On The Brink with Castle Island - Weekly Roundup 11/21/25 (Quantum FUD, DAT hangover, stablecoin duration risk) (EP.686)

Episode Date: November 21, 2025

Matt and Nic are back for another week of news and deals. In this episode:  Is Quantum FUD causing Bitcoin to sell off? Ray Dalio is worry about Quantum Scott Aaronson is worried about quantum computing Vitalik is worried about quantum Quantum upgrade scenarios Are we still suffering from the flash crash? The DATs are selling DAT spot arbitrage Will the US government end up with the Satoshi coins Should the government bail out AI? Will NFTs come back? IBIT is Harvard's largest 13F position David Frum on stablecoins Will stablecoins require a bailout?

Matt Walsh and Nick Carter are partners at Castle Island Ventures. All of 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 only. Brought down by bad mortgage investments, Lehman, which has 25,000 employees will be liquidated.

The federal government loans American International Group, AI, $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. And 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. Welcome to On the Brink. I'm Matt Walsh. And I'm Nick Carter. And the coins are getting crushed this week. I think it's because of your quantum tweet. I saw that I was trending on Twitter, which is never good. I think quantum fud is part of it, actually. Yeah, I do think quantum thought is part of it.

Yeah, did Ray Dalio come out and say something about quantum today? Was that him? Yeah, on CNBC. Okay. Yeah, but like, where is he, is he on Twitter? Like, how is he finding out about this? I think he probably reads Scott Aronson's blog. Did you think Ray Dalio reads,

Stettle optimized? Is that shuttle? I don't know how to say it. I think a lot of people are reading that this week. Yeah, a lot of people are, you know, born again, Scott Aronson fans. I actually read his book.

I bought his book this week. He's having a good book sale week. It's kind of a very contrived title, Quantum Computing since Democritus. He doesn't talk about the ancient Greeks at all. I'm just going to spoil that for you. Okay. In fact, there's a lot of very heavy-duty math throughout the whole book.

All right. It might not be my favorite book, but I figured, you know, people were talking about quantum on a three to seven-year time horizon, so it's time to start paying attention. So, yeah, what did he say? First of all, he said that he changed his mind on quantum, right? Yeah, and then he clarified it today, right? Didn't he have a second blog post that said,

I didn't mean to scare you? Yeah, what did he do? say exactly let me find it okay he says in his original post he says and for those you don't know scott arinson is like the academic slash educator around quantum computing has made fundamental innovations in the field uh teaches a class on it's very very well known computer scientist guy and he's also known as a skeptic or a realist around quantum computing he's never sold out because obviously the field has a lot of these exaggerated claims.

So he says, I now think it's a live possibility that will have a fault-tolerant quantum computer running Shores algorithm before the next U.S. presidential election. And then Vitalik repeated this on stage at DevCon. Within a couple of hours, yeah. So Vitalik must read that blog post pretty regularly, I'd say.

Then there was a big brouhaha and a lot of people started panicking about quantum. and then he wrote a follow-up post saying quantum investment bros have you no shame i guess that's us and so he's clarifying that he doesn't support the valuations of the quantum shitters basically yeah all these things that are zero revenue just trading through the moon on the public markets yeah regetti is up by a factor of 20 in the last year and that's even after selling off huge Crazy. But he does say at the end of that post, if you think Bitcoin, SSL and all the protocols

based on sure breakable cryptography are almost certainly safe for the next five years, and I submit that your confidence is unwarranted. So he actually does double down that Bitcoin is not 100% safe for sure. Well, I think it's time to start having these upgrade conversations across every development community. It's going to take a long time. How long do you think it would take for Bitcoin to actually update and then most people that own Bitcoin to move their coins into quantum secure address schemes? Yeah, I mean, it's like an unimaginably large task.

