On The Brink with Castle Island - Weekly Roundup 12/17/21 (Crypto-dollarization in Myanmar, CMC glitches, Bitwise's NFT index fund) (EP.269)

Episode Date: December 17, 2021

Matt and Nic return for another week of news and deals. In this episode:  A glitch in the CoinMarketCap data feed causes disturbances in the crypto industry  AscendEX is  hacked last week to the tune of $77 million Coinbase urges the SEC to approve NYSE Arca's application to convert the Grayscale Bitcoin Trust into an exchange-traded fund  Bitwise launches a blue-chip NFT fund A bipartisan group of Senators write a letter to Treasury Secretary Janet Yellen regarding the crypto provisions in the infra bill The Myanmar government in exile official adopts Tether, while the Junta government de-dollarizes  Matt takes the giving pledge The Open Markets Institute spreads a lot of FUD Can the boys lift a 230 pound tungsten cube?  Sponsor notes: This episode supported by Public.com. Start investing with as little as $1 and get a free slice of stock up to $50 when you join Public.com today. Visit public.com/onthebrink to download the app and sign up. 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. Bitcoin. Welcome to On the Brink. I'm Matt Walsh. And I'm Nick Carter. And this episode is brought to you by Circle and it's also brought to you by public. More on those companies later in the episode. So we're here in person?

Here in person. Castle Island holiday party is tonight. That's right. Matt forgot to get gifts for the rest of the partnership. I didn't know we were doing gifts. I didn't know it was one of those things. I'm always that guy. I brought presents.

I don't know if we're allowed to say this. I brought presents for everyone. And Matt has no presents. I mean, I probably have, I'm like one of those guys now that has a box of chocolates here. Thanks, shout out FS Vector. Very nice chocolate box. Might be re-gifting that to someone tonight.

But yeah, I'm like always that guy. Well, you got two hours, so there's still time. I did get all of my, like, holiday shopping done for my family early this year, which was good. You know what I did this year? I don't think my family listens to my podcast so I can say this. Well, do you think they listen? I don't think they listen. Probably not.

I got everyone aura rings and I wasn't even paid to say that. Oh, interesting. I've been really tempted to get the eight sleep mattress. I know you have that or the cover. I was paid to shell eight sleep. You were paid. Yeah. I mean, well, does it does receiving consideration in the form of a mattress count as payment?

So how many followers do I need to have on Twitter in order to get? get like a free eight sleep. Well, I think you might be under 10,000, right? I'm well under 10,000. So there's just a threshold here for notability. But if I keep on finding SEC filings that no one else is looking for, how many Twitter followers do you think I can get up to? So I gave you some credit for that this week because you found the lemonade,

honestly, very underwhelming Bitcoin purchased by lemonade. So for those of you who are not familiar, lemonade, which is the insurance company, came out and they bought a million dollars worth of Bitcoin this week. And they hit it, they tucked it into an SEC filing. But you can't get that back. You can't get that past me. Yeah. I mean, that's one of your skills, dare I say, is finding mentions of Bitcoin and SEC. No one else seems to have figured out how to do it. There's, you know, I'm reading these documents. The way you do it is I'm just reading, you know, 250 page Edgar filings all day. It's laborious.

Every 10K that comes out, I have to read it. I remember when we were at Fidelity and Robin Hood had a disclosure that I think they got like a state license for a crypto division. I highlighted it. I think it was like three weeks before. I remember you told me, but there was no alpha in that information. I know. I just, you know, it would be great if I could put this to use on like long tail assets or something. Yeah.

So, I mean, if they start buying, you know, token ranked 600 on coin market cap, you know, maybe those. the alpha. That's the alpha, is if they come out and they're like, hey, we're going, we're going, there's an asset in the top 10 actually this week. That's like a brand new one. Yeah, you were telling me is something you never heard of. Might be a data, data problem, corn market cap related data issue. Could be a data issue. And, you know, not to forget, and in fact, I think you broke the news on this show, the micro strategy Bitcoin purchase or even prior to the purchase, there was discussion. You found that. I did. I did. I I did have a tip off on that one.

