On The Brink with Castle Island - Weekly Roundup 06/14/24 (Nigeria v Binance, Terraform settles with SEC, Are Dems pivoting on Crypto?) (EP.536)

Episode Date: June 14, 2024

Matt and Nic are back for another week of news and deals. In this episode: GME and Roaringkitty drama The detention of Tigran Gambaryan continues OP_CAT prospects Biden considers accepting crypto campaign donations What's the deal with Hamster Kombat Martin Shkreli vs PleasrDAO Terraform labs settles up with the SEC Microstrategy is still buying Bitcoin Should crypto holders donate coins to Biden? New nominee for FDIC chair Are democrats pivoting on crypto?  We dissect a tweet thread by Rep Sean Casten Sponsor notes: Meme Coin Mania In Coin Metrics' State of the Network issue 263, we delve into the surge of meme coin activity on Ethereum and Solana, highlighting key market trends driven by the meme coin sector. Content Mentioned: Jen Wieczner in NYMAG, Are Democrats Pivoting on Crypto

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

What 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 quantitative easing. You print a couple trillion dollars, and all of a sudden, people start to worry. So out of this worry, we have something called a Bitcoin. Bitcoin.

Welcome to On the Brink. I'm Matt Walsh. And I'm Nick Carter. And this episode is brought to by Coin Metrics, and here is the Metrics Minute. For today's metrics minute, we're looking at the rise of meme coin activity. The total market cap of mean coin stands at $60 billion. Wow. Fud's got to raise rates. With Dogecoin and Shiba Inu comprising 80% of this.

In March, meme coin saw $13 billion in spot trading volumes, surpassing the volumes of major assets like a theorem in Solana. While Doge and Sheeb dominated trading in 2022, their influence is waning as Pepe and Solana meme coins account for over 50% of trading volume. Since 2023, a basket of major meme coins returned 740%, outperforming other sectors of the ecosystem covered by Coinmetrics Dautonomy Universe. Despite the potential for outsized returns, meme coins on average showcase a high genie coefficient of 0.8,

highlighting the significant concentration in ownership. That's your metrics minute. Speaking of meme coins, did you see this GameStop news? They raised over $2 billion in an at-the-shelf offering, and now that company has no debt in $4 billion. Honestly, credit to them. I mean, that's to the, I guess their gain is Roaring Kitty's loss, right? Since that was very dilutive.

I think his options were exercisable any time before tomorrow, right? So we're tipping this on a Thursday. So he'll be able to exercise those options in the money. And he already has a huge position. So I think he does great. So what I don't understand is why didn't he, because he accumulated such a large position, why didn't he actually mountain activist campaign and rally all of the retail shareholders that like him to vote with him on whatever proposition he want?

Like, he could have taken over the company, maybe. Yeah, I guess that assumes that he has a view on what the company should do. Yeah, maybe he just liked the stock and didn't want to be an executive or anything. Yeah, he's done great on the stock. I'm sure he's enjoying what he's doing now. I mean, what did he do before? He worked, like, in the back office or something. He was an analyst at Mass Mutual.

I don't know exactly what that means these days. he got fired right did he get fired they let him keep his job or he quit no he he quit but I think that they told him that he was going to lose his job as a result of this I think some of the stuff he was doing with the live streaming was catching the ire of the regulators I mean he's now being investigated right for market manipulation or something

he is but that's a hard case to make I don't see anything that he's done that is exactly market manipulation it looks very similar to what he did last time doesn't it? Yeah, I mean, just making vague social media posts, buying the stock, and then doing a lot, I don't see anything specifically wrong with that. I don't think that's technically illegal. Did you watch his live stream last Friday? No, but people were very disappointed. I think they expected some kind of bonanza, and he just talked about the stock. Yeah, I went back and watched it. It was not interesting whatsoever, and the stock was going down as a lot.

Sue speaking. Yeah, I mean, what could he possibly have to say that would be that exciting about GameStop? Now, I don't know anything about GameStop's business, but what would you do with $4 billion? They've said that they're going to target M&A. I guess you can buy pretty much anything, right? This sounds very much like large cap crypto projects that don't have a real business and try and buy their way into something real. But it works.

