powell knows a lot about Bitcoin and is going to be one of these guys that ends up on boards of crypto companies once he's done at the Fed, I think. So I was going to save this for later, but I want to read it to you now. So at the end of the FMC presser,

he said, quote, banks are perfectly able to serve crypto customers as long as they understand it can manage the risks, ellipsis. We're not against innovation and we certainly don't want to take actions that would cause banks to terminate customers who are perfectly legal

just because of access risk aversion may be related to regulation and supervision. Good job. A remarkable statement. I would say that was actually a market moving statement if you'd just look at the Bitcoin price. So some people are saying, well, he's just weaseling his way around

to give himself plausible deniability for the choke point stuff. I mean, we don't know yet what the Fed's role was. I think they did have a role I don't know if he was involved because he's saying, well, you know, he's caveating by saying as long as the banks can understand and manage the risks. But I don't think he would have said this three months ago. For sure, he would not have said that.

He's a political animal. He knows which way the wind is blowing. Yeah, so if I'm a bank, I don't know. This looks like a green light to me. Well, you already have the green light with sub 121. So if you want to custody of this stuff, go for it. Powell's comments to me is more of a green light towards stable coins. Well, and also banks serving crypto, you know, the thing is about chokepoint is the regulators

don't actually have to specifically tell you to not do the thing. They just need to kind of imply that you'll be in trouble if you do the thing. And then you just won't do the thing. Yeah. So it probably does take a clear statement like this saying you're expressively not discouraged from dealing with crypto. I mean, we've heard stories, numerous stories actually, and this is not even a chokepoint thing,

about the SEC having conversations with very large hedge funds that are not crypto hedge funds. And those hedge funds over the past few years have wanted to do various things in the crypto space. We've heard stories of the SEC saying, well, if you do that, just expect to see a lot more of us. What do you think they're going to do after they hear that? You think they're going to go press the button

and release their new crypto thing? I don't think so. So the Senate has a hearing next week. Senate banking on Wednesday at 10 a.m. I think we're actually not going to be able to live tweet that. We have an offsite. But the three witnesses, curious for your thoughts on this. We have Nathan McCauley at Anchorage.

I think he's going to be the most important witness because they have the OCC charter. They have the only federal charter. That was approved, I think, last day under Trump maybe. And then you have a guy that sells coffee. And then you have a lawyer. So I don't know what's going on with the coffee guy. What is it, black rifle coffee? Yeah.

So they're like a conservative, militaristic coffee company, I suppose. Is the coffee any good? Have you tried it? No. Whenever I see content about them online, it's always actually conservatives hating on them for not being real conservatives or something. So I guess what the story is here is that they were debanked maybe. I mean, that has to be the story.

Were they debanked? I don't know. I'm doing one of these rise coffees right now. They better not debank these guys because we have this office fridge is just full of these things. Okay. So he says that they had been debanked. Okay. I mean, I guess what is there to say about that we, the coffee company, were debanked?

I don't get it. Shouldn't they have more like crypto people on this panel? Well, I guess it's just it's a broader debanking question. I mean, you have to remember that Melania and Barron were also debanked. So this is more of a, this is bigger than just the crypto industry, I think. But if you're looking at our space and you're trying to come up with a good person to be on this panel, Nathan McCauley's excellent. He's going to be a very good representative, yes.

This is one issue though, which is this hearing is about debanking generally. it's not actually about specifically what we call chokepoint 2.0. I think it maybe muddles the issue a little bit, you know, because I understand that conservatives have been debanked, and obviously I'm sympathetic to that. I don't know if there is going to be any evidence that that was a coordinated thing. Right, and there was a coordinated thing in crypto, and we do have the receipts.

Yeah. So I think there are different concerns, albeit part of the same conversation. Either way, we will be covering it in next week's episode. All right. Shall we hop into the deals of the week? We have an absolutely astonishing number of deals. First up, D3, a decentralized domain marketplace. There is 25 million from Paradigm and Coinbase Ventures. Then it's Cryptio. This is a crypto accounting and tax platform.