It's not only the biggest infrastructural change to Bitcoin that would have ever been done. We're talking about ripping out the core signature algorithm here and the way that private keys are even devised. public keys from private keys. I mean, it's such a huge infrastructure built. It's almost not the same thing after. And on top of that, you have to give people years to migrate their coins. Yeah. I mean, the backlog, it's a queuing problem, right? There's only so many transactions per second that can actually happen on the Bitcoin blockchain. Yeah. And, you know, some people are in prison or in comas or something and they don't have access to their coins. So how long do we give people to move their coins over. We don't have that long, it seems, until Q-Day is upon us.

What do you think the politics behind this upgrade would be? Do you think that there will be, hey, let's lower the block size while we're at it and it'll get muddied with other debates that are happening in the community? I think we're going to have to raise the block size significantly, actually, because as far as I can tell, based on my survey of the post-quanamo rhythms, they're all much bigger than elliptic ECDSA, which is like 200 bytes. Some of these quantum algorithms are like 10 kilobytes. Yeah.

So you actually need more block space to accommodate the same number of signatures. I guess the small blockers would like that, though. But they're just going to have to deal with it because it's existential. Like forget any other Bitcoin politics issue. This is the only thing that matters from now on. Yeah.

And I think people, People are going to accuse us of fudding or like, you know, talking her own book or whatever. I don't consider it fudding because it is such an existential problem potentially. So even if it's only a 10% chance, I think we should still care about it a lot. Because if it happens unexpectedly, the damage is astronomical. I'd say the biggest risk is doing nothing over what time horizon, who knows. The second biggest risk is that you do upgrade in just classic brute, force or some other way to just break a normal signature scheme happens on this quantum resistant

algorithm, wouldn't you say? Yeah, because in cryptography, you actually want to go with the tried and true. Right. You don't want to go with the new and untested. And it has been the case that people have devised post-quantum algorithms that were themselves breakable classically. Right. So what you really don't want to do is rush everyone onto some new scheme that turns out you can just break with an ordinary computer. So let's start testing those post-quantum schemes, ASAP. Yeah, yeah. That's exactly it. And there are some, this one called MLDSA, which NIST has proposed, I think. So NIST is on it. Yeah, NIST seems to be on it. It seems like a lot of the Europeans are on it, too. These Oxford people are really sharp. Yeah, there's something weird about quantum, which is Europe is the nexus. I don't, it's like the

first time Europe's been on top of anything in years. Yeah. Yeah. Yeah. wonder what that is. It's just, you know, just so happens that Oxford is a training ground for all these people. Europeans. Good at quantum. Not so good at, you know, crypto market structure regulation, but that's all right. Not everyone can be. Yeah, they're nowhere on stable coins. So. All right, let's hop into some deals of the week. Very big one to start here. Cracken, a big crypto exchange. They raised $800 million from Citadel, Jane Street, DRW, tribe capital, and a number of others. Pre-IPO round there, $20 billion. Huge round. Next up we have OBEX, a stable coin incubator. They raised 37 million from Framework, Layer Zero, and Sky. And we put this one in here. It's not

really a crypto deal, but Dopple, which is a digital identity protection platform. There raised $70 million from Bessemer, A16Z, and South Park Commons. This is one of those companies that identifies people that are being impersonated on Twitter. quite useful actually I will say OX bow is a privacy focused decks they raise 3.5 million from Star Bloom Coinbase ventures, boost VC and others. Then it's Dblock which is a French crypto exchange

there is $35 million from speed invest commerce ventures and latitude. And lastly we have self-protocoled an identity verification protocol that raised 9 million from Greenfield, Spearhead VC and Veritaventures. All right, where do you want to start this week? So we've covered quantum. We're concerned about quantum. It's just going to be an issue.

And I think we should tackle it now. That's not the only thing that's causing the coins to sell off. Yeah, I think generally just the whole market, even in equities, has been risk off this week. I also wonder how much of an overhang, the 10-10 flash crash and kind of finance-related issues are having on this market. I think that could definitely be it. And I think, you know, the probability of rate cuts dropped as well, which probably didn't help.

