On The Brink with Castle Island - Weekly Roundup 11/26/21 (El Salvador's Bitcoin Bond, who we are thankful for, Big Poultry causing inflation?) (EP.263)

Episode Date: November 26, 2021

Matt and Nic return for another week of news and deals. In this episode:  Coinbase acquires Breadwallet El Salvador's Bitcoin City Is El Salvador's Bitcoin Bond worth buying? New merch on the website Midwest tungsten releases a new shape Is India banning crypto again? Miners coming back online in China The OCC, FDIC, and Fed will release cryptoasset guidance in 2022 Saule Omarova's nomination to run the OCC has fallen through Jerome Powell will keep helming the Fed Elizabeth Warren blames inflation on Big Poultry ConstitutionDAO crashes and burns Insider trading doesn't just apply to securities Who we are thankful for Merch: onthebrink.shop 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 to Britain's ailing economy with a new round of concentrated 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 the Bitcoin. Welcome to On the Brink. I'm Matt Walsh. And I'm Nate Carter. And this episode is brought to you by Coinbase Prime and Circle. More on those companies later in the episode. So today is Thanksgiving. Happy Thanksgiving. Yeah, happy Thanksgiving.

This is a measure of our commitment to this show. We're really taking time out of our Thanksgiving plans to bring you this information. It's been a busy morning for me already. I ran a road race with our partner Sean this morning. 730 road race. That's, it's an early one. How'd you do? Not great. I was, I got beat by like a fourth grader. So not overall not great. Pretty humbling. You used to be a competitive runner, right? I did. Yeah. So it's hard to go back, you know, but you expect to have a good race. But when you actually don't run and you don't practice, it's hard to expect that. It was a very light news week this week. It was a very light news week. Actually, before we get into the news,

there was four turkeys in my backyard this morning for the first time in a very long time. I thought that was very interesting timing. They're commemorating the date. Wake up there. Yeah, they knew what day it was. So I went out there and I wanted to get a picture so that we could, you know, share it for this podcast. And so I was out there with my phone and they just like bolted away, which had historically not been their pattern of behavior towards me, but I think they thought I was holding something else that they don't like. So they ran away. So turkeys, despite having tiny minuscule brains, have the capacity to learn.

I think they've learned that when I come in the backyard, you don't want to be in the backyard anymore. Sounds somewhat menacing. But yeah, it was a light news week. You did do a good episode this week with James McGuinness, the founder of David Energy. Yeah, so David Energy, it's named after David and Goliath, like the biblical story. Okay. I thought, you know, maybe the founder was named David, but none of the founders were called David, so it didn't make sense. Turns out it's, you know, it's the Bible story.

And, yeah, they're trying to ease the transition into a grid which is more distributed and less centralized. So there was more coverage on the notion of demand. response, which is all the rage these days in Bitcoin mining. We will be continuing the mining miniseries with an episode next week. Mining miniseries has gotten very popular. Yes. There's basically unlimited stuff to talk about. There's just so many mining firms. So we will be doing it indefinitely. Well, why don't we get into some deals of the week? The first one is Moonpay, which is crypto payments company. They raised $555 million in a series A from Co-Thope. Tiger, Paradigm, NEA, Thrive, and others.

Just a super impressive company. This is actually the first capital into this business, completely bootstrapped and just an incredible kind of category defining business. Yeah, Moonpay is, that's an incredible story, bootstrapped. And now basically the dominant fiat crypto payment processor for the crypto, very impressive story there. Next up we have Royal, which many of you will be familiar with the NFT, music and royalty startup.

There is 55 million from A16C, the chain smokers, founders fund, Coinbase, and Paradigm. Music NFT is definitely a hot category. I'd have to imagine that the music industry is going to be thrilled with these extra revenue streams that they're going to be experiencing in the coming years. Or chafe at the, potential redirection of royalties, right? I guess it'll be interesting. I think you have some of these startups like Royal, which are taking kind of a very disruptive view on what that market

structure should look like. And then you have others, you know, Mint songs comes to mind as one that's sort of positioned as just ancillary services that artists and labels can sell. And so you could look at a business like that as just giving extra ammunition to the artists and the labels to make more money, kind of digital merch, so to speak. So it's probably going to be both angles that have to imagine. Right. Next up, we have Boucha, which is an African crypto exchange. There is $4.2 million from Jump Capital and Cadenza Ventures. That African market is just completely ripe for penetration here. If you just look at crypto adoption, look at that Chanalysis report that came out a couple months ago around crypto penetration. And there's a number

