On The Brink with Castle Island - Weekly Roundup 04/19/24 (Stablecoin bill, Halving, Code is not law) (EP.520)

Episode Date: April 19, 2024

Matt and Nic are back for another week of news and deals. In this episode:  Dubai is underwater The Lummis Gillebrand stablecoin bill and its prospects Do stablecoins affect the US' ability to make sanctions? Avraham Eisenberg has been found guilty for the Mango markets hack Stablecoins as proto CBDCs Do stablecoins disintermediate commercial banks?  What do the 13F filings tell us about ETF flows?  Sponsor notes: Bitcoin's 4th Halving In Coin Metrics State of the Network Issue 255, we understand the significance of the Bitcoin halving, its impact on miners and potential effects on BTC's price as the 4th Bitcoin halving nears. Content mentioned in this episode: Timothy Massad, Stablecoins and national security: Learning the lessons of Eurodollars

Brought down by bad mortgage investments, Lehman, which has 25,000 employees, will be liquidated. The federal government loans American International Group, AIG, $85 billion. This is a different kind of market, and the Fed is asleep. The federal government is stepping it to stabilize Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis. The Bank of England has pumped 75 billion pounds more into Britain's ailing economy with a new round of concentrated easing. You've printed a couple trillion dollars, and all of a sudden, people start to worry.

So out of this worry, we have something called the... of Bitcoin. Welcome to On the Brink. I'm Matt Walsh. And I'm Nate Carter. And this episode is brought to by Coin Metrics. And here is the Metrics Minute. Today's Metrics Minute. We are talking about Bitcoin's fourth halving, which is due tomorrow, Saturday, April 20th. It will reduce block awards from 6.25 BTC to 3.125 BTC, cutting deletions from 900 Bitcoin to 450, lowing annual issuance.

from 1.8% to 0.9%. Since the third having in 2020, minor revenue from block rewards climbed to 43 billion in the aggregate, while fee doubled to 2.5 billion over the period. Popular mining rigs like the Antminer S-19 may become unprofitable at US industrial electricity rates, 8 cents kilowatt hour, as break-even power costs drop,

which would phase out less efficient machines. Historically, Bitcoin's prices reached new all-time highs within 500 days after the halvings. 500 days. Keep in mind, that's only based on three data points. So not sure that's predictive, but that's what it says here on the text that I'm reading. And 19.7 million out of 21 million bitcoins have been mined. Time to rekindle the security budget conversation. That's your metrics minute.

All right. Bitcoin having, we're not doing any parties this year, right? When we were in Fidelity, they used to have great Bitcoin having parties. Shout out to Hadley Stern. He used to organize a great having party. Is it the halving that exciting? Well, I think it's pretty exciting. You know what the exciting thing for the having is Roons.

Casey Rodhamore's Roons. Yeah, that's coming out. People are going nuts about ruins. That launches on the having block. From what I can tell, it's just a better beer. C20. I actually gave Roons a shout out on Bloomberg today. That's probably the first Rooms mentioned on Bloomberg. I saw that. Good Bloomberg appearance there. They're asking you about price predictions and you did not give financial advice. That was good. I was proud of you.

Yeah, that's my media training kicking in, which I never received. But I did you like my joke about Dubai? Yeah, Dubai's underwater. I'm so happy we didn't go. Yeah, I canceled my trip at the last minute and then they had the biggest rainstorm in 25 years. Well, not to mention the Israel-Iran thing started to break out right before the conference. Yeah, I mean, it looked like an absolute nightmare of a lot of friends that were there and they were like sleeping at the airport. Honestly, terrible. Yeah, it sounds like a really tough conference to be at.

But wow. Yeah, so that was good media hit. We had a busy podcast week. I sat down with Cynthia Lobeset and Matt Horn from Fidelity Digital Asset Management, talked about Fidelity Strategy and the cryptocurrency. Do asset space, tokenization space. Had a lot of fun with that. Recorded that in our studio in Boston.