Yeah, I think we have unheeled wounds from the flash crash. It's just, yeah, it's not possible to vaporize that much money and not have some carcasses that just float ashore. And we haven't really seen anything yet. Yeah, not one for, no one will ever admit it, though, unless they have to. Well, it's interesting. You think about where the leverage is in the system. in the last cycle, we kind of knew all the lenders. And unfortunately, we didn't know who they were all lending to.

But in this cycle, I think the exchanges are interesting to take a look at. The exchanges that have been offering credit to some of their bigger customers. And you wonder, I mean, you never really know unless the company was public how much credit they're extending. Yeah, I was going to say the leverage was coming from the dots. It's not really leverage per se, but it is, it's like a form of leverage. There's some leverage at the Dats, right? Some of them have taken out margin-type loans off of their Bitcoin holdings. It's leverage in the sense that a large amount of supply was taken off the market,

and that was baked into people's expectations. And now the supply is being spit back out onto the market, unceremoniously. So this week, FG Nexus, I didn't even heard of this one. Do you know about this stat? No, I've never heard of that. I didn't know it. but they sold 10,900 ETH for share buybacks. So they had 50,000, eighth.

They sold a fifth. That's a death spiral situation. Yeah, because once the DAT starts selling the E's to buy back the shares, you know, why would you ever buy the DAT again after that? I don't think you would. So they're all announcing buybacks. Strategy has not. No.

They're holding the line. Well, he's got the voting control, right? So he's probably less exposed to activists than some of these dads. But I guess the question is, so like the marginal dat holder, let's say you're holding strategy and it's trading the exact same MNAV to some other fungible Bitcoin debt. The other dat says we will sell coins to do share buybacks. Strategy has, I guess, said they won't.

Wouldn't you then reallocate to the debt? that's willing to do the buyback? Yeah, maybe. On the margin? Maybe on the margin you would. But I don't know. He does have a huge head start at micro strategy in the sense that he's been able to tap the convert market.

He's got all these preferred. So his infrastructure is objectively a lot better to be able to issue assets that enable him to buy Bitcoin. Yeah, he might structurally just be the most advantaged and able to weather this storm. I also have a hard time thinking about, all these people that are talking about the M&A with the Dats. I get it and you will have consolidation.

But these markets move really quickly. And so, you know, you're going to announce a deal. Presumably you're going to be at a premium buying a data out that's trading at a discount. You would buy it at some sort of a premium. Markets going to move pretty quickly to close that premium. Like the merger arm there is pretty fascinating when you think about it. I think it's going to be a lot more complicated than people think to effectuate an M&A deal. Okay, so speaking of arbitrage, I want to ask you something.

I think that the Dats are pulling down the price of spot because the Dats are trading a discount to spot and you have people doing these convergence trades. Yeah, I think that's right. Or a short spot and long DAT. A, is that happening? And B, is there an actual mechanism whereby they would converge, though? I don't think necessarily there's a mechanism that they would converge because there's so many factors going on at the Dats. but I would actually think the futures contracts would be more liquid than spot and probably easier to get in and out of.

So I wonder if it's either long or short the DATs and then vice versa on the futures contracts. The only way this resolves is if the DATs sell enough coins, that they become less important in the market and the nabs go back or close to one. I don't see any other way. I think you just have a lot of spot inflows could kind of solve this, right? just the market picks up and rates get cut and market goes risk on. I think a lot of these debts would pop back up. Yeah, but in a sideways market or low interest market,

the dots, I think, weigh on crypto for a long time, maybe a year, maybe more. It's a big overhang. It's a big overhang. It's not hopefully as bad as the overhang from like GBT style, you know, the leverage blow up and then the GPTC overhang was a pretty big one. Yeah, so the credit crunch of 22, that took 18 months to fix. Yeah. When you say, the dots aren't as bad.