of African countries, some really fast-growing companies out there. So yellow card, obviously, where investors in. But congrats to the Bushet team. That's great. Next one up is Talas. This is a company that's building an NFT marketplace on top of the Terra blockchain. There is $2.3 million from Parify in Arrington Capital. Talas, not to be confused with Talos. A dominant trade execution platform. I spoke at their all-hands meeting. They were in Barcelona last week. Next up, we have blockade. games, which is a blockchain gaming company. There is 5 million from Animoka Brands, Mike Dutus, Meltem, Demirz, and Christine Moy. This is, of course, the company founded by coin artist, Marguerite de Corsell. Many of you will have seen Neon District. I actually have

a Neon District NFT in game item. that Margaret gave me years ago. And I'm really hoping that, you know, on the strength of this fundraise, it's actually going to be worth something. Yeah, I mean, get some good angels in that deal, too. So congrats to the Blockade Games team. Next one up is Avocado Guild. That's just a phenomenal name.

It's a play-to-earned gaming company. They raised $18 million from Anamoka brands, QCP, Three Arrows, Salonaventures, and others. Do you know avocados? I had never even had avocados until I graduated college? How is that possible? I just don't think avocados were that popular back in the day. You know, like guacamole wasn't even really a thing when I was growing up.

So pretty, I mean, if you think about the business model of this company, it's just imagine, I guess, you know, maybe it's not that new because you've had the notion of people playing games in order to earn real world sort of revenues. from creating endgame items. I mean, that's existed. Like, there were people that farmed World of Warcraft gold for actual dollars. Yeah. But I guess the difference was, that was like the black market.

That was how Brock Pierce got to start. That's exactly how we got to start. That was kind of black market activity. It wasn't really sanctioned by the game. And in this case, the fact that it's an open loop marketplace is explicit in the game. game. And so then you have these now companies that organize this activity. Yeah, it's obviously a

fast growing part of the market here. Seems like every week we're talking about two or three blockchain gaming deals. Next one up is Coinbase. They've acquired bread wallet for an undisclosed sum. This is a fascinating acquisition here because bread wallet was one of the first kind of mainstream crypto wallets. I remember that we actually forked bread wallet at Fidelity when we're just kind of getting our hands on Bitcoin back in early, I think it was probably early 2015, mid-2015. But I used to be a big user of bread wallet. They ended up doing a token. And so this is also an interesting transaction from the perspective of there's a utility token out there. I think it's BRD. I think it went up something like three or four X when this deal got announced. So companies,

acquiring businesses that have done tokens, it's probably got to be a little bit complicated from the Corp Dev perspective, but this is a real product with a lot of users. Yeah, I used to use bread wallet back in the day. It was a pretty good iOS wallet. I don't know what's going to happen to the token. I can't imagine Coinbase would continue whatever it is that they do with the token. I mean, that's a big thing to take on. Yeah, I don't know how you think about valuing a, you know, a token as part of a capital race. It's, you know, where does that fall in the liquidation stack, so to speak. So the interesting thing about Coinbase acquiring breadwalled here, though, is that Coinbase has the kind of the open source. I think it's called just Coinbase wallet.

And they've been doing a ton of development work on that front, now kind of positioning that to be a full-blown Metamask competitor. And it's non-custodial, which Bread always was as well. So maybe that'll be part of the play here is to just really beef up that defy non-custodial wallet side of the business. I mean, I don't consider it an asset in an acquisition. I would consider it a liability, frankly, because there's probably hundreds of thousands or millions of people that own the token. Maybe that's an exaggeration, but a large number of people that own the token that feel that you kind of owe them something.

And so you're inheriting that obligation. It's interesting because how do you think about that? Because they have tokens on the balance sheet, presumably, that just went up a lot in value. And so another way to look at that is maybe it just paid for the whole acquisition itself. Who knows? So next up we have C3 protocol, which is a trading project built on Algarand. They raised $3.6 million from Arrington Capital and Jump Capital. And the last one of the week is Grid, GRIID, a Bitcoin mining company. They raised $500,000. $125 million via credit facility from blockchain.com. So congrats to the grid team.