Really? Yeah, someone else who will not be able to be able. And there I was thinking your patient zero for this. Well, I was patient zero, but someone said, you know,

what might be interesting is if you take a look at something. Was it Michael Saylor? I won't, I will not disclose the source. So I looked on Twitter and you were the first person to mention that. On the micro strategy one. On something like August 20th or something or other, 2020.

You're the first. I broke it. And what was interesting back then is it was just a casual mention. So they said, we're going to diversify the treasury on the balance sheet. We're going to be looking at gold. We're going to be looking at Bitcoin. Who would have predicted that they would have been a full-blown Bitcoin access vehicle? And yeah, they now have something like 120,000 bitcoins.

That's crazy. And they keep issuing stock to buy Bitcoin. So it works in one direction in terms of accumulating. Bitcoin, but you can't get the Bitcoin out. No, it's, it gets a little bit interesting when there's a Bitcoin ETF. Well, the interesting thing with this lemonade thing is actually that if you look at the stock, I mean, it's, there's some shorts on it, right? So there's some hedge funds there that are actively shorting that thing.

I would not want to be actively shorting a company that's buying cryptocurrency. That seems like a terrible idea. Or maybe you do. Maybe. I mean, if you have a view that it's going down. Things have turned, Matt. have turned we're tapering oh we're in bear season now yeah we've come down I mean yeah you know we're gonna see maybe two whole rate hikes possibly three next year yeah I think

Jerome said three next year three whole so we're gonna go to 75 pips well I don't know what that's gonna mean for for crypto assets it seems like the it's trading macro right now maybe but it's also you know it'll be interesting to see if two or three big custody banks come out with full-blown crypto asset custody offerings, what that does to the price of these things. So I think market structure is under-discussed here in terms of what's moving these assets. I think if the market wants to sell, it'll sell, regardless of how good the news is. And, you know, the struggle is that Bitcoin has been trading like any long-duration tech company, which where all the value is discounted,

very distant future being discounted back to the present, which is incredibly sensitive to interest rates, right? Because if you raise interest rates, then the near-term future becomes more important. The distant future becomes more expensive, right? That's true. And Bitcoin has been trading in lockstep with big tech. Like if you take the ratio of the NASDAQ to the NYSC and you compare that to Bitcoin, they look the same. So tech outperformance relative to, you know, you you know, regular equity, Bitcoin's chart looks like that. So, you know, that concerns me. You know, it doesn't look much like gold.

You know, gold is as negative real rates hedge. But Bitcoin looks like Tesla, which is kind of concerning. Yeah. Well, that's the way it's trading for sure. So it was a busy week of Castle Island content. I sat down with Alex Wilson. He's the co-founder and CEO of the Giving Blog. We talked about crypto philanthropy.

Good time a year if you're sitting on some crypto gains to start donating them to your favorite charities, that's for sure. Yeah, shout out of giving block. Take the giving pledge. Have you taken the pledgement? I don't know if I'm like public on it, but yeah, I do that. Will you pledge right now? Yeah. What do you have to put your hand up in the air and say, I pledge allegiance?

How do you pledge? Well, it's like in the office where Michael Scott declares bankruptcy. Oh, yeah, you just stand up and say I declare bankruptcy. So this could be it right here. I declare that I will donate 1% of my crypto. Is that what it is? I wish I had any, I just don't have any crypto.

I don't know what the specific pledge is, but you know, you're in it now. I pledged. You pledged. So that was a good episode. Tis of the season, though, of course, you know,

Lockins, you can offset some of your taxes with a charitable donation. So a lot to be said for that. You can either pay the government or you could pay a charity of your choice. That's a good way to frame it. And it's kind of shocking to me that universities haven't all gotten on this train. Do you know how many people are sitting on appreciated crypto assets that would happily make a donation to their universities? But they just don't have the infrastructure.

It seems like a big opportunity. But do the universities need more money? It feels like donating to a huge hedge fund or something. Well, the big ones are. The big ones are hedge funds, right? Tax advantage, no loss. Yeah, it's a great business. So should we jump into deals?

