On The Brink with Castle Island - Weekly Roundup 03/19/21 (NYDIG's rumor, NFT taxonomies, BoFa's bad Bitcoin report) (EP.195)

Episode Date: March 19, 2021

Nic and Matt return for another week of deals and news. In this episode:  We announce onthebrink.shop What was Robby Gutmann from NYDIG rumoring on our recent episode? Morgan Stanley opens up their platform to Bitcoin funds A new taxonomy for NFTs Bridging the gap between NFT fans and skeptics Why NFTs are not bearer assets and are liabilities of an issuer We break down a popular thread debunking NFTs Bitmex Research publishes a book on the blocksize war BoFa publishes a very bad report on Bitcoin India dithers on their cryptocurrency ban The parallels between the crypto wars of the 90s and state bans today Is there a double standard for Bitcoin versus other ETFs at the SEC? Is Gensler a grey swan for crypto markets? The SEC is officially on the clock for a new ETF application Why FTX should not buy the naming rights to the Miami Heat stadium Content referenced in this episode:  Nic Carter on Medium, Why NFTs are Hard to Explain Twitter thread on NFTs by Jonty BitMEX Research publishes 'The Blocksize War' SEC Comissioner Hester Pierce's speech, Paper, Plastic, Peer to Peer  This episode is brought to you by Sovryn, DeFi on Bitcoin.

This episode is brought to you by Sovereign. That's Sovereign with a Y, S-O-V-R-Y-N, Y is in Yankee. Sovereign is D-5 built on Bitcoin and secured by the Bitcoin network. Sovereign.app lets you earn, bar, and trade without giving up control of your coins. Connect your wallet and start earning interest on your Bitcoin today with Sovereign's lending facility. Pledge funds a liquidity pool to earn a portion of your trading fees or trade with up to 5x leverage on the centralized exchange. visit sovereign. That's sovereign with a y.

Dot app. 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 to Britain's ailing economy The new round of closer to it to easy. 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. Welcome to On the Brink. I'm Matt Walsh.

And I'm Nick Carter. And this is an early morning rip. I hope that you have your coffee in you. It's 8 a.m. on Thursday. Yeah. It's mad early. This is not really early for like a normal person. It's just early for our podcast.

Yeah. We just, we typically record this, what, Thursday evenings? So it's just weird to record on the brink in the morning. It's completely, it's knocking me out of whack. I'm drinking some nice coffee from my On the Brink mug. You can't see it, but it looks great. Ooh, I got one too. So this mug, which I'm holding up to the camera right now,

I wish we were recording this, is available at on the brink. There's a couple good ones up there. Yeah, lest you accuse us of profiteering. Let me go to On The Brink Shop. dot com. No, it's on the brink. Dot shop. You got it.

Damn it. I keep getting the domain wrong. On the brink. dot shop. So we basically made this merch store so that we could sell funny merch, not really, I don't expect to make any money on it. In fact, when I sold the dice last time, I lost money, believe it or not. So given my track record, this is probably going to be money losing enterprise.

But there's just certain Bitcoin merch that is either out of print, like the magic internet money wizard and I really wanted that merch so we had to make it or you know really funny stuff like the having was priced in mugs which are personal favorite so anyway if you want to support this show on the brink dot shop i am the number one buyer of anything on this shop so far and i don't think that's why we did it but it seems like it's just a conduit to get me new t-shirts and mugs right now Yeah, you know Lynn Alden's analogy about Treasury bills and the biggest buyer of Treasury bills being the Fed is like a chef eating their own cooking at the restaurant. That's like us with this shop.

Yeah. So far it's just us buying this stuff from our own shop, which is sort of weirdly circular. We do have a good one for the bankers in the crowd who are just in it for the underlying technology. There's a lot of people that don't like Bitcoin, but they do like the underlying technology. And we have them covered too. Yeah, that's one of the better ones. But yes, we also have nice on the brink mugs.