Not as bad as bad. All right, let's talk about what happened with the OCC this week. Not a lot of coverage, but I thought this was a big deal. So the OCC put out interpretive guidance. They confirmed that it's permissible for a U.S. bank to hold crypto assets on their balance sheet for the purpose of paying gas fees. This is actually important because it wasn't clear to many of these banks that they do this. So it became clear that you could actually hold Bitcoin on your balance sheet,

mostly as a function of staff accounting bulletin 122, which rolled back Sab 121. But then holding proprietary coins on your own remained kind of unclear if you could do that. And you obviously need to hold your own Bitcoin or ETH to pay network fees when you're just moving the customer asset. So this was a very in the weeds type of a problem, but it was one that a lot of the banks were experiencing. So the OCC coming out and saying this is okay, I think actually brings a few banks on the margin into this industry. I was very surprised that this needed an explicit letter, but I guess you better say than sorry as bank. Oh, I mean, if you're a bank, I mean, you operate due to the benevolence of the U.S. government, right? You don't want to do anything to mess that up.

And if you want it very crystal clear, okay, I am allowed to hold this Bitcoin on the bank balance sheet. You could take a capital charge against it, obviously, but you just can't move the asset without it. So there were some banks that, you know, we had been talking to that had some pretty interesting endarounds to try to do this, almost like sponsored gas fee type of things that were off balance sheet to try to figure it out. But this is just a cleaner way to run a custody operation. There's some other pieces of news out of Washington this week. The Senate banking chair, Tim Scott, said he's pushing for a vote on market structure by the end of the year. Yeah, this is encouraging, huh?

And so we still don't know what's going to be in market structure. We still don't know about the D5 provision, but the fact that this is still being pushed is a very good sign. Elsewhere, Senate Ag has voted along party lines to move forward the CFTC nomination of Michael Selig. I didn't get a chance to watch the hearing, did you? No, but we generally like them, I think, is the word, right? Yeah, I think he'd be a good pick for the digital asset industry.

And I'd imagine that this will be able to move along party lines to get the full confirmation, hopefully. And Warren Davidson has introduced a bill called Bitcoin for America that allows taxes to be paid in BTC to go into the strategic Bitcoin Reserve. We'll see how far that gets. This is actually how I thought that digital asset treasury companies would evolve. I remember having this conversation back in like 2016 with someone very explicitly around would a public company ever hold Bitcoin. And at the time, I didn't think that a public company would come out and just start buying, which I guess I was wrong. Myco Strategy did that a few years later. But I said, wouldn't be crazy to me that you see more of these like overstock style companies where they just accept Bitcoin in order to purchase goods and they just like keep a little bit of it.

And it sounds like that's what's being proposed here for the U.S. government. I don't know if this could pass, though. My Black Swan prediction for the next decade here is that the U.S. government gets the Tudu Kis coins with quantum. I think there's a reason why we don't know the total amount of Bitcoin that the U.S. government has where they haven't actually fulfilled the this was promised, wasn't it, a full audit of how much Bitcoin the U.S. government has? They haven't given us the audit. No, I think because the number is huge. I think the number is way bigger. I think it's bigger. I think it's weird. Yeah, because Bitcoin was invented in four Meade, Maryland at the NSA headquarters. Well, yes. So they have the Satoshi coins, obviously,

and that's probably only obvious to you and I. But I think they also have just a lot of confiscated Bitcoin. You saw the story a couple weeks ago where the Chinese government accused the U.S. government of taking $13 billion worth of Bitcoin illegally from some Chinese person that was running some scam. Wasn't that the U.K. government? No, this was separate. As my understanding. This was a different one. Yeah, different seizure. So the UK government also has a lot of Bitcoin.

More than one. But the, the allegation is basically that the U.S. government, this was years ago, like during the early part of the Biden administration, seized a bunch of Bitcoin tied to some Chinese-related scam. So here's why I think it's going to happen. And I have more on this in my fourth coming blog post.