Yes. There are some monster deals this week. So NIDIG, Bitcoin Financial Services Company, they raised a billion dollars. It was led by Westcap. It was participation from Bessemer, FinTech Collective, a firm, FIS, FISA, Mass Mutual, Morgan Stanley, New York Life, plenty of others. But just a huge race. Yeah, enormous raise. NIDIG, one of the premier institutional focused on ramps into Bitcoin, particularly.

obviously a cherished company in the crypto space. And if you look at this cap table here, actually, it's a lot of their partners and clients, actually, that are investing. Of course, they've been really active with FIS and FISF, giving regular folks access to Bitcoin through their digital banking applications, which is pretty cool. So a huge, huge congrats tonight. And I will also say, Robbie Gutman's,

episode on the brink remains our number one episode I've often wondered like how that happened does he just have a lot of people that are just hitting download you know download re-subscribe unsubscribe maybe he's juke in the stats or something either that or there's a lot of people that listen to that episode and don't listen to the other ones

well yeah and that one's like head and shoulders ahead of our second place episode which I think is sack prince actually if I'm not mistaken but Robbie and also Nighting is an organization. They just don't do a lot of press. And so, you know, they were kind enough to do our show. And I think that kind of explains it because people want to hear from the leadership. And the leadership just aren't that public. But that was a very public announcement there. So congrats to the Nadig team. Next one was

pretty cool. So Nike has acquired artifact. And I'm glad that they put in the press release how to pronounce this one because it's RT F KT, which apparently is artifact. It's an NFT studio. They have some really fascinating NFT concepts. So physical shoes that are represented as NFTs. And it's not hard to imagine where Nike's going with this. So big development. Yeah, I would have never known that it was artifact. Yeah, RTFKT just rolls right off the tongue. There's some vulgar interpretations of that. But we're going to go with Artifact. Very interesting from Nike. It seems like every major brand is thinking about NFTs now. Yeah. And some of this is going to be every major brand is thinking about NFTs. Every major brand is thinking about Dow's. And some of them are

going to do it right and some of them are going to do it wrong. It's going to be a lot of private blockchain style stuff here in this industry. But it's how you get to, that's how you learn, I guess. next one up is paradigm this is not the fun this is the derivatives platform they raised $35 million it was a series a financing led by jump it included alameda and genesis trading next up we have stacked they are a company building passive investment tools for crypto traders they raise 35 million from alameda research fidelity international dear w jump capital and others we missed that one actually a couple weeks ago so thank you to the person that pointed out that we missed that.

We included that one. There's a lot of people that now send deals our way to make sure that we include them. Yeah. Oftentimes, we don't call TechCrunch, actually. So some of these deals that get announced on TechCrunch, I just don't read it as much as I used to. The thing that's interesting is the deals of the week section on OTB is now a prestigious thing to have your deal announced on there.

Yeah, you've got to get into it. I've heard that from a lot of founders that they specifically listen to hear their funders in the deals of the week. That's hey, you got to be known for something. So, look, to be clear, Matt is the one that puts together the deals of the week section. So if we miss any, it's generally my fault. It's Matt's fault. Generally my fault.

Next one up is Gala Games. This is a blockchain gaming platform. It looks like what they've done here is they have merged up with C2 ventures to build a $100 million fund to invest in play-to-earned games, Metaverse concepts, and a bunch of other stuff. Then we have Third Web, their blockchain app development platform. There is 5 million from Gary V, Ryan Hoover, and others. Anchorage is the next one. That's obviously the crypto-custodian.

There is $350 million. It was a series D round. It was led by KKR, included Goldman, Alameda, and Andresen. So KKR getting aggressively into the game. This is great. Do you ever read Barbarians at the gate? didn't all-timer all-time great one about the rjr nabisco transaction that could have been your christmas gift to me and yet here you are empty-handed oh that's a great i actually have a copy so i will

i will give you an old book i'll accept your years book um that's a must read uh and predator's ball you got to read that one too it's about the junk bond era so speaking of andresen they're investing in pleaser dow which is a Dow focused on accumulating, I would say, digital artifacts, NFTs, things like that. They bought the original Doge meme NFT. They have quite the portfolio over there. So pretty interesting to see Andreessen buying into the Dow directly. Yeah, it's going to be more and more common. And I think we're going to actually, we're aware of a lot of these deals that have happened,