That's Harry Suttick and the crew over there. Yeah, and I think we'll be hearing from them on this podcast if I have my way, because I think what they're doing is very interesting. So stay tuned for more on grid. Yeah, grid is kind of how you say that, right? So I don't know if this is the big news of the week, but El Salvador, is issuing a hybrid Bitcoin bond, which gives you exposure to their sovereign debt, and also Bitcoin because that's what nation states do these days. They issue Bitcoin-flavored debt.

Yeah, so cheat this up for me here. So what are they doing with the money? They're starting a dedicated Bitcoin City. That's kind of the headline. Yeah, it's called Bitcoin City. The failure of the prior blockchain cities has not. not dissuated President Nayi, Pichelli. They will be creating a glorious Bitcoin city in El Salvador, laid out in a circle like a coin, and in the city center will be a plaza that will have a huge Bitcoin symbol. So kind of exactly what you'd expect from a Bitcoin city.

So let me just get this straight. So they're going to raise a billion dollars via a bond offering that is essentially just country debt. plus Bitcoin, and they're going to use 500 million of that $1 billion raised to build a city called Bitcoin City. Am I getting that right? I mean, it's current year. You know, crazier things have happened. So they're going to be raising the money via BIP. It's going to be a token, I believe, and you'll be able to buy the bond on BitFinex.

So, I mean, this is the brave new world we live in. We're having sovereigns issuing. debt on crypto exchanges. So the city will be located along the Gulf of Fonseca near a volcano. And the idea there is that the volcano will provide the energy and there will be Bitcoin mining out of the volcano. This is something that if you wrote that paragraph two years ago, I would have just started dying laughing. So the Bitcoin city offering is not without criticism, however.

I thought Matt Levine had a pretty interesting take on it. So, you know, he actually looked at the numbers and he said, like, if you want this exact exposure, you can get it much more efficiently by just buying existing Salvadorian debt with the same maturity and then also buying Bitcoin. And you can get the same risk for cheaper if you home brew the product. but, you know, the benefit of buying the specific product is that you, I think, also get residency if you buy a certain quantity. So it's a Bitcoin adventure if you buy the product. Yeah, so maybe that makes it kind of a sweetener.

You had all those folks that were, where did Roger Avere buy residency? Sank kits. Sankets, yeah. So maybe people will buy it because of that. It is sort of this novelty. And you know, you could have said the same thing, I guess, about micro strategy in the early days when they did that bond, which who's going to buy this? But, you know, there are buyers for that. There, you know, some of these folks that are out there buying sovereign debt can't go buy Bitcoin exposure. So I'd actually be surprised if this isn't oversubscribed. we will see the bitcoin city bond was announced at a conference in el salvador Buckele came out to like a big fireworks show and announced it in front of an audience of sharing bitcoiners it's not like the typical way that sovereign debt issuances are announced he came out wearing a backwards hat and kind of looking like he was about to rap or something Yeah, but the backwards hat is kind of his trademark.

Speaking of hats, actually, we got some new gear on the store. I have one on right now. On the breakdout shop, you are rocking the gear. It was very cold out this morning. So this is a stocking hat. We don't do the YouTube thing, but this is a stocking hat with a big Bitcoin flag logo. Yeah, if only you could see the gear. So we got some interesting stuff up there.

I designed this logo, very proud of it. it's basically a American flag, but with the Bitcoin logo instead of the stars, it's really creative. And I think it looks pretty good on the snapback. So, and I'm a big camo hat enthusiast, and so you are, yeah. I actually did a, I did a accounting of my camo hat collection. I have 16 camo hats. 16 camo hats. That's incredible. And you can as well. If you go, go to On the Brink. Dot shop. We have three different kinds of camo. Actually, yeah, for Black Friday, check out the hoodies, too. So the few hoodies are flying off the shelf right now, according to our merch guy. I don't like the few hoodies.

Apparently they're the most popular thing out there. So look, this podcast isn't free to produce, okay? We got costs associated with that, you know, buy a hat. I also the fud dice are up there still I think we're running low on those that's going to be the last probably the last run of fud dice

on these orange ones that'll be the last plastic fud dice for sure we're moving on to new materials here yeah not to always bring it back to tungsten but do you think that there's going to be any sales tomorrow on this Midwest tungsten you know black Friday specials so they came out with the new shape

did you see this new shape just dropped What shape? Oh, man. You're in for a shock here. They have, let me see what they called it. They introduced a pyramid. A pyramid. Pyramid.