So it was a very good podcast week. The Robbie Gutman episode just exploded. Yeah, that's our number one episode of all time. Thank you, Robbie, first of all. And then thank you to everyone who listened to that. I think part of the reason is because Robbie had the mother of all teases at the end of the episode. He did. He said there's some big announcements within the next week or so.

And then there was a big announcement. Morgan Stanley has put Nidig on the platform as an investment product. And a Galaxy Fund as well, I think. So we've recorded that episode on Wednesday the 10th. And then he said within the next week or so, a lot of people are really dissecting this, what he said at the end. The key phrase is or so. What else is coming here?

Yeah. I'm on the or so camp because I believe that there's more to it based on there's got to be more. I mean, Robbie sort of said announcements, plural, if I recall correctly. So I'm thinking there's some other stuff coming down the pipe. I don't know. I might have to go back and re-listen to that and interpret it, but I'm in the or so camp as well. Yeah, this might be the most scrutinized line and on the brink history.

But yeah, you know, when Ross Stevens did his thing on Sailor Day, he talked about their pipeline a little bit, which sounded fantastic. now Robbie comes on. He says there's some major announcements coming down. We get Morgan Stanley, so he's already vindicated. What next? What could top that? The best thing about crypto asset infrastructure is that people just cheer on client announcements. You think if like Oracle signs a big client, people like, yeah, let's go.

That's, you know, NIDIG, it's not like we're going to make any money from them onboarding life insurance companies, but the whole industry awaits and is applauding. That was my dark horse, well, actually, I guess white horse candidate, honestly, was New York Life to announce a position given that the New York Life CEO has joined the board of Nideg. That's still waiting for, still waiting to hear about that. Still went to here. He might just like being on boards. Yeah. So we had another good episode went out this yesterday morning, I guess, by the time you guys hear this portfolio company of ours, Dennis and Bertram and Raf Solari from Talley. Talley talking about DFI governance. And that was a fun episode. We talked a lot about just how voting and coordination works on D5 protocols or at large.

There are some analogies to regular quote unquote real world financial services with proxy voting and things like that. So we're recreating some things. And then there's some things that are brand new. Yeah, as Matt Levine says, we're just crypto is rebuilding the financial system from scratch. But why not? You know, why not? And then you had an article this week why NFTs are hard to explain. Did a good job explaining them.

Yeah, I have issues with the NFT discourse, basically. And this is something I want to get into in this podcast. There's a thread that's really blown up that I want to talk about urgently. But yeah, the point of this article is basically to sort of bridge the gap between bit corners that don't get NFTs or choose not to get them. and then NFT enthusiasts. And I actually think both camps have a kind of warped impression of what NFTs are. So, yeah, we'll link this one in the show notes.

So set this up for people that haven't read the article. You think that we need a new kind of, well, maybe not even a new one, but just a taxonomy for how to think about the different categories of NFTs and some are more exciting than others. Yeah, so NFTs, to me an NFT is just like a very generic. process, it means taking a serial number and inserting it onto a public blockchain. That alone doesn't really signify much or tell you much about what is happening, right? Because you could assign anything to that serial number, right? So that alone doesn't give you any property rights

or assurances. My view is that NFTs are basically the liability of an issuer. And they're not bearer assets necessarily, because there's always this sort of external data. which the NFT refers to, right? So the NFT is just like a reference to that data. And of course, you can financialize it and trade it and everything, and that's great. But there's still some sort of external data somewhere that really matters. And so you sort of run into problems when you treat them all types of entities is the same class of thing. And so I tend to believe that the most functional NFTs that are the most comprehensible and really make the most sense are the ones where,

the issuer, the entity that's creating or wrapping the NFT is actually very proximate to or consists of the owner of that IP in question. So when an artist sells art, you know, maybe they use a third party service, but it's still them authenticating it and permissioning it. They own that IP. So, you know, it's totally valid for them to basically tokenize it and put it on chain. Same thing with NBA Topshots. They are the owners of the IP, so, you know, there's no question as to the authenticity of those things. But then if, you know, for instance, that guy who did the longboarding meme of him listening, drinking cranberry juice and listening to Fleetwood Mac. Fleetwood Mac.