just maybe a lot of them haven't been announced, but more and more Dow deals. Next one up is Ramp. This is a payments infrastructure companies. They're MoonPay competitor. They raised $52.7 million in Series A funding from Balderton, NFX, Galaxy, and Seed Camp. Then we have Loden, their crypto lending company. They raised $70 million from 10T Holdings, Golden Triocet Management, Raptor Group, and others. So they said in this press release that they're coming out with a mortgage product

and talk about something that the market's asking for. Really, really cool. Mortgages incorporating Bitcoin. I mean, that's been a significant pain point is people have Bitcoin, but can't really use it as collateral. They can't actually financialize it in any way. Little known fact, that's actually one of the reasons why Zach started BlockFi is because he was going through that process and he was dealing with the bank and he was like,

well, I got this, you know, Bitcoin over here. And they're like, no, that's not something we don't underwrite to that. Yeah, I mean, I think a lot of people that buy property with Bitcoin just sell it for dollars, which is kind of a sad outcome. No, and like what you should be doing, and this is not financial advice, is evaluating your alternatives there to take out a loan against your Bitcoin collateral. Again, not financial advice. Next up we have Robin Hood has acquired Cove Markets,

which is a crypto trading technology company. The next one is brink. This is a venture accelerator. They raised $130 million from Anamoka brands. And that's brink with a C. Brank, yeah. Now, there's a lot of brinks out there. We were the first Brink-related franchise in crypto, I believe.

I think we were. And then John Newberry's thing took Brink. I mean, we've told this story before, but I wanted our fun to be called Brink v. Yeah, you also wanted to be called some bird thing, right? Starling. Starling. Not just any bird, Matt. Come on. Some bird. Special bird.

There was reasoning behind that. And honestly, like, the compromise was that we got to call the podcast on the brink. But I'm really wistful. Could have been Brink v.C. Brink VC. I think it's a lot better at Castle Island because people are like, what the hell is Castle Island? And then you get the people that call us Castle Rock. That drives me nuts.

We got killed on that. Yeah. I don't know. I don't even know what Castle Rock is. some production thing and some Hollywood thing. It might be a TV show or something. Yeah, I don't know. It's happened so much.

It's not an early stage venture fund investing in blockchain infrastructure companies. Brutal. Next up, Solana Ventures has announced $150 million fund to back blockchain gaming companies. Good time to be a blockchain gaming entrepreneur, that's for sure. Next one is sounds.xyZ. This is an NFT music startup that raised $5 million from Andreessen and 21 Savage. Then we have Giant, which is a crypto company focused on the telecom industry. They raise $5 million from Coin Fund and Gumi Crypto.

Then we have Nansen, a crypto analytics platform. They raised 75 from Excel, GIC, and Resin, Tiger Global, SCB10X, and others. I didn't put on here at Dune, but Dune is, there's a story right now that just broke, that they're talking about raising a billion dollars. So good time to be in the crypto data space. I mean, what an incredible. We're going to see a number of unicorns in the sort of data and analytics sector.

Eminently, I'm sure. What a week of deals. What a week of deals. Just an incredible week of deals. And has anyone taken these two weeks off? I don't think so. I think there's just going to be more and more deals. People are jamming them in to end the year.

What a year of financing in the crypto space. I was saying this to someone earlier today, but if you just look at how much capital, has gone into these early stage companies. It's just going to be incredible to see what gets built here. And so it feels like there's a great intersection of the technology actually becoming possible and some of these use cases, you know, sparking. Now, there'll be some absolute landmines too.

It's a good time to be a founder. It's a very good time to be a founder. Yeah, the pendulum of founders versus investor relative strength that I think is jammed. It might actually be broken. That's how far left it is on the founders. I'm not salty. Yeah, well, founders are, founders are in a good spot. Speaking about someone who's not in a good spot, the coin market cap data feed.