If we get quantum, it's going to be a very short amount of time until China catches up. Yeah. If you did to guess, I'm going to test your knowledge of history. How long did we have the nuclear bomb for before the Soviets got it? It was probably under three years, right? It was four years, almost exactly.

Great guess. So a lot of the secrets got leaked, and then they just did it so quick. And I think it's going to be the same with any major technological inflection. Like it's not that hard to build it once you know how to do it. So I think if we developed quantum, we've like two years. So what do you do in that time? time because you know China's going to get it. Maybe North Korea is going to get it. They'll steal the coins. Yeah. For sure. Yeah. They're not going to have any qualms. China might do it just to mess

with us. North Korea will do it because that's their whole line of work. That's how they make money. So we have to preemptively steal the coins, not we. The U.S. government has to preemptively steal the coins. I don't think that's crazy to think. And I wouldn't be surprised if you actually see some public-private partnership to get the coins and mobilize them and to have the U.S. government oversee the key management of the confiscated coins. Not that I trust the U.S. government, but I trust them more than North Korea or China. Of course. This is actually the best case.

We requisition or eminent domain. What's it called civil asset forfeiture? Yeah. With civilly asset forfeit Satoshi, forfeits the coins, U.S. government. Maybe they go into the reserve. maybe they say if Satoshi pops his head up again, he can get the coins back. Yeah, if he can come and prove it. But I think before the next decade is out, so between now in 2035, we're going to have to actually confront this problem.

We're just going to have so many forks, aren't we? This is going to be back to the Bitcoin Cash, Bitcoin SV, all of these various forks that happened. You're going to have a lot of new coins get created around this time. It's frightening. It feels like the most. existential thing that we've ever been confronted with. It's the last boss to beat on the fud dice probably. Yeah, and it was on the fud dice. It was on the fud dice. So those are they say we only just started caring about quantum.

It's on the fud dice in 2018. I'd say it's a pretty good fud, but at least there's a game plan for it. I'm not sure what the game plan is for the stability of the network post-block reward. Well, we can obviously solve two birds with one stone should we choose to. We'll just recycle the coins.

Recycle the coins. Oh man. I don't know. I don't know about that. That fixes both. Just permanent inflation with Satoshi's coins. Yeah, the Bitcoin Maxis will love that. Use the coins as an endowment to fund mining for 30 years.

I guess you haven't created more coins in that situation. So you still have 20. No, yeah, it's no inflation. Yeah, there's no inflation. It's perfect. Elegant. So this gets me to the other thing I was talking about yesterday with someone, which is we talked about Sarah Fryer's comment.

I think last week, the CFO of OpenAI, when she said something about government bailout. Do you think that the government would actually bail out the AI industry if we have a dot-com era crash? No, I don't think so. I mean, the reason we have bailouts is because ordinary people's savings are in the banking system. And the political cost that is too great. Do they care if 10,000 Silicon Valley elites lose money? No. So you don't buy this national security argument that if Open AI or some of these big companies gets totally over their skis and goes bankrupt, that it's going to become a national security issue.

We're going to have China surpassing us on the AI front. No, because even if Open AI collapses tomorrow, there's so many other good companies that can develop strong Western aligned AI, anthropic, Google, and XAI. I mean, it's basically there's four companies that can do it. So no one company that does it matters. I don't know if Sam really meant that, though, when he asked for a bailout? I don't know if that was the intent. I don't know if he really asked for it,

but it is interesting that this is getting to the scale where this will make the dot com below up look like a small thing if we keep on ripping here and something happens. Yeah, I mean, the economy is totally dependent on AI infrastructure. Yeah, it's just fully intertwined here into the NASDAQ.