It is proven to work for some of these. It is amazing the lightning struck twice for GameStop. I'm kind of astonished by that. A lot of chatter around GameStop putting crypto on the balance sheet. That wouldn't shock me, to be honest with you. Yeah, I mean, do they still operate brick and mortar stores and they sell video games? Like, physically? Yes.

I feel like it's because no one buys, does anyone buy video games in the store? like surely not right I've never been in one but yeah they must I mean the thing is still operational I used to go to GameStop all the time it was my favorite store when I was a kid but you just buy like a console game

yeah that's when you had to buy you to physically show up buy the disc and put it in your PlayStation 2 or whatever but now I feel like they just sell Funko pops like you now you just download games right I guess that's what you do, right? You don't buy the disc. Yeah, I would imagine that this is all online,

but I don't know, there must be a market there. Well, we're two of the worst people discuss gaming. It's just totally outside our sphere of competence. No, I've never really been a gamer. You know, I do like Buck Hunter. So, okay, before we start, Warpcast Roundup, there is request for you to post the oven mitt. I will do that.

I saw that a couple days ago. I will be posting a picture of the oven mitt that scalded in my hand. Matt Donovan says he's convinced your house is built on a Native American burial ground. That's certainly possible. Just based on all the issues I've had with the wild animals, that's possible. I mean, it's spooky. I'm surprised you didn't come in today with some kind of zany tale. I actually do have a, it's not.

that zany, but I was out last night after dinner, taking a little walk with the kids. And I saw a huge coyote. It was like the size of a dog. It wasn't at my house, but some wildlife. Coyotes could be a threat to, you don't have a dog, but they do occasionally eat small dogs, right? Yeah, they do. Yeah. And they'll kind of hunt in packs. This is just one coyote running across the street. But yeah, I've heard stories of people out walking their dogs and running into a pack of coyotes, and it's not good. We had a mini scandal in my old neighborhood where there were a bunch of disemboweled deer.

What are young deer called? Doe. Doe? Are doos young dears? And there were just all these doves that were slaughtered on someone's lawn. And you know how you have neighborhood list serves? Yes.

And it's like full of just insane chatter and gossip and things like that, this list serve became convinced that there was some psychopath living in the neighborhood that was slaughtering young deer and leaving their entrails out in some kind of satanic ritual. Oh my gosh. But it was a coyote? It was a coyote, which is kind of totally a rational explanation. But for weeks, there were debates as to like, who is this crazy psycho that lives in the neighborhood

that's killing deer. Man, wildlife. That's why living in cities a lot easier. Well, we had feet of rain this week here in Miami. It was, it's actually still raining here. So as it turns out, it rains in South Florida in the summer. I forgot that. Yeah, yeah, Boston, no such problem up here.

So we had a good podcast week here. Wyatt sat down with David Say at Babylon, talked about the Bitcoin staking market, enjoyed that episode. Babylon, really excited about Babylon. Yeah, I mean, I guess people considered similar to eigenlier, but the difference is that Bitcoin is fresh pal. You know, Bitcoin is not already staked. So we don't necessarily have the potential risks that come with restaking

because this is just the first time it's being staked. There's a lot of chatter around OpCat, but I'm monitoring the Bitcoin dev mailing list, not a lot of talk about Opcat on that mailing list. It's a little hard to tell where all the conversation in Bitcoin CoreDev is happening these days. Yeah, I'm kind of optimistic around Opcad because it's Poelstra's baby, I believe.

So you do have the Blockstream faction is supportive of Opcat, which I think it's historically the most important power center in Bitcoin. And the Tapper Wizard guys, which they seem to be influential these days. Are they influential at the core dev level? Probably not, but I think Poelstra is.

So it's kind of a pincer maneuver. I'm actually weirdly optimistic around OpCat. I know you should never, ever count your chickens with Bitcoin Core, but I'm hopeful. Yeah, it'll be interesting to see where that goes. Obviously, BitVM is a, I guess, a rival implementation. Would you say that they could both happen, or would lose one or the other at this point?

Yeah, I mean, there are different ways to potentially enable a roll-up. BitVM wouldn't require a change, and OpCat itself is a soft fork. So hopefully we get both things. But the jury's still kind of out on whether BitVM is actually real. So it's kind of a choppy week this week with the FOMC. Bitcoin and other cryptocurrencies were just popping all around this week. As of the time of this recording, we're down. in the mid-66s for Bitcoin.