Did you really? I did. In person's always better. For sure. So Fidelity Digital Asset Management, to be clear, it's different from FDAS. Yeah, and you of all people should know this, but you posted the show notes as FTAS.

And I got it wrong. It's a separate entity. This is the asset management arm that does the Bitcoin ETF. They use Fidelity Digital Assets, the custodian. Yeah, I got the show. that horrendously wrong. Yeah. So badly wrong.

I don't like getting, you know, emails from communications, people at Fidelity pointing out inaccuracies that I should know. And I did know. Yeah. That's a my bad type situation. That's hands up. That's fine. That's fine.

So we have to address something from last week's podcast. We had audio quality issues, which I thought we were beyond that. Major League audio quality issues. I'd say there was a dull hum. I think it was your air conditioner, but it could be this new podcast set up that we're trying to do the video thing and we will post that video i guess it'll be the lost episode but it's just us slamming down instruments and just complaining about things we had to cut a lot yeah no the video wasn't good we don't need that so we're um evaluating the cause of the hum and i've now

turned off my AC so i'm suffering for this podcast it's hot here i live in south florida yeah that it is hot i was in florida this past week went to disney world What was your favorite ride? I went on the Mount Everest one, the big roller coaster at Animal Kingdom. I'm a big Animal Kingdom. I went on Dumbo three times. I think Animal Kingdom is by far the best section. Yeah.

I mean, if you were an animal, that would be the zoo you would want to be at, for sure. Really? Oh, yeah. I mean, you get all, it's basically like the Franklin Park Zoo, but in a beautiful climate, and they take care of all the animals a lot better than if you're just in a cage zoo, I would think. So Disney World is still pretty much intact, like DeSantis hasn't destroyed it or anything yet. I had a great time. My NPS score was very high. It's fun for all ages, two-year-old and a four-year-old, and they had a blast. All right, so Disney is not canceled.

No, I never canceled Disney. Okay, we're not canceling Disney. No. All right. Well, there is actually a ton of news and an avalanche of deals. So we might as well get into those. Yeah, I mean, people haven't really slowed down here. So why don't we hop right into it?

First one up is Uplink. This is a decentralized physical infrastructure network. There is 10 million from framework, blockchain, and outlier. Next up, we have AI Avalon, their blockchain gaming company. there is 10 million from Bitcraft, Hash, Coinbase Ventures, Spartan, and Forsyte. Then we have inference labs. It's an AI Web3 company

that raised 2.3 million from DACM, Delphi Mechanism. Then we have a lined layer. There are decentralized ZK proof verification platform. There is 2.6 million from Lemnoscap, bankless, and paper ventures. Then it's Mayan. It's a cross-chain swap protocol that raised 3 million from 6 million,

borderless, salonaventures, and others. Then we have a Zoro, a prediction market protocol. There is $3.5 million from 7X Ventures, Fembusci, and Arrington Capital. This is a cool name, Homeium. It's a real estate securitization platform. It's building on the Avalanche blockchain. They raised $10 million from Sorensen Impact Fund and the Avalanche Blizzard Fund. We have Crypto Valley Exchange, a D5 platform.

There is $7 million from Fabric Ventures, Cyber Capital, and Wave Digital. Then it's sending network. It's another D-PIN network that raised $7. 1.5 million from Nomad, symbolic, Balladry-Srinivasan, and a number of angels. Next up we have GeoDNet, a company building a blockchain-enabled global navigation satellite system. Wow. There is 3.5 million from North Island, modular, road capital, and reverie. Then it's Puffer Finance. It's an Ethereum liquid restaking protocol. They raised 18 million from Brevin Howard, Electric, Coinbase, Avon Ventures, and others. Then we have Plena.

an account abstraction app. They raise $5 million from consensus and big brain holdings. Then it's Ordeo. It's a Bitcoin Ordnals Block Explorer, and they raised $2 million from SORA, Bitcoin Frontier Fund, and Baloges for Navasson. Balogies getting on the board this week, huh?

I think that's probably the first deal we've announced from Bitcoin Frontier Fund, if I'm not mistaken. Is that right? Maybe I am mistaken. I don't know. Next up, we have usual labs are an RWA stablecoin developer. There is 7 million from iOSG, Krakken, GSR, and Hypersphere.