So he's a great clip. He sold that as an NFT, right? The question is, okay, so he's, you know, not to sound like a scold or anything. Does TikTok own some of that IP? because he posted on TikTok, right? Does Fleetwood Mac have a claim on that NFT to a certain extent? If he's financializing, he's monetizing their song, effectively. What's their claim?

Does the cranberry juice company, are they okay with him using their likeness? You know, maybe he worked out all those issues. I don't know. But, you know, so you see into thorny issues there where now you're smashing together all sorts of different sort of IP questions. and you have a third party that's monetizing it, that gets much trickier. So user-generated IP,

or if you're using third-party IP and you're inserting that on a blockchain, I think you actually run into problems there. So, yeah, that was basically something I wanted to point out is that it's sort of about the IP integration, and then it's about the assurances of non-sort of duplication kind of thing. Kind of a tricky subject. And to be clear, what you're saying is not that

the IP owner needs to control the actual underlying protocol. You still think that these make more sense on immutable public ledgers as opposed to corporate chains. Oh yeah. I mean, you only get the nice assurances of blockchains if it's on a public blockchain for sure. So on that topic, let's talk about this John T. Warrang thread that got a lot of buzz on Twitter this week. Yeah, so this is a really, really, really interesting thread. So we'll link it. But basically the first tweet is out of curiosity, I dug into how NFTs actually reference the media you're buying and my eyebrows are now orbiting the moon. And so basically, John T goes into the details of a few different NFTs and finds that, you know, the files are effectively hosted, you know, by Nifty or

by, ultimately by, they're hosted on servers or their host on sort of IPFS gateways that are ultimately controlled by these NFT companies. And so basically the point is these things aren't really immutable. They're not digital bearer assets in the truest sense. And if these companies go out of business, then your NFT is going to vanish. It was basically the point of that thread. And it was a very interesting critique. But I think where it misses the point is NFTs, in my opinion, are the liability of an issuer. I don't think right now, in their current form, they actually are true digital bear assets.

Because first of all, someone has to manage the content, as the thread points out. Like, there always has to, and then someone also has to maintain a link between the artist or the issuer and the content, right? Because there has to be proof. Like if I'm Beeple, there has to be a public attestation somewhere that, you know, I permission this specific content.

I made this addition with this many vintages of the content. So that proof has to exist somewhere, right? Otherwise, how do we know that it wasn't just wrapped by some random third party? Like, we have to have that linkage somewhere. And then, of course, someone has to maintain the content. So I think if you start to see NFTs as liabilities of a third party of an issuer, things make a lot more sense. And then you're not really worried about who's managing the asset on IPFS or whatever,

decentralized file storage system because you know you probably retain the right to have the artist reissue it if you know something breaks technically so I think it would be interesting if we could get to a world where there was true persistence but I don't think IPFS gives you true forever persistence for a start because someone has to pay for that storage ultimately and so I see them as liabilities of an issuer I don't know that's kind of my solution to this thread. So do you think that some of these issuers like Rob Gruncowski and Taco Bell are contemplating the perpetual liability that they're creating here? Probably not, right? Like, I don't know if Rob, you know, God bless his heart, even has opinions on IPFS. He, yeah, he took

down a million dollars right out of the gate here. Yeah, so they, it's kind of like tokens, tokens, tokens are liabilities, just like generic, fungible tokens. Those are also liabilities. If you put something on chain and you sell it to people, now you owe them something. So with NFTs, what you owe them is persistence, basically. Well, it's going to be a messy couple of years here, I think, as people start to figure this out. I mean, there's questions on IP, there's questions on the underlying protocols. The use cases are fascinating, though. So I think we're going to see a lot of experimentation here. And it could be a lot of fun. So that was a lot of NFT chatter. There are also a few monster deals this week.