But I mean, if you think about it, wasn't it always just didn't have to be this way? Like, does it actually surprise you that we're just going to convert the earth into one giant data center? I'm not surprised by that. That feels like, well, of course, like intelligence

is the highest value added commodity we can produce. So of course we're going to just try and max out and make as much as we can. Yeah, I think that's right. I think that's right. All right. We are doom and gloom today, man. I don't know what's going on. So elsewhere in news, there was a leak this week. Coinbase is apparently planning to launch their own prediction market powered by Kalshi. That's interesting. So Coinbase's X profile says December 17th right now. Do you think that that is the announcement coming on December 17th? That would suggest that it could be.

I guess corn base would be well positioned to be the front end for prediction market services. That does make sense to me. For sure. But they could have built it on their own if they wanted. They could also buy something, but probably not calci at this valuation. Remember their debacle? Remember when they tried to build an NFT marketplace? Oh, yeah.

Oh, yeah. And they paid, I forgot his name. The former Google guy. Yeah. They paid him over 100 million in stock. I mean, that was a deal. You remember that, what was it? OpenC raised at like a $13 billion valuation that year.

That was a real fever dream. It was a heady time. That's just one of the greatest all-time, like, job situations. It's the guy that went to Coinbase to build NFTs, walked away with nine figures and cash. In cash. Cash, salt. Yeah.

Did they still have that platform? Does that still exist? I don't think so. I don't think it got built. I went into an old NFT wallet that I have and a bunch of them are gone. Turns out these things are not like permanent. Yeah, I did notice that some of my NFTs, the images. Yeah, they're just gone.

The image is gone. That's not the point. I thought they were one of ones, but maybe they were, but someone deleted them. It was meant to be permanent. And so what? These were just being stored in an AWS bucket? Probably. And that was it.

Weren't these meant to be stored on like FileCoin or Are Weave or something like this? yeah man NFTs do you think they will ever come back will NFTs ever come back I'm sure they'll come back I just don't have the appetite to engage on it I don't know maybe they would come back but maybe not

I always was intrigued by using this to represent you know music files or rare IP or something I think there were use cases that made a ton of sense for NFTs but they also collapsed right around the time of FTX And so post-FTX, all of the real businesses that were built in that category, they just evaporated because all the customers are like,

we're not doing crypto stuff post-FTX. Yeah, I was really excited about generative music NFTs, actually. I thought it was really interesting and unique that an artist could create a song and then 5,000 variations on that song. And then you could uniquely own one of those. That was cool. I thought those was very, very cool. Or one-of-one songs, like the Wutan clan thing could have been in that.

Or that. or that maybe it'll happen. I mean, I still see people wearing board ape street wear. Like the bored ape people are actually still bought in. Oh, yeah. That's a religion. Yeah. They, like mutinate.

Like, they still believe in it. They go to the meetups and things. And they make, like, merchandise. Like, you can buy water, like ape water, ape tequila. Yeah. Incredible. I mean, doodles is still a thing, right?

A bunch of these things are still around. They still have communities. I think the Pudgies was kind of maybe the only one that sort of broke containment and became a cultural phenomenon. Yeah, they started being sold at Walmart. Yeah, like Pudgy actually made it out. But that might be the only one. Cryptopunks are still around.

I guess just way down bad, but. Yeah, and they don't have any cultural salines. Like, if you ask your average seven-year-old, they might actually know what a Pudgy is, you know? Oh, do you think so? I'll have to try that. Yeah, why don't you report back to us next week? Yeah, I don't know. know about the nfts market that was um i think prediction markets obviously weren't really the thing back

then and i think a lot of the energies just has been sucked into these more kind of speculative use cases around just betting well elsewhere in news this was weird did you see this new hampshire has launched a bitcoin backed municipal bond what happened there yeah so how does this work it looks like it allows private companies to pledge bitcoin and then take out a cash loan so is this almost like a wholesale market where you can go and as a company you can just park 10 Bitcoin and get out of cash loan type of thing? I don't understand it at all. But yeah, it is a $100 million Bitcoin-backed conduit bond lending companies borrow against over-collateralized Bitcoin held by a private custodian. Yeah, I guess that makes sense. I mean, well, when you think about it, there, you