Then it's Nebra. This is a zero-knowledge-proof research organization that raised 4.5 million from nascent and bankless ventures. Then centric well-known on-chain finance of RWA platform. There is 15 million from Parify, Greenfield, Arrington, Bordelis, and others. And the last one up is an M&A event, so SAFE has acquired Maltis,

which is a cryptocurrency treasury management platform. Man, busy deal week, huh? Where do we start here? There is the LaMis Gillibrand Stablecoin bill, formerly entitled to Llamis Jolabrand Payment Stablecoin Act 2024. It's a lot in here. Yeah. So this is the Senate Stablecoin attempt, I guess.

So I don't know. There's a lot of people going back and forth on not liking this bill on X, but I don't really know that it matters. So my take on this, I'd be curious your perspective, is that McKenry and Waters are clearly negotiating the house version of a stablecoin bill. No one knows what's in that. So nothing is leaked about that. No one in the industry that I talk to has any idea what's in that McKenry Waters version.

But it seems like they're trying to get something together. I don't think that Lummis and Jill Brand have been involved in any way in the host version of this bill. It doesn't sound like they're under the tent negotiating or being present in any of these conversations. So they went out and released their own version. There's a bunch of stuff in there. I mean, has a state and a federal element to it. So you can issue a stable coin out of a state wrapper and be regulated in the traditional kind of two-tier banking model. And then there's a $10 billion AUM threshold upon which you'd get tossed into the federal bucket.

So that's one thing. I think that's problematic for a bunch of issuers. Some people will like that. Some people won't. there's also a ban on algorithmic stable coins which i think is good um i don't think we need algorithmic stable coins there's a bunch of language in there around the reserve composition and how that's going to work but i guess my net net on this is that i don't see this bill in particular moving forward i don't think this is a standalone passable bill in the senate doesn't seem like it has the support that it would

need in order to pass in his current form i don't really see this getting thrown onto any other bills that are going to pass. I think there's a TSA bill that is coming up in a few weeks. I don't see it getting bolted onto that. I don't really see this getting bolted onto the Defense Authorization Act either towards the end of the year. So I think our best bet on stable coins is if McKenry and Waters come to some sort of a detente and then the Senate can pick up something that looks like that, whatever it looks like. Yeah, there are specific things that are problematic with this bill actually. Like Austin Campbell had a good tweet on it. The bill, is very specific with regards to what assets are acceptable for reserves and it excluded overnight

reverse repos, which actually if you look at circles reserves, I believe that's actually the majority of their reserve composition is overnight repose, which is a very important tool. So it's kind of weird that they didn't include that. So there's technical problems and, but yeah, I think overall we don't have to worry about it too much. I think they also capped the state pathway issuance, a 10 billion, which is very problematic, my opinion. Yeah, I don't like that cap. Yeah, I mean, it's completely arbitrary. Yeah, that kind of just forces issuers to go for the federal pathway, I guess.

Yeah, and I think you're just going to have a bunch of companies that have already spent a ton of resources on the state pathway. you know, there should be a path there to, there's really, there ought to be a kind of reciprocity, rather, with conventional assets. So I don't know. But in any event, people are getting all worked up about this and I don't think it is going in. Yeah, look, I don't love the bill, but it also probably doesn't matter. So. Yeah. But it would be good to see this McHenry Waters thing move forward. We're kind of getting into crunch time with this Congress. You know, you get another two, three months here, nothing is going to go through before the election. All right. Also on the stable coin front, I read one of the most interesting pieces of research

written on stable coins ever. This is courtesy of Timothy Mossad at Brookings. He used to be Obama's CFTC chair, I believe. So he understands, he is dialed in. He understands stable coins very well. He compared them to Euro dollars. I'm not claiming that he plagiarized me actually because it's a very easy comparison to draw. And so I totally grant that other people would have this exact same idea. So anyway, they closely resemble Euro dollars. That's for sure. Yeah, totally. So he makes the exact same analogy that I've been making about stable coins being like Euro dollars and the way they grew, the reasons for them growing, and the way the policymakers reacted or should react in the case of Stables.

