On The Brink with Castle Island - Weekly Roundup 12/20/24 (No SBR?, Prometheum, Crenshaw) (EP.585)

Episode Date: December 20, 2024

Matt and Nic are back with another week of news and deals. In this episode:  Nic comes out against the SBR on Bloomberg More Prometheum nonsense MicroStrategy acquired an additional 15,350 BTC for roughly $1.5 billion, bringing the company's total holdings to 439,000 BTC. Microstrategy was also added to the Nasdaq 100  this week, which will lead to the stock's inclusion in several large ETFs including Invesco's QQQ. Anchorage Digital has received New York BitLicense approval, enabling them to offer digital asset custody and trading services to more customers in the state such as RIAs and other institutional asset managers. The US Senate scrapped a vote to renominate SEC Commissioner Caroline Crenshaw in response to immense backlash from the crypto community, led by Coinbase-backed non-profit Stand With Crypto, for Commissioner Crenshaw's treatment of the digital asset industry. A Texas state representative, Giovanni Capriglione, introduced a bill for the state to create a strategic Bitcoin reserve. Riot Platforms, the publicly traded Bitcoin miner, acquired 667 BTC this week for $67.4 million to add to their balance sheet, bringing their total holdings to 17,429 BTC. The NFT collection CyberKongz announced they had received a Wells Notice from the SEC. A California judge sided with Coinbase in a suit brought by BiT Global over the exchange's delisting of wBTC. Coinbase had recently moved to remove the asset, a tokenized version of BTC tradeable on Ethereum-based networks, following BiT Global, a custodian closely affiliated with Tron founder Justin Sun, assuming custody services for wBTC. Sponsor notes:  Coin Metrics, State of the Network's Q4 2024 Mining Data Special A quarterly update on Bitcoin mining in Q4 2024

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 as 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. $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 the Bitcoin. Welcome to On the Brink. I'm Matt Walsh. And I'm Nick Carter. And this episode is brought to you by Coin Metrics, and here is the Metrics Minute. For today's metrics minute, we're looking at the last quarter in Bitcoin mining. In Q4, Bitcoin's hash rate grew by 18% to 759 X of hashes. USD denominated mining revenues recovered to $3 billion in Q4, up 20% from Q3. The hash price has partially rebounded to 6.4 cents, but remains below pre-having levels of 10 cents.

Since July, while Bitcoin's price has risen 54%, certain mining companies have outperienced. performed with HUD 8 rising 68%, BitDeer 75, 8% and core scientific 62%. The S-19 machines now dominate Bitcoin mining, accounting for 63% of the network's hash rate. That is your metrics minute. Well, congratulations. You crashed the price of Bitcoin. It's down 5% since you went on Bloomberg this week. Is it my fault? Are I taking credit for that? Nick Carter says no Bitcoin strategic reserve and the price of Bitcoin just plummetz. Jay Powell might have a little bit to do with it.

I'm leaning into the Grinch arc. I stole Christmas. You did. So let's just talk about that first. So you went on Bloomberg. Pretty good interview. Some pretty good quotes. Would you say a tough thing about being in Bitcoin is that you're in the trade with a bunch of delusional people?

I mean, and I threw some shade of the stock to flow people too. You did. Can't forget that. It's true, though. Am I wrong? It's true. Bitcoiners are a very delusional bunch, and that was the, look, I don't know what they're going to ask me when I go on TV.

I thought they're going to ask me about quantum. I had all my quantum talking points ready. They didn't. They asked me about what the price of Bitcoin is going to be. They asked me about ether, micro strategy, and then about the sovereign reserve thing. And I don't support the sovereign reserve. I don't think it's a good idea. So is your take that the price of Bitcoin is reflecting a market belief that there is going

to be a Bitcoin strategic reserve, that the government is going to start buying a lot of Bitcoin? Yeah, I literally said that. I said something of the effect of the reserve expectation is at least partially price and when there's disillusionment, it'll sell off. And I think that's literally what happened. I warned people about it. But it might have been a self-fulfilling prophecy. J. Powell came out and said they don't want to hold Bitcoin at the Fed.