They raise $25 million from Alvin, 1KX, and BitGo. Then you have Pod Network. That's a new layer 1 blockchain. There is 10 million from A16C crypto, 1KX, and blockchain founders fund. Irreducible is a manufacturer of chips designed for ZK Proofs. They raise $24 million from Paradigm, Bain Capital, Crypto, and Robot Ventures. Then you have Humanity Protocol, an identity-focused blockchain network. There raised $20 million from Pantera, Jump Crypto, and others. Breeze is a Bitcoin Lightning payments platform. There raise $5 million from ego death and entree capital.

Then Ranger Finance, that's a decentralized trading protocol. they raised 2 million from Rockaway X, Anagram, and Z Prime Capital. Pixion is a Web3 gaming developer that raised 12.4 million from Delphi, L1D, and Spartan Group. This one's interesting. Jupiter, the Solana-based decks, they acquired a majority stake in Moonshot, the meme coin trading app that I think was climbing the charts on the App Store a couple weeks ago. Wow, that's interesting. I missed that this week.

That's actually a pretty big deal, two really big salons. infrastructure companies, I suppose, huh? Yeah. Next one up is a crew. This is a cross-border payments platform that raised 1.6 million from lattice and Maven 11. Then we have Pell Network, a Bitcoin restaking protocol. There is 3.5 million from D11 Labs and Core Ventures. Then it's signed. This is a token distribution platform.

They raised 16 million from Yizzy Labs, which is formerly Binance Labs, HackVC, and Amber Group. Then you have Signal Plus, a trading software provider. There is 11. million from OKX Ventures, AppWorks, and Hashkey Capital. Mevi is a trade execution platform. I bet that's focused on MEP. They raised 2.8 million from multi-coin and chapter one ventures. Then you have Cedar, a stable coin powered B2B payments platform. They raised 10 million from QED, North Island, Entress, and Latis. Here's a fund announcement. Varick VC, an early stage crypto fund, started by Richard Chen,

raised his debut fund, $30 million. Congratulations to Richard. Yeah, Richard, obviously, X1 confirmation. He actually posted an article on how he went about raising that fund, which was pretty elucidating. I highly recommend that. Last one, we have Sapien Capital. There are a $65 million venture fund focused on D-SI, decentralized science. They were launched by the SAFE Foundation. Where are you on D-SI these days?

Well, there's a lot of D-Sai haters out there. I don't know if there's been a D-Sai backlash recently. Yeah. I find it interesting. I don't know if it will work. I thought the Vita DAO is interesting. Vita DAO was interesting. But there's a real proliferation of these DAOs.

I don't know. I don't know if we should be financializing research like this. But I would say consciously optimistic is my stance. Some of these projects that we've looked at in this category really ought to just be securities, is my view. Some of these tokens actually would function a lot better if they were actual securities. Yeah, I don't know if, yeah, they should be like in the format of like a biotech fund or something.

I don't know if it makes sense to jam it into the Dow framework. Well, there's a lot of attention there. And you're right, there are a lot of haters. Some people are really out on D-Sai. So news-wise, there's a ton. No massive pieces of news, just a lot of small pieces of news. First up, Microstrategy has this new preferred share offering. STRK, I don't know what that stands for.

Stork. strike maybe that's a perpetual preferred stock with no maturity date pays fixed dividends indefinitely two and a half million shares of stork will be offered i actually tried to read this prospectus and then i was like what am i doing this is we don't invest in this type of stuff i was just very intrigued by this financial instrument i had not seen something like this yeah the micro strategy thing is like potentially a black hole of attention where you can just constantly go down the rabbit hole of the various financial engineering schemes that they do for no apparent benefit whatsoever.

Yeah, it's one of these things where some of the best and brightest minds are really going down that rabbit hole. I actually recommend you read Jeff Park on X if you want to go deeper on anything, micro strategy. I think he probably has the best stuff out there. Yeah, that's kind of like how we were

with GBDC back in the day and just don't have the energy to do it for micro strategy this time around. Well, it's just, it's a little harder, right? It's a publicly traded instrument. We don't really have a, you're hearing from two podcasters that are private market investors here. Yep. Speaking of public markets, Robin Hood has teased the release of futures trading for Bitcoin in addition to oil and gold.

