On The Brink with Castle Island - Weekly Roundup 12/19/25 (Quantum FUD, CLARITY markup, are forks obsolete?) (EP.692)

Episode Date: December 19, 2025

Matt and Nic are back for more deals and news. In this episode:  Secret exchange insolvency rumors Caroline Ellison is free David Sacks says CLARITY is getting a markup The Fed rescinds their 2023 Novel Activities Supervision program Insolvent exchange prediction markets Visa's stablecoin advisory business JPM launches a tokenized Treasury fund MONY Quantum FUD Why Quantum might be a surprise Bitwise 2026 predictions The four year cycle is over Grabby aliens and the Dark Forest Content mentioned in this episode:  Talos and Factset, Year in Review

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, A.I. IG $85 billion. This is a different kind of market, and the Fed is asleep. The federal government is stepping it to stabilize Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis. The Bank of England has pumped 75 billion pounds more into Britain's ailing economy with a new round of quantitative easing. You print a couple trillion dollars, and all of a sudden people start to worry. So out of this worry, we have something called a Bitcoin. Welcome to On the Brink. I'm Matt Walsh.

And I'm Nick Carter. Busy week, huh? So the world's like getting really crazy. I know. Yeah, this brown thing was crazy. The MIT professor being shot. So now the police suspect that that they're related. Those related shootings.

Yeah, so we're recording this at 815 on Thursday night. And it looks like they're saying that they might be related. And something's happening in Salem, New Hampshire right now. It seems like they're swarming a like a storage unit facility. I mean, it's insane that. there was a mass shooter that got away on skates. I've never even heard of that before. Yeah, I mean, usually you'd have like cameras around, right?

And then you have the top nuclear fusion scientist, you know, just getting, I mean, it's like crazy things are happening. This feels like the beginning of the 3D body problem. This is what happened in the 3Body Problem. It is what happened in 3Body Problem. Yeah, I was thinking that when that happened, you know, or some sort of like retaliatory advantage or something. I don't know.

You don't see that. And it's, it's jarring. There aren't many people in the world that had the qualifications of this MIT professor. I don't know. I'm kind of spooked out by it. I know. I'm not with you. Scary times.

In lighter news, I guess. Let's hop over to some crypto stuff. Henry made his podcast debut this week, sitting down with corn from Uren Finance, talking about the evolution in the state of defy protocols. State of defy protocols doesn't seem great this week. No. It's generally been tough for the last.

several years in fact so this guy corn i presume that's not his christian name i presume that he has a real name that's not corn it's just corn like the vegetable that's the whole name that's the name yeah well it's like good to see henry chiming in it's nice to see the load being shared honestly i'd welcome more of that across this fund i'm going to be coming back with some more podcasts in the new year i actually just recorded a really good predictions podcast Yesterday. I think we'll release it next week. I guess it is that time of year. We'll make a prediction if you want.

Okay, what's your prediction? My prediction is that in about three or four weeks, we will have come to the conclusion that over the past three weeks, someone has been blowing up in the crypto space, and it's likely a venue. I think that there's a venue, probably in Asia, that is running fractional right now. And that is a big part of why all of the coins are dumping.

Yeah, I've heard you muttering darkly under your breath these last few days. But this is pure, this is the realm of pure speculation. This is speculation, but I've spoken with two investors about portfolio companies of theirs that have tokens. And exchanges have reached out to the token, the leaders of the token project and said, we're out of inventory. We need to send more. That shouldn't happen. So how does an exchange run out of token? tokens. Yeah, exactly. You know what exchange ran out of tokens? FtX and Mankox. Those are exchanges

that ran out of tokens. If they don't have the tokens, but the users think they have the tokens and they're trying to process a withdrawal, then they would go. But I mean, couldn't you as the exchange that's short the token, literally and figuratively just buy the token, cover the short, so to speak, buy it somewhere else from some other exchange. Well, that assumes that you have disposable cash. But let's say that on 10-10, you internalized a lot of losses on ADL positions through the perpetual futures contracts. So you just ate a lot of that activity. I think that's how you'd get to a position where some of these exchanges might be running fractional. What is the catalyst to reveal? When's the tide going to go out and we're going to see

swimming naked? I don't know. I mean, what was the catalyst for FTX? It was Ian Allison's coin desk. It was the balance sheet. It was leaked, right? So I don't know. A leak. That's one of the great unsolved things in the history of the crypto industry is who leaked the balance sheet to Ian Allison. Yeah, speaking of which Caroline Ellison is out of prison already. I saw that. She's in halfway house. She, that was so little time. What was that? Did she even learn her lesson? That's like where you get for stealing a stick of gum. She did less than a year. That's awful. What is she just, I mean, I'm presumed she's banned from the securities industry or something.