And I think it is sinking in that a Bitcoin reserve, strategic reserve buying additional bitcoins. I'm not just talking about a stockpile. A true strategic reserve will not happen. But so many Bitcoinists have convinced themselves of this. I mean, I don't know where they even got the idea from. It's just all of a sudden they all ardently believed in this thing. Well, Lundas has the bill which would establish a Bitcoin reserve. It seems very unlikely that a bill like that could move its way through Congress. It seems somewhat unlikely that anything can move its way through Congress at this point. Yeah, I mean, people don't understand how hard it'll be to pass even a stable coin bill, which is very uncontroversial. So the, you know, I don't think Trump has ever

come out and explicitly said on the record, I want to establish a Bitcoin strategic reserve. He did say something to the effect of not selling the confiscated coins, though. Yeah, so that's the stockpile idea. That's fine. I have no issue with that. Sure, we should hang on to them. Will he actually have any coins once he makes it to office that's actually a question well maybe that's the i think the government's been selling i think it'll come out later that the u.s marshals have been really dumping coins here over the past year yeah i think so but the reserve idea i mean that's champion by lemmas and sailor and the bitcoin policy institute guys there's zero evidence that trump supports this he hasn't made any noise about it if you actually listen to what he said about it

He's talked about the stockpile. Some of his surrogates have talked about it. I think one of his sons did maybe, Eric or Don. But there's just no evidence that he himself intends it as priority. It would be legislatively impossible. Maybe there would be a way to abolish Fed independence and strong-armed them into, you know, doing it through some executive means. That would be a constitutional issue, if you ask me.

Maybe the executive can appropriate funds from somewhere without congressional approval, but that's an anti-democratic thing. If it's easily done, it's easily undone. So I have an op-ed coming out. It'll be out by the time you listen to this. Talking about the political prudence of it, I think it would be considered a handout to Bitcoiners. It would be very politically unpopular.

And, yeah, just running through the whole thing. I think it's a bad idea, and I don't think it's a feasible. either. It's a pretty good interview to have you say that you're against the Bitcoin Strategic Reserve, but you think that the price of Bitcoin is going to gold parity, implying a $900,000 Bitcoin price in the same interview. Yeah, I mean, how can you be really mad at me? I literally called for $900,000 Bitcoin. They're upset. These people are very hard to please. It's tough. Tough to be you sometimes. Well, that was a fun one. We had a busy week of Castle Island content, why it sat down with Alex Lynn of Reforged to discuss innovation and consumer use cases

in the blockchain space. And I sat down with Rodrigo from Cooley and Ron Hammond from the BA, the blockchain association, talk about digital asset policy. As you might imagine, I enjoyed that one a lot, just talking about what's going to happen in 2025. Yeah, still a lot of question marks. We don't really know what the Trump's crypto priorities are for the next year. I guess some information is trickling in, but we don't know yet. Well, I think he's been pretty clear that he wants to pass comprehensive legislation. So what does that mean? You know, French Hill is pushing that in the direction of a stable coin bill first,

which makes sense to me. But I think, you know, you start working on market structure and maybe that's the end of 25. But I guess the question on market structure is, will the SEC just be able to do a lot more via rulemaking that would address some of those market structure issues? That's what I would keep an eye on. Yeah, I would hope that they could at least make a start on laying out some kind of framework for tokens, disambiguating securities and commodities, laying out the rules for token issuance without even any legislative action. Although I guess Chevron maybe makes that more difficult.

Yeah. Well, I think to your earlier point, you just need to have something in place that cannot be pushed back easily when a Democrat assumes the office at some point in the future. sure. Yeah, so I think we do ultimately want legislation. I wouldn't even expect a market structure bill in the first year, to be honest with you. I think it's critical to really push for that, because that's what's going to give the clarity on the securities versus commodities designation and open up the spot markets. So that one should be a high priority. And it really is only going to have 18 months here to push his agenda before the midterms kick into gear and start talking about who's running for president next. Yeah, there is a very short window of time.

And historically what happens in the midterms is you lose seats. And if that happens, then Congress could flip. Yeah. But we're not bearish. It's just there's a lot of work to be done in a short period of time. For sure. Before we dig into the rest of the news, let's hit the deals of the week, a lot of deals this week.