Robin Hood, ooh, set up nicely there. They also wrote an interesting op-ed in The Washington Post advocating for the tokenization of real-world assets. Yeah, that's also interesting. So if you just think about the, what was that big issue around GameStop where Robin Hood have to post more collateral, I think with the DTCCC maybe. This tokenization thing, if it ever comes to pass in equities, you could see Robin Hood benefiting tremendously. Yeah.

I mean, they already offer stocks. So I'm kind of unclear on what the difference is between buying a tokenized security on the platform and a conventional equity. Well, I don't know if what I'm about to say has been actually borne out because all these things are in their infancy. But if the settlement cycle can be shortened on a tokenized security, then I think the margin requirements that Robin Hood would be required to post would potentially be less. And so I think it could have an impact just on their overall cost structure. In his op-ed, he says that you could tokenize the Picasso, the Washington Wizards,

carbon credits, or musicians' publishing rights, anyone with mobile phone could trade any tokenized asset in any quantity 24-7. The thing that I struggle with is it doesn't seem like a need. It doesn't seem like a market need. It seems like there's a lot of supply. People want to bring a lot of supply to market, but I don't see the demand. I guess that's right, although you wonder, first of all I disagree with this idea of just tokenizing things and all of a sudden you pop up with a liquid market. That doesn't seem right to me. I don't, and the private equity is a perfect example there. fund interest is a very illiquid market kind of by design. And there's a lot of factors that the general partners wouldn't want it to be a very liquid market. And so I don't think that

will ever be something that is a central limit order book traded thing using a token. You know, LP interest in Sequoia is going to not trade that way. But I guess there might be other types of assets that are not currently financialized that could be. You know, so that idea of YouTube royalty streams. I could see people wanting to buy that. Yeah, that I like. I think for tokenization, it has to be a novel asset class for it to be interesting. There has to be some new, create new financialization of an instrument that previously wasn't. On the liquidity front, I also, there's this really good piece by Howard Marks on liquidity where he says no derivative can ever be more liquid than the underlying. And just being able to chop up like some block of something

or other, that doesn't make it liquid. You're just dividing it. You still need to have a buyer for every seller and vice versa. So I just don't buy the story. The tokenization creates liquidity. I do think that there's going to be some interesting. So if you just tokenized kind of everything that exists now in TradFi and just made the settlement process more efficient, okay, I get that. That's sort of unclear to me that there's a revenue opportunity there, but it's very clear

to me that there's a cost savings opportunity. And the cost savings is more than just the technology. You just look at the back office of all these banks and broker dealers. And you just have a lot of redundancy there if you had a golden copy everywhere. So you'd need to probably fewer middle and back office human beings, I think, at a lot of these places. So I think all of that stuff probably does happen. Now, the other thing that could be interesting about tokenization is what if you could actually do things on chain with some of these new. types of assets.

What if you could have some of these assets moving and put them in pools and taking out loans without intermediaries against, basically imagine taking a margin loan against some esoteric asset that you hold that is a security, but it is operating in like a defy pool. I don't know what it's going to take to get there, but that could be interesting. And that's the paradox is the real unlock of tokenization would be incorporating these other novel traditional assets into the defy infrastructure and as you say like giving people access to margin against their apple stock that they maybe don't have to their brokerage just creating a more holistic composable portfolio but that's not how defy works I guess right now no but there's

nothing to say that it couldn't work like that right you could have these asset issuers that are allowing these assets to be put into pools and you could have a whole liquidity landscape pop up there. There's no structural limitation from a technology perspective why that couldn't happen. No, it's the compliance function. Yeah. Like you, we can't just have, we can't lend against Apple stock against counterparties that we don't know who they are. And that sort of brings you back to like some of the AVE arc stuff is will that start to become a bigger part of the narrative where you have these permission pools or maybe don't even need a permission pool if you could have some sort of a structure where you could have like a zero knowledge

know your customer verification or something like that yeah so there's some work to be done on the compliance front next up X the X CEO Linda Yakorino says that X is going to layer on payments with visa yeah so So let's see what happens there. I remember under Dorsey, he had wanted to embed lightning payments into Twitter. That never really happened. They did an integration with strike. I remember sending lightning.

So we'll see if this one works. I guess X was the original name of Elon's startup back in the day, right? Merged with PayPal. Yeah. So kind of a full circle moment here. We'll see what happens there. But they've been getting all sorts of state money. Transmineral licenses for the better part of a year and a half here.