He's pretty concerned, actually, about Stablecoins eliminating the sanctions-making ability of the U.S., which I guess makes sense for someone of his station. My view on that is that the cat's out of the bag, actually, with the dollar and sanctions. Like, we've overused the tool so much that both are allies and our adversaries. have built or are building independent networks that aren't as exposed to treasury or to sanction. So yeah, maybe stable coin. The other thing is like if we do want stable coins to be less of a threat to our strategic toolkit, then we should fold stable coins into the regulated apparatus here in the U.S.

So if you're worried about that, then pass a stable coin bill and make the issuers accountable and bring the issuers onshore. the thing to not do is to force all the stable coins to offshore jurisdictions where they will be unaccountable. So it's a very easy and simple solution if that is what you're concerned about. Do you think in 25, 30 years we'll look back on the weaponization of the SWIFT network is really being the straw that broke the camel's back in terms of the U.S.'s ability to levy sanctions? Yeah, I mean, it's like a general trend, right? I mean, there have been so many specific things that I think cause people to seek to divest from the dollar network.

For me, the most important one was the seizure of the Russian reserves in 22. Right. Which, again, there's a moral dimension to that, but there's also a practical dimension. So we can have a separate argument over whether that was the right thing to deal. But undeniably, it's caused other central banks to revisit the notion of, okay, should we store? value in treasuries are they a store value asset the gold rally coincidentally may coinciding with the iran attack on israel i actually don't think that's a coincidence so we know the sovereigns are buying gold you see that in the data for sure i think there's a very concerted effort to divest away from

treasuries as the sort of gold standard gold like store value asset no doubt yeah gold has had a great run here and it's definitely the sovereign. It's the central banks that are buying it. Also, oil is no longer fully invoiced in dollars. You know that 20% of oil trades were settled in not dollars now. I mean, so it's already... Yeah, and that used to be staggering. Yeah, so it's already begun.

Like the, well, really was the realignment, the new axis between Russia, Iran, and China, especially for commodity of these trades, those are being settled in other currencies. This de-dollarization of trade invoicing has begun for sure. So many reasons why this stable coin thing is pivotal, obviously have just the strength of the dollar and pushing that.

But you also have, it's no surprise to me that BlackRock is out there in the lead on this in tokenizing a money fund because they are going to be able to settle securities transactions in something like that money fund or some BlackRock stable coin at some point. And it is going to directly accrue value to holders of BlackRock funds. It's going to bring down the cost basis for owning Black Rock investment products. So it's a very rational strategy. I think you'll actually see the security settlement landscape shift as a result of just getting cash on chain. In completely different news, the former main character, you never want to be the main character at all.

One of the former main characters, Abraham Eisenberg, if you remember him, has been found guilty. of commodities fraud, commodities market manipulation, wire fraud in connection with his exploitation of the mango markets exchange, which if you remember the time, he had a whole bunch of tweets about this saying, yeah,

I did it, but it's not, it's just code is law. It turns out law is law. Yeah. Code is not law. Yeah. Law is law.

I believe the technical term for this guy is jerk. This guy is total jerk. I think there was also like a child pornography angle in there. as well. Oh, maybe that's a, maybe I was too dark at there. He's just a little. He's a bad boy. Yeah, not a good guy.

There are some, there are some discussions on sort of crypto lawyer Twitter about, you know, maybe this is too harsh because he was sort of like dealing with the protocol as it was specified. But I mean, look, he clearly manipulated the market and took money that wasn't his. So I think this is probably a reasonable outcome. Yeah. There's no place for this guy in this industry or really any industry, it sounds like. I'm not shocked that he is going to jail.

