On The Brink with Castle Island - Weekly Roundup 10/29/21 (FATF publishes guidance, More Tungsten, Facebook is Meta) (EP.255)

Episode Date: October 29, 2021

Matt and Nic return for another week of deals and news. In this episode:  The SEC wants to regulate stablecoins El Salvador buys 420 BTC River launches a mining product Direxion wants to launch a short BTC ETF The FATF guidance isn't as bad as we thought it might be Facebook is now Meta Is 'the metaverse' going to stick around? We unretire China FUD Content mentioned:  The NFT Tax Guide Coin Center, The long-awaited FATF crypto guidance is not as bad as it could have been, but still flawed Nic in Bitcoin Magazine with Shaun Connell, Miners Are the Optimal Buyers Sponsor notes   This show supported by Coinbase Prime, an integrated solution that provides advanced multi-venue trading, custody, and prime services for institutions. For more information see coinbase.com/prime Corporations and institutions can allocate cash into Circle Yield to gain crypto lending exposure and earn superior returns compared to traditional markets. It's secured, overcollateralized and built on the leading dollar digital currency. Visit circle.com/yield to book a meeting  

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 Concentive 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. In this episode is brought to you by Coinbase and Circle. More on those companies later in the episode. What a week. This has been, what a week. It's been a crazy week. We had a monster storm up here in Boston. Just huge storm, like trees down, everything.

Crazy. I had two trees in my backyard uprooted. The turkey's story. survive? I haven't seen a turkey in like three days. Well, that could be a blessing. The turkey problem has gotten way better. I got a fence and there was another action that I took that don't have to get into, but haven't seen a turkey in a long time. Well, I think our listeners might be curious as to what brand of violence you committed against the turkeys. Can't talk about that, but let's just say the turkeys are at the house

next door to me and two doors down, but they stay away from mine. So they learn their place in the food chain. Yeah. I love to see it. I haven't been seeing a lot of those turkeys. But yeah, crazy storm up here. So like all of the electricity in the South Shore of Massachusetts is basically shut down right now.

Well, that's one of our themes of this week. We, in our episode on Monday, we covered the Texas electrical grid, which is a very interesting electrical grid, if I may say so myself. Yeah, you're just going down the rabbit hole of electrical understanding there. Yeah, I mean, I think if you listen to this podcast, you will get effectively half of a postgraduate education in, you know, grid balancing and engineering because it's incredibly detailed. So it's with Ray Klein and Sean Connall.

Lansium. Lansium is one of the firms using Bitcoin. as a synthetic power plant is one way to describe it effectively. Running Bitcoin miners in such a way that it actually helps balance out the grid and potentially even makes the grid more suitable for more renewables than if they didn't exist. So it's absolutely fascinating stuff. Definitely recommend that one. Yeah, that was a great episode.

So you'll have more on that topic, right? Well, we are kicking off a mining miniseries. that's one of the first ones in the mini-series and I'll bring on a few other industrial miners because there's so much to say about mining really is so much and few are saying it so we're going to do a little mini-series

all right so we'll have that to look forward to was a pretty busy deal week why don't we kick it off the first one is coinless this is the crypto exchange and issuance platform they raised a hundred million dollars it was a round that was led by accomplice and agman partners Next up we have Alchemy, the node infrastructure company, they raised a monster round. They raised $250 million from A16Z.

That's a huge round, and Alchemy is definitely powering a lot of infrastructure across the industry. Another company in that node infrastructure category is QuickNode. They raised $25 million. It was led by Tiger, included 776, Soma Capital, Arrington XRP, and Pomp. And QuickNode is one of the Miami Bay. crypto companies. Oh, there's a bunch more Miami companies of late, huh? Yeah, shout out Austin, Bunsen, and QuickNode.

Next up, we have Nameless. They are a company that helps brands launch NFTs. There is 15 million from Mechanism Capital, Red Beard Ventures, Delphi Digital, and others. Next is Club NFT. This is an NFT infrastructure company. They raise $3 million from Galaxy Digital, CMT, Fermion, Red Swan, and Draper Associates. And then we have friends with benefits, which is a decentralized autonomous organization.