So it's been fascinating. It's just an inflation trade this week, right? Yeah, I mean, I think people interpret Powell as being fairly hawkish here. And, you know, Bitcoin didn't like the news at all. So sentiment is super bleak on crypto Twitter right now, unfortunately. A lot of infighting on crypto Twitter these days. People need to get out and touch some grass. Well, there are so many deals.

So the venture side is still popping off. Completely agree. I mean, this is one of the most active markets I've ever seen in terms of early stage stuff getting funded. First one up is actually a fund. So Paradigm has announced that they have closed their newest venture capital fund, CryptoVC fund, at $850 million. So congrats to the paradigm team.

That's great for them. Yeah, congrats to Matt and Fred, the whole team there and Georgios for being promoted to general partner. Really cool to see. Next up we have Nexus Labs, a zero knowledge virtual machine protocol. There is 25 million from light speed, pantera faction, Dragonfly, and the blockchain builders fund. Then we have squad labs, which is a Solana-based multi-sig protocol. There is 10 million from electric coin base placeholder, Ruckaway, and L1D. Then you have symbiotic, a restaking protocol. There is 5.8 million from Paradigm and Cyberfund. Zyfi, which is a gas fee management service.

They raised $2 million from Tensor, Eversake, and Criterion. Then you have the Rio Network, a liquid restaking token platform. They were acquired by eigenlabs for an undisclosed amount. Then it's layer three, a token distribution protocol that raised $15 million from Parify, Greenfield, Electric, and a number of others. Then you have Nuffel Labs. They're a DA layer for the NEAR protocol. There is 13 million from electric, fabric, lyric, robot ventures, and others. Iris, which is an on-chain data provenance layer.

They raised 3.5 from Lemnus, framework, primitive, and escape velocity. Also in data, you have co-data, decentralized data protocol. There is 2.5 million from Oakex and comma 3. Pixelverse, which is a telegram-based gaming ecosystem. They raised 5.5 million from Delphithex. Merit Circle, Big Brain Holdings, Scale Capital, and others. Telegram-based gaming seems to be really catching a bid right now. Yeah, so Hamster Combat, have you looked into this?

I tried to play it, but it kept on crashing. But Hamster Combat is apparently the number one blockchain game right now. Everyone is playing Hamster Combat? I don't know. What kind of a game is it? What's the gameplay? I don't know. I just press start and the thing just loaded a circle repeatedly and it wouldn't start.

So what does it actually do? You fight hamsters? Apparently, tens of millions of people were able to do it. So everybody else figured out. Trust me, the telegram was working. It must have been a lot of people on it. It felt like I was in the dial-up internet days. What exactly is the game?

I think you just click around a lot and you get tokens for that as far as I understand. Yeah, look, if you know what hamster combat has, let us know. I'd love to know more about hamster combat. I mean, it's the number one game, apparently, in the whole ecosystem. So I guess you got to try it, right? We should know. We should know. Next up, we have Inc. Finance, a defy protocol for DAWS.

They raise $5 million from a public alliance Dow, GSR, and Polygon. Then it's Honeypot Finance, a defy hub on Barachane that raised $1.3 million from TKX Capital and CSP Dow. Then you have Nexus Network, non-custodial. staking middleware for Ethereumelops. There is a million dollars from hashed emergent, mask, network, and founder heads. Ava Protocol, which is a network enabling private and autonomous transactions, raise $10 million from Electric, Shima, Buxererate, and BingX. And lastly, the Kima Network, decentralized money transfer protocol,

there raised $5 million from blockchain, MasterCard's FinSecInSq Innovation Labs, outlier ventures, and big brain holdings. Are you monitoring this Pleaser Dow lawsuit against Martin Schrelli? Yeah, I saw some noise about that. So I guess the Wu-Tang album, Schreli had to sell that, or he had to sell it to Pleaser Dow as part of his legal troubles, right? Yeah, and I don't know if he sold it to them or if there was another sale in between, but he had to sell a number of his assets, including, I guess, a Picasso in order to make good with the government.