Huge deals. So let's kick it off. So Fireblocks, which is a custody and it's also a platform for trading crypto assets, basically, in a secure way. So really cool concept. Fireblocks raised a $133 million series C led by Koto Ribbet and Stripes. And actually, we should mention BNY Mellon was in that round as well. And so, you know, B&Y Mellon getting off the sidelines here in a big way. as we announced, or as they announced, rather, a few weeks ago working with fireblocks as well. And so largest custody bank and oldest custody bank in the world.

That's right. And I think largest buy assets, we sort of had this debate last time as well. They also released a case for Bitcoin. I don't know if you saw that. Is it a good case? Well, they cited my chart that I made with Hasu of visions of Bitcoin, if you know that chart. I do. Yeah.

I was actually talking to someone about this, and we should link this in the show notes, just around the ideology that binds together the community over the years. And Bitcoin obviously had a fracture with the big blockers and the little blockers. But I think about the ideological beginnings of Bitcoin. And there's a comparison to what's going on in NFTs right now where people like NFTs for different reasons and there's different tribes. I don't think we're going to have like a fork war over this. but the reasons to be excited about it are completely different depending on who you talk to.

Yeah, speaking of history of ideology in Bitcoin, Bitmex Research, aka Johnny, wrote a book, like a physical book about the fork wars, the block size wars. That was an immediate buy for me. I just saw that and I clicked by. I have it right here. Oh, yours already arrived. mine was delivered the block size war dare I say much more effort

put into the content than the cover but that's okay I think the cover is a picture of Hong Kong yeah it looks like Hong Kong if I had to guess that was obviously the Hong Kong agreement a key part of the block size

that was the first skirmish I thought that the cover should have just been an off by one bug that might have been to how do you visually represent that though it would have been very difficult yeah so that was kind of the gettysburg of the block size war the off by one wouldn't you say i think so i think so whereas the hong kong agreement was the antietam you could say more people more people died at entitum though right actually antietam was like in the towards the middle of the civil war right

have you been to antietam yeah i mean it's in maryland yeah yeah It's very. We used to go with our Boy Scout troop. That's what we would do. We would go to all the battlefields, Bull Run and Tidum. When I went to, I went to. It's all around where I grew up. I went to Gettysburg and Antietam.

And Stephen Ambrose, the historian, was giving a tour. And we just kind of snuck in there and just listened. You got free. You got a free knowledge dropped. Free tour. Yeah. Well, it's a non-excludable product. So how do you stop someone listening to a tour?

It's true. It's true. All right. I don't know how we got on to Antietam in Gettysburg, but let's get back to the deals. Did you see the E. Toro one? Yes. So E. Toro, obviously, most of you are familiar with them. They are going public via SPAC, and it's actually valuing the new entity at $10.4 billion, which is just a staggering figure. Congratulations to Eitoro. That's amazing. Next one up is Republic. This is a crowd equity platform. They have a number of blockchain. integrations and a security token, they raised $36 million in a series A led by Galaxy

Digital. Next, we have Alchemix, a decentralized lending protocol. Kind of reminds me of synthetics. Maybe that's deliberate. Anyway, they raised $4.9 million from CMS, Alameda Research, and Immutable Capital. So it took us four deals to get to a CMS or an Alameda deal. I was, you know, I was worried they weren't going to be doing a deal this week. that's like on the brink bingo like CMS or alameda named in a deal that's the free space because

they're always in the deal section i mean these guys don't sleep yeah i mean the pace i feel like the block has probably done those maps mapping out their portfolios they're going to need to just continually enlarge them because this is meant two of the most active firms this year yeah for sure next one up is bit panda this is an austria-based neobank they raised 170 million dollars in a series B led by Valar Ventures and DST. I was in Austria for Christmas a couple years ago, and the airport was covered in Bitpanda ads. Oh, Panda, nice.