Okay. Why would they do that? Well, it's pyramid slash tetrahedon, they calling it. Why would they introduce a pyramid? Because it's a new shape and new shape just dropped. Why not? Oh, I kind of like this. So here's the interesting thing.

thing about the pyramid. The pyramid is made from a cube. So it has the essence of a cube in it. You know, so if, and also it's the benefit that it doesn't slide off your desk and crush your toe the way a sphere might. Well, that's the thing about the sphere. That's the downfall of the sphere. Yeah, I mean, we've heard some good things about the sphere. Even the general manager, the GM of Midwest tungsten endorsed the sphere. But the problem with the sphere is it's just, it's not very stable. So the pyramid is really the most stable shape. All right. Well, I'm going to have to do a little bit of Christmas shopping here tomorrow. The pyramid is pricey. I mean, it starts space price for the pyramid is $630. Yeah, but it's not like it's just this useless piece of steel or something. You know,

it's a piece of tungsten and you can do a lot with it. It's a high quality metal. Yeah. There's a lot of good things to say about it. So there's some more Indian news this week. They banned crypto again. Is that kind of the gist of it? There may be more to it than that, but yeah, they're agitating against it. It's like every two weeks there's a flip-flop here. But the story is that they've proposed a, there's a new law.

They're preparing a bill to regulate cryptocurrencies and effectively say that private cryptocurrencies are illegal. And I guess they say private cryptocurrencies are non-government. issued ones. Yeah, another country level ban to look out for, I guess, would be China again, because there is now mining activity occurring in China. I hate to report it, but your faithful correspondent, I feel obliged to tell you. Miners are turning their machines back on in China. And how do you know that? sources, Matt.

You can't ask me to reveal them. Okay, so sources, sources say. Yeah, what? I can't have sources. I got sources. I thought you were going to have some sort of an analytical bent on this, network data angle on this. My sources, my sources.

Anyway, I can assure you, small miners turn their machines back on in China. And so prepare ourselves for more headlines around a Chinese ban. Well, you can only ban it once. I mean, no, the bans keep on coming. It's never ending. 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 order routing, robust analytics, and algorithmic execution strategies. To learn more, visit on the brink. dot link slash coinbase. If you manage corporate or institutional funds, you're probably looking for ways to access opportunities in crypto. You see the growth in momentum and want exposure, but a lot of institutions don't know how or aren't comfortable with the risks of Bitcoin or defunders.

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This was a big one this week. Yeah, that's a really catchy headline. but so basically the Fed and the FDIC and the OCC, the three horsemen of the financial apocalypse here, have basically made an announcement for an announcement, which is that they are going to basically continue to assess the crypto asset landscape. They have conducted a number of policy sprints,

and they will be, you know, determining some conclusions or providing clarity on whether certain activities related to crypto assets conducted by banking organizations are legally permissible. So this actually, who knows what the clarity ends up being here, but it seems unlikely to me that they would go through all of this and have banks that are pushing for clarity and then come out with something that says

you can't do all of these activities. But the range of activities that apparently throughout the year 2022 there will be clarity on would be the following. The first one is crypto assets safekeeping and traditional custody services. Second one is ancillary custody services,

which we can get into a little bit more detail on what that means. Third one is facilitation of customer purchases and sales of crypto. basically agency trading there. Fourth one is loans collateralized by crypto assets. Fifth one is issuance and distribution of stable coins. And the last one is activities involving the holding of crypto assets on the balance sheet.

So it's very clear that there are banks that are pushing for this clarity. And we know, and listeners of the podcast will know this too is there are a number of banks that have teams that are very far along on products here that are not in market, that they're waiting for this clarity from the OCC and the Fed. and they don't think that they can launch these products from a risk management perspective without that clarity. And so to the extent that we get some of that clarity, I think very, very quickly you will see custody and trading products in market from banks that you know. What I've heard from the largest financial institutions is that there's no explicit law or rule against engaging with crypto, but the informal guidance they get verbally from regulators is absolutely to not touch this. stuff. So will this change in 2022? I mean, will they formalize the guidance? Hopefully.