Busy week. BVNK is the first one up. This is a stable coin infrastructure company that raised $50 million from Han Ventures, Coinbase, and Tiger Global. This is an interesting deal. Mega-Eath. They're a L2 for Ethereum. There is 10 million on Kobe's investment platform, Echo.

It's kind of a crowdfunding platform. I like Echo. That was a good one. Next one up is Plume. This is a Layer 2 network for RWA's. There is $20 million from Brevin-Howard Digital, Han Ventures, and Galaxy. Then we have Agri Dex, a commodities tokenization, platform. There is four million from portal ventures, endeavor ventures, and others. Then it's

fraction AI. This is a decentralized data labeling platform. They raised $6 million from Spartan group, symbolic capital, and borderless. And we have Stabler. They're a European stable coin issue. They raise an undisclosed amount from Tether. That's kind of interesting, huh? So Tether, maybe having a difficult time with Mika, do you think? And then making this investment, could be a great thing for Stabler to have Tether behind them. I've heard from a lot of defy founders in Europe that Mika is an absolute headache, actually, and stable coin founders for that matter, too. So I know we were giving the Europeans props for getting ahead and writing some legislation

or rules for crypto, but what I'm hearing is that it's very hard to operate there as a crypto startup. Yeah, it seems like props for getting a market structure bill in place, but maybe not the best in terms of the details and actually how do you come into compliance on the fringes of that. Yeah, and I think for stable coins, there's a capital ratio element that makes it very hard to issue a stable coin profitably. Yeah, that is a tricky one. All right.

Next one up is fantasy top. This is a decentralized social gambling platform. They raised $4 million from Dragonfly in manifold trading. All right, you're going to have to explain this one to be Silencio. A decentralized noise intelligence platform, there is $2.5 million from. block change borderless capital envy global and others what in earth does that mean what is this is not i just checked this is an actual deal this is not our in turn playing games with us yeah so this is real that means um centralized noise intelligence what is noise okay i'm reading the medium we're turning

everyday smartphones into real-time noise sensors creating a platform that delivers hyperlocal data power actionable insights across industries like urban planning real estate and hospitality it's kind of cool i guess i mean so what is the use case there so i want to be looking at buying a condo in new york and i want to know if it's a busy street or something yeah that kind of makes sense i never thought of noise mapping before as a concept i guess could be useful so they have 410,000 active users providing noise data i mean that would be a thing i remember when i first moved to new york i was like this is so much louder than i was expecting i was on like the fifth or sixth floor of a walkup but i was like this is crazy how loud it is and if i

known that maybe i would have chosen a different place to live yeah that is this is why i don't think i can ever live in new york is it's an assault on all of the senses it is like smells bad it's loud people are harassing you the noise is definitely a factor especially in men of the Manhattan. Yeah, New York's really gone downhill the past few years. They've got to clean that up. Let's make that a priority. So, yeah, thank you, Salencio, for crowdsourcing the noise. All right, I like it. We'll have to have them on the pod. Next one up is Lens Protocol. This is the social finance app. They raised $31 million from Lightspeed, Circle, and SuperScript. And lastly, our favorite company, Prometheum, they're a tokenized securities platform.

there was $20 million from an undisclosed group. What's going on with Prometheum, Matt? Prometheum. Ever heard of these guys? Yes. Oh, my gosh. We were in the mud this week. I was in the mud with the Prometheum guys,

and you were in the mud with the Bitcoin people because you were talking down the coin. Well, Prometium is an easier target. It is a little bit of an easier target. So I don't know. I don't know what's going on with Prometheum. So Prometheum is this, I don't know, how would you describe it? is a platform for trading and custodying digital asset securities.

But they're more like theoretical than they are real. As far as I can tell, they don't have any customers or trading volume or anything like that. So we have we've talked about this company ad nauseum and maybe we can put some of the background material in the in the podcast notes. But they somehow ended up in front of, I believe the House Financial Services Committee maybe a year and a half, two years ago, being held up as an example of how to come into compliance versus some of the crypto-native companies like Coinbase and Cracken and Gemini that are, quote-unquote, not in compliance. Now, of course, you can say that Prometheums in compliance

and they have the special purpose broker-dealer, but they don't actually have a business. And they're saying that the security is on their platform, if you just go to their website or things like Ethereum and Uniswap and Compound, which the, the, Those aren't securities as far as I'm concerned. It's very difficult to understand on what basis they're saying those are securities. So anyways, you know, there's all sorts of other things about this company that we don't have to get into too much detail on now. Or on like who are the actual investors in this firm? How did they get put up on the pedestal?