So apparently a glitch in the data feed caused a ton of disturbances in the industry this week. So a bunch of wallets where the user balances weren't correctly portrayed. There's actually a bunch of protocols that apparently used the coin market cap feed for Oracle pricing. I think at one point said the price of handshake was like $400,000. So that would have been nice. Yeah, a lot of people were very briefly trillionaires. But I tweeted about this, but, you know, clearly I'm pretty biased here, but you can't really be trusting your institutional data feed to someone who was trying to sell you Bitcoin,

a couple years ago, can you? Yeah, they did have those BitConnect banner ads, never forget. They're also owned by Binance, so they're not strictly neutral. There's probably data companies that I can think of that are institutional in nature, explicitly neutral. Couldn't name them. That's shameless. That's shameless. I leave that one up to the listener's imagination. Getting started investing, whether it's public equity or digital assets, is pretty tricky

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when you join public.com today. Visit public.com slash on the brink to download the app and sign up. That's public.com slash on the brink. This is valid for U.S. residents 18 and older, subject to account approval. See public.com slash disclosures, not investment advice. If you manage corporate or institutional funds, you're probably looking for ways to access opportunities in crypto. You see the growth and momentum and want exposure. But a lot of institutions don't know how or aren't comfortable with the risks of Bitcoin or Defi. Now there's a new investment that's built specifically to help institutions get into digital assets. Meet Circle Yield. It's a blockchain-based investment built with USDC, the leading dollar digital currency. Circle Yield is fully secured

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That's circle.com slash yield. Well, the next story is a Sendex. This is a crypto exchange. hacked us a week. It seems like it's been a while since we had a hack. So that's, it's nice to see another hack on the board. $77 million. It was three assets, Ethereum, finance smart chain, and Polygon. So, you know, it feels like there's some times during the course of this podcast where we've had a hack a week on the exchange front. I love it when I first find out an exchange because of the headlines around them being hacked. I mean, I've never heard of this exchange in my life.

I've heard of this one, but my favorite is when you find out about an exchange because there's no fact violation and it's some exchange in russia or something that you just never heard of so coinbase has this is interesting coinbase has urged the cc to prove nyanc arca's application to convert the grayscale trust into an etf so i don't understand why but i support their letter i just can't figure out why they would want that. All right. Well, let's think about it for a second, right? Because they are a primary constituent in the index for that product.

And so it would seem to follow that Coinbase is going to be making a ton of money on data at some point in the next couple of years, especially if exchange traded products get approved. So if you're Coinbase right now, not only do you want the grayscale Bitcoin trust approved, you want every reasonable Bitcoin ETF approved. And for that matter, a bunch of other stuff. So, yeah, but good for them for putting it out there. So this was interesting. Bitwise has launched a NFT index fund. Yeah. And again, we're investors here and deeply conflicted, but this is awesome.

Well, no conflict, no interest. This is probably the coolest product launch of the year. So what I want to know is how did they find or determine these 10, projects to be the index constituents. Well, there's a thread that we can put in the in the show notes. Matt Hogan has a really good thread with all the details and how it works, but they came up with an index for it. They have a floor price concept. And it's kind of the iconic blue chips. You have to meet a certain threshold. So for instance, NFTs with less than 100 items in the collection, like one of ones, they're not in it. Music rights, virtual land, game items, that's not

in it. So there's a full methodology on their website or on how they do it. And it's really the blue chip collections that they're trying to focus on here. So I think it's an incredible product. So I'm looking at the weightings. And basically my takeaway from this is that Cryptopunks and board apes dominate

and then there's a bunch of runners up. Because together, punks and apes have like 70% of the index. Yeah, those are definitely the most popular. But this will change over time. I mean, I think it's just a matter of time before some of my like chill frogs. That might be something that those could eventually end up there.

I think some of these captures that no one seems to like might end up in the index someday too. So the other components are mutant apes, which is an offshoot of board apes, V-Friends, Autoglyphs, Fidenza, Cybercongs, Genesis, Cool Cats, Mebits, and then Chromy Squiggles. Yeah, that's a cool. In case you wanted to know what the, these are like the Rembrandts and vangos of NFTs. They are. This is just the crumb de la crumb. They are. It'll be interesting to see how this constituency changes.