The crazy thing here is going to be once they start, let's just assume that there's clarity and it's, you know, it's workable, that there's a way to offer custody services for crypto. There's a way to facilitate customers buying and selling certain crypto assets on your retail platform. Then we are really going to see who is completely asleep at the switch from the retail banking side. So there are retail banks out there that have kind of blockchain innovation theater efforts but don't have real teams building real products. And we're going to quickly find out who those banks are. I was having a conversation earlier this week with someone and just talking about how retail banks sort of think about their competitive landscape. And these banks are

constantly monitoring transfers of assets on and off platform. So they're doing analysis on, you know, if you're Bank of America, you know if assets are flowing towards Chase or the other way around and you're kind of monitoring on a month-to-month basis what your T-O-A in and T-O-A outflows look like. But these firms aren't really evaluating themselves based on the crypto companies. So they aren't looking at Coinbase and BlockFi and River and all of these transfers of assets off traditional retail banking platforms into the crypto companies and seeing the crypto companies is competitive. So they're grading themselves on Bank of America versus Chase. But what they really should be doing is kind of thinking about the jobs to be done lens, which is there are entire swaths

of the community that are just treating crypto brokerages as their new front door to financial services and doing everything in stable coins and crypto assets. And to the extent that those companies start to add things like direct deposit and they start to add more lending services and you can take out a mortgage through these places, it's really going to be tough for these traditional old school retail banks to compete. So we'll see who's asleep at the switch here. Well, that's just classic innovator's dilemma, I'd say. Yeah, it's like a newspaper company looking at the internet and saying, well, we don't compete with them. But it's like, yeah, you're competing for people's free time in the publishing space. And so you do compete with

the internet. And, you know, people didn't evolve. And so if you're Bank of America right Now it's like, all right, your competition is actually Coinbase and BlockFi and like Metamask and Phantom and all these things that are capturing people's wallet share here. It's not necessarily Chase. So in related OCC news, Saul Omerova, the nominee to have the OCC, has had her nomination effectively killed. She lost support among Democratic senators, which I'm not going to hide. my glee at this. She had some very concerning attitudes regarding regulating banking. And in my view, it's a very good thing that she is not going to be helming that agency. Well, what do you think the fallback option is she could go work for like Liz Warren's office or something? Yeah. So the

senators that basically killed her nomination are Sherrod Brown, Kirsten's. Senema, very controversial, Mark Warner. And, you know, given that those are Democratic senators, they kind of need all the votes they can get in terms of nominees. And that killed it, which is great because she had some very, very aggressive kind of like, I don't know, I hate to say it, but possibly even Marxist views on regulating banking and should be nowhere near top financial regulator, my opinion. You brought up. So Sherrod Brown sent a letter to the major stablecoin operators, Circle, Paxos, tether,

basically the whole spectrum of stablecoins actually seeking information on how they manage their platforms and reserves. So we'll see if anything comes to that. But the request was basically for a plain English breakdown of how they work. Yeah, it was a pretty sensible set of requests, actually. Also in policy news, Drum Powell, it has been renominated to head the Federal Reserve. The alternative there was championed by progressives, like our dear Elizabeth Warren, was Lail Braynard, who is considered to be more, takes a more sort of creative view in terms of the Fed's role in society

and pursuing an expansionary monetary policy in order to achieve progressive goals, which I believe would involve more printing of money. she will not be heading the Fed. It looks like it's going to stay with Jerome Powell. Yeah, you know, Jerome Powell's kind of got his hands tied behind his back here. What's he going to do?

It's a tough role. Yeah. I got himself into this mess, though. So on the Elizabeth Warren front. Oh, are we going to do the tweet? I'm loving it. We had to go there. So,

um, do you think she actually writes these? tweets or this is this is one of the most disingenuous tweets of all time so i i don't know i'm not sorry about blowing her up because i know that her staffers pay attention to the things that we say about her and so i hope they're listening so she had a tweet wondering why your thanksgiving groceries cost more this year it's because greedy corporations are charging americans extra just to keep their stock prices high this is outrageous and suffice to say say she was roundly ratioed on Twitter. Yeah, the best one, the best replies from Aubrey Strobel,