So I had sort of forgotten about these guys. And then on the 16th earlier this week, Jeff Roberts tweeted out, Gensler's pet crypto firm, Prometheum, sued crypto guy Matt Bloomberg, who has less than a thousand followers for calling them scammers. So apparently what happened was this guy Matt Bloomberg was a developer in the blockchain space. Nice guy. He tweeted something out on his account, just calling them scammers and saying something like they were kind of in trouble now that Trump won was kind of the gist of it.

And Prometheum called this guy's mother. and started to threaten. That's tough, man. They reached out to his mom. And I was like, hey, your son's going to be in trouble. He's asserting that they said, you know, like put out this statement on your account and just say, upon further reflection, I love Prometheum, basically something like that. I love that because they weren't just like, they didn't just ask them to be like, I retract

my statements. They asked them to say like Prometheum is great. Yeah. This is what he's saying in his motion to dismiss. He's saying they asked him to say, upon further reflection, Prometheum has taken an innovative approach to digital assets allowing for further evolution of the industry. I'm excited about the future, exclamation. That's amazing.

That's amazing. I'm going to start suing people and demanding they say nice things about me. It's just crazy. And so anyways, that comes out. And Jeff Roberts from Fortune tweets about it and people start to talk about it and say, like, this is ridiculous. Promethium's calling people's mom. moms to get them to stop saying mean things about them.

And then the next day, Prometheum announces that they raised $20 million. But I found it to be really confusing. So they said they raised 20. If you look at their latest Form D, which is what you have to file with the SEC when you raise capital. They had a $20 million target, and they had only raised $9.3 million as of September 2024. And I get that these form Ds get updated when around. closed, but I haven't seen a like a final form. So I, they said they raised 20. I guess they raised 20, but it looks like they only filed that they raised 9.3. And then the structure of this

raise, they paid $932,000 in sales commission to Network 1 Financial Services, which is that China-affiliated capital raising firm based on New Jersey that we had talked about a year or two ago, which is just so strange to me. Like who's actually investing in this company? And of course, you know, they're saying, hey, we're going to be the only platform that you can trade these digital assets securities like Ethereum, the graph, uniswap, Arbitrome. It's like, come on, guys, this is not a thing. And then you go in, and so Prometheum has this ATS venue. They had said they would be live in 2024. I went through the FINRA transparency reports on the volumes.

And as far as I can tell, there's never been a trade on this platform. So this whole thing, I don't know what's going on. This is totally bizarre. this whole company and this whole setup with the SEC. Nobody sleuths their public filings better than you, Matt. It's a great skill that you have. Yeah, not to gas you up or anything, but I wouldn't even know where to look. Well, to close the chapter on this,

I've been getting these DMs from this guy, John Brubaker, who's the head of communications at Prometheum. And I'm not really good at these DMs on X. Like, I guess some of them come through, some of them don't. And if you're not following the person, it goes into a different folder. So I wasn't really paying attention to this. But it turns out he's just been sending me mean messages for months. No way.

No way. Just talking to himself in your DMs. Yes. And I have never hit accept. Can you read me a couple of these? So he sent me Jeff Roberts's fortune piece. And he said, your article published didn't turn out as well as you might have hoped, a kid. So he called me kid.

Like I'm from Boston. I know you call someone kid. That's not a nice thing. Yeah, that's fighting words. It's like you call someone, pal. Yeah, he was getting pretty close to call me chief. Like, bud? Well, wait, there's more.

The next message is, hey, bud. And then he sent me a link to an MSN.com slash money prometrium article, which I confess, it's been, I don't know, 15 years since I was on MSN.com. So apparently they wrote an article. Bo Prometheum. And he said, just keeping you posted on the latest good news, capital, much more coming. So he's called me, this guy called you kid and bud. Kid and bud so far. But wait, there's more. Okay. So then I tweet out my thing about, hey, this is just, you know, this is kind of strange.