They raise 10 million in a token sale to A16 Z, Pace Capital, Kindred Ventures, and others. It's really, it's fascinating to see some of these DAOs popping up, you know, kind of investing in like social clubs. It's almost like you, if you could be an investor in one of these like exclusive, what are the clubs that have them down in Miami? So if you could be like buying a membership as well as just buying equity in the company, it feels like a combination of both when you're buying into a Dow like this. This is one of these social DAOs. Yeah. And unfortunately, I was waitlisted for my Soho House application because I'm a finance bro and

I'm not artistic enough. You're not cool enough to be in the Soho House. That's devastating. I want to. either, but I thought you would have been. I wanted to explain to them that I'm actually more of a cultural figure than a finance bro, but I think it's too subtle a point for them to grasp. Oh, man.

Well, that's too bad that we can't hang out at the Soho House when I go down to Miami. Well, last deal is Elementus. This is a blockchain forensics company. They raised 12 million. It was a series A led by Velvet C Ventures. It included Alameda, BlockFi, Pomp, Lightspeed, Gemini, blockchain.com, and Avon Ventures. So it was a pretty active news week as well.

I mean, enormously active. My personal favorite piece of news was, of course, the WSJ story on Tungsten Cubs. I mean, this Tungsten Cube thing is the gift that keeps on giving. I was at the CMS office today, and they have a, I don't know what the actual size is. I think it's like one of the seven inch cubes. Is that possible?

Did they get the seven inch already? I don't know. It's enormous. It's like 45 pounds. It's the densest thing I've ever felt in my entire life. The seven inches a lot more than 45 pounds. Let me tell you. Maybe it's a four or five, but it fits in your hands, but you have a hard time like lifting it over your head.

It's that heavy. So I think this might be honestly. I think the cube thing is our greatest ever accomplishment. and by we, I mean sort of, you know, the crypto-twitter, you know, cultural sions. Because the story in the WSJ, every single person interviewed is committed to the bit. Yes. It's really quite incredible. When I was interviewed by the author, I was a phone interview, and I was muting myself so I could chuckle in between.

giving her quotes. But yeah, I just, I'm in awe of this thing. They have an incredible picture of Naraj staring lovingly at the cube in a rather glamorous kitchen, I may add. Oh, it's great. Yeah, I mean, that kitchen is amazing. It looks like an industrial kitchen or something.

I really like this Drew Morris character, 35-year-old Florida lawyer. He's definitely one of the highlights of this whole WSJ thing. I love the end when they start. talking about the Midwest tungsten also makes spheres and he just says no we we like the cube yeah I mean this is easily the most entertaining news story I've read this year they even gave the cube the stipple treatment which I thought was a really nice touch

what's the stipple treatment so that means that they put it in the WSJ pointillist art style. Ah, I see what you're saying. All right. Yeah, so that's how you know when you've made it when you get stippled by the WSJ. But only the cube got that treatment

for this article. So they are making a 14-inch cube at Midwest tungsten, and it seems like there's some buyers out there, so we might need to be a one such buyer. Well, I haven't actually seen any successful bids for that so far. They set the reserve price pretty

high. so we'll see if any of the maybe the NFT Dow's decide to bid on it. I feel bad for all these investors that are investing in like enterprise software and some of these just boring, boring market sectors that don't have tungsten cubes. Yeah, I mean, the one thing, and the story was also covered in gentlemen's quarterly, GQ, today. And I gave the author a number of quotes. So now this has been covered in Bloomberg, GQ, WSJ, and actually was in Matt Levine's money stuff as well. And obviously all the crypto-native rags, the industry news outlets.

And it just makes me think, you know, it's kind of incredible that, you know, a few tweets from like crypto people have penetrated the mainstream financial news circuit. I mean, that's the power that this industry wields for better for worse. It really is. It's hilarious. So I hope this continues for a long time. But yeah, that was a good news story. Another news item this week that I found pretty interesting was Bloomberg is reporting that the U.S. Treasury is going to be coming out with a report. And that report is going to say that they have the point of view. I didn't even know this could be a thing the Treasury Department we could do, but they have a point of view that the SEC has the ability and the authority to