Yeah. I was really psyched about it because it was at the time being represented as a crypto brokerage. I'm like, oh, they like Bitcoin here too in Austria. Great. Well, it is. They're doing a ton of stuff in crypto. So. I think they began as.

a Bitcoin exchange and then now they're branching out a little bit. Well, that's what's going to happen here is that financial services are just going to start to get eaten by crypto companies. You know, fast forward five years. The new front door to financial services for a lot of people will be crypto brokerages that just offer, you know, regular stuff too. So next up, we have syndicate a decentralized investing protocol. They raised a million dollars in a seed led by our friends at IDEO co-lab ventures. So those are the deals of the week. And I guess we should just caveat that there'll probably be more deals announced today and we'll miss them.

Hopefully there's not like a couple weeks ago when we did the podcast early and the Coinbase S1 dropped. Yeah, we knew we were going to miss something and then it was the Coinbase S1. Yeah, that was tough. We can't have too much of a lead time on this podcast. All right. Let's get into the news. I guess the first one up, let's talk about that we mentioned it earlier with Nidig, but Morgan Stanley has become the first U.S. bank to offer on their platform to offer Bitcoin funds.

And so they announced that financial advisors on the Morgan Stanley platform are going to be able to get access to three funds. It looks like two of them are offered by Galaxy Digital. And one of them is offered by NIDIG. And these look like it doesn't say exactly what the funds are. Maybe they've talked about that, but assume it's a Bitcoin access vehicles here. Yeah. So I would class this in sort of the incremental.

camp, right? So it's certainly a good development, but, you know, ultimately not that earth-jaking. I mean, they're just offering access to third-party funds, but still good overall. I mean, I would also put this in the camp of no-brainer camp, right? Like, this is, this is something that every bank should be doing. This is not rocket science. It doesn't involve building your own custody infrastructure. It's, it has a Q-Sip. It's a security. This is very strong. straightforward. Yeah. In other bank news, did you read Bofa's commodity strategist report on Bitcoin called Bitcoin's Dirty Little Secrets? Yeah, I did. Why don't you talk a little bit about it? It's not a good report. It pains me to say at Bofa, you really should hire someone that's a

crypto-native. I have a lot of names. I can help you get someone on your commodity desk. that understands Bitcoin. Why do they not have a Bitconer on their commodity desk? Bank of America is really falling behind in a lot of different areas. And they haven't even really attempted to be in the crypto asset blockchain space. They don't have a team there. They have financial advisors that it's funny. I've been getting a lot of people forwarding me emails when they ask their financial advisor

what they should do about Bitcoin. There are a lot of Bank of America financial advisors that have no idea what they're talking about. It pains me. they're actually not that far from sort of the truth on this report, but they use a lot of like really really indifferent data sources. I mean, stuff that you'd know not to cite if you had been around in crypto for a long time. So part of it is just knowing what is reliable and what's not. There's a lot in here about the energy outlay. They actually, I think the most illegitimate thing they do is they derive an implied carbon footprint for a billion dollar purchase of Bitcoin because they

there's two mistakes they make they say a billion dollar purchase drives up the price or market cap of Bitcoin by X amount based on this flow analysis which I think is totally not right completely erroneous wait till they hear about bonding curves and then they obviously are sort of naively assuming that a dollar inflow into Bitcoin causes miners to, you know, consume more energy, which is, it's not really that direct relationship. But yeah, they completely underwrite Bitcoin's liquidity by assuming that, you know, a relatively small buy would massively drive up the price, which just doesn't seem to square with empirical reality where we've seen billion-dollar buys executed in specific windows, and we saw

what the market impact was of that. So, yeah, this was a vexatious report. I'm not happy with it. Yeah, we can file this one away as one of the worst ones I've ever read, read for sure. Okay, so India sort of walked back their proposed cryptocurrency ban a little bit. The Minister of Finance said that they are not going for a full ban. So kind of hard to tell what's going on there. Conflicting reports. I don't know. I mean, it would be great to speak to someone who's on the ground in India and following this more closely.