Like, who's actually investing in this company that are not disclosing the investors and there's this Chinese affiliated placement agencies like what's going on here? And then he sends me a, a link to the Axios thing that says that they raised $20 million. And he says, to answer your question on revenue and funding, colon, and then just puts it in. And it's like, well, that doesn't answer my question at all. That just says, you said you raised 20, but I see that you raised 9.3. And I don't know who it's from. And then he goes, ha ha, rent free in your head, love it.

Also brush up. No. Also brush up on your form D laws. Rounds are for VC scum like you. We don't play in that sandbox. Real investors only. mind you i've never responded to this guy he's just talking to himself in my dms and just calling me kid uh kid and bud he's not called me chief yet he probably couldn't bud that's bad chief that's

fighting words chief he better not call me chief i might actually the gloves are coming off i might actually respond to him and if he calls me chief yeah i'm trying to think what's the word i think the most annoying one is pal i got a nice thing to say to someone either i don't like pal It's condescending. In Scotland, if you call someone pal, it's a, that's, there's a fight in words. I think it's kind of,

you could call your, like, close friend pal, maybe, but you just don't come out and call someone pal or kid or bud. It's just the level of disrespect that I've gotten this week.

The endearing ones are like buddy, dude, big dog. That's a top, top endearing term. That is, yeah. Chief of him,

horrible. Wow. So this guy's just been talking to himself. Incredible. Honestly. I guess not really very good at his job. You didn't even notice DMs this whole time. Well, I guess, yeah, it's shame on me for not being all over my DMs earlier, but I'm checking them now. Well, since the news came out about their lawsuit, a lot of people have been calling them scammers. Not me. I haven't said it. I haven't called them scammers. We have not said that. But just no, if I do call them scammers, then I might be back on a podcast episode saying,

on second thought, it is a very innovative solution. So if we change our tune here on Prometheum, you know what happened. Okay, this is your official warrant canary. I feel like I'm going to end up being like Baghdad Bob and just being like,

everything is fine with Prometheum. Volumes are going to win. It is a highly liquid platform with robust volumes. Oh, man. What a joke of an industry we are in sometimes. So we're not even into the news yet. First news item, Micro Strategy, our favorites. They acquired 15,350 BTC for 1.5 Bill.

Now they have 439,000 bitcoins. And they're added to the NASDAQ 100. So they will be in major ETFs like QQQ. Yeah, I think that being added to the NASDAQ 100 is a big deal here. So you get into the QQQ, you get into some of these more passive vehicles. But then if you're a portfolio manager that is benchmarked against the NASDAQ 100, and I don't know how many there are of those, presumably there's a bunch of public fund managers that are probably comp to that. So let's say you're benching to that and you don't own micro strategy or you don't own any Bitcoin exposure,

you're going to underperform that index if Bitcoin keeps on going up. Yeah. I mean, it's cap-weighted index, right? So they're going to only account for a very small percentage of it, right? Yeah. Yeah, but still, I mean, if you think, like, Sailor thinks that Bitcoin's going to go to gold parity here pretty soon. If that happens, that's like a 10x move.

And, you know, you're just going to underperform that benchmark. If you don't buy micro strategy, I guess. Or if maybe you buy, like, the ETF, or you buy, you know, Bitcoin miner company. So I would like to share a word of confidence. Not to, you know, continue my FUD campaign or anything. Micro Strategy is trading a 2x premium to NAV. So if you're buying micro strategy for the Bitcoin, you're buying the Bitcoin at double the price. You could get it in the ETF.

Correct. Keep that in mind, guys. We said this with GPDC, too. It's basically the same situation. Yeah. So keep in mind, the Bitcoin can go up by another 100% and micro strategy could be flat if it converges to nav. So I'm not saying that's going to happen,

but that could happen. The other thing I want to say is the miners. The miners, Matt, they are capital incinerators, okay? Bitcoin mining companies are capital incinerators. They're now doing this thing where they themselves are buying Bitcoin, like Micah Strategy Light. And you might be like, oh, wouldn't it a novative interesting strategy?