I'd imagine. I mean, that was a tough one for the feds, though, because she was the case. The fact that she testified, that was the slam dunk, I think. Not that there were. But anyone could have, anyone could have said, like, it wasn't like you're bought, you know, busting a mob operation. You got a tattle on the other guys. Like the smoking gun was plainly visible to everyone.

Yeah, I mean, there's no money there and he stole it all. there. The money wasn't there. Yeah, Caroline Ellison. She'll be probably launching an AI project or something pretty soon. Yeah, while Ryan Salam wroughts in jail for seven years. Yeah, the equity there doesn't seem right. Yeah, it's not a fair system. All right, let's hop over to the deals of the week. First one up is a company in our portfolio that we originally invested in back in 2018. It's called Don, formerly known as Andrina. It's a centralized Wi-Fi provider. They raised $13 million from polychain and archetype. Congress, the Andrina team. Yeah, super exciting to see this one. Come to fruition. We did this investment before D-Pen was even a thing. No one called it, but we later found out

that we had done a D-Pen investment. Do you remember that original office? It was right off of Canal Street, no air conditioning, fifth floor. Very hot. Yeah. And we had to walk up. That was one way to raise capital for those guys. I don't know. That's why that round was a little hard for them to raise because they were bringing investors into a 100-degree heatbox in Chinatown. I remember that vividly. Next up, Intraub Lobb is developer of the Axelard Network.

They were required by Circle. Then you have re-dot pay. I always call this red dot pay, but it's red dot pay. That's what I thought it was too. Stablecoin payments company. They raised $107 million from Goodwater, Pantera, and blockchain capital. Next, and we've ETHGathapel. a block space futures market for theorem.

There is 12 million from polychain, Blue Lard, and Suscohanna. Then it's Contigo, which is a stable coin-based neobank. There is $20 million from Coinbase, Y Combinator, and DST Global. Olea is a blockchain-based trade finance company. There is 30 million from BBVA-XDC network and others. Then it's Speed Wallet, a stablecoin payments app on Bitcoin's Lightning Network. They raised $8 million from Tether and Ego Death Capital.

Stable coins on lightning, that's where we should have started originally. I haven't heard of lightning in a while. No. It's nice to see people still trying to build things on it. Motto is an on-chain credit card company. There raised $1.8 million from Eternich Capital and Cyberfund. Strata is a DFI protocol for structured yield products. They raise $3 million from Maven 11, lightspeed faction, and Halo Capital.

YoLabs is a defy yield aggregator. There raised $10 million from Foundation and Coinbase Ventures. Do you remember the app, Yo, back in the early iPhone days? You could just send people the message, yo, right? Yeah, you just send the word yo to people. I do remember that. I had it. I think it had it on my Blackberry.

It might have even been a paid app. That was like one of the first apps. I remember that. Yeah, good app. Then next one up is worm.wtf, which is a prediction market on Solana. They raised 4.5 million from six-man ventures, Solana Ventures, and the Alliance Dow. Harbor is a decentralized exchange. There is 4.2 million from Susquehanna, Triton Capital, and Salini Capital. Then we'll close out with a couple acquisitions. A securitized for advisors, which is the wealth management unit of securitized, was acquired by Anchorage Digital.

And Hedgy is a token distribution platform. They're acquired by Anchorage. A lot of news this week. Where do you want to start? It's got to be market structure. Market structure. All right. So Crypto czar David Sacks has tweeted that, that's, Senators Tim Scott and John Bozeman, who are the chairs of the Senate banking and Senate Ag committees respectively, have confirmed to him that there is a markup of the Clarity Act coming in January. That would be your market structure bill. So that is good news. Yeah, I would put my personal odds of this passing and being fully signed into law at 30%. 30%, which is an improvement

from last week. You know, I think the biggest sticking points from what I hear, the behind the seen Scuttlebut is the Trump family involvement in crypto is just an issue that a lot of people have reservations about on the Democrat side. So that could cost some votes. The other thing is the stable coin yield loopholes. That's what people are talking about right now. I don't like that it's called a loophole. That was just how the Genius Act was drafted. Yeah, it's not technically, I mean, I guess it's kind of a loophole, but it's it's just revenue share. between two consenting parties. You know, I don't...