But earlier in the week, there was a report that they're moving forward. As you say, the finance minister sort of walked that back. There's a proposal that people would have six months to sell all their cryptocurrency. Good luck with that. I definitely agree with the comments that Novigrat's had on CNBC around this ban is just ultimately not going to be successful. going to start to see people running around this in a massive way. You're going to have gray markets, Craigslist style transactions. There's just no way that something like this could be successful. Furthermore, I guess, you know, it's a 1.2 billion person country and just talk about

putting yourself at a structural disadvantage with a fast-growing tech industry. It would be a shame if this happened. Yeah. And I was actually on Clubhouse last night. And it was so interesting because we were talking about the proposed bands, and we had people from India weighing in, and then people from Nigeria also weighing in. It was just a reminder of how great clubhouse is. And someone made the point that a lot of folks in India are kind of freelance workers on these platforms

to get paid in Bitcoin and Stablecoins. So it's actually a huge part of their livelihood because it's way more efficient to pay someone directly with Bitcoin, with Lightning, with a stable coin, rather than going through the correspondent banking system, like doing all that compliance stuff, yada, yada. So it actually doesn't just, you know, affect their ability to protect themselves from debasement or whatever.

It also affects the livelihood of hundreds of thousands, maybe millions of people at this point. I think we're kind of reliving the crypto wars in a lot of ways still right now. Have you read that book by Stephen Levy? I think it's called Crypto. It's a history of the Crypto Wars and how it's on my shelf behind me. I haven't read the whole. thing, though. So it's a terrific book just around, you know, the invention of public, private

key cryptography and some of the government attempts to ban it. And I'd highly, highly recommend it to anyone. And it was written before Bitcoin. And one of the pieces that really resonated with me was just commentary around the genie being out of the bottle for cryptography. And there were all these attempts to kind of bottle it up and make it illegal. But at the end of the day, it's just math. And people have access to math and the ability to send this information around now with the internet, which we didn't have back in the advent of cryptography, or public private key cryptography at least. So there's just no putting this back in the bottle. I mean, India is going to have Bitcoin. It's just a matter of if it's going to be kind of well lit and if they're going to allow

startups to thrive. But Bitcoin, the protocol, will always live in India, whether politicians like it or not. Yeah, that book is interesting. I do that was back when crypto meant cryptography, not cryptocurrency. Right. And it was so interesting. I do love the parallels. Well, I think we're replaying it now with much higher stakes, though. But in the 70s, public key cryptography was an NSA thing. And then academics sort of independently developed it outside of the NSA. And it was, the government treated it like it was a military technology that it escaped from the lab. Yes. Yeah.

Even if it was literally researchers just doing math. It was regulated like a munition. Yeah. And yeah. And so it was the arms control regulation. Then you had people like Adam back that printed out the code, put on a t-shirt. And it was kind of like, well, come and take it. You know, like what are you going to do?

Yeah. You're going to put me in jail for wearing a t-shirt with a few lines of code. And that was a huge win. I mean, everybody should know the history of that because it's so cool. And so many of these OGs and cryptographers and basically Cypherpunks were involved in this. You know, before it, before Crypta meant money, you still had these really pitched, really heated legal battles. And the crazy thing is it wasn't that long ago. I mean, when you think about it, it was like, what, 40 years ago that all of this stuff was just being created.

And fast forward, on the back of that non-state money not controlled by an individual has been created. It's really staggering how fast this is developed. Yeah. And I think, you know, this is a great retort to the people that think that, you know, Bitcoin will ultimately be regulated or shut down by the government because we're just talking about value stored as information. And so you can't ultimately prevent that from spreading. I mean, you can hold a 12 forward private key in your head, you know, so you can't ultimately ban that or regulate that to the point where it doesn't exist anymore. So it is very much a case of you can't put the toothpaste back in the tube.