and I guess he kept copies of the so I guess for those who are not familiar Wutanklan I don't know this was 10 years ago now at this point a year's and years ago yeah a one of one album and you can only listen to it if you own it I guess but Schrelli I guess copied it and has been playing it on Twitter spaces so pleaser doubt had bought it and obviously they're arguing that the value of the asset decreases if it's copied and I guess it's been copied so is that basically the gist of the lawsuit. Yeah, I think he broadcasted it on Twitter spaces. Obviously, Pleaser Dow is probably legally in the right here,

but they also look petty by suing him. Yeah, I don't think this is a win for anyone. Apparently, Suzu is in PleaserDAO. I mean, that doesn't surprise me at all. So, yeah, they, I guess they're now going to sell the album themselves, right? at thealbum.com, something like that. Yeah, and they have, Pleaser Dow, I think has ambitions

to share some of the revenue with Wu-Tang Clan. Do we know if the album is good? Like, is it a hidden jump? I mean, Wutan Clan's good, so I imagine the album's good, right? It's not my favorite thing in the world, but it's generally pretty good. I don't think I could name one Wutang-Klan song.

I'm not an aficionado, but, you know, comes on and you recognize it, I think. Well, I think it's better this way because it's like a rare piece of art that just gets puts in someone's collection and that no one ever sees it. At least this way, it's going to see the light of day. Yeah, it's, I don't know, seems interesting. But the idea of like a Tao suing someone over this is kind of a bad look, I think.

Yeah, they got the optics wrong on that. So the Nigeria and finance executive Tigran Gambayaran situation, rumbles on. So he was kind of abandoned, I would say, by the diplomatic apparatus. He was wrongfully imprisoned in Nigeria, decorated former federal prosecutor, has been in prison in Nigeria for months now, I think. So a group of 108 former federal agents signed a letter urging the Secretary of State to try and get him released. But as far as we know, he's still being unlawfully detained. I mean, this guy's gotten totally screwed here. This is a decorated former federal prosecutor that is the compliance head at Binance. If he was being held basically hostage for three months

and he worked at like Citigroup, this thing would have been resolved within a week. Yeah, I mean, how does the U.S. not have strings to pull and diplomatic pressure can exert on Nigeria. Like obviously there's things they need from us. The fact that they're just detaining a high-level executive who has a career of service to the government and we've done nothing about it is astonishing. It's basically a hostage situation at this point. It's a U.S. citizen.

And I mean, like I said, he's a very decorated former federal prosecutor here. It's just, it's crazy to me that no one's talking about this. Yeah, and I don't think there's allegations of wrongdoing. I think Nigerian, the Nigerian government is kind of blaming their currency crisis on Binance. I don't think Binance is responsible for that. So they're kind of being scapegoated. They detained two finance executives by luring them to the country for a meeting.

One of them escaped. Yeah. And Tigran is left. I mean, it's a very tough and unfair situation. He also has malaria right now. So it's not like he's doing well. It's not good. Oh, that's terrible.

Yeah, this one totally rankles me. I think the Biden admin has a lot to answer for here. I mean, they moved heaven and earth to release Brittany Grider from Russia. And this guy has decades of service to US government and not a peep so far. Yeah, this is a true scandal. All right. Well, hopefully we see some resolution on that. I mean, it was a very big group, as you point out. So there's 108 former federal prosecutors and federal agents signed this letter to Secretary of State Anthony Blinken. So hopefully that moves the needle a little bit. Let's hop to the next one. So Terraform Labs and its founder, Doe Kwan, have agreed to a settlement with the SEC. And the settlement has a headline of $4.5 billion in a civil fraud case. So, On paper, this looks like a huge splashy number for the SEC, and I'm sure this factors into the judgment that now Gensler can go around and say, I've extracted X billion dollars of restitution from the crypto industry. But in reality, it's not like this company has anywhere close to that amount of money to pay, like not even a tiny fraction left.

This is a defunct bankrupt company, and maybe Doquan has some money stashed away somewhere that he can make some of his portion of this payment. But this basically just says $4.5 billion as an unsecured claim against a bankrupt estate that is never going to repay it. Like this is a total nothing burger. It would also be a scandal if the government dipped their hand. Let's say they did have the money. It would be a huge scandal if the SEC basically pulled everything out prior to any of the other creditors. I mean, the people that actually lost money to terraform lobs, which is a lot of ordinary people. Yeah, it kind of reminds you a little bit of the IRS claim.

against FTX, which initially came in at like $20 billion and I guess was later negotiated down. We covered that last week, a couple hundred million dollars initially. But yeah, the net net on this is that none of this money is coming to the U.S. taxpayer. Yeah. Next up, Micro Strategy has proposed another $500 million convertible note offering to, you guessed it, acquire more Bitcoin. Absolutely incredible. Just he keeps on going. I mean, I'm shocked that he's still able to make this trade.