And a lot of the, I think all these are on Ethereum, but that, if you read the PPM, they're open to other platforms as well. So it'll be interesting to see how that evolves. All right. So the next story is six U.S. senators, and I'm going to rattle them off here. So Rob Portman, Republican from Ohio, Mark Warner, Democrat from Virginia, Mike Crapo, Republican from Idaho, Kristen Sinema, Democrat from Arizona, Pat Toomey, Republican from Pennsylvania, and Cynthia Lummis, Republican from Wyoming. So bipartisan group, they wrote a letter to Treasury Secretary Janet Yellen, and they asked her to keep with the original intent in that Treasury brokerage provision.

So basically, the infrastructure bill, they want some clarity there around tax reporting provisions for crypto brokers. So it doesn't seem like Yellen's in any rush to give that clarity. Yeah, I'm impressed that it's a bipartisan group. I mean, obviously, it seems like many more on the Republican side are on board with crypto, but there are some pretty high-profile Democrats, which are now appear to be, you know, positively disposed towards the industry. One of the things that I am most excited about with this industry over the next three months

is that the actual organization that is going behind, getting behind candidates or opposing candidates, is strengthening in this industry. And so, you know, not to spoil any announcements here, but you're going to see some things in the coming months around the crypto industry really banding together and backing certain candidates and really aggressively going after some of these candidates

that are just anti-crypto for no reason. Here's something interesting, too, is a lot of the, challengers that have not been in office or pro-cropto. And so that's not even strictly on people's radars. If you are a Democrat right now that is pro-crypto, you will have the ability to raise a tremendous amount of capital to run for Congress. So, yeah, I think things are going to change for the better in 2022 here with the midterms.

I think it's going to be an orange wave. Oh, oh, all right. Orange wave. All right. You get it? I do get it. But yeah, Kristen Sinema is probably the coolest member of Congress, and so it doesn't surprise me that she's into crypto.

I didn't know there were cool members of Congress. That's good to hear. She, like, does triathlons and wears, like, jean jackets with the sleeves cut off. Oh, really? Yeah. Oh, that's cool. Look, some of them are cool. Some of them do insider trading.

not naming names, and then some of them are cool. Yeah. Well, if I could just, it would be one thing if I could just track Pelosi's portfolio, but apparently you can't do that anymore. I love how she's just shameless in defending it, too. I mean, she just is resolute in wanting to retain her ability to trade aggressively while being privy to all the nation's secrets.

Well, if the theory is, hey, we don't make enough, so I need to go inside her trade. I mean, that's one thing. Just be honest about it. That's true. Maybe that is there a true, compensation model is that they can inside a trade with the impunity. So, all right, here's an interesting story. So if you want a vision of the future as far as global crypto adoption is

concerned, look no further than Myanmar. So there's two governments basically in Myanmar. There's the coup, the coup government, the ones that I think they're China backed. Anyway, they ousted Aang San Suu Kyi And it was a military coup You might have seen the video of that woman working out While the coup was happening behind her Did you see that? I didn't see that

It was a viral video And you know Then now there's the shadow government That's sort of gathering their forces And I guess they want to do a counter coup at some point We'll see what happens there So you have the government Then the government in exile

And they both did something Very relevant to the crypto industry This week What they do? So the official government, I mean, this isn't strictly a crypto thing, but they officially repudiated the dollar for international trade and they adopted the yuan. So we're going to see more of that. So that's definitely a trend, is de-dollarization entering the Chinese sphere of influence directly. Now the unofficial government or the shadow government, Aang-Sang Suu Kyi's government, officially adopted tether.

their currency. So this is mind-boggling, but makes a ton of sense because how else are you going to raise capital very easily outside of the banking system, both the U.S. banking system and the Chinese banking system? What else are you going to use? Yeah, it's very interesting because they need financing, but they can't use banks in Myanmar because they're controlled by the other government. But they also want stability and they want to be able to accept funding from the diaspora globally. There's a big Burmese diaspora as far as I understand it. And so they're using Tether for that. So of course the risk is that Tether or Bipfinex shuts them down or black labels and

address or something. So really what they probably want is something like base coin or a huge decentralized stable coin, which doesn't really exist. So tether is the next best option. Yeah, barring that. And it's interesting that they went for Tether specifically as opposed to USDC. Well, USDC would be, I mean, that would be shut down immediately. No, I don't think so.

