On The Brink with Castle Island - Weekly Roundup 05/13/22 (Terra collapses, FASB reconsiders Bitcoin accounting, the Fed's third mandate) (EP.318)

Episode Date: May 13, 2022

Matt and Nic cover news and deals of the week. In this episode:  The CIV hat snafu Was synthetic USD on Bitmex the first stablecoin?  Remembering Mastercoin and seigniorage shares stablecoins  Does the Fed have a shadow third mandate?  We break down the Luna situation and why it was destined to fail  Why the subsidized yields on Anchor were the biggest mistake  Likely fallout from the Luna collapse  The Terra blockchain is halted  Do we actually need algorithmic stablecoins?  SBF acquires a stake in Robinhood  Is the Twitter sale to Elon under threat?  Sponsor notes: Subscribe to the Coin Metrics State of the Network newsletter

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 Concented 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 a Bitcoin. Bitcoin.

Welcome to On the Brink. I'm Matt Walsh. And I'm Nate Carter. And this week's episode is brought to you by Coin Metrics. Let's shoot over to the Metrics Minute. This Metrix minute is brought to by Coin Metrics. First up, the correlation between Bitcoin and the S&B 500 is near all-time highs. Bitcoin is moving inversely to risk indicators like the VIX and gold. The correlation of returns between Bitcoin and Bitcoin and Bitcoin.

Ethereum has also been increasing over the last few months. Despite all this, Bitcoin holders are hanging on. Only 34% of the total Bitcoin supply has moved in the last year. That's been the Coin Metrix Metrics Minute. I'm surprised the Metrics Minute wasn't about Terra this week. Next week. Well, that's pretty much all there is to talk about this week.

But, yeah, anything else? Anything happy happened this week? We had a nice meetup in town. We did. saw the new office we have got some artifacts in there we have a bucket like a historical bucket in the office

oh yeah we have a bucket yeah I thought you were going to talk about the hats and the hats we had a bit of a hat snafu some people like the hats so we gave out hats recently and they are

our logo is sky blue it's the famous castle island sky blue and the hats were teal so sky blue logo on top of teal doesn't work in my opinion huh yeah i i wasn't a huge fan of the hats but a lot of people love them it's just you can't put adjacent colors on the color wheel together i think i feel like that's sort of art 101 you know that's what they teach you art class fourth grade well uh we had a podcast this week that was uh taped a couple weeks ago but it ended up being very relevant so i had mark lamon from korean

which is a crypto derivatives platform that has a stable coin and the stable coin is backed by the perp on the derivatives exchange so coin flex and uh it's flex usd is what the stable coin is called and we talked about algorithmic stable coins and mark wasn't very high on them and turns out that that was pretty warranted i'd say yeah there's some good quotes we um we put a couple extracts on the break Twitter account. The synthetic derivatives-based stablecoins is an interesting one. I feel like that was actually

the original stable coin, right? If you think about it, people would make them on Bitmex, right, to go market neutral. Yeah. You have your Bitcoin position, then you go 1X short Bitcoin, and now you have effectively USB position.

And oftentimes you get paid to short Bitcoin, depending. So that was kind of the first stable coin almost. I was actually diving into the literature around stable coins. Bitmex research is a very good piece on the history of stable coins. I would say the first, so senior chairs style stablecoins, which we're going to talk about, they date back to 2012. So BitShares?

Bidshares had a over-collateralized model, which was kind of like the Maker-Dye model, where BitShares was used to make it. And you know who's in the BitShares white paper? Who? Charles Hodganson. Oh, wow. He had a ridiculous tweet this week, too. I was going to talk about that.

I thought BitShares was just a Dan Laramirthing thing. Turns out Charles Hodgonson's right there. He was a co-founder. Yeah, he was a co-founder. Yeah. I totally was not aware of that. But the first senior shares sell stable coin proposed was in MasterCoyne, ICO. It was in the Mastercoin white paper in 2012.