Stable coin rewards. I mean, good luck banning those. Yeah, I don't think you can ban an affiliate payment. I don't either. So I hope we get some action on this. But early, yeah, early January is good. So the Fed rescinded a letter from 2023. I remember this one very well.

This is August 2023. It was the novel activities, novel cryptoactivity supervision program. So the Fed, at that time, this was in the depths of choke point, they demanded that banks doing anything pertaining to crypto gives the Fed a heads up, basically implying that you needed their permission. And the Fed has now rescinded this guidance, which is great. Pretty awesome. I mean, the fact that it was even put in place in the first place was kind of a disaster and a sham,

but it's amazing to see. You also have the FDIC this week proposing a stable coin application rule designed to provide consistent framework for institutions on how to launch a genius compliant stable coin. FDIC also approved ERABOR for FDIC insurance this week. Huge development. So you're seeing the bank regulators actually get on board here. Yeah, huge, huge week on the regulatory front for institutions when I touch stable coins. I thought this is interesting. Visa launch their stable coin advisory practice.

practice aiming to help banks and fintech implement stable coins. I think that's smart. Yeah, you're one of these banks or fintechs or, you know, broker dealers even. And you know you want to do stable coins, but you don't have a team that knows how to do anything with stable coins. Visa looks like is sending a forward deployed engineers to do this. It's not like you're going to hire Deloitte to do stable coins for you, right? Like you kind of need a specialist for this.

I think it's smart for them to do it. So they reported a run rate. I thought this is funny. They reported a run rate of their own settlement volume using stable coins of $3.5 billion. Although with a run rate figure, are they just annualizing a daily figure? Well, you do what founders do. Yeah, you just take a daily figure or like a half day and you just take the smallest quantum of data possible and then annualize.

annualize it and that's your run rate. So three and a half I don't want to disparage visa at all. In fact, there are allies and our partners in the stable coin. Three and a half billion annualized. That's 10 million a day. So there's still a lot of room to grow. Yeah. I mean, those are some rookie numbers, but we're just getting going here. Yeah, yeah. This thing just turned on. And they also, visa settles like $15 trillion a year. Yes. So some ways to go. But really cool to see. than monitor's practice. I think it's a very smart idea. I actually think maybe more,

it's expensive to do something like this where you actually just send human beings out to help build, but that actually works well. I mean, doesn't Palantir do that? That's kind of their whole business model. Do things that don't scale. A couple more regulatory things.

So the SEC, they issued a statement this week clarifying that they will not object to broker dealers, custody, and crypto asset security, such as tokenized equities, bonds, et cetera, on behalf of their customers. So kind of seems like a, hey, no, it's an obvious thing, but the SEC of yesteryear really had an issue with this. So having this statement out there in the public,

I think will open the door to more broker dealers, getting a lot more active in the space. Also on tokenized securities, the DTCC has partnered with the Canton Network to tokenize U.S. treasuries following their no action letter from the SEC, allowing them to offer tokenized RWAs. This is happening really quickly. That's an exciting development. I think it'll be interesting. I think about what the DTC is doing is a little bit more of a different market structure from some of

the alternative asset managers that are issuing funds. I think you're going to see just a lot more kind of closed ecosystem activity probably with the DTC. But the fact that they're doing it on an open blockchain, that has privacy. It's very compelling to me. Yeah, a few years ago, I would have been on their enterprise proprietary blockchain. I mean, yeah, DTC did all these pilots with like Exxoni and R3 and all these other ones. But it seems like the whole industry is moving towards open standards. Yeah, speaking of which, JPMorgan, of course, they love a private blockchain. They launched their tokenized money market fund on Ethereum, public blockchain this week.

It's called My Onchain Net Yield Fund or Mone. Moni. short, Mone. I like that. I kind of like that. A hundred million of their own capital. It's open to qualified investors. So the million dollar minimum. Tokenized money fund.