I mean... I think they would almost certainly have to blacklist certain addresses here. There's nothing against the terms of service just because they're government in exile. I mean, I haven't read the Terms of Service recently. I think the calculus here is pretty clear that if you're making a counterparty bet, maybe you don't trust Tether as a as a credit worthy counterparty, but they're less likely to have a compliance department that's shutting you off. Yeah, so you're just determining that the credit risk is worth taking because the political risk is less. Correct. Yeah, so that's the trade. And honestly,

I think that's the way the world is going. Crypto-dollarization. That's the first instance of officially sanctioned crypto-dollarization. That's a dub for us. Remember we wrote that white paper? We did. It's us in the The guy's over at Jump. So Peter Johnson's been on this for a long time too. Yeah, he's a big proponent of it. And nobody else, basically. Like, no one else cares about it. It's like one of the most exciting things happening in the industry right now.

I know. I mean, that's what's going to happen. It's not Bitcoinization guys. No, I do hate to break it. I hate to say it. Yeah. It's just public blockchainization via dollars. Yeah, I mean, that's generally what people want is dollars.

And here's the thing. Everyone thinks so at the U.S., you know, they can't project power and broad. They're not going to have a blue water navy. They're not going to, you know, ensure the trade routes, and they're not going to be the world police. Their empire is going to collapse, and thus the dollar will be eliminated. But guess what?

After the British Empire collapsed, the pound sterling was still a global reserve currency for an additional 20, 30 years. At least. At least another 2030 years. The pound was very material until the 50s, but of course, England, the UK, basically withdrew from the world after World War I.

in 1920. So there was a long period where Britain was irrelevant and the pound sterling was still a global reserve. So these things are very sticky is what I'm saying. Even if the U.S. withdraws, they pull away from the international system. The dollar is very, very sticky. These things tend to not change absent war is sort of what I would say. Yeah, that doesn't sort of bode well. That's kind of an ominous statement. Yeah, I mean, I'm not saying we're going to war, but it's, you know, The dollar as a global reserve asset is going to be very difficult to unseed. Well, and the thing is being the issuer of the global reserve is like a very poisoned chalice. It's not something you strictly want to do.

No, it's, I mean, there's some major societal ramifications. Obviously, you've seen the middle class absolutely gutted in this country for the past 30 years, and a lot of it is because of the status of the dollar. Yeah, and you have to accept structurally, you know, structurally more expensive. You just have to surrender monetary sovereignty and have a fully open market and not resist the urge to manage your currency. China actively manages their currency even right now. They actively manage it. And so, you know, it's tough to pull off that mandate and allow things to flow freely and not have capital controls.

So I don't see it changing there. So anyway, crypto dollarization, who knows where it's going to strike next? But we're on the board. Well, it's pretty fascinating with My Enmar there, so we'll keep an eye on that. And what's the next story here? We got Robin Hood. Robin Hood rolled out a new crypto gifting feature. I think this will be pretty popular.

Yeah, I mean, I'm a fan of the Open Dime approach. Yeah. But the digital gift card is also quite interesting. And also Open Dimes only work with the one. And then Kevin Durant, he signed a deal with Coinbase. So he is going to promote Coinbase. athlete we'll see more of those sponsorships so i have one last acts to grind this week which is um the open markets institute open markets institute so they testified in front of the senate

this week it's very hostile yeah i don't i don't have much time for these like every time i was with warrens talking about crypto i just it's better for my temperature to just not watch it. All right, here's the problem. I mean, aside from the general problem of there being this whole organization that appeared out of nowhere, which just creates opposition research against crypto for some just indecurable reason. So that's like the general problem. But then the more specific problem is the testimony and the claims they're producing are just total garbage. So one of the things they created this grid showing what it's like to do a round-trip remittance transfer using Western Union versus using a crypto platform.