I mean, they are ETFs now. There's other more efficient vehicles to get access to Bitcoin now if you're a public market investor. So I'm by no means an expert on this, but I think it's just a different channel, right? So you have these convertible investment funds, you know, and banks and so forth that can only buy converts. And that's a market that is very efficient.

And this just looks like an interesting convertible note. And so you're going to get attention for this because those buyers like the upside exposure to it. And it's not like they can go out and buy Bitcoin themselves. Like that's not within their mandate. Yeah, I guess that could be it. I mean, my understanding historically was that the stock would trade it a premium to the value of the bitcoins. And Sailor could to the extent that premium existed could just arbitrage that issue stock and push the premium down. But I don't know why there would be a premium these days.

It will be studied for years to come on just the corporate governance of this whole deal and just what he's tried to do from a balance sheet perspective. I can think of nothing that parallels this. So there's a few things to talk about in D.C. The Biden administration is apparently mulling whether they want to accept Bitcoin or crypto for campaign donations. I don't know if they've officially announced that yet, though. Yeah, who reported this initially?

This seems like it's not, maybe a trial balloon is how I would classify this. Yeah, and the early reaction was very negative, I would say. Yeah, so let me get this straight. So Biden administration, who is actively going after Coinbase is now thinking about using Coinbase as a payment processor to get crypto donations from people in the crypto industry who have been completely marginalized by the Biden administration? Do I have that about right? Yeah, I mean, the optics of this are terrible.

They've spent the last four years harassing crypto in every conceivable way through every possible avenue law enforcement regulatory, informally, formally, any way you can imagine they've been utilizing that to harass the crypto space. And of all the things they would do to reverse themselves on crypto, this one is so nominal.

I mean, it's such a small concession. If they wanted to actually reverse course on crypto, there's 50 other things they could do that would be meaningful. And this is probably the least meaningful of all of those things. It's completely insulting. It's not a reversal of course on crypto. It's just saying, hey, crypto, I know we've tried to shut down all your bank accounts. you know, founders have had their bank account shut down. We're making the FDIC not bank

crypto startups. We're using the SEC to go after some of the most reputable companies in this industry. We're not providing clarity. We're vetoing a bill that would allow for the banks to enter into this custody market and make it safer. We're, you know, blocking the market structure bill. But if you guys want to give us money, you know, we'll add a button. Yeah. So actually on the FDIC front, the White House, it's being reported. They're going to nominate. CFTC Commissioner Christy Romero to replace Chair Gruenberg at the FDIC. My understanding is, I don't know too much about Romero, but my understanding is she would be kind of a like-for-like replacement of Grunberg.

So if she is confirmed before the election or if she's confirmed at all, I don't think much would change at the FDIC, unfortunately. And of course, the FDIC has been the architect of the the systematic unbanking of crypto firms in the U.S. Well, you'd like to see that maybe the culture of rampant sexual harassment changes under new leadership, right? At minimum, maybe what she could do is clean up the organization because it's obviously just a, it's a dumpster fire over there at the SEC. Yeah, that would be a good start. The FDIC, rather.

And the, yeah, and the culture, the bro culture and the bullying culture at the FDIC. secondarily also maybe allow crypto firms to be banked. I don't know, just an idea. Yeah, just, I don't know, like allow startups to have bank accounts in the United States. Like that would be a... We're not asking for much. So I'm interested to see how that goes.

It's unclear what Romero's affiliations are. So this seems to be something that Sherrod Brown is on board with out of Ohio, which obviously makes you skeptical. That's a bad sign. Yeah, that's usually a bad sign. If he likes something, it's usually not good for financial services writ large. So we'll see where this one goes. But there's nothing really in her track record that would suggest either a pro or con view towards the industry.