I mean, got to give Jamie Diamond credit. Just out there bashing the industry nonstop, just relentless for the past four years. But he maintained 150 engineers working on blockchain stuff the whole time. Real quiet. Yeah, I respect that he evolved, maybe,

or just he doesn't talk about crypto anymore, crypto products probably still hates it. I think it's just a really good operator and he's a really good politician. Don't you think? I think he's just, hey, I'm going to make money on this. I'm going to win. But it isn't cool to hate on crypto. I mean, it's kind of still cool, but it's less cool to hit on crypto now. You remember that hearing when Elizabeth Warren and him were just having a great time together. It was almost like she slipped him the questions or something. He knows how to, he's a chameleon. Was it him that said that Satoshi was going to come back? Oh, yeah.

You listen to Galaxy brains. You can hear that every time they're doing that episode. It's going to come back and delete all the coins. Yeah, I mean, maybe he's on to something. You know, he might be on with something. I mean, Quantum Satoshi. Quantum will reawaken, you know, the beast. Yeah, from the slumber.

I forget who we were talking to this week, but they were like, did you think that Satoshi just knew about Quantum? just wanted to accelerate quantum? Yeah, I mean, I understand the theory. I think it's insane. But we do know that Satoshi knew about quantum. Because he wrote about it in Bitcoin Talk forums, right? Yeah.

No one brings that up in the debates about quantum. Satoshi said actually in the context of hash functions, which are really not that quantum vulnerable. Satoshi said if quantum exists, we can just use a new hash function. It's like he should have been talking about elliptic curves like signatures. That's true. But anyway, the point is, Satoshi was in the team tackle the threat upgrade, which is why I don't understand all the developers today that are determined to be blissfully ignorant about this whole thing.

It doesn't make sense. You know, look, I am no quantum expert, but I'm sitting here and I'm taking pitches and I'm hearing about people raising hundreds of millions of dollars to build quantum computers. and the first thing they're talking about is going out in trying to break Bitcoin in the context of getting Satoshi's coins. So something's clearly happening here. I think it would be worth

talking about from the Bitcoin developer ecosystem. Yeah, and people like to say, well, you know, there's a lot of frauds in the quantum space. It's like, well, first of all, it's a little rich coming from crypto. Let's just lay that on the table. Second of all, all all we need is for one of these people to be telling the truth. And these are not fraudulent people. We're talking about

These are real physicists. Like PhD physicist people that have won some big awards. We just started someone that won a Nobel Prize for God's sakes. Yeah, so these are serious people. Serious people think it might be a next decade concern. If you go to there's a prediction market called Metaculous, they think it's only like experts, so to speak, are allowed to vote on it. The consensus there is 2032, which is not that far from now.

And the thing is, even if it is a long ways out, if Bitcoin is going to upgrade, it needs to happen deliberately, slowly. People need time to migrate their coins, obviously. Some people are in jail. We can't just leave them high and dry. They're part of the network too. Some people are on a silent retreat in a monastery. They don't have access to their coins. Some people are doing tours of duty on nuclear submarines.

They don't have access to the internet, probably. Right. we can't forsake them the nuclear submarine bitcoinsers there are some i'm sure there must there's a non-zero number we have to give them time to upgrade so even if it is 2035 we have to start today well it's you know it's also just the queuing right so if you think about the throughput of the network and everyone that holds bitcoin and all the custodians you're we're going to have a very congested bitcoin blockchain here at some point yeah i mean you're talking a couple thousand transactions a block 144 blocks a day

that's not enough and you have 300 million UTXOs I think that's roughly the right order of magnitude that you have to rotate and it's going to take like two years yeah that's just for the upgrade so we don't have that much time let's say it is a 25

2035 issue okay we're going to spend three years arguing then we just spent a couple years testing the post quantum signatures then we've just spent a couple of years between proposal and implementation of the soft fork. Numerate, plural. Soft forks plural.

And we've decided what to do with Satoshi's coins. And then everybody on the network has to have a window of opportunity to switch over. And we have to hope that Q-Day doesn't come earlier than we thought. Right. That's a lot. Meanwhile, there is a geopolitical arms race going on. And everybody thinks we're going to have notice and warning. What happened in...