So everyone's known they're up to something. I wonder if they'll put stable coin rails. They'll probably be like running on Doge. I can't say using X I've ever wanted there to be an additional payments layer on top of the network. I mean, maybe it's just like tip for a good tweet or something like that. Yeah. Why wouldn't you want to do that? I mean, you see like a feel good story or like kind of a GoFundMe type of use case.

It just if you could click it and have dollars in your browser, I would use that. So Trump, median technology group is launching something called TruthFi, a financial services venture rich plan, so up to invest up to $250 million in traditional investment vehicles, ETFs, SMAs, Bitcoin, and other cryptocurrencies. Don't really know what to make of this, to be honest. I saw that. So, I mean, this is a publicly traded company, obviously, sort of a pivot into financial services. Wasn't there a rumor they were going to acquire backed there a few weeks ago? Yeah. So the press release says truth-wise, natural expansion of the truth, social movement.

We began by creating a free speech, social media platform. Now we're moving to investment products. Developing America First Investment Vehicles is another step towards our goal of creating a robust ecosystem through which American patriots can protect themselves from the ever-present threat of cancellation, censorship, debanking, privacy violations committed by big tech and woke corporations. Oh, so this is sort of competing with VVEX company. What's the name of that one? Strive. Strive, strive, yeah. So I guess the idea is that we need a right-wing financial apparatus.

I don't know. My fidelity accounts fine. Yeah. I mean, I think this would actually have been more warranted when Trump was not in office. You know, and there was more debanking happening. Hey, can't knock them for trying stuff. They're trying stuff. ETF, system is Bitcoin,

crypto-related securities. Why not? Next up in news, the ECB president, Christine the Guard, has dismissed the possibility of adding Bitcoin into EU central bank reserves.

That is not at all surprising. Although, is the Czech Republic buying Bitcoin? Is that going to happen? I saw that story. Is that actually true? So the Czech Central Bank just approved buying Bitcoin or something?

So the block reports that the board has approved a proposal to analyze the options for us and additional asset classes, including Bitcoin. Maybe Czech Republic is going to be the third Bitcoin nation. So who do we have? We have El Salvador. Who else? Boutan. Oh, Bhutan. Yeah. Not America. No, no reserve, no SBR guys. I mean, hate to break it to you, but Russia and North Korea have also started buying Bitcoin. or stealing it yeah stealing it mining it whatever you want to call it

they have possession of a bunch of bitcoin acquiring it Iran probably Iran for you don't we don't mention the pariah states when we talk about the Bitcoin nations yeah it's kind of like your money for enemies they probably have a lot of dollars too

so that's all right did you see this blockchain association piece so they came out with a proposal for digital asset market structure policy I won't get into all the details on it but it's basically clear classification for tokens, you know, are the securities versus commodities defined right to self-custody? Pretty impressive. I'm starting to wonder if this market structure bill is starting to get more momentum than we thought. I think the common thought was

that stable coins goes first than market structure, but everyone's talking about market structure. Yeah, I am receiving reports from my informants in D.C. that market structure is now the new priority ahead of stable coins, which is a big shift from what I thought was the case before. Yeah, because market structure is a much harder one. I mean, you could even put in stable coins as part of market structure, but market structure is a big piece of work. Yeah, so we will link to this. Shout out to the BA for putting that together. All right. So then we have, I love these type of announcements. So Cracken, the crypto exchange here in the U.S., they announced, hey, we're going to relaunch that staking platform. Two years.

after closing it down because the SEC went after them for basically saying it was like operating an unregistered security platform or something. So they said, we're back up. I can't believe it's been two years. I know. It feels like just yesterday we were talking about that. It really does, doesn't it? Also on the tokenization front, Apollo and Secretize are partnering to launch a tokenized credit fund on Solana and Ethereum. It's actually a pretty big deal if you ask me. That is a big deal. actually think tokenized credit funds also make a ton of sense credit funds you can buy in and out of these things i suppose but imagine having a tokenized credit fund that paid you i don't know what do they pay out monthly something like that imagine just getting a stable coin payment out of

your tokenized credit fund i think that would be pretty cool so fair shake the crypto pack they've raised 116 million already for the 2026 midterm so if you thought fair shake was going away you're wrong they're still at it. Who's up in the midterms here? I mean, I haven't even gone back to the drawing board in terms of which crypto haters are running. Yeah, I actually don't know yet, but we will identify these people and put them on blast for you and we'll see if we can move the needle.