This guy was running a muck on these D5 protocols. Do you remember this? He's tweeting out. He's basically just, he wasn't technically hacking, but he was doing these market manipulations that effectively was stealing money from these D5 protocols. And this guy had to go to jail. And it looks like that. Yeah, I mean, like playing the game according to the rules,

of the game that are specified by the protocol can still be breaking the law. That's just the long and short of it. So, just because you're following... Just because someone leaves their door open doesn't mean you can go in and steal their money.

Right. I don't understand why this is like a difficult concept for people actually. Non-crypto people are going to be listening to this podcast and be like, what are you even talking about? This is open and shut case. This guy is a total crook. He stole hundreds of people.

millions of dollars and people in crypto like well the code you know the code technically said that you know you could access it's like what are you talking about yeah the term code is law has caused enormous damage to the industry over the years code is not law i think it's one of the dumbest things that people say in this industry is oh code is law you know the code technically you know permitted people to steal money from this pool it just makes no sense yeah that and there's a lot of dumb stuff that people say in crypto. That's top three. A lot of dumb stuff.

I mean, like, the having was priced in. That's pretty dumb. Having was priced in for sure. I was actually looking at it. We went on Bloomberg four years ago. And I said the exact same thing that I said today. Oh, you did. The having's not a factor.

And I stand by it. Well, Michael Saylor would disagree with you. Well, just because he's more money than me doesn't make him more right. Okay. a lot a lot less net new emission here. So I want to talk about something I read this week that was really interesting and kind of plays into the CBDC world that I think we're going to in some jurisdictions. So in China, they apparently have a new system where if you are in default on your debt,

you cannot ride the fast trains. Have you heard about this? Yeah. I mean, that's kind of the essence of the social credit system, right? So it wasn't clear to me. So you can't stay in nice hotels. So your money does not work there. And you can't ride in the fast train.

You have to take the slow train. So it's all the people that are kind of in default on their debt or behind on their payments. They ride the slow train and they need to stay in the bad hotels. Yeah. That's pretty crazy. Yeah. You want to throw a CBDC on top of that. You're just going to have, you know, they're going to expire people's money and make it impossible for them to spend.

Yeah. Or like, you know, if you have a BMI over 30, you can't. buy certain kinds of groceries, you know. Yeah. Yeah, for sure. It's a pretty scary future. I think it's pretty established in China, like fully established, especially with public transport. No, they're going to do next. You're not going to be able to use your CBDC to buy like cigarettes and stuff like that. Yeah, coming to a Western country near you. I do think these CBDCs are going to be a thing. I mean, we talk to a lot of stable coin infrastructure companies that are doing on and off ramps. And I actually had a good podcast episode.

We'll release it, I think, next week with Chris Harms from BVNK. But, you know, there are a bunch of these regional CBDCs that are popping up that I think will more or less be the way that people onboard into the cryptocurrency ecosystem. So coming to a jurisdiction near you, hopefully not the United States, I would say. I mean, isn't aren't stable coins basically a form of a CBDC? I keep saying they are a form of the CBDC. No one likes it when I say that, but they're effectively a wholesale, CBDC. Kind of, I mean, but you don't have the government necessarily going in and saying, here are the spending conditions for the asset.

So you could imagine during COVID when they were trying to, you know, boost GDP and, you know, get money flowing in the system. They could have said, all right, we're giving a stimulus of $1,000 to every person in the United States, but you have to spend the money in the next 60 days or else it expires. Like, you wouldn't be able to do that with the system. stable coin. You could encode that into a stable coin, do you think? Well, you could encode it for sure, but then you'd have to go and you'd have to have the U.S. government tell Circle and all of the other stable coin issuers, here's what you have to do. And I think

that would be a stretch. I think that would get challenged in the court. Yeah. My contention, though, is that the line between stablecoin and CBDC is going to get more blurred in the coming years, especially if stable coins, the large ones, become more heavily regulated. And it's not just a matter of responding to law enforcement requests for occasional seizure or freezing of certain addresses. If they layer on more conditions, you do have something that's backed directly by treasuries that individual retail users are using digitally, maybe with more and more conditions. And this isn't an anti-stable coin talking point at all. But I do think we're actually kind of going in that direction. Yeah. The reason why,

stable coins will continue to persist in the U.S. I think is just the banking infrastructure in the way that we've tiered out the commercial banks in relation to the Fed. If you introduced a CBDC at a retail level, you just wouldn't need a commercial bank anymore. Deposits would just go to that CBDC and the banks would all go bankrupt.