regulate stable coins in the United States. So is that something that Yellen can just come out and say, I think Gary Gensler should have this capability? Well, it's very convenient for, I guess, Treasury to assert that SEC has jurisdiction over these things. I mean, typically you'd look for that designation in law, but I guess you can also just assert. these things. You just asserted, hey, Gary wants to be the next Treasury Secretary, so we're going to give him stable coins, going to let him rattle a few cages. But meanwhile, the CFTC acting chair, Rosten Benham, he had testimony before Congress this week, and he asserted that 60% of cryptocurrencies or commodities. And he also was pushing for the CFTC to have a broader mandate in regulating the

market. So it seems like it's a little bit of a turf war to me between the CFTC. and the SEC. It seems like Gensler is maybe maneuvering to have the SEC have the have the football here. Well, it is odd because stable coins are a, they're effectively a exotic type of sort of commercial bank liability, right? I mean, the vast majority of them are. So that doesn't strike me as something the SEC should be covering. I know it's a dead horse and, you know, of course the SECs likes to say that they think stable coins are securities and so on. But to me, you'd look to, you know, the FDIC or the OCC or some other, you know, more bank-focused regulator to actually be the primary regulator for stablecoins, because don't be fooled by the name. Stablecoins are just, you know, a bank deposit

that circulates on an alternative ledger, that's all. You know, there's nothing that special about them. They're just commercial bank liabilities that just so happen to change hands on a blockchain. They're nothing, you know, metaphysically unique. So I don't know why the SEC would really be the primary regulator that doesn't really make that much sense to me. Yeah, I think we've got a little bit of a political battle

here and we'll see how it plays out. But certainly the SEC is working on a number of cases on the enforcement side that will probably get a lot of the attention in the months to come if I had to guess. So also in news, El Salvador purchased 420 bitcoins this week. And President Buckele was sort of crowing about it on Twitter, which is just surreal to me to see a head of state talking excitedly about buying the dip. I mean, I honestly still have a hard time believing that that's the reality we live in. Yeah, I mean, 2014, you've got anonymous Twitter people just crowing about buying the dip.

And 2021, we've got presidents of sovereign nations doing the exact same thing, saying, I just bought 420 bitcoins, bought the dip. What a world. Yeah, he definitely won't be the last. It is what it is, I guess. You know, El Salvador should do proof of reserve, by the way, in case any, you know, Salvador and power brokers are listening. It's not difficult to do proof of reserve. They should do one for the Chivo app because, you know,

I think there will be questions about the backedness of Chivo and whether they really do have the Bitcoin reserves backing the claims. They should. Yeah. So do they, have they made any public declarations around how they're holding it? I don't think so. I believe they're relying on a few. Crypto infrastructure firms is kind of this detailed workflow.

But yeah, not clear to me how precisely they're holding it. Hopefully it's not the way the U.S. Marshals held the Silk Road coins, just in a file cabinet with a hardware wallet. That probably wouldn't be great. Is that right? Is that how they held them? I don't know if that's exactly right, but the story here is that that transaction was like a white knuckle transaction

when they sold them to Draper. It was like reading out the alpha-numeric string. I mean, it would have just been a donation to everyone had they lost the coins. Yeah, it just poof, reverse dilution on the whole cap table of Bitcoin holders. So in elsewhere, Cream Finance, which is a D5 protocol, was hacked this week, apparently to the tune of $130 million. All right. A very significant exploit. That's been hacked before.

for I think cream finance it has it has so that makes it the third largest in history what's number one again the number one would be poly network which apparently was 600 million dollar hack although apparently some of those funds were returned yeah well be careful out there a bunch of stuff at the intersection of crypto native firms and traditional financial services firm. So BlockFi announced a partnership with Newberger-Berman. They're going to launch a suite of crypto asset management products under a new entity. It's going to be called BlockFi NB. So great to see Newberger getting in the game here. Crypto asset management. I mean, if you're a traditional asset management firm, you're obviously looking at this category and just seeing the margin

potential here, seeing the customer appetite, and you've got to make a move. Elsewhere in crypto asset management, River Financial is... launching a mining product, which allows users to mine Bitcoin without actually setting up the infrastructure. So you can mine and purchase a miner directly from the app. And they will manage it for you and host it for you, which is really cool. And honestly, I'm 100% going to buy a miner. Yeah, that's really cool. And so it, it'll deposit it right into your river account too, right? Yeah. So it's, um, you're basically buying kind of a exotic option, I would say you can model out cash flows from mining as a string of