So on that same topic, Jen Veechner at NYMAG has a new article entitled, Are Democrats Pivoting on Crypto? And I don't know. Are they pivoting? What do you think? Well, I don't know. It depends on when you write this story, right? Because if you are writing this story on the heels of Sab 121 passing through the House and complete bipartisan fashion and then passing through the Senate and surprising bipartisan fashion with Chuck Schumer getting on board, no doubt because the bank lobby is very influential Chuck Schumer. Maybe you'd say, yes, the Democrats are pivoting on crypto. But then Biden vetoes this Sab 121 custody issue. And I don't know how you can actually say that. But they do have some interesting quotes. So some Democrats went on the record here. Wiley Nicol, who's a Democrat, Congressman out of North Carolina, basically said like this,

there's no one against crypto. So you're not winning any net new votes by being against this. And there are 50 million people that own crypto in the United States. So it's obviously an issue. He points out that a lot of these holders are single issue voters. So he's very favorable. Obviously, Richie Torres is favorable. Jake Ochenklaas up here in Massachusetts has been a strong ally to the

industry so far. So certain Democrats are totally on board, but I wouldn't classify this as like a policy platform at this point. Yeah, I think my interpretation is some moderate Democrats, especially those in tight races, are open-minded on crypto, some members of leadership in Congress. and then I really see no change from the Biden admin itself. So long way to go if they want to persuade us that the Democratic Party is not completely against crypto. Yeah, I mean, the Biden administration, you always have to remember that this is not Joe Biden himself

that is taking these strong views on crypto. And it's really John Donenberg, who's one of his advisors that is a former Elizabeth Warren chief of staff, that is really the strong anti-cryptoperson. So there's absolutely no indication that that is changing. And it'll be interesting. I mean, let's say Biden were to win this election, which I continue to believe he's not going to be the nominee.

But let's just say for the sake of argument that Biden wins. Do you think that Elizabeth Warren continues to get to pick the head of the SEC and have the stamp of approval on FDIC and OCC and all of these key roles? or do you think that there's a world where Biden would actually turn to a different power center? You know, it's interesting because I see Biden as needing to shore up the progressive side of the party. They seem to be very dissatisfied with him. And a lot of the recent messaging from the White House appears geared at progressives, trying to fire them up. And I think that was the deal was Warren will deliver the progressives for him if she gets to handpick.

members of the cabinet. So I could see a dynamic like that again. However, this whole thing could be undone if a few Senate races go Republican, at which point Biden is not able to confirm any of these appointees. And because things are so polarized now, you're not going to have people breeze through confirmations. A Republican Senate will fight tooth and nail to stop the next Gensler getting confirmed or the next Gronberg. So the presidency matters a lot, obviously. I think the Senate matters so much as well. And the electoral math is heavily tilted in favor of the Republicans right now.

So I'm watching the Senate as much as I'm watching the presidential race. Yeah. So Montana and Ohio are just huge races for that. So if there's a world where Sherrod Brown is no longer the senator from Ohio, I think a lot of this changes. So you're going to have a new head of Senate banking. You probably would see advancements of stablecoin bills and market structure bills and repeals of Sab 121.

But yeah, to your point, then there would be the ability to block some of these nominations. So you wouldn't see a Gary Gensler type get into the SEC under that dynamic. And that was a close confirmation in the first place. On the other side, Trump met with Bitcoin miners this week. And he released a statement, I think, on truth social saying that he wants all the remaining Bitcoins we mine in the U.S., which I found to be a little quixotic, frankly. But more to the point, he said he believes Bitcoin mining, I'm paraphrasing, is a way to help

us reindustrialize and build a new energy infrastructure, which I totally agree with. So I think he's directionally right on that topic. That's pretty spot on. And I'm under no illusion that Trump really cares about crypto, but I think he just sees a huge block of young voters that are, you know, many of them single issue voters and they're going to be turning out. And this is a very smart political move to be leaning into this movement. Yeah.

And I look, we've been talking about Bitcoin mining as positive for energy policy in this country for years. I mean, how long are we talked about? I don't know. It felt like my full-time job for a long time. Trying to make the case that Bitcoin mining is not only benign on the grid, but actually useful for an increasingly renewable grid, a more self-sufficient re-energization of the heartland and building a repurposable energy infrastructure.