1939 you know we discovered the fission was possible all the scientists went silent you know they went to work for their respective governments and then five years later we exploded an atomic bomb in new mexico so you the governments that will presumably be developing quantum they have a huge incentive to take people by surprise not to broadcast their progress. Yeah. You want to be first. You don't want to tip your hand to your adversary and tell them, oh, we're right on the brink of getting there.

No, you don't. So I think actually we'll know that we're close when all the top guys stop publishing. It's interesting to think about it in the context of a government in terms of what is more valuable. I think it's very clearly the communication systems. So if you're a government that can get this and you can basically just read all of the historical communications of your adversaries, to me there's so much value there. That is driving a lot of this cap-X.

And then you have, of course, the Bitcoins, the Satoshi coins. And who knows, that's a little bit harder to predict because you could always have a fork and maybe those coins aren't around. But from the government perspective, there's all sorts of incentives to pursue this at scale. Yeah, exactly. and we know China is the world leader or the number two in quantum. And do they care about Bitcoin? Do they like Bitcoin? I don't think so.

I don't think they like Bitcoin. If Bitcoin is an American thing, China probably doesn't like it very much. So I know a lot of people say, well, it wouldn't be legal to steal the coins. When has that ever stopped anyone? Did that protect the Louvre? Can you waive the constitution of the thieves and the Louvre? Yeah, we catch those guys? Are those guys caught?

No, they got it off Scott free. That's crazy. I thought they arrested one of those, Louver guys. Oh, yeah, they might have. I think they were like going to the airport. But yeah, good points on Quantum. It's nice to see mixing it up with Adam back on the old Twitter. The other thing that I thought was interesting was a lot of people said,

well, you know, if the Satoshi Coins thing leads to a debate, we'll just fork. So we'll have two forks. And then everybody can choose which fork they want to buy. like 2017 with Bicklin Cash. I think that's 100% not going to happen. You don't think so? Because I don't think any of the big asset managers, the real big financial institutions,

would allow that to happen. Because that's just chaos. Which asset gets the reference. You can't have two. No. You know, like a fiduciary cannot have a ticker duplicate and morph, and we don't know which one is the right one. Like, that's insane.

They all do have fork policies in their ETF applications, but I think you're right. I think there's enough of a trad-five flavor to the custodial landscape right now and the ETF landscape that you'd have a, you'd probably not have a fork. I think that's it. I was looking at actually the Black Rock Fork policy today, and they're very clear that they're just going to pick one. So I think this means that forks are obsolete. Everyone thinks, oh, it would just be like 2017. We'll run back the Bitcoin cash thing. No, absolutely not.

We're not doing that. Are you kidding me? That was chaotic time. That was pre-mature. It was pre-the Bitcoin being this like integrated thing. That's part of the financial system. The financial system can't handle Bitcoin splitting in two and both Bitcoin's being pretenders to the throne and like which Bitcoin is in the ETF.

Like we don't know anymore. What coin does the ETF? That's crazy. that's not possible. So what's actually going to happen is BlackRock and Fidelity and Coinbase and whoever else will just agree. We're just all going to support the fork that freezes the coins or doesn't. And that's it. Yeah.

And I know the Bitcoiners don't like that, but that's the way it is now. Yeah, it'll be interesting. Sailor went on Alex Thorn's podcast today. I don't know if you've listened to that yet, but Sailor doesn't. seem very worried about quantum, but it doesn't seem to me like he's really in the weeds enough on it, to be honest with you. I'm withholding comment because I don't want to be mean. So I was talking quantum. I've got some great quantum books here. Oh, did you buy some? What do you have? About a bunch of them. Hold on one second. This one right here, I wish we did video,

quantum computing since Democritus. I understand, I mean. Yeah, how far did you get into that before your eyes glazed over. This is a dense read. I just don't have enough background knowledge and physics to understand this stuff. There's a lot of philosophy in there too. Yeah. There's theory of mind. And then there's also a lot of math and set theory, which I had actually done a lot of

that in my philosophy courses and propositional logic. So I had somewhat of a grounding, but I found it very dense. I just, I'm kind of reading this with the view that if I can understand 25% of this book, that's a huge one. There's value in it, for sure. We'll be talking about quantum, I think, on this podcast for many, many years to come. Yeah, and we're not fudding, by the way. This isn't fud.