So that's why you won't see it here. But in other countries, that's not really the principal concern. The banks are nationalized. Yeah, this is actually something that people don't talk. Crypto, people don't talk about this a lot. is mass stable coin adoption would disintermediate commercial banks.

The commercial banks play this vital role of creating credit, at least theoretically, making loans to small business theoretically, giving out mortgages. Again, theoretically, banks kind of do less and less of this, it seems to me. Classically, banks would engage in this maturity transformation, create capital and, you know, create credit, that goes away if everybody's just holding the equivalent of a central bank token directly with none of the intermediation. So you have to rethink the entire commercial banking model. Well, I think banks in general are just getting picked apart, you know, product by product. I mean, you look at how leveraged buyouts are being financed right now. And banks used to be a huge

part of that. And increasingly, it's private credit that is being used to finance a lot of those transactions. You're also seeing a lot of banks get out of things like FX Prime brokerage and you're starting to see non-banks step in to actually fulfill that. So added to the list, I would say. I think the banks are really getting whittled down here. Yeah, when it was last time you heard of someone starting a business with a bank loan? Like, I feel like that doesn't happen anymore. Never. Never happen anymore. No. I mean, in the 80s in the United States, that's how you would start a business a lot of times. I mean, this was really before venture capital became a primary funding source but you know you'd go to your local bank and you take out a loan now we have the brave and

courageous venture capitalists that yeah just lubricating GDP of the country you know funding all these great business you know just doing the world of service vc's i don't think you know tip your vc they don't get enough credit yeah the uh ultimately you just look at the value chain of kind of who needs money and who has money and bank sits in between that so people will find a way to route more efficiently across really any product, whether it's LBO debt or, you know, venture capital financing or, you know, foreign exchange prime brokerage, right? Like there's, you pick payments is another great example. So the fintech have really emerged on the payments front and facilitating a lot of the cross-border flows right now. So you don't see banks really playing in that

category. Yeah. And also, um, as rates have climbed, you've seen new fintechs that give people direct access to treasuries and things like that. So people, you know, used to buy CDs, I guess, in banks. Yeah, sure. I used to buy banks. Yeah. And, you know, just, or banks would pay high rates and savings accounts. Now people are going outside, they're going direct.

That's also disintermediation. That's not even a stable coin thing. That's just another secular trend. Bad time to be bank. Yeah, banks, a lot of great buildings, though. You know, I think these restaurants that are popping up in banks, They're great, great videos. In the bank vault.

Some in Boston. Bank vault restaurants, yeah. We're on the hunt for an office. So if any of our listeners have a nice hour leases up at the end of the year, I want to be in a bank. I think it would be so cool to just be in an old bank. So banks have some utility. Architecturally. All right.

What else happened this week? Did you read this Ray Dalio post? Do you have enough non-debt money this week? No. He's, uh, how is this guy nodding to Bitcoin? This guy just talks about, you know, why you need something that is not government-issued money to store your wealth in in the face of inflation. Does he like gold? But everything that Ray Dalio talks about gold.

Oh, he loves gold, yeah. The, but he should, he ought to love Bitcoin. Why does he post on LinkedIn? What's up with that? He really surveyed all of the platforms for posting long-form content. He settled on LinkedIn. Yeah, it's really. strange. LinkedIn is just a

really garbage site. I think I have like 700 invitations on LinkedIn. It's just spam people everywhere. All right. So the 13F filings dropped. Some of them did. And we are seeing some names of some

firms that are holding Bitcoin ETFs now. But you know the Sherlock Holmes story which is like the dog that didn't bark? The Hound of the Baskervilles, I think. Yes. So the key thing, the information was that the dog didn't bark, right? So what's more interesting, I think, is not the names on the list, but it's the names

are not on the list. Because the names on the list are like, I've never heard of any of these funds, basically. Yeah. So it's a lot of RIA shops, you know, a lot of home offices of registered investment advisors, a bunch of boutique ones, the Fidelity one, I recognized a bunch of the names. that are kind of multifamily offices in the Boston area. But you didn't see like Druck and Miller or any of these big macro funds on there. It's definitely possible that they're holding it through a brokerage platform now.