who's the head of comms at Lolly. And the response is, no, Liz. It's because 40% of U.S. dollars in existence were printed in the last 12 months. Nice try, though. So that one got ratioed big time. She also had one about big turkey. Yeah, this one cracked me up. Americans are paying record high prices for their Thanksgiving turkey while big poultry companies are paying billions and dividends. These companies are abusing the market power. I'm asking DOJ to investigate. So it seems that her thesis on inflation is that the robber barons have decided to begin start to profiteer all at the same time, all for the first time since the 70s, apparently. And it has nothing to do with money printing. That's just a total coincidence, the fact that it

happened coincidentally with M2 money support. growing by its greatest post-war amount. Forget about that. It's all because these companies just arbitrarily decided to start hiking prices for no reason whatsoever. I mean, the logical kind of follow-up is, do you think we're that dumb? Like, how dumb do you think we really are? What I want to know is, does she believe this stuff? I mean, does she believe the things that she says? Because, like, if this is the case that, you know, big poultry, you know, big turkey decided to just completely capriciously hike prices for no reason whatsoever. Why didn't they do it before if they had that kind of pricing power? Why didn't they do it in prior years? So if this is solely at the discretion of,

you know, the corporate sector, why haven't, why don't they always do it? You know, why, why now? Why just, why in 2021. Just incredible. Thank God for Twitter, huh? Some of the replies to these tweets are just incredible. Yeah, so I asked her to investigate the Federal Reserve instead of big turkey. I mean, can you imagine putting the DOJ and asking them to investigate poultry companies for price gouging? Seems like a little bit of a waste of time. Could be. Let's talk about Constitution now. So Ken Griffin just emerged as a super villain. and beat out the Constitution Dow bid for the U.S. Constitution. Honestly, I think it was kind of a merciful action by Ken Griffin.

That's my contrarian take on this, because the Constitution Dow was mismanaged, if we're going to be honest about the situation here. It was a little bit of a dumpster fire there in terms of how messaging was working and too many cooks in the kitchen, it seemed like. Yeah, there was total chaos at the end of its life there. I believe they've now said that they're going to unwind their refund strategy, leaves something to be desired because they're at their median donation with something like $200 and so with gas fees that means that all those donations and below will be stranded for

refunds right so what they could have done would be to process refunds on a low gas fee chain like polygon or something like that which a lot of people suggested but no they just decided to process refunds directly on base layer of Ethereum, effectively eliminating a huge function, a huge number of like the donations themselves. So it's kind of like a Chinese finger trap or something. You can't really get your fingers out. Now, the fascinating thing is that this is an asset now, so people, which is, you know, if you go on coin gecko here, the seven-day chart on this thing is insane. So I think Constitution Dow will live on here. Yeah. And I, think that was another thing the team was criticized for actually was making decisions like reversing

themselves dramatically on their path forward which had predictable effects on people so they caused a huge amount of volatility in both directions which is always you know always tricky because then there's clearly a notion of inside information um and i found out recently that insider trading i was starting a lawyer friend of mine, insider trading actually doesn't require security to be enforceable. So it's possible to have insider information on a commodity, for instance, believe it or not. Like an insider view on like oil, you know, a big oil trade or something? Oil would be tough. But I mean, obviously a lot of these crypto assets are, you know, the drivers are not global, you know, commodity drivers.

They're not whether their, you know, decisions made by a small number of people. So anyway, there's this view in the crypto community that something needs to be a security for an insider trading standard to apply. It's actually not the case. It would be more rare to find an enforcement on a non-security for trading on inside knowledge, but it is completely possible. So that's not me alleging anything about Constitution Dow, but just figured I would mention that. So what do you think Ken Griffin was thinking?

Just I don't like these crypto people. And so I'm just going to go win this? Well, the problem was that it was visible on chain how much they'd raised. But I thought that they were going to have that off-chain kind of war chest that was not known. So I thought they were going to come over the top on the total number. I think that's what's known in the business as a bluff, Matt. Yeah, so they bluff me pretty good there. And yeah, so Ken Griffin called the bluff, basically.

And, you know, he knew that they'd raised $47 million, because you can just look on chain. They, on the website, they stopped announcing, but if you just looked at the contract, there's $47 million in there. And then presumably, because he's not a moron, he could figure out what the costs were for maintenance, which had to be built into their bid, right? And the taxes and the additional fees. And so it turns out that that took it down to somewhere in the 41 million range. And then he just bid slightly more than that and won.