J.R. Willett. J.R. Willett? Yeah, I'm friends with him up like that. So is everyone. So MasterCoin became Omni, which was what Tether was first issued on. Also in the MasterCoin White Paper, a unbacked, undercollateralized senior chair style model. That one didn't see fruition. The first senior share style stablecoin to be released and sort of work for a time was Newbits.

New bits, I remember that one, 2016. So I did point this out last week. New bits, you know, we've had failed attempts at senior shares style stable coins now for six years at least. So it's not like these things are unprecedented. Like we have a lot of data regarding them and basically normally they fail. Well, we're going to get into that. Let's talk about some happy things first. Talk about some deals.

So a lot of deals happen this week. I don't think a lot of new deals got signed up this week, but a lot of deals. got announced this week. And we'll see what the lag is. There is two in the Castle Island portfolio. So the first one up is Talos, which is a company focused on trade execution for digital assets. They are a digital asset technology infrastructure company. They raised a series B around to financing, $105 million. A general Atlantic led the round. City Group, Wells Fargo, Bank of New York Mellon, DRW, Fidelity, Us, Andresen, PayPal. So just an awesome round. And congratulations. to the whole Talos team, Anton and Ethan, who are on this pod in the past.

We'll have to have them back. That was a very popular episode. But great job from Talos. Also in the Castle Island portfolio, CASA, of course, well-known crypto custody, multi-sig provider. They raised $21 million from accrue capital, positive sum, ventures, Neval Ravacant. They've been with us for a long time as well, SIV portfolio company. Big congrats to the CASA team. Congrats to Nick and Jamison.

This is a good week to just have your assets in deep cold storage, I'd say. Yeah. Just don't worry, but keep them on the CASA multisig. I mean, especially with some of the new disclosures that we're seeing in Coinbase about the status of depositors in liquidation. Yeah, yeah. That was interesting disclosure. I mean, a lot of people were spooked by that.

I think that is the, that's really the default, actually, for basically all crypto exchanges that you're not in any way senior. There's no segregation, you know, in the case of an insolvency. And I don't think Coinbase is anywhere near insolvent, but it's stuff like that that just reminds you, you know, it's always somewhat risky to have your funds on exchange. A lot of thought about Coinbase. We'll talk about that later. But, yeah, it wasn't really too spooked about that.

Knock on wood. Next one up is Ku-coin, which is the global cryptocurrency exchange. They raised $150 million. They did that at a $10 billion valuation. It was from Jump Capital, Circle Ventures, and IDG Capital. Then we've got chain analysis. Of course, everyone knows chain analysis. They raise $170 million and $8.6 billion valuation from GIC and others.

Some of these valuations are, you know, you look at them in a couple weeks ago, you wouldn't have blinked, but now you look at Coinbase trading at like a $15 billion valuation on the public markets. It's pretty crazy. Yeah. Next one up is Flow. This is the blockchain platform that was started by Dapper Labs. They raised $725 million for an ecosystem fund. They raised that from Andresen, Koto coin fund, and others. Then we've got Jambo, which is an Africa-based Web 3 user acquisition platform. They raise 30 million from Paradigm and others. I like that name, Jambo.

That's a good one. I don't know what that means, but I like it. I think it means hello and Swahili. Oh, really? I'm mistaken. Nice. Yeah. Next one up is Mara, which is an African crypto exchange.

Another one in Africa. They raised $23 million from Coinbase, Alameda, and others. Then we've got Ariani, which is a luxury goods, NFT, platform. They raise $21 million. from Tiger Global and others. Next is Morales, a Web3 development platform. They raised $40 million from Coinbase. Then we have BVNK, Bvunk.

I think that's maybe bank with the V. The V is actually an A. Or bunk. Maybe it's like where the V is the U. I don't think they could get bank.com, so they get BVNK. Bvunk. So they are a crypto-native bank.

they raised 40 million from Tiger Global. Next one up is a fund. Spice VC, they raised $250 million for their second fund. Then we've got Co-Crate, which is an NFT tooling protocol. They raise $25 million from A16C and Vayner Fund. Lighthouse Labs, a metaverse search engine. They raised $7 million from Excel, Block Tower, and Anamoka. Then Starry Nift, a Gamon,

Launchpad for digital collectibles raised 10 million from Susco Hon and others. A couple more fund announcements. Sixth Man Ventures. This is Mike Dutas. They raised $145 million for their second crypto fund. Congrats to Dutus. Then we've got Archetype. They raised $150 million for their second fund and they'll focus on Web 3 investments. Congrats to Ash and the team over at archetypes. That's a great, great raise. Next one up is Branch, a play to earn game. They raised 12.5 million from Dragonfly, Coinbase, Three Arrows, and others. And finally, we have Nean Heroes. Another player, earned game.