So I don't, it's really hard to disentangle who holds the underlying. But if your point is that it seems like this is mostly retail flows into these ETF so far, I think that's what I think. Yeah, exactly. So it seems to me that the quote quote real institutional flows have not. yet materialized, whether that's because they haven't been greenlit yet they're still indiligence or because there's no desire to hold Bitcoin. So it could be a good thing that it's mainly retail or high net worths or multifamily offices. If you just look at the performance of the fidelity ETF and how big their retail distribution channel is and obviously IRAs and

and things like that in tax advantaged accounts. I mean, I bet that most of their flow is coming from that channel. So, you know, with BlackRock, a little bit harder to tell. The 13Fs were a little bit more, there were more of them, I'd say, on the BlackRock side, right? Like there were probably twice as many 13Fs filed on Ibit than there were on FBTC. But yeah, I think it's mostly retail. It's mostly these, you know, platforms like Schwab and Fidelity that seem to be capturing most of the share. but early days.

In terms of the big macro funds getting involved, I think you probably just wait for rates, right? They will get involved when they see the rates environment shifting. Yeah, the rates have been terrifying lately. Like the 10 year is very high, which indicates not to get into macro talk or anything. That suggests that traders expect strong growth, high inflation, higher for longer,

we look at commodities that's indicative of inflation picking up. It could be a cycle like the 70s where you had high and variable inflation. We had a trough and then it climbs again. Well, that's an accumulation zone, I guess, for Bitcoin because, you know, high rates is not good for risk assets. Yeah, but ultimately, you know, the government solvency is challenged by sustained high rates. So something has to break, basically. Well, before the election, just count on seeing something. Yeah.

Right. I found it impossible. Yeah, you can bet on that. So we got chirped on Warpcast for not including any shoutouts last week on the Farcaster section. So we want to make sure that we do. A lot of people saying they need to see the video. So we'll try to get a video up. Okay.

We're trying to figure this out. Maurice says I don't need video. just put an audio file on YouTube and add an animated background but what? I think we can do animate what? Do one better than that? Like what visual? I don't know.

We're going to need more details on that comment. We also have a comment from Adam who said that it's great to hear Cynthia Lobeset and Matt Horn talk about self-ownership with smart contracts. So basically what I was talking about at the end of that episode was I want to live in a world where I hold my Bitcoin with Fidelity as a custodian, but I have a key. And so something like a CASA, for instance, in this case, Adam is suggesting that safe would be a good way to do this. But you're going to need the regulation to support this, so Fidelity can't do it now. But imagine a world where Fidelity has a key and you have a key yourself and maybe you have a lawyer has a key,

or maybe there's a signing company. Antinoplas actually had a company. I don't know if it's still around that was, I think it was called third key signing or something. And that would be a really cool concept. Yeah, that would be super interesting. If you just make custody very safe and resistant to hacks of centralized institutions. That's pretty cool that fidelity would even acknowledge that concept. Yeah, so Cynthia and Matt talked about that.

And basically, they called out CASA actually as being a really cool setup for something like that. But you need the laws to change in order to do that. So we talked about that a little bit. What do we have? A lot of people talking about the SEC in the Warpcast. Someone says, Yeho Sheel, that's very difficult to pronounce,

would love to see an episode on crypto themes that we think will move the needle. Things like Infra, ZK, meme coins, restaking, what's next? We've never done a meme coin one, except I did one back in the day with Alex Thorne about doing. Here's my prediction. Rooms will become the meta for meme coins.

Rooms. Rooms, huh? I don't have any picks because I have no idea what meme coins are slated for ruins. But if I'd guess, I'd say that matter will no longer be Salon of meme coins. It won't be BRC20s or anything. It won't be base. Okay, I don't believe the meme points on base. I think that's astroturfed.