You know, that's smart. It's not smart. Okay, they did it last cycle and they all went bankrupt doing that. And then they just sell the Bitcoin as they went bust. Reflexive up, refluxive down. Yeah, so they're adding volatility to Bitcoin by doing this. It works great in a bull market. You know, stock price rises.

They can do at the money offerings, sell stock to public markets, cash out themselves. But we have so much evidence that it goes south for miners to get overlavered, over extend themselves, pile on debt, buy Bitcoin, then they go bust. They have to sell the Bitcoin. Just look back in history two years. That's all I'm asking of you, if you're an investor in Bitcoin miners. This literally happened two years ago. So beware. You know, you always remember the really good advice you get in the investing game. And I remember the first time I met the Stevens brothers, or I guess it wasn't the first time I met them, but the first time I went to their office and they have this stack of Bitcoin miners.

And I was like, what's the deal there? They're all just these old clunky miners. And they said, it's a daily reminder when we walk into the office to not invest in Bitcoin mining companies. Yeah, real capital incinerators. I mean, I used to be kind of obsessed with Bitcoin mining, not really on the investing side. But I became super dissolution with the sector because I talked to all of these companies and I asked them the same question. We have our mining miniseries. I don't know how many episodes we did so many.

I asked them the same question. Do you view yourself as levered long? Bitcoin exposure like high beta Bitcoin or do you are you playing the margin game and just trying to mine Bitcoin cheaply at a discount to market price and sell it off and playing the spread game and almost all of them said the first thing. Yeah. I'm like well gold miners don't see themselves like that. They're like trying to mine gold cheaply and sell it on the market. They're trying to play the margin game. Why are Bitcoin miners doing the other thing? It doesn't make sense. It still doesn't make sense. Yeah. Now you actually have added levels of complexity as a public markets investor, I think, looking at these miners because some of them have a high performance compute angle and some of them don't, it seems like. And so the access to power is another interesting reason why people are getting excited about these things. That's true. The AI sector has kind of been a bit of a bailout for some of these Bitcoin miners and some of them have been able to repurpose their infrastructure and sell into that market too.

So yeah, it's kind of a tricky one to value. All right. Next story. Anchorage Digital. They just got a bit license. This is a big deal. It takes forever to get a bit license. So I don't know how long Anchorage was at this, but now they can offer digital asset custody and trading services to more companies, basically, more customers, more companies, and can freely operate in the state of New York. So that's a big, big accomplishment. So congrats to Nathan and the team over at Anchorage. Another big news item this week, the Senate scrapped their vote to renominate SEC chair, commissioner, rather Caroline Crenshaw. There was huge backlash to this.

She was about as hostile to crypto as Gensler was. She voted against the Bitcoin ETF. Props to stand with crypto. I think they marshaled 100,000 emails. 106,000 people went on Stand With Crypto and wrote letters to their senators through Stand With Crypto, myself included, and I did not get anything back from Elizabeth Warren. Should not respond to them.

It's surprising. And I believe Adam Schiff had a role in Torpedo. torpedoing Crenshaw's redom here. Well, so he was put on the Senate Banking Committee. So Sherrod Brown is on his way out in Ohio looking for work at the moment. He wanted to get this done. And Crenshaw, just so everyone's aware, the reason why Crenshaw was so controversial is because she's probably even more hostile to the digital asset industry than Gensler.

So she came out and actually voted against the Bitcoin ETF after it was mandated effectively by a federal court that they actually put it through. And Gensler voted ultimately to approve the ETF. Crenshaw was still opposed to it. So it seems like she was, you know, we didn't hear much about Crenshaw. It was kind of the thing. So everyone was sort of like, where does she stand? Myself included.

It was very, very unclear. Because you'd hear these stories about people that were having these meetings with Hester Purse and coming away being like, oh, like she really gets it. She understands this market structure. This is super encouraging. Obviously, Gensler is not a fan. But everyone was always saying, I wonder about Crenchner. Crenshaw, but it turns out that she was very hostile against it. And so Warren and Brown wanted to

push her through. Schiff got added to the Senate Banking Committee like 10 days ago. And keep in mind that Schiff beat Katie Porter in that California election. And he had a lot of support from Fershake in that $10 million. $10 million in that primary and Democratic primary. In the Democratic