There is 7.5 million from Cosmos Ventures. I've actually got a couple more here, late breaking off the press here. Salidas Labs, which is a risk monitoring firm for crypto assets. They raised 45 million from Liberty City and others. And we have Saluna, which is a developer of green data centers for crypto mining. They raised $35 million from Spring. Lane Capital. And the last one is LightSpark, which is a startup building on Bitcoin's Lightning Network. It's started by David Marcus. They raised an undisclosed amount from Andresen,

Thrive, Cotoo, Ribbitt, and others. So a bunch of deals this week. Cool to see a high profile raise for Bitcoin infrastructure. Yeah, David. David. Yeah. Really cool to say that from David. Yeah. So, all right, what do we have in terms of the news? I mean, basically everything sold off and we're all poor now. So. Yeah, and let's maybe we're going to talk a lot about terror out, but just the general sell-off here, everything's true trading on interest rates at this point. So what's your take on what's going to happen here over the next two months with Powell raising rates? I think the canary and the cold mine here is the cryptocurrency market. If you think back to March of 2020, crypto puked first before equities did.

But it seems to me like we're going to be following the same playbook here. Maybe crypto went a little bit more aggressive because of this systemic issue with Terra. But what's your just general sentiment on the rate environment? Well, I mean, the Fed is extremely hawkish. And even the former doves of the Fed are still transfixed by inflation and trying to do something about it. Now, I don't know how effective raising rates will be, you know, 25 basis points at a time in order to deal with inflation. There seems like there's also this notion of an inverse wealth effect where they realize that there's a transmission channel between asset prices and GDP, you know, asset prices and expenditures. And so if you get asset prices down, you might get, you might sterilize demand, thus driving down inflation.

So it seems like part of their objective is actually to just reduce asset prices. so a few people like to think that the feds got more than two mandates actually so you know the stable prices and you know full employment but then the shadow mandate the third mandate is the orderly functioning of the u.s. treasury market and if that market starts to fail lose liquidity and the u.s. can no longer finance itself by issuing treasuries, then the Fed might be, you know, galvanized into action. And actually we're starting to hear whispers about that, about the U.S. market, not the Tera market, but the other U.S. treasuries becoming kind of distressed. So that's sort of what I'm keeping an eye on. I think that could be the thing that actually gets the Fed to move. Not, you know, they don't really

care about, you know, where stock prices are. But if the U.S. is finding it much, much harder to issue debt and if those auctions are undersubscribed and if U.S. Treasury is start to become illiquid, that's when I think we would see them thinking about reversing course. I just find it hard to believe that they're going to raise another 50 in June or and then another 50 in July. I mean, it seems like they would just send the economy into free fall at that point. but it seems like it's priced in. Well, there's never been a soft landing. So, you know, everybody talks about soft landings.

There's never been a soft landing when you're hiking interest rates. You're always going to get a recession. And the weird thing is they've never hiked into a recession, which is we're sort of, look, a recession is two quarters of negative GDP growth, right? We're one quarter in. You almost think that the better path, politically speaking, might be to just run inflation hot here for a few years and get debt to GDP back into the 80% range, just run it hot, especially in an election year. It's interesting that the Fed would be this hawkish.