I think it's going to be runes. I don't know. There's a lot of meme coins. Yeah, I think it's astroturfed. There's a lot of meme coins everywhere. So ruins drops on the block of the halving apparently. I'm sure there's going to be shenanigans around the block of the halving, don't you think? Oh, for sure.

In terms of people racing to be the miner that ends up block, you mean? We might even see Reorg or something or Mav or something. Like everybody wants to be the halving block deliverer. Oh, yeah. You want a Satoshi from that coin. Yeah, I think even Foundry mentioned something about that. Yeah. Yeah, you'll see something like that.

So when exactly is the having? I think it's slated for early Saturday morning. Is this going to be like the Ethereum merge where you have to like stay up and? That's pretty anticlimactic in the end. Just refresh your brousal. Yeah, I mean the Bitcoin having, I'm quite confident. I'm going to be sleeping soundly. Unbothered.

Yes. Moistrised. Yes. Yeah, good for you. That's good. You got to get your rest. Well, I destroyed my motorcycle. that's a fun thing that happened to me.

So how did this happen? Well, it was knocked over or it was blown over and the handlebar went at a 90 degree angle from where it should be. Well, you weren't on it. And so then I had to drive it home with the 90 degree angle handlebar. And then also halfway back,

I realized the tire was flat somehow. Have you thought about just not having a motorized vehicle. I think it's you've proven to be really poor at well this wasn't my fault this is just something that happened to me so I was riding a motorcycle with a flat tire which is possible by the way as it turns out very precarious it's not at all stable and uh the handlebar was the wrong way around it's quite a scene that's not safe but I made it that's you you don't want so now and so you And you have that and you have a leak in your bathroom. Yeah.

This is a crisis. I mean, my, uh, my below neighbor said that, uh, the water coming through their ceiling. It's not my fault. Again,

it's not my fault. This is the fault of the previous owner that set up the bathroom in a leaky configuration. There's a homeowner. The buck stops with me. I have to fix this. Of course. Yeah.

You're on the hook for that. I might have told this story on the podcast in the past, but when I lived in South Boston, that happened to me. It was my hot water heater, one note. And it went all over the unit below us. And it was a store that I lived over. And there was probably a 50-year-old woman native from South Boston that ran the store.

And she came upstairs. I was not home. But when I came home from work, I was getting the calls. I was actually at the circle offices. This was way back in the day. And I was getting nonstop call. It finally picked up and went over. And I thought this woman might have killed me.

So she was, I've never been so physically intimidated. Did you ruin all her? inventory yes it was bad there was a it was a consignment shop or something but um i don't think i've ever felt this physically threatened so did they maybe buy out like it's like you break it you own it there was a it was a whole thing there was an insurance claim it was a god yeah it was a bad bad situation yeah maybe that'll happen to me i don't know i don't know what i did to my below neighbors what my previous owners of this of this place did because it wasn't wasn't my fault at all.

But now I'm on the floor. Tough week. I know. Things are not going good. All right. Well, they'll look better next week. We'll have a Bitcoin having between now and the next time we talk to folks. We're cranking out podcasts these days. So did we release one today? We were slated to, but it's not out. But it's very good. So you should listen to it when it does come out. Okay. So there's, I think there's two episodes coming out next week. We have a bunch that are in the can already. We're recording episodes left and right here. Podcast never sleeps and maybe this ends up being on video. Yeah, technically we did record video. It's just I don't think we should publish it. I look tired. We're neither. We're not looking our best. I mean, what you don't think

I look good? Yeah, actually you look fine. All right, thanks. Yeah. But yeah, you look a little bit tired. Yeah, I don't think we should release videos as a matter of course, actually. I just I think it subtracts, if anything, from the experience. From the experience. All right, well, we'll see what the people on Farcaster think about this. Get in on our channel. Let us know if you want the video or not. All right.

All right. That's it for the week. Have a safe and healthy weekend, and we will see you on Monday.