Now that this idea exists, it can't be eradicated. And you can change the legal context. A small number of committed individuals can ultimately be persuasive and change the reality on the ground. I think that's what's going to happen here. So India banning crypto or harshly regulating it, that's going to be Singapore's gain, Pakistan's gain. And ultimately, I think Indians, a lot of Indians are going to make the persuasive case that, hey, they actually rely on this technology.

It's just part of their everyday life at this point. Yeah, absolutely. So we had some movements in the Bitcoin ETF front in the past week. So Wisdom Tree filed an application. I believe the Van Eck application. application was put on register by the SEC, meaning the shot clock has started on the Vanek one as well. So I don't imagine we're going to see anything anytime soon here, especially since we don't have Gensler in that seat yet. And it looks like he's got a pretty good shot of getting confirmed.

But I'd imagine, you know, this will be on the list for for Gensler and team to take a look at, along with a bunch of other stuff in non-crypto, by the way. So I think he's going to be busy and and maybe won't have too much opportunity to decide what he wants to work on because he's going to have payment for order flow and ESG and all sorts of other stuff. But Bitcoin ETF will be on that list. Yeah. And very relevant to that. Hester Purse gave a speech last week, I believe, talking about the SEC's dithering on the ETF front. And she rightly pointed out that there's a double standard for Bitcoin ETF approval versus conventional ETFs. And her thoughts really resonated with me.

I mean, she says, you know, there's a quote unquote fairly straightforward standard that they've applied in approving other ETP filings, including for precious metals like palladium and platinum. And, you know, but she basically says there's an element of goalpost moving for for the Bitcoin ETF, that the SEC is raising the bar for Bitcoin and not for other exchange traded product applications. And I think she's absolutely right. I mean, if you look at the size and liquidity and scope of the Bitcoin markets, it's a far larger and more liquid market than the market for a number of other commodities and things that have received that ETF wrapper.

And now with GBDC trading at a discount, like there's an element of harm reduction here in terms of approving a product, which is just going to trade efficiently. Yeah, I'm hopeful. But again, nothing is going to happen until the SEC has kind of leadership in place here. But, you know, we'll see. I think also, as you've pointed out, be careful what you wish for as an industry because, you know, we might get a Bitcoin ETF, but we also might get some tough love on the other parts of this market, you know, token issuance and things like that.

I said this on LinkedIn. so I do tweets on LinkedIn now because I'm retired from Twitter. But you're still tweeting. I don't get this. You're still like tweeting. I'm not making original tweets anymore. I have to retweet stuff because I have obligations, basically. But I'm not tweeting out new thoughts.

That's the difference. All right. All right. So what did you say? Anyway, so on LinkedIn, I tweeted. I don't know. What do you call it LinkedIn an in? I don't know.

Anyway, I said that I think regulatory risk is way, way underpriced by the market right now. It's almost not being priced in my view. And I expect the Gensler is going to be super savvy about tokens. I don't think he's going to be taken in by some of the promotional claims. And I do think there's like a gray swan there where the Gensler, SEC goes after high profile, onshore token projects. Yeah. So on that regulatory risk front, one of the things in this, there's an announcement this week with the portfolio company of ours, Nodibene, Inche Analysis, announcing a partnership to bring a travel rule compliance service to market. That's another area where I think people are underestimating some of the risks with brokerages and exchanges, not having a travel rule compliance platform in place, which this is not a new rule, by the way.

I think there just hasn't really been tools to comply with this. But you think about some of the violations that are occurring. And OFAC has come down already on some custodians and brokerages. If they want, and this is a treasury issue, not an SEC issue, but if they wanted to make a bigger deal out of this, I think they could be right now because a lot of companies are just not in compliance here. And this is not a value judgment on being in compliance or not, but it's the law.

So you kind of have to abide by it. but you think about like defy and the ability to even have compliance with the travel rule in ofac and i don't even know how you do that like so there's there's a lot to figure out there yeah something there is going to have to give uh you're right that's another gray swan is uh is travel rule i mean we were talking about it a lot six months ago and we were talking about it less now but it hasn't gone away at all and like in singapore people are like getting contacted by the regulators in Singapore. So there are some jurisdictions that are really beefing up enforcement.