But inflation also ultimately plunges into a recession, and it's very unpopular. I mean, that's what people reason about is prices at the pump, things like that. You know, I think part of the issue with the midterms, part of the reason for the administration's unpopularity is, inflation. Basically, there's no good choices here. Well, I think as long as the debt markets here are structurally not in chaos, then they'll probably keep on hiking. I think they won't really care too much about sending equities off another 20 percent. But if the fixed income market starts to get wonky and repos have some sort of tumultuous night or two, you can see them backing off a little bit. Yeah, so check back in next week. See what happens. Well, so,

So that's going on in the crypto market, and that's obviously driving down just asset prices across the board. But then within our little neck of the world here, we had a little bit of a Lehman Brothers situation this week with UST and Luna. So maybe just set this up for those in the audience who might have missed it. I don't know how you could have missed it, but if you missed it. Yeah. So, you know, Luna slash Terra was basically the consensus trade of last year. I mean, it was one of the most popular trades. And tons of industry participants and funds had exposure to this thing.

So this wasn't, you know, a BitConnect situation or a plus token situation where you got this thing that's mostly owned by retail and, you know, foreign retail and it fails and it's bad. But, you know, it's not affecting sort of the core industry groups. In this case, you know, this thing was very much owned by, you know, large share of the industry. Basically, it was an L1, like Ethereum. The native sort of equity style token was Luna. And then it had a native stablecoin called UST. And UST, as we mentioned before, is a senior share style stablecoin. So it's not fully backed.

UST was backed by the guarantee, I guess, that you could always redeem a dollar's worth of UST for a dollar's worth of Luna. And it was also backed in theory by a Bitcoin reserve that they were building up, but hadn't finished building up. Now, the problem is if the supply of UST got very big relative to the quantity of Luna. And the other problem is confidence in UST. If that were to drop, then probably confidence in Luna would drop as well. it's kind of like if a bank had a lot of bad loans a lot of loans go bad then probably the equity in that bank would sell off so you know the problem was that you know when when things start to look bad

you know luna holders might be selling the other thing is it's inflationary to redeem lots of usts for luna would cause inflation and logically as a luna holder you're not going to sit there and take dilute if you can see it happening. You're not going to sit there and be diluted. So you'd probably sell the Luna. So that was really the key problem is Luna isn't really ever going to be a reliable backstop in the kind of distress

because the markets will be reacting to the distress and selling off the Luna. And that's exactly what happened. You know, as crypto prices came down, Luna started to sell off. UST was worth a lot, 18 billion at peak. Luna sold off from 40 billion. And eventually, I think people realized that

Luna was not going to be a sufficient exit valve if there were a lot of UST redemptions. And UST did break the peg, and then USD holders started selling on the secondary market and redeeming on chain. And it caused a death spiral, a classic death spiral. Tons and tons of Luna were printed. I mean, the supply of Luna skyrocketed

by over an order of magnitude, but the price of Luna collapsed too quickly to clear out all the bad debt in the UST. And now the whole system is basically collapse. Just to give you a sense of how big this collapse was on the 3rd of April 2022, so a little bit over a month ago, the price of Luna was $116.41. It's currently trading at $3.00. The market cap of the network was, $41.5 billion that's currently less than a billion dollars. So we're talking about a wipeout of paper wealth here of over $40 billion that's just on Luna. There was all sorts of ancillary projects building on this. This is a massive, this is a Lehman Brothers style wipeout really. This is a on a scale that you would rarely see. And certainly if things like this started to happen in the

equity markets, you'd be talking about bailouts and things like that. I mean, definitely layman in terms of this was a top five project. I think Luna peaked at four on coin market cap. I mean, it was one of the most active L-1s. There were a bunch of a eth bridged onto Terra, you know, hundreds of startups building on it. And yeah, the combined value of UST and Luna at peak was $55 billion. and that's been wiped, so huge paper losses.

And yeah, the reverberations, I think, are going to be numerous. It's already being cited by regulators as an issue with stable coins. It'll be a great pretext. I think algorithmic stable coins are basically discredited now. There had been other failures like this. Like there's the iron slash titan system, which was very similar, which failed. similar way. Basis cash. Basis cash.