No, we hold Bitcoin. We want it to be sound. You aren't allowed to call us fudsters. I just want to get ahead of that. This isn't fud. This is a valid concern. We're not fudding for the sake of it. You think we enjoy fudding?

No. no but i would say we intend to make strategic investments into companies that are preparing the ecosystem for this future yeah so we will you can call us bagholders like but the reason why we're becoming bagholders is because we're worried about it yeah exactly that's the causality so call us baggies but not fudsters now we will hopefully be holding some heavier bags uh in the months to come um all right let's talk about something else here uh coinbase they announced a bunch of products this week uh at an event. So they announced they will be releasing stock trading, a prediction market powered by Kalshi, a white labeled stablecoin service, and an AI powered portfolio advisor. It's a lot of

announcements. Yeah, they are shipping over there. And it was interesting that they partnered with Kalshi and not a plate market, the less crypto native of the two. But maybe they're poking the nose out in front. Yeah. I mean, it's interesting that they are partnering. I guess that's the fastest way to get to market because I don't think Coinbase has has this built, obviously, internally. But I also thought it was interesting that they're getting into the white label stable coin category. There's a bunch of companies in that space now.

I was at a dinner recently with three creatives, not finance, certainly not crypto. I didn't even mention that I was involved in crypto. And these are like creative director types. And one of them said, I'm going to tell shit. So wow, no way. Like it was a generic term. Not I'm going to prediction market it or polymarket it. Cal shit.

Yeah, I feel like just check the polymarket is the way everyone talks about it usually. But haven't heard that. Yeah, this girl just blurt it out. I don't even remember the context. I'm going to cal shit. I'm like, wow. Wow, if they could see this right now. Yeah, they would be very happy.

They'd be thrilled. Yeah, so it's, you know, really penetrating the mainstream. Yeah, I mean, prediction markets just going crazy. All right, here's some other news. CFTC acting chair Caroline Pham has announced that she plans to join stable coin payments company MoonPay following her departure from the CFTC. The transition is dependent on the confirmation timing of Trump's CFTC nominee Mike Seelig, who it looks like is going to have a Senate hearing in the coming week to hopefully get approved at CFTC.

But that's a great hire by Moonpay. Yeah, huge pickup for them. She's really good. So on the dat topic, strategy has bought another 10,645 Bitcoin for just shy of a billion. I didn't realize they're still buying Bitcoin. Yeah. Yeah. They're always trying to buy Bitcoin over there.

Market just chewed right through that, which, yeah. Someone is just a forced seller in this market. This is, there's a lot of weird shenanigans. Sailor throws a billion dollars at this thing and just choose right through it. Yeah, the MNAV according to them, which there's like, I don't know the right way to do it. I don't think the right way is with enterprise value. If you ask me, their MNAV is blockwork says it's 0.0. It's 0.75.

And then micro strategy says on their website, it's 1.1. So whichever one it is, that doesn't seem high enough to support a big Bitcoin buy like this. Well, I think they just had a bunch of cats. on the balance sheet, right? Didn't they raise like $4 to $5 billion over the past six weeks? I mean, these guys are just cash rich at this point. But he's going to, I mean, maybe he's buying the dip, who knows. In other news here, Intuit has signed a partnership with Circle to integrate

stable coin payments into their products, including TurboTax and QuickBooks. Do you, would you pay your taxes in stablecoins? Yeah, if it was convenient. Yeah, I think so. Yeah, I think that makes sense. You could also have, I mean, QuickBooks, there's a lot of B2B payment activity that could happen there. That seems very logical to me, actually. Also in the same coin world, SoFi has launched SoFiUSD. That's the stable one issued by its nationally chartered bank.

That's pretty cool. I mean, SoFi's making some big, big moves over there. I feel like they were having a cup of coffee with the crypto industry back in the last cycle and kind of turn things down a little bit, but now they're back in full force. So did you see the bitwise predictions for 2026? I did. Yeah, you want to talk about some of them? All right. Let's evaluate these predictions. I mean, obviously they haven't happened yet. It's not even 2026 yet. But all right, first one, Bitcoin will break the four-year cycle and set all-time highs for 26. Yeah, for 26. So the four-year

cycle is broken if Bitcoin closes down this year, which it looks like it's going to. So the four year cycle is over at that point? It'll be over in 10 days. I didn't even realize that. Is anyone talking about that? Yeah, if we have a down year. But I think that's great because everybody was kind of conditioned to think that the four year cycle is a thing. And if we deny that, then, you know, then we don't have to worry about a sell-off. because we're not slaves to the cycle anymore, which would imply that 26 would be a down year. Yeah.