And so this could happen. Totally. So this just hit the tape. The SEC has acknowledged VanEx's Bitcoin ETF filing, which means that if they use all the extensions, they would have to make a final decision in November of this year. So we're officially on the clock for an SEC. ETF decision.

So, you know, shot clock has started. My guess is that we're going to start to see a flurry of additional ETF applications, if that's the case. Dare I say this is going to be the hottest ETF issuance ever. I mean, there's probably a dozen issuers jostling for position on this. And if the SEC approves one and not the others, that is going to make all the difference. I mean, it's just going to be explosive when it happens. I would have to think that they would approve a few at the same time, right?

I think they would have to to not be, yeah, to not look like they're giving special treatment. The day one inflows to a Bitcoin ETF are going to be just staggering. I think it'll be the hottest ETF launch, literally of all time in any asset class. Yeah. Well, I think it'll be bigger than GLD. Oh, I think so. And GLD is pretty huge. And, I mean, the Bitcoin Investment Trust alone, which is an inefficient vehicle,

as we know is about 40 billion. GLD, I think, is in the 60-something billion range. So the trust could be bigger than the biggest gold ETF. So speaking about fireworks here, Coinbase has revised their S-1. They plan to float 115 million shares in their public listing. And a lot of people wondering when that public listing is going to be because it will be depending, you know,

if they went out right now, this thing would just be just a straight line up on the first day, I think. I think it's still going to be one of the hottest IPOs pretty much ever. But I'm also a little nervous. They're going to miss their window of opportunity if they delay listing for another couple months. So we'll see. But this thing has the potential to trade over $100 billion,

which would put them in striking range of Goldman Sachs if you want a nice sort of like changing up the guard moment. Yeah. I mean, $100 billion. 100 billion seems very, very attainable based on the momentum. Yeah, although I guess you might wonder, you know, should there be a ratio in terms of the amount of Bitcoin they control or custody and then the market cap of Bitcoin,

presumably there's sort of an upper bound where an intermediary, how much they're worth relative to the underlying protocol itself? Well, I mean, they're making most of their money on transaction fees, right? So I think it's just the velocity of the transaction, you know, on top of it is probably what matters. So in sort of disconcerting news, or a.k.a. top signals, FTX is in talks to purchase the naming rights for the Miami Heat Stadium. What's it called right now? I'm not a basketball fan. I don't know. Huh. Well, this is kind of, yeah, that could be a little bit topy.

Yeah, I'm hoping this doesn't happen because, like, that is going to be the thing where 10 years from now people will be like, yeah, in hindsight, we knew the top was in when exchanges were buying sports teams or buying the name rights of their stadiums. It's like BitPay buying the, didn't they have a Super Bowl commercial or something or didn't they have a bowl, maybe a college bowl game or something like that? during one of the last tops. You kind of see this in different asset classes, too. When you're at the sports team buying stage, that's sort of when, like, the party is, like, probably kind of over. Well, I don't think we're calling the top right now, but they're just in talks.

They haven't done it yet. They're still negotiating. So hopefully they negotiate for another six months, so we don't have to call at the top yet. But, yeah, that's a very, very topy thing. And speaking of FTX, Blockfolio is now advertising on Barstool. That looks like they're pushing into the mainstream there with the sports gambling. I mean, honestly, nothing put crypto more in the mainstream than I would say NFTs and in particular top shots.

Yeah. In terms of the number of people that have asked me about it that had never expressed any interest in crypto before, NFTs have done that. All right. So I think that's it for the week. We've got to cut this one a little bit short. And we have a lot going on next week. So we'll have several podcasts coming out next week. Yeah, some really exciting ones in the queue.

All right, everyone. Have a great weekend. And we'll see you on Monday.