Never really got off the ground. Obviously there was new bits. There was ESD. So there have been a number of these failures. There have also been currency pegs which failed, which is basically the same thing, but at the sovereign level. So yeah,

I mean, I'll give us like a small shout out. We did raise a lot of these concerns on OTB episode 301 in late March back when they were starting to buy Bitcoin. We didn't, you know, specify the precise manner of the failure or anything. But yeah, go back and listen to that one. We definitely raise the alarm a little bit. So let's talk about some of the second order

effects. There's a lot of plot lines here. So one is just it'll be interesting to see what happens to some of the funds that had exposure to this. It's one thing to have exposure to Luna. as a venture investment and take a zero. It's another thing to be levered up on this position. And so my guess is that right now in the market, you're seeing margin calls across the board for funds that were levered into this trade, which there were definitely a lot of.

And so that will have second order effects on everything from trading firms to lending desks to the crypto funds themselves. What do you expect to see in the coming weeks on that front? Yeah, so I think we'll learn more about the the various funds that had a position here. Very few have sort of put their hand up and said they did. There's also the regulator dynamics.

I think it's going to be a classic pre-tax where regulators come in and, you know, stir up some nonsense of the stable coin space. I think ultimately, you know, it's possible we get a much more regulated stable coin space, which is, my opinion, would be bad for innovation. you know, suboptimal in terms of, you know, quality of consumer products. The retail are the biggest losers here because this was a very popular product. Anchor had the best yields, quote unquote, in crypto. They were a lot of neobank style interfaces to Anchor.

Even those understood that Anchor was Ponzi-like. The yields were subsidized. Explain Anchor for those who might not be familiar with Anchor, because I think that's a big part of this. And you talk about regulatory, the existence of Anchor and the types of customers that that was targeting, I think will be what gets the regulators really active on this front. Yeah, because they have been, you know, going after, for lack of better word, the crypto lending platforms, especially the centralized ones.

And Anchor, so they were decentralized lending and borrowing protocol. So there was actual borrowing, which, so there was, there was. a portion of the interest rate that was sort of real and market-derived, but it was topped up to 19.5 percent, which is artificially way high. I mean, there's no, you know, genuine interest rate in crypto that's based on market activity that's that high. So the anchor, you know, you should think of the Terra system as you got anchor at one end, you have UST in the middle, and you have Luna at the other end. So Anchor was the force which sucked in all the liquidity into the Terra system, inducing people to create UST in order to get access to Anchor. And in order to create UST, you had to acquire Luna and then

convert the Luna into UST. And so you can think of it as like UST is actually just the exhaust of the system. It's sort of a byproduct. It wasn't used for anything other than just parking funds and anchor. Anchor via UST ended up massively juicing the price of Luna, right? Because Luna was this pass-through thing you had to get access to to participate in the first place. And so that's the way I see it is actually UST was a whole, it was a byproduct. This was really about the subsidized yields driving up the price of Luna. The problem was once UST became really big and it peaked at $18 billion, it became impossible to maintain. And there wasn't enough market cap or liquidity in Luna to process the redemptions.

Now, if it had been more like a 10 to 1 ratio of Luna market cap to UST, maybe it would have been okay. But they, you know, UST supply eventually came to equal the value of Luna. And so obviously you weren't going to be able to squeeze all the UST out the door through a lunar-shaped door, especially if it was shrinking in real time. So I think that's going to be one of the things that really gets the regulators active on this front. What is your take on what happens here just in terms of the project? So they halted the blockchain earlier today, which tells you something.

Is this thing just dead or is this going to continue? So they, yeah, they, and you know, it's like a little bit ironic because the whole point of UST was that it was meant to be the most decentralized algorithmic stable coin. That was sort of the pretext and the revealed actions of the terror leadership, which I think we can be critical of. It demonstrates a total centralization. There was no decentralization whatsoever. And now we have the chain being halted, the terror blockchain itself. because there was a fear that some of the other assets could be siphoned out of the chain, that they were worried that they were exposed to governance attacks.