That's what the cycle says. I mean, to evaluate this and to say like, hey, Bitcoin's going to hit an all-time high, I think you just have to have a view on the macro in risk assets at this point. Because that's what Bitcoin's trading as right now. And I just think there's a lot of overhang from the Dats, but who knows? I mean, you print a bunch of money, Bitcoin will certainly hit new,

all-time high. Yeah, nominal all-time high. I can see that. In gold terms, maybe not. They think Bitcoin will be less volatile than Nvidia. Reasonable? Yeah, I guess that's reasonable. Yeah, I could see that. Then crypto equities will outperform tech equities. This one comes from the Castle Island playbook. Stable coins will be blamed for destabilizing an emerging market currency. That's a great prediction. That's definitely going to happen. like that one. I would say times two or three countries. I mean, you're going to see some fiat currencies absolutely capitulate.

They also say Ethereum and Salana will set new altam highs, but conditional on clarity passing. If clarity passes, that will be a huge catalyst. Yeah. For Ethereum in particular, I would say. Half of Ivy League endowments will invest in crypto. Probably do already. Honestly, I think half of their endowments do.

Yeah. But if you include like paradigm. Yeah, yeah. And Bitcoin's correlational stocks with stocks will fall. I can see that as well. We will return next year and tell you how they did. So you skipped one. ETFs will purchase more than 100% of the new supply of Bitcoin, Ethereum, and Solana.

I think that's easy. That's easy. That's easy because Ethereum is barely inflationary. I don't know about Solana. on it, but how hard can it be to buy all the new supply? Yeah. And Bitcoin barely produces any coins anymore. Right.

So I think that's a pretty safe bet. And they're predicting polymarket open interest at new all-time high. Yeah, I don't know about that absent an election, but yeah, that's probably good. I want to embarrass on, I'm on it. Although the sports betting could maybe bail them out. You had a Patriot Super Bowl. There'll be a lot of people in Boston using polymarket, I bet. Well, it's not going to be the commanders.

Another thing to check out, we'll put this in our newsletter. Talos and Faxette, they wrote a year-in review on digital asset capital markets. I thought that was really good. Good report out there. This is the four, coin metrics used to do this. Yeah, exhaustive, very detailed year. It's really good. This is like a, you know, McKinsey-style report in terms of how detailed it is.

Yeah, we're going to put this in our show notes for you. Yeah, I would recommend checking it out for. sure. I got some feedback from the listeners about my UFO comment about the Tic Tacs. People are like, thanks for bringing that up. And I can't believe Nick is not following this story. So a lot of people joining my side. I have heard that many people are passionate about UFOs.

Yeah. There's a, I guess it's a movie called Age of Disclosure. I haven't actually seen it yet, but a bunch of people were like, you got to tell Nick to watch that. I'm more of the dark forest mindset, you know, that, I mean, you remember the three body problem. Yeah, of course. The aliens discover us or rediscover them. The first reaction is to immediately destroy the other civilization if you're slightly more advanced than them. Right.

Which is what happened on earth when civilizations met each other, right? Correct. They didn't peacefully coexist. Immediate destruction. Whoever was slightly like 100 years ahead technologically of the other guys, total devastation, right? Yeah. Yeah, you really get a hope that it's like humans from the future traveling back.

Not the planet. What are the odds we're meeting or match? We're talking cosmic timescales, you know. Do you think that it really worked out that the bacteria, you know, became eukaryotic at the exact same time, like on Alpha Centauri and our? Earth or whatever, the moons of Saturn. And then advanced civilization developed at exactly the same rate where even 100 years of difference means, you know, atomic bombs versus sticks.

Yeah. Yeah. So I think if we have an encounter with an alien civilization, either we are like infinitely more developed than them or they are. I think it's going to be them. I mean, if they can get here, I mean, we can't even come up with a cure for the norovirus. Yeah. As of right now, if we encounter anyone else, they're way better than us.