But yeah, I mean, look, crypto, one of the biggest singles you packs in Washington and still still rumbling. You know, it's going to be interesting because I think the common view is that the Republicans are going to struggle to keep the Senate potentially. Maybe I wouldn't say it's a common view, but people are thinking that. And then you have in North Carolina, you have this guy, Tom Tillis, who's a Republican, who, I don't know, hasn't really done too much for crypto stuff, as far as I can tell, hasn't been hostile, but just hasn't done much.

I would think that Wiley Nickel, who used to be a congressman down there, the Democrat. I would think he would be running for that position. I don't know if he's announced yet, but. And he's great on crypto. He's great on crypto. But I wonder, I wonder how that support is going to transpire. I also wonder, like, is McKenry really just not coming back to politics? Can we get McKenry to run for something? Yeah, he was great. So we'll keep you updated on the races, the center. It's never too early to start looking towards the next cycle. Our favorite former SEC chair, Gary Gensler has returned to his role at MIT Sloan. He will teach and conduct research on AI, finance, financial technology, and public policy.

And some people are not happy. What did you think of this one? I mean, he needed to do something. Yeah. I guess this was expected, right? He was already a professor at MIT. It would have been really interesting to see if he decided to go into the for-profit sector, because you can almost imagine

whichever company he jumped to would have been boycotted. It's kind of hard to boycott at college, I suppose. Yeah, he could have joined a law firm. I would have thought he would do that, go to big law, and it seems like

all of the possible candidates that realized anyone in securities markets just hates the guy. Yeah, or even like, think about if he went to, like, Charles Schwab or something like that. I think Charles Schwab

would have lost a lot of customers as a result of that. And I think people would be very vocal on social media to get your money off a Schwab. So Tyler Winkelvoss at Gemini said they will not hire any grads from MIT, not even interns for a summer intern program, some collateral damage here for MIT grads. Oh, wow. Are we going to have to take the pledge here?

This is going to be like the tax pledge, the Grover Norquist tax pledge. I will not hire anyone from MIT as long as Gary Gensler is there. Is that what the industry is going to do? I mean, we've never hired someone from MIT so we can continue to not do that. We have funded an awful lot of MIT entrepreneurs, though, some of the best ones in our portfolio. That's true. I'm not going to commit to not funding MIT grads. We need to keep doing that.

No. If you're an MIT grad and you want to start a company, we do want to talk to you. I would recommend not taking Gensler's class, though. Yeah, no hard feelings, guys. Please, we will still write your check. Yeah. But, man, so he's going to be in our city. and I don't know, last time he was here, he was all on the scene.

You know, he'd go to the crypto blockchain meetups. He would talk. He would pontificate. I can't do it again. I'm not doing, I can't do that. I mean, we started our fund one block from MIT Sloan. Yeah. That is our stomping ground.

So we're going to be in close proximity to the guy. Oh, yeah. We'll see him. I mean, he's going to be a fixture on the scene. Just talking about how these things are all securities. It's fascinating to see what his talking points are. It was interesting, though, that they didn't call out crypto as anything that he's going to focus on over there. He was involved in the DCI.

I think he just wants to forget about it forever. I think he never wants to hear the word crypto again as long as he lives. Well, now he can buy some. That's true. I wonder what coin he would buy. Bitcoin. I think Bitcoin's the only one he likes, right? Yeah.

That would be hilarious. He likes Bitcoin and Central Bank digital currency coin, whatever that ends up being. That's what he likes. Oh, Ku-coin, did you see this news? So Ku-coin has pled guilty to charges of running an unlicensed money transfer in the U.S. and $300 million fine. It kind of went under the radar, huh? Yeah, actually, I didn't hear about this one at all.

That's a chunky fine. Did you even know Ku-coin was operating in the U.S.? No. They're Seychelles based, apparently. So. Also on the crime front, Sam Bankman-Fried's parents are seeking a Trump pardon for their son.