I believe there's RAPT-E theorem on Terra for some reason. And so they halted the blockchain. They're changing the rules. So not only do we have a collapse at sort of an application level, but that collapse now trickled down into the protocol. I mean, to me, this discredits a lot of the narrative. around L1s that were very popular, alternative L1s, they're popular in 2021. Of course, the contagion has meant that the other large caps have been financially, deeply affected,

but I think long term this works in Ethereum's favor relative to the competing L1s like Terra and Solana, et cetera, because, you know, some of these engineering choices and just design choices are questionable and it shows how much, you know, deliberate, careful development matters. You know, these things were considered quote unquote Ethereum killers, right? Solana, Tara, Avalanche, their rivals to Ethereum. I think it vindicates Bitcoin's design philosophy. So I don't know if there's much more to say about this. There probably will be in the coming weeks, but a lot of sad stories out there on the

Terra subreddit. So, yeah, thoughts with everyone. It's nothing really good to say about this whole whole deal. Yeah, it was preventable. It was preventable. The world didn't need an algorithmic stable coin. We have functional stable coins. The idea of creating a decentralized algorithmic stable coin, people call it the Holy Grail,

it's more like alchemy, right? Yeah, of course it would be nice to turn lead into gold. I'd love to. You can't do it. It's not doable through chemical means. So stop trying. trying to do it. Algorithmic stable coins are basically going to the market and saying, I can dictate the market price with a finite amount of collateral. And of course, you're going

to get overpowered by the market. Everything we know about economics and finance tells us that. The whole history of algorithmic stable coins tells us that. And the history of central banking tells us that. So it's just a total lack of perspective from certain folks trying to build these things. And there's plenty of, you know, worthwhile things to build in the crypto industry, but algorithmic stable coins, the track record is dismal. Well, folks, folks certainly see it as just an enormous addressable market. And so barring, you know, maybe people won't go after it now, but I mean, just the size of the opportunity is really what's brought a lot of people to this, to this challenge. But, you know, we'll see. This regulatory backdrop here against Doquan is going

to be pretty harsh, is my gosh. guess. So maybe that'll give folks a second thought. Yeah, I mean, I hope that we, you know, undertake some self-reflection as an industry and realize that being critical of some of these structures is totally okay and that you'll get the best products ultimately if, if you expose the bad ones. So, but yeah, I mean, the other thing was the substance. city for the anchor pool, it was really what caused this, right? And there was no reason to subsidize it. It was completely unnecessary. They could have let the market clear and UST would have been much smaller. And then if USD had an outflow, it would have been much less catastrophic. But the

decision to subsidize the anchor pool. That was the worst mistake, I think. Well, there's a saying in this industry that, or there's a thing in general, I suppose, to be greedy when people are fearful. And it's coming across the tape right now that Sam Bankman-Fried has acquired a 7.6% stake in Robin Hood. It's just disclosed this afternoon. So that's an interesting development. Yeah, I mean, we've been looking at these public market valuations for a while and saying, wow, these are very modest. Very modest. And, you know, that's a, that's a platform that has a ton of users and the crypto part of that platform has been pretty suboptimal, I would say. So a lot of synergies there.

That's fascinating. It says just his name. So I'm interested to see whether or not this is a FTX or maybe him just personally. But I guess we'll find out more here in the coming days. I mean, talk about distressed public equities. Coinbase. They reported earnings. They missed on the revenue target.

but they're trading and it's such a challenge multiple they look like frankly like incredibly undervalued stock right now disclaimer not investment advice

nothing we say on this program is investment advice but yeah there's a lot of these things are trading in the dumps right now Coinbase really smart to do those converts when they did by the way a couple months ago they did I think it was a couple billion dollars and convertible notes, sitting on a lot of cash right now.

So certainly could be aggressive. Galaxy also reported earnings this week posted a loss of $111 million compared to a gain of $858 million a year ago for this period. So those were primarily losses in the trading and principal investment business. So not a lot of great news from some of the public companies in the crypto space right now. I mean, every public company that's blockchain adjacent is trading, like it's going out of business. Oh yeah.