Yeah, I don't like our chances whatsoever. By definition, we're like cavemen to them. So they wouldn't like just like, you know, create these like vague signs and like, you know, sprinkle in a couple of UFOs here. They would obliterate the earth. They would cleanse it. It's a good. It's a good theory. All right.

So I'm going to put you down in the camp of all these things we're seeing or just humans from the future doing a little time. doing a little time travel back. I'll put you in that conspiracy camp. And by the way, there's a name for this, which is the Grabby Aliens. I don't know. Hypothesis. I think,

I say Robin Hansen talks about it or Nick Bostrom. Like, one of these philosophers. It's basically like game theoretically, if you are an advanced civilization that's capable of interstellar travel, you would just immediately, you know, seize as much resources as possible and to the exclusion of any other.

civilization. The fact that we haven't, you know, had any encounters implies that there's none that are near us, basically. I don't know. Maybe it's just like ants, you know? I don't go out of my way to step on ants. They just don't really bother me. And I don't really think about them. And I'm sure there's a lot of ants in the middle of some forest somewhere that are like, hey, we're, we're alone. But I don't want to depend on the benevolence of an alien that thinks of us. insects. Yeah, that's, yeah, that's a fair thing. Like if I was an ant, I wouldn't trust that you weren't gonna, I also try and avoid stepping on ants. Like, I think they've little ant souls. Yeah, I mean, the only time I do is when they're in my home. I love ants. I think they're so fascinating.

I used to be obsessed. I had ant farms. I read all these books about ants. Yeah, I would have these ant farms. I loved ants. Never really thought about ants too deeply. Yeah, no, they're fascinating, little critters. I would never step on an ant if I can avoid it. Yeah, I mean, it's bad karma, right? We can't trust that the aliens are going to be like that. Definitely not. We'll know that there's an alien when we get

vaporized instantly with no warning. That's one we'll know. All right, I think that is it for the week. How are we doing on podcast next week? I guess we'll be podcasting around Christmas time next week. Nothing has stopped us doing podcasts in the past.

We'll do a podcast next week. We don't take any weeks off. It's been a long time since we had a week off. I was just thinking about it. So we've done six years of this podcast. We've missed two, right? Is it two? Is it only?

Yeah, I thought maybe even one. Two or three. There's one that we recorded and just never put out. It's between, I think that was during Bitcoin, Miami, the first one. Yeah. Yeah. Yeah. So we've missed between one and three episodes.

Yeah. We'll do it next week I'm sure there'll be news My guess is that we're going to find some Bodies floating ashore here in the You know exchange or market maker I just don't believe I just don't believe it

I believe that they exist I don't think they'll show up We need a catalyst we need a leaker You do you need a leaker So get in touch with your Someone leak in a coin desk columnist or whoever's doing that We're received these days Is he still at coin desk? Yeah it might be

There's another pool that's up for the grabs journalists go get it the Pulitzer is inside the computer you just have to get it out i just don't we don't need another big scandal right but i mean some of these rinky dink venues and uh in asia are or are just bad for business you know actually one way to do to incentivize this would be a prediction market yes do a is the x exchange and solvent prediction market and then if you're an insider, you can quote unquote leak. I'm not not this is not legal advice, but you can leak your knowledge of the exchanges in solvency, thus warning everyone and profiting from that's very true good deed. That's very true. So actually there should be it would be pro social for there to be

prediction markets on exchange insolvency. It truly would be. It truly would be. And you know, I'm looking at the proof of reserves that some of these exchanges are putting out. They're not impressive to me. There's not enough detail. I don't like the PORs. I don't like it because I mean, we know for a fact that some of these venues have had hacks and that they take out loans to cover them. So, you know, there's no way to encapsulate the liabilities. Yeah. I mean, we know this is a known gap with POR. Yeah. But you're right. But it's, you know, these POR, they're hiding behind the PORs. I kind of maybe regret a little bit being so insistent. The POR is not our only line of defense.

You need full financial statement audits. Yeah, you know, it would be good as like having a big three auditor, but I mean, those are going to be hard to get for a while. But like some auditor, some attestations. In the meantime, prediction markets on exchange and solvency. Yeah. All right, I think that's a good place to leave it. We will be back on Monday.

Everybody have a safe and healthy weekend.