And they were trying to ascertain what the fees are like if you're sending $200 worth of dollars using stable coins or using the traditional rails. And they somehow contrived a flow such that you ended up paying like 60 or $1,000. or $80 in fees to the exchanges. That's why you've got to be using XRP when you're doing those remittances. I'm telling you. And so the, yeah, these open markets people decided that you would be using a bank wire to make your withdrawal from the exchange and that you would withdraw every time you made your remittance transactions with a wire.

Because, of course, people that are doing remittance transactions, the stable coins love to send bank wires. Well, that's one way to do it. It's one way to do it. Yeah, so this thing, I mean, like, I get the idea is like they want to do the round trip. They want to go from bank dollars to bank dollars. But the thing about stable coins is you don't need to redeem them back into the banking system. You don't need to do the last mile because you're staying in stables.

This is a very natural exercise to do. I remember we actually did this back in like 2014 when we were looking at Bitcoin remittances and we did this calculation. But, you know, if you thought that this was the way people were going to do things, obviously this doesn't work. So it's sort of a pointless exercise at the end of the day. Yeah, it's ludicrous. It's like they found the worst possible way to do this and then they claimed that that was the most common way of doing it or the default way. But it's just not. You're not sending bank wires as part of your stable coin remittance flow because you're probably using stable coins because you don't have access to banks or you don't like the convenience or the inconvenience of

a bank wire, which is terribly inconvenient. I mean, ultimately, the market market's just going to do what the market's going to do. So it would be more practical to just look at what people are doing and what the practitioners are actually employing as a technology. Right. I mean, they didn't interview anyone that uses stables for remittances, but we know that they're actually very popular in a lot of these markets where the bank system doesn't work. Quite popular. And so it's just a matter of going around the world and talking to these people. So maybe the open markets people should actually investigate some of these open markets. I had never heard of this open markets thing, and I guess I don't really, doesn't matter. It matters because they're in front of the Senate somehow. Yeah.

And we're not. Yeah, that's great. That's a good point. Yeah. All right. The last thing, at least on my end, is Alex Leishman of River. He wrote a great op-ed in New York Post. The title is Eric Adams' hopes for New York City Bitcoin Boom blocked by backwards-thinking

Albany. And you have to say, New York, just one of the all-time worst places to start a crypto business. And yet it's somehow booming with crypto entrepreneurs. It's just, well, it's a great place to live, I guess, right? And there's a lot of talent there. But talk about a backwards situation. That bit license just continues to be the worst. So you're starting a crypto business.

I guess you could be in New York. There's a lot of smart people, a lot of talented engineers. But Albany's not doing any favors. Shout out to Miami. You know, the funny thing is that people talk about the decline of SF in New York. it's really just SF that's declining. Yeah. I think New York is sort of okay.

And then, of course, Miami is thriving. Miami is thriving. It does appear like Miami is pound for pound more startups this year coming in than any other state. Maybe Austin is up there, too. Yeah, it seems like every week I see someone else and other VCs move down there. The meme is infectious. A crowded trade. That's true.

The property value certainly reflect that. All right. I think we got to wrap it up. We're about to go get a tour of a tungsten cube. So I'm looking forward to that. I think it's the largest tungsten cube on the East Coast probably. We're about to go see it. I'm pretty excited. So we'll report back next week. I'm going to try and pick it up.

Yeah, it's like 200 pounds. 230 pounds. It's the seven-incher. Pretty awesome. Now the question is you may be able to lift 230 pounds. Not in a cube format. But that's the problem. Can you lift it with a smooth? Smooth cube.

No. Yeah, me neither. No chance. You might be able to push it around on the floor. Yeah, I mean, I can move it, but I can't, like, lift it up. There's no chance. Yeah, it needs handles. Yeah.

That would change the game. That's an idea. That's a good idea. Anyway, I'm going to give it a shot. I'm wearing a suit, and I've loafers on, but, you know, we're going to experiment. Give it a shot. Give it a shot. Give a shot.

All right, everyone, that's it for the week. We will see you on Monday. Have a safe and healthy weekend. Thank you.