The converts on, we're trading in the high 50s this morning for Coinbase. The convertible notes is crazy. Aside from that, okay, here's an interesting piece of good news. The FASB Financial Accounting Standards

Board has unanimously voted to evaluate the accounting system for digital assets, which I think we've complained about it a number of times on this show from NOMA. We have. Yeah, you can't market to market. So, you know, the issue is, and I'll oversimplify this,

let's say you buy Bitcoin at 50,000. Let's say it goes up to 100,000. You have to mark it up. But if it goes down to 25, you can't take it back to 25. And so you need to have this impairment thing, which just makes it really wonky and difficult to analyze companies like micro strategy and Square that have Bitcoin on the balance sheet. So this FASB thing, and could theoretically just allow for you to mark these things to market, which you have reference rate providers like coin metrics that are in production at all the major asset managers and banks right now. I don't know why you wouldn't just use something like that.

That's like an IASCO compliant rate. It just seems like a no-brainer. Yeah, this has been one of Michael Saylor's pet causes, I think. So it's good to see this to re-evaluated. I mean, it didn't make sense to mark Bitcoin as, what do they call it, indefinite, intangible, something, I mean, we can only market down and odd up. Just didn't make sense. Yeah, it just doesn't make sense. Yeah. You can, you can market to market at any point. It's highly liquid market. It's not like a goodwill or some,

you know, genuinely intangible asset with no market price. I mean, it has price. Do you think, um, do you think Twitter's going to sell to Elon here? It's not, it's not trading like it's going to. Forty-five dollars. and $0.8.00. Right now is the close. And that's well below the takeout price. Sale price is in the 50s? $5.4.20.

So, yeah, this is what I'm nervous about because Tesla keeps selling off. And Elon's whole structure depends on the price of Tesla. And taking out loans against Tesla. Yeah. And, you know, if Tesla keep selling off, Elon's just going to have to straight up sell Tesla stock instead of

taking out loans against it, but that revelation would crater Tesla stock. It's actually kind of, in some ways, analogous to the Luna situation, right? So if he declares his intent to sell Tesla so that he can consummate the Twitter

transaction, Tesla stock's going to sell off further because he's a huge, huge shareholder, thus meaning that he's going to have to sell more Tesla stock. he might run out. I mean, he doesn't want to lose control of Tesla, undoubtedly. Everything's getting recut in this environment.

So my guess is that he still buys it, but he buys it at a lower price. Yeah, well, I mean, I think that was the reason the Twitter board took the deal was because it was a fair price and things were selling off. All the Twitter's peers were selling off. So I don't know if the deal gets done at a lower price. Not a lot of happy news today. I went to the aquarium this morning. That was fun. What was the best creature that you saw?

No, no. They don't have sharks. I took my daughter there. They don't have sharks in the aquarium. I thought that that was, I thought every aquarium had sharks. Did they used to have sharks? I don't know.

I guess it makes sense, though. You're just going to have like a big tank full of fish and put a shark in there. That doesn't really work. That's the one in downtown Boston right now. near the fidelity office one of the fidelity office yeah yeah i hadn't been there in a very long time but it was it was nice it's it has penguins on the top floor right no right when you walk in there's penguins oh yeah i thought there was seal oh the penguins are right there yeah they're right

there when you walk in okay yeah it's nice take took took my mind off of uh the crypto markets for for a little while i think there's a lot of folks that i would diagnose with a trip to the aquarium that would be my recommendation everyone should take a trip to the aquarium. It's just take a breath. The crypto market's going to be around. It's not going to zero. Just take a beat. Luna, Luna's going to zero, but the crypto markets are going to be around. The Baltimore aquarium is my favorite. I don't know if you've been to that one. It's sizable. You know what? I don't think I've been there, but I've heard that's a great aquarium. Yeah. The Boston one is a little bit on the small side. I think we can admit.

I think that it's rated high as far as aquariums go, though. No sharks. sharks. Those, yeah, there's like a baby shark. There's nothing to write home about. I don't really like it. Yeah. You know, it's a tough week when the best news is coming out of the accounting regulators. Yeah, the best thing we had to say today is good job, Fazby. Well, we'll check back in with you next week. We probably Luna won't exist by then. We had to guess. Who knows? We'll have a bunch of podcasts coming up next week recorded a bunch over the past week so content content so we'll see you on monday have a safe and healthy weekend