options. And so I think probably right now if you're mining it, you know, five or six cents per kilowatt hour, you know, you're still making money, although of course there's duration risk there. And you know, you ultimately are very exposed to the price of Bitcoin and to hash rate increasing in the future. Yeah, the other thing I love about the River platform is they make it really easy to link up a hardware wallet. So anyone who's ever used a hardware wallet knows that checking the balance can be an issue. So, you know, I remember in the early days, I used to just take out the hardware wallet and put

it into the computer just to check the balance, make sure it's still there. With River, you can all, you monitor that in real time and see your transaction history. So it's a really great integration. So you could do this mining product and then have the coins go directly into your hardware wallet, which is really cool. So speaking of wallet's Coinbase is now the number one app in the Apple App Store.

Let's go. Bull run. Yeah, I think we're in it. You know we're ready. You know we're ready to get those installs up. Coinbase, let's go. In Bitcoin financial product news, Direxion, known for their lever at ETFs,

is looking to launch an ETF that would be short the Bitcoin futures ETF, which is, you know, classic Direxion. And it would give you the ability to bet against Bitcoin, but only through the mechanic of the futures-based products. And Valkyri is apparently going the other way. They're trying to do the 2X long, I believe. I don't know if that one's actually going to get approved, 2x long on the futures. But yeah, let's lever it up.

Lever it up. Now, if you're wondering what happens if you go long, the 1X long and long, the 1X short products for the same underlying, the answer is that you lose money. Yeah, you lose money. Well, for a couple reasons, right? Because you have the roll cost, but then you also have, I mean, it's not actually tracking the price of Bitcoin anyway, right? Because it's only 85% exposed to the future. Yeah, and those inverse levered products have a structural decay to them. So mathematically, basically lose money.

I learned that the hard way back in like 2007. They had some energy one. I think it was called DXO. It was like 3x natural gas or something. What a terrible product. Yeah, that's the thing about those levered ETFs. I mean, it's just you can get 4x sort of levered inverse natural gas. gas ETFs and 3x levered long gold ones and you know these incredibly volatile products that

guarantee mathematically that you lose money if you hold them for a longer period of time and yet we still don't have a spot bitcoin ETF in the name of investor protection although gray scale has said they are optimistic that they think they will be able to convert their gbdc product into a spot ETF so there is a small candle of management burning. Maybe. I don't know. Gensler hasn't really had any public comments that would support being optimistic on the spot ETF. But, you know, the spot landscape is going to look a lot different here with CBOE becoming a big player there. So who knows, maybe some of the spot kind of market relevance of the Huobis and some of the China exchanges that are sort of on the clock to shut down.

Maybe that will change what the mix shift looks like at the spot level. And you'll have more of these venues that have surveillance agreements and the U.S. government gets a little bit more comfortable. Maybe that's happening at the same time as the Fidelity and BitWise and gray scale proposals get to their decision points. And maybe we do get a spot ETF. Who knows? We ebb and flow on this so much that I don't even think it's helpful to the listeners. Because one week we're like, yeah, we're bullish on it next week. No, this is definitely not going to happen. Yeah, we're a little volatile on the ETF topic.

To be clear, I'm still optimistic. will get a spot ETF within 24 months. This show is brought to you by Coinbase Prime. Coinbase Prime offers trading, custody, and financing tools for institutions. With trade financing, you can trade from cold storage instantly and acquire margin for lending and shorting. Coinbase custody is battle tested with dedicated on-chain addresses and industry-leading insurance. Coinbase Prime offers integrated trading tools, including real-time market data, smart

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This does not, initially it looked like this would apply to like node infrastructure companies and companies that are using public blockchain nodes to sell data to their customers and things like that. So there's a worry that some of those companies would fall under the definition of a VASP and be forced to collect information on their customers. And that part is not in it. So I guess that's good. The bad is that some of the travel rule changes are above and beyond what you would see for travel rule compliance in other types of assets. And so it's not on an even playing field with other asset classes. So that's not ideal. So who knows?

We'll see how this is actually passed down to remind people, the FATIF is a body that doesn't actually have any power to enforce these things. They make recommendations to countries and then the equivalent of FinCEN or, you know, within the Treasury Department in every country will actually implement these. And so these are being rolled out on a jurisdiction by jurisdiction basis based on this directive. Yeah, it's a mixed bag, but much better than some of the draft guidance that was out there. So I would say on balance actually quite positive. Coin Center's analysis is very good.

They did change the travel rule. And so, you know, they find that travel rule basically applies to VASP to VASP transactions. and not VASP to unhosted wallets, as they say, or just sort of regular old wallets. So that's great. They try and exempt, it seems like it exempts people that are just effectively deploying code that then governs decentralized transfers,

and it sort of frees them from their surveillance obligations, which is also good. That said, they do seem, interested in whether individuals or entities actually exert control over a sort of essential defy system whether it's through governance tokens or in some other way and that's going to be a gray area is you know who has influence over these purportedly decentralized networks to the extent that influence exists do those individuals actually have surveillance and reporting obligations.

But as you say, the FATIF is sort of they don't actually make the policy or they don't impose it. That would be the responsibility of the FinCense of the world. So there is another layer of interpretation between them and then between what actually gets implemented in the real world. I guess one thing to emphasize is just that exchanges and brokerages do need to be complying with the travel rule, which is something that not every crypto exchange or brokerage is doing right now. And so this reinforces that you need to have a policy in place. And, you know, we've seen compliance software companies pop up to serve these needs. We're investors in one, no to benet that a bunch of exchanges are rolling out. So I think you'll see more of that is just getting into compliance with this directive before the FinCense of the world start to.

come in and just slap you around. Yeah, that's absolutely right. I mean, it's very clear that VASPs, or as we know, crypto exchanges have travel rule obligations. But on the whole, I actually found the FATIF language pretty encouraging. So it certainly is possible

to have non-suboptimal outcomes when it comes to financial regulators. So changing gears a little bit. So Facebook is changing its name to meta, and they have been teasing that they will support NFTs as part of their grand plans to transition into a quote-unquote metaverse company, and they just want to own that metaverse. They want to be toll collecting on it.

They want to run that whole metaverse. This is very difficult to imagine a world where Facebook owns the whole thing. It would be like owning the whole internet. Yeah, I mean, with all due respect to Zuckerberg's metaverse, ambitions. I do not intend to digitally reside in any universe meta or not that he creates. I want to own my own land in the metaverse. I don't want Zuckerberg owning my land that I'm like building a house on. He's not going to be my landlord. Yeah, it'd be nice if there was sort of a non-corporate murderverse where it could be something other than digital sharecroppers because the highly centralized

model of the internet right now is pretty inferior. So make sure we have a plurality of metaverses. Are we going to call it the metaverse at scale, or is this the equivalent of like the early 90s when we called it the World Wide Web or like the Information Super Highway? And then it ended up being something else. Surfing the web, yeah.

I think it's vanishingly unlikely that 10 years from now we're calling it, even if there is something that is the Metaverse. that has spoken up today, unlikely we call it that. So is it just going to be like, do you have to do the VR goggles? Because I don't want to do that either. I can't wear them. I get seasick.

Yeah, so I don't know. Maybe you won't even be in the Metaverse. You're just going to be exiled. Three-dimensional for the rest of your life. Yeah, I'm going to be stuck here in an analog world with my metal cubes. That's Zuckerberg, man. You got to hand it to them. you turn around and you just call it meta,

and then all of a sudden, the public narrative on this thing can be very different. It's like, don't look over here at this social network that is destroying the fabric of society. We got a new thing over here with this metaverse. Yeah, it might actually be sufficient distraction. People's memories are short these days.

One of my favorite pivots recently has got to be Google going from don't be evil to whatever their current, motto is, but they got rid of don't be evil, to be clear. Which is incredible. Because they acknowledge that they're a little bit evil. Is that the thing? Well, I mean, if you're partially evil, you can't have don't be evil as your motto. So if I were them, I would change it to be as evil as the market will tolerate.

Yeah. But they don't seem to, that doesn't seem to enthuse them very much. It seems like that we're going to have a lot of, um, fall out here from this Facebook whistleblower, who's apparently, by the way, crypto rich and in Puerto Rico. So that was an interesting twist that happened over the past week. I mean, that's the only not cringe thing about her. You know, there's two things happening right now. There's Julian Assange. His trial is happening.

Actual whistleblower. And then we have a purported Facebook whistleblower who's just advocating for censorship, which is like the opposite of generally of whistleblowers. So I do respect the fact that she's rich from whatever, Doge and lives in Puerto Rico, though. Yeah, that was just, I did not see that coming. But I guess she'll be okay, you know, financially without that Facebook salary. Give her credit for that at least. Alex Leishman, founder of River Financial on the topic of mining, wrote a good piece in Newsweek.

What Bitcoin's environmentalist critics miss? That was a terrific. essay. I don't know how he got Newsweek to pick it up, but I thought it was awesome. And he talks about, he leads it off with talking about Henry David Thoreau back in the time of telegraphs. And he was saying that there was a lot of pushback then and said Thoreau had this quote around Maine and Texas having nothing important to communicate. So really like, who cares about this new technology and then drawing some parallels to Bitcoin where people say it's wasteful but not understanding what it actually does. It really calls to mind all of these, you know, famous people

that are very quick to dismiss new technologies. You know, the Jamie Diamonds of the world have existed through time and memorial. So Newsweek infamously published an article, I think in 2017, saying that by 2020, Bitcoin would consume all of the energy in the world. Am I getting that right? Nice to see them evolve their attitude. Didn't they have an all-time one on the internet, too? I'm blanking on what it was, but they basically dismissed the internet back in like 1994. Well, and it was a Newsweek journalist that falsely identified Satoshi as Dorian Nakamoto. That was tough.

Yeah, docks. Yeah, that wasn't very nice. But he was very sort of accommodating, I think, and very gracious about the whole thing. I added another article to my corpus on Bitcoin's energy consumption this week. Oh, yeah. Where'd that one get published? Bitcoin Magazine, Coin desk didn't run it. So we had to go Plan B.

And that was with Sean Connell from Lancium, very, very deep dive. As deep as it gets, really, you know, we hit the, We hit the ocean floor on this one in terms of depth. Yet again, talking about the economics of mining in Texas and explaining why it is economical contra the claims of some environmentalists to turn off your machines at a certain price point for energy. So, you know, in case you're wondering about that,

we do run the numbers. I love it. All right. So we'll put the link to that one in the show notes. and that'll be part of your deep dive on the mining space. When are we going to start seeing mining? Like, where's the next frontier of mining besides a shell country? You mean physically or?

Yeah, physically. Physically, well, there's an interesting story. The Kazakhstan mining that's been hyped up is not happening. The Kazakh authorities have really rebelled hard against that. So expect to hear some headlines about that soon. So it will not be there. An interesting dynamic that's happening will be resurgence of Chinese mining.

So you thought we were we were rid of China and the China fund? I'm bringing it back. Remember how we retired the fund? Why is that coming back? I thought that was retired. We retired that last week. We retired it, right? How is that coming back?

It's like, you know, I don't know. It's back, okay? It's like Brett Farve, you just can't get rid of them. So we've unretired the fud. There is mining in China, to be clear. Just smaller scale. And the thing that happened was a lot of Chinese miters were kind of under the eye of Sauron over the summer during the CCP's 50th anniversary. Now that that's passed, some smaller miners are turning their machines back on again, but they're doing it covertly.

Oh, well, you better be careful if you're doing that. So the China hash rate is not zero. it is most likely you know not well at the very least it's non-zero so you know right now the press seems to think that it's actually zero

which is also wrong so making a comeback well you brought up Tom Brady I don't know if you saw this but last Sunday he threw his 600th career touchdown pass and you know that's a big event so you want to hold on to the ball right and you probably put that in the NFL Hall of Fame

or something. So Mike Evans, who caught the ball, just ran up to a fan and just gave it to them. Like, he didn't know that it was a 600th completion, or touchdown rather. So completely inexplicable. And so they were panning to the guy who got the ball. And they're like, oh, man, this guy just like, it's like a million dollar ball. And how is he going to get it back? So during the commercial break, someone from the bucks goes over there, and they're having this like negotiation. And it turns out that the guy who returned the doll, his name is Byron Kennedy. So from Brady, he got a package that included season tickets, a bunch of autographed memorabilia, and Brady gave him one Bitcoin. So that could be a multimillion dollar package right there.

So here's the thing I don't get. Why is the ball that Brady threw a 600 touchdown worth, you know, anything? I mean, why are people just alleging that it's worth hundreds of thousands of dollars? It's just a football. Well, that's just like, why is a U.S. dollar worth anything? That's a good question. It's just a shared fiction, man. Yeah, but the government is actively trying to make it be worth something.

Where does the Valley of the Ball come from? It's like an NFT. Why is a Solana tungsten NFT like $300,000? Because it's super rare. No, because it's redeemable for a large lank of tungsten. It's backed. it's uh well the book value on those tungsten cubes is a lot less than what they're trading at i think i think there's a monetary there's a monetary premium there is a premium the price to book is

completely out of whack so yeah i just don't understand why people just believe that the ball would be worth whatever i mean would someone really pay five hundred thousand dollar for a ball that you know brady threw his six what about the what about the ball he threw his 500th touchdown on with. Well, that's pretty good too, but it's not as good as a 600th. And, you know, this guy has U-TXOs that came from Tom Brady at this point. It's like, you're not going to want to move those. That's true. I mean, that's more special than the ball, in my opinion. How about Brady just like sweetening the package with Bitcoin? Very savvy. That's right. We're gaining allies all over the place now. Newt Gingrich, whether or not you want him as an

Appares to be a Bitcoiner now. I didn't know he was still around. I saw Rand Paul came out this week. He said that he was on Axios on HBO. He said that cryptocurrency will become the reserve currency for the world. Unclear which cryptocurrency is talking about could be like Shiba, who I'm not sure. Yeah, Shiba's flipping Doge. So the Doge coin crew have been wrecked by that.

Flip him by an imitator. You hate to see it. Do you know that when you go to the Apple iTunes store, we'd mention that Coinbase is like the number one app right now. Coinbase says Bitcoin, Ethereum, and Shiba. Those are the three assets that are in the front line. That's what the people want right now. I'm getting a lot of people asking me about Shiba.

So Joe Wisenthal had an interesting article on it where he explained that Shiba has some technological innovation, apparently, because it's built on ETH, and there's Dexes around. rounded and NFTs. And so it has the trappings, whereas Doge is this ancient unmaintained blockchain. And, you know, there's not a lot you can do with it on chain. I mean, I think I need an Alex Thorne research report on this very quickly.

And, oof, I remember I have an outstanding bet with Alex Thorne that Doge would be below a certain level a year from a couple months ago. And so far I'm losing the bet, but I remain confident. that Doge will be sapped of its monetary premium and return to obscurity in short order. I think we're at the stage of the cycle, though. I need a 20-page research report out of Thorn and then Novigrat's on Monday to go on CNBC talking about Shiba. It feels like that's like what's about to happen here. Yeah, I'd love to see a professionally done research report on the asset.

I've never spent any time on it. But I understand that the zoomers hold a lot of it. Man, you just, you can't take a day off in this industry. You get a dog coin coming into the top 10. Can you imagine the unrealized taxes on that thing? The unrealized capital gains were they to be taxed? Devastating. Yeah, a lot of people would have to move to, I guess not Puerto Rico, but move somewhere.

It looks like that unrealized thing is kind of dying, though. It does seem to be. So on the topic of taxes, Zen Ledger and others released the NFT tax guide, which is available as an NFT. So a little bit of recursion there. So you mint the guide for, I think, it's 0.08th. And it tells you how to pay taxes on your NFTs,

which honestly sounds terrible. I can't even contemplate how. difficult that must be but apparently the guide will tell you so hold on you buy an nft and the nfts is a like a how-to manual on how to pay your taxes correct written by actual tax professionals huh that sounds pretty good i guess you never have to pay taxes on your nfti if you never sell your nfts uh unless uh you know unless treasury gets its way all right so i think that's it for the week uh another busy week um we've been back on Monday with an episode that goes really deep on on-chain forensics and understanding

blockchain risk. So keep an eye out for that one. We are pausing our coverage of mining for a week and then we will return. So have a safe and healthy weekend, everyone. We'll see you on Monday.