could make a lot of money lending cash into some of these businesses that just give you a loan against your Bitcoin collateral. There aren't that many of them. I'm surprised that it's not more popular. And it looks like this is just the government being the wholesale dollar market. So I guess it's kind of a, as long as you can liquidate the Bitcoin,

you feel good about the operational side of it. You shouldn't really have losses in a bond like that, right? Presumably not. That one caught me totally by surprise. I don't know New Hampshire was so adamant about this. The Granite State is their nickname, apparently. Oh, yeah. New Hampshire's been way ahead of

crypto stuff. All those live live for your dive people. That's where Bruce Fenton's from. Also in New England news, great transition there. I bet is Harvard's largest position in its 13F. So not necessarily the largest endowment position, but I guess among

its reportable liquid positions. Yeah, that's interesting to me. Smart guys over there at Harvard. So not too shocking, but the fact that it's the largest position that had to know that that would get picked up, I guess they don't care. Yeah, there have been some reports of really major institutional holders of Bitcoin lately. Sovereigns.

Yeah, sovereigns. I hope the quantum thing doesn't freak people out too much. I think people are getting freaked out. I mean, you're trending on Twitter right now on quantum. That's never good. No. It's never for something good. No, it's like, hey, Nick Carter says.

It's always because I said something. Worried about quantum. Yeah. To be clear, we're going to be fine with the quantum thing. We just got to start getting on it is the point. And I think the fact that we're going to be. talking about it now makes her odds much better. So I view this is a necessary pain to the extent people are concerned about it. We're pulling forward some of the concern and the fear into the

present day so we can fix it now and be safe later. And I guess we know the playbook to some degree, right? It's just a matter of picking the post-quantum scheme that we're going to use, which if you had to guess, which algorithm would we map it over to? Project 11 has a candidate. Do they? MLDSA variant. I don't know enough about this stuff. I'm not a mathematician. The thing I do worry about is the Satoshi coins,

but as we said, we think the U.S. government's just going to requisition them. Well, so that's just more of a community thing, right? How does the community react if the U.S. government gets those coins versus a private U.S. company getting those coins, which I would argue would be theft, right? Well, worst case would be some hostile entity just steals them abruptly. Yeah, then you just have a fork, right? And it's a complete gong show.

But that's just a disaster. Then you just have spot markets, wick down tremendously. Yeah, I mean, no fork, major fork would be good for Bitcoin, especially if it's unresolved. That would be the worst, maybe the worst case. Well, I think it would be resolved, right? If North Korea, but I don't think they're going to be out in the lead on quantum, but if they get the coins, we'll just fork. No, I mean, Bitcoin culture is to not do that, though. Remember how much we complained about Ethereum and the Dow?

Yeah, Bitcoin culture is also for the number to go up, though. I don't know. This would be a massive percentage of the overall supply. I would think that you'd have a fork. But I don't think Bitcoiners would sign on to that. Conviscating coins to the protocol level? See, we're forking right here. I think it's...

Can't even get the two of us to agree. I think it's pretty different when you have a hostile dictatorship taking a million bitcoins. I think there's a fork there. I wouldn't vote for that. Oh, my gosh. Are you kidding? What we do need is a prediction market around this stuff.

We could have some more prediction markets. It's going to be great Castle Island fodder for the next three to ten years here. Yeah, just when the industry was like getting kind of a little boring maybe, we've just been totally revitalized. Yeah, I mean, it's either that or we start talking again about Gary Gensler's executive assistant there, whatever her name is that's making all the wave on Twitter. Yeah, I mean, there's only so much we can save it. stable coins you know they're great yeah I guess stable coins uh continue to go up and to the

right this which is kind of like a weird you can't log on every week and say that that would get boring I was on a train ride with a guy this week come back from New York and um we were chatting and I had uh had my one of my vests on that sort of portended that I was in crypto and he's like he must be having a bad week I was kind of like nah still says that to you on the train yeah I was like, That's rude. No, I'm having a really good week, actually. That is honestly so rude to say to someone.