I think Bitcoin mining is great for that. So I'm really glad that the Trump camp understands that. I hope the left does as well. I do want you roll out a new segment on this show, which I'm calling the Bozo of the Week Award. Oh, Bozo of the Week. I love it. All right. Who do we got this week? So the Bozo of the Week, I didn't know about this person before, but it's Sean, Representative Sean Kasten. Oh, yeah. I saw his tweets. He is my Bozo of the Week. So he had a thread about Trump's tweet or truth.

What's the noun form of a post on truth social? A truth? Is that what they call it a truth? I'm not on truth social. Do I just get on there? I think a retweet on there is re-truth. Re-truth. Anyway, so Sean Casson didn't like Trump's comment.

He, because Trump said something about CBDCs, which was maybe a little tenuous, but Sean Casson says, CBDCs are largely theoretical. outside of China. That's just not true at all. I mean, every central bank in the developed world is working on a CBDC. I mean, even the Fed is, right?

CBDCs have been operationalized in a few countries and every other major country is working on them. He says, quote, if you've ever gotten your paycheck deposited electronically, et cetera, you might ask, isn't money already digital? Not really. you know, CBDCs are, you know, basically digitizing base money as compared with cash, which is physical. So he's wrong about that.

He says the only distinction is that a CBDC is on a blockchain to record transactions. That's false. There's nothing about CBDCs that implies they're on the blockchain. He says they're largely useless in a modern economy since they're not. to fractional banking. I think that's also a very questionable thing to say. CBDCs are being employed in modern economies. They could, in theory, be deployed via commercial banks as well.

So you could have fractional banking on them. He says, CBDCs are a crypto-bro equivalent to red baiting. They can scare people, but they're largely imaginary. that's also false. I think it's completely valid to be concerned about a CBDC, especially the surveillance. Moving on to Bitcoin, he says,

Bitcoin is useless to modern banking because you can't lend against deposits. I think that shows a tremendous ignorance of history. You've had fractional reserve banking against hard monies like gold for hundreds of years. Credit existed in hard money systems. So I can't, I don't know why he would assert that. That's just false.

He says producing Bitcoin doesn't create jobs or investment. It just consumes energy and computer time. I mean, that's also false. Bitcoin mining does, it's this economic pressure that powers investment energy resources, including renewable energy resources. I mean, there's like so much in this thread that's wrong. Anyway, it was a bad thread. So Sean Kasten, you're my bozo of the week.

Bozo of the week. Wow, I love this new segment. I have so many ideas of bozos of the week going forward. We haven't really retired the bad boys, right? Because we do have bad boys that are still out there on the lamb. So that that segment is still active. There are extant bad boys. And now we have a new segment.

And look, there's no shortage bozos out there. So I suspect we'll keep this one going. Yeah, there's a lot of bozos. Yeah, there's a lot of bozos. It would be good to kind of get to the end of the bad boy segment. I would love to be doing this podcast and not have to ever do a bad boy section of the week ever again. I think crypto is just such that there's always going to be bad boys. You know, the moment we finally get over the last credit crunch, there'll be a new one.

I can feel it coming. Some of these AI blockchain token things, I feel like there's some bad boys in that segment. Some of those boys are bad. Yeah. For sure. Some scamy pitches. Yeah, I don't really pay that much attention to the AI blockchain stuff. Some of it's interesting, but to me it seems like there's a lot of this warfare between rival clans, like the Akash versus Ionep people or at each other's throats.

I don't know if you've been following this. I hate each other. I don't understand the dimension of the argument whatsoever, but these guys are just lying. up and they're just shooting at each other. There's a gigantic civil war happening in the Airbnb for GPU space, and it's completely impenetrable to me. Oh, yeah. These people are just, as far as I can tell, for some of them,

it's actually their full-time job, is to just argue about their project and why the other project that looks pretty similar is just complete garbage. And what's funny is that not to be mean, but I don't think any of these things have traction at all. And I think there's fundamental reasons why they'll continue to not have traction.

It's like what is the expression? The argument is so intense because the stakes are so low. That's what it seems like. Yeah, yeah. Well, I don't know. With some of these token prices in that category, the stakes seem to be pretty high.

All right, so I think that's it for the week. Pretty late news week, but we'll be back next week. We've got a great episode lined up for Monday talking about digital asset infrastructure, stable coins. So we'll see you on Monday. Have a safe and healthy weekend.