I don't, why are people in Trump's orbit giving SBF's parents a hearing? I think he's barking up the wrong tree there. I mean, Sam Bankman-Fried was the number one or two contributor to Joe Biden in 2020. Do you think Trump's really going to take that meeting?

Yeah, I mean, that's the kind of thing Trump would remember. Yeah. You think he's all about loyalty. and his parents are like democrat superbundlers why or at least barbara is why in earth would trump hear them out now ryan salem on the other hand i could see him hearing ryan salem yes frankly i support a pardon for salem i think he was shanghai he was uh he was hard done by um but yeah i don't i don't know same bank midfrey is going to have to wait until elizabeth warrens

the president yeah so he's trading at six percent on the markets to get the pardon 6% too high, my opinion. Yeah, I don't see that happening. And then what do we have some big news or I guess it's not big news, but which fund just came out and said that, oh, Elliot, one of the larger hedge funds in the world said that the White House is inflating the crypto bubble and it could recap it. Thanks. What do you guys, experts on crypto now? Yeah, he says we've never seen a market like this. he says investors are acting like a crowd of sports betters or they said they said crypto is ground

zero for the speculative surge partly because of its perceived proximity to the White House I mean it's not just perceived it's very real so as the inevitable collapse the crypto level could recal have it in ways we cannot yet anticipate now contrast this with what george suros said about bubbles he said when I see a bubble forming I rush into buy adding fuel to the fire Be like Soros. Okay, don't be like Elliot. Although Elliot is just legendary. They're the ones that had the huge fight with Argentina.

That's right. They won. 20 plus years. Elliot's also, if you're a technology company, you're on the board of a tech company, and Elliot shows up just acquiring a stake, that's when you know your life's about to get really miserable. So they don't like crypto.

I mean, the thing is, if you identify there as a bubble happening, you should have exposure to it, in my opinion, not to sound cynical, but bubble means number go up, to be clear. Yeah, bubble also means pop, yeah. And then pop. Yeah. So if you see the bubble forming, speculative fervor, I don't know. Maybe you should probably own some.

Yeah, not financial advice or anything. But I don't feel like it's a bubble forming. I mean, Bitcoin is just trading in range here. This is kind of peculiar, given everything, the positive is happening. Yeah, I mean, for a market like this, it's all about the credit, in my opinion. I think, you know, you see leverage building up in the system and then, you know, then you have a de-leveraging cycle. Like, I would track the leverage. I don't see a lot of leverage in crypto right now.

I don't know. I don't know where it would be coming from. Well, there's certainly no bilateral leverage, right? Like, you don't have a Genesis blockfi type of desk to borrow from. You know, there's some stuff going on in defy. I guess you get the crypto exchanges and you can look at the. open interest over time, but it doesn't seem like it's out of control to me. Some of it might be coming from Trad FI from these firms that are doing the basis trade.

Sure. So there's some there. But yeah, I don't see like massive uncollateralized lending like we did last cycle. No. Well, remember we were talking about this a couple weeks ago. And I think that will come back at some point. And that's when you start to be a little bit afraid. Yeah, so we'll let you know.

Just keep listening. Just keep listening. And I don't think we'll let you know. when the top is, but... We won't know the exact day, but we'll start to get a sense. It's coming. Start to get a little bit uneasy, but hopefully that,

hopefully that won't happen for a long time. Yeah, I don't even believe in cycles anymore. I'm a super cycle guy. I don't know. I think the, I really think that the interest rate cycle, which has nothing to do with crypto, dictates a lot of these cycles.

That's true. So we, yeah, Not a lot of news today, but we'll keep it short today. All right. We'll keep it short. We'll be back next week. We actually have some pretty explosive podcast news coming in the next couple weeks here. Oh, yeah.

We forgot to tease it. We have one of our most important podcasts ever coming out next week. It's going to be really good. You guys are going to like it. I've been working on this one for years. And I believe. it'll be the first interview of this person. It's not Ross Albrecht.

It's not about Ross Albrecht, but this will probably end up getting a lot of attention. I think it could be newsworthy. Yeah. So, yeah, not to get you too excited, but we got a good one in the hopper. All right, everybody, that's it for the week. Have a safe and healthy weekend,

and we will see you next week.