Now, the bigger story is the person that bought that, what was it in 1988, paid like 100K for it. So talk about a good return. Yeah, I mean, definitely a bit of asset price inflation collectibles too. So yeah, I think the moral of that story is DAWS are not really capable of being extremely nimble or secretive, especially when it comes to something like an auction. And it's not surprising that he was able to sort of outmaneuver them. Yeah, there's going to be a way to have some level of obfuscation around the total price or else this just won't work in high stakes bidding. But it'll be interesting to see if this mobilizes around anything else. I mean, you can imagine sports teams being acquired this way.

Maybe people have lost some enthusiasm, given the debacle of the Constitution now. But they did get their people token out of it, which doesn't have a clear purpose. But, you know, when has that ever stopped anyone? Yeah, this will be, I mean, we'll be talking about this for the months to come, I'm sure. This people, people Dow token. Okay, so given that it's Thanksgiving, I think we did this last year, right? did we do this? I think we did.

So we're going to do a who we're thankful for a bit. Why don't you start Matt so I can think of some names? Who are you thankful for? Well, we added three new Castle Island team members this year. So I'm very thankful for Ria and Hunter and Sean. Very thankful for the Castle Island team, expanded team. That's sweet. I hope they actually listen to this podcast so that they know that we thank them.

We're like 35 plus in. They probably stop listening. Yeah. I mean, I was actually asked by one of our guests if I listen to all the podcasts. And you said no, because the answer is absolutely no. Rarely listen to mine, which is offensive. I don't even listen to mine. I mean, I edit them, so I guess I have to listen to them.

I'm not a big podcast listener. I'm more of an exporter. Let me see. I am thankful for even though we had a tough year, a tough year. I'm thankful for the policy organizations that have marshaled to defend the crypto industry, whether that's Coin Center, Chamber of Commerce. Blockchain Association. Blockchain Association. There's new organization, SAT Center. Tough year. We took some losses, you know, took them on the chin. But I think 2022 is going to be better.

I think so. We got to start to get some of these super PACs going, though. We need to start get on the offensive as an industry. Yeah, forget about constitutions. Let's do lobbying Dow next. Yeah, lobbying DAW is very important. All right. I'm thankful for Gerard Mayo and Stephen Belichick, who are orchestrating just a hell of a turnaround for the Patriots defense, and I'm pretty sure we're going to the Super Bowl this year. Gerard Mayo, obviously great defensive coordinator. Also, An angel investor does both things. He's very knowledgeable in the crypto space. So just a man of many talents.

But that defense is just humming right now. And I am thankful for our pro-crypto members of Congress. Some key names I'd like to call out, Representative Tom Emmer, Rokana, Darren Soto, Warren Davidson. Thank you. Especially the Democrats, because I know it's difficult with your base. They don't like Bitcoin. So it's kind of a challenging position to hold.

Then in the Senate, of course, Cynthia Lummus. And newcomers, Ted Cruz, Pat Toomey, Ron Wyden. Thank you for your support. Yeah, that Wyden-Tumee Lummus bill, that amendment didn't go through, but that was a very good moment this year. A sign of things to come. I am thankful for my fence guy, which just solved a big problem for me this year.

And to round it out, thank you to the guests that came on the show. This year, our most popular guests in order were Robbie Gutman, Nydig, great episode, George Selgin, of course, economist at Cato, Zach Prince, Blackfy, Hasma Cook, great episode, Bitcoin's energy consumption, recent one, Ray Klein and Sean Connell of Lanciam, stellar episode. and then Renee at Block 5, Michelle Rocks at the Cambridge Center for Alternative Finance, Matthew Muzinski's, Crypto Voices, Dan Tapiero, Alex Thorne, Nick Newman. I'll stop there, but thank you to our guests for tolerating us. Yeah, definitely. We have the best fans in the world.

We get the strangest DMs in the world from some of these guests. too, but keep them coming. Couldn't have a better fan base. Yeah. And thank you to Brink Nation for very occasionally buying the merch with a lower frequency than you should, frankly, and for funny tweets and emails. Well, I think that's it for the week. Hope that everyone has had a great Thanksgiving. You're listening to this on a Friday. Hope that you have a day off and can recalibrate and go out and buy some crypto merch. Exactly. See you next Monday.