He didn't say it in a mean way. It's just like, oh, I own some Bitcoin's getting smoked. I'm like, yeah. It's not your fault. No, it doesn't really impact my week. So actually on the topic of stable coins, I did want to talk about this Atlantic article by a certain David from, David from.

David from, Neo-Con. Why is he writing about stable coins? What does he know about stable coins? Not very much. is the answer. Not very much is the answer. Did you read this article? I did not read it. What's it say? Well, he's just hating on stable coins. He thinks they should be FDIC insured. He thinks to only use by criminals. They're not used for anything real. Also, this guy's not like a finance writer.

So how would they be FDIC insured? The FDIC insurance limits $250,000. Yeah. I mean, I don't think he's really aware of the structure of that or why it exists and the difference between how a bank works and how a stable coin works. He also said stable coins are going to be bailed out when they collapse, which he doesn't really, he just kind of like states these things, but he doesn't really explain the dynamics of his predictions. He compares them to mutual funds that broke the buck, which is like is somewhat reasonable comparison, but the ones that broke the buck weren't just filled with short-dated treasuries. Those were commercial paper money-market funds,

not government money-market funds. So I like to think there's a difference between layman commercial paper and short-dated treasuries. Yes, I would... Bit of a difference there. So he thinks stable coins are screwed because of that. And the weirdest thing he said,

I think this was a single weirdest claim, was he thinks that state... Stable coin issuers have duration risk. They have duration risk. Duration risk with the 90-day treasuries. So he thinks if interest rates rise, the value, face value those treasuries falls, thus causing a run on the bank and the stable-quant issuers to be insolvent. Yeah, that's not going to happen.

I mean, theoretically, if everyone raced for the exits into fiat, you'd have some issues. But I don't know why that doesn't happen in government money market funds. So why would that happen here? It literally never has. Because like by he says oh yeah in 22, 23 there was a rate hike cycle. So like first of all the magnitude of the face value sell off in bonds, government bonds short date it is enormously small because there's so little duration three months. Second of all, you can just hold the bond to maturity. Right.

And you get the nominal value out of it. Yeah, it seems to be confusing like an SVB style situation. with something that's exactly it. Yeah. Yeah. So that claim in particular, I thought, was very egregious and I wanted to call that out. So you're going to be writing a revival blog here? Is that where we're going with us? I just, I know, you know, people want me to. I just, I don't, I can't tackle all these. There's too many money. Yeah, you're just on the wall defending so many things. But I don't think a lot of people go to, what would you say? It was the Atlantic?

The Atlantic. I don't think a lot of people read the Atlantic for their crypto news. Yeah, political commentator writing about stable coins the Atlantic. Why? All right, David Frum, not the best, not the best take. How are we looking on the weekend for the Washington football team? Well, we lost to the Miami Dolphins last week. That's tough. I was in Spain.

I actually know people that want to watch the commanders play in Spain and lose to the Miami Dolphins. That's tough. That's tough. I mean, and we had a chance. win the game with like a 50-yard field goal as time expired we missed it. I mean, can you imagine the level of depression going flying all the way to Madrid to watch the commanders lose to the dolphins? I mean, I guess at least you're on a vacation or something like that,

but the year is going very differently for the Patriots. We're having a really good year. Yeah, very shocking. Drake May is definitely the future. I wouldn't say shocking. I was expecting this. See, I think the commanders will actually lose out. The Dolphins was our best chance to win a game. And that's it. I don't know. I guess you're all set on quarterback theoretically. First overall draft pick. Here we come. Yeah, tank for whoever. All right, I think that is it for the week. Everybody have a safe and healthy weekend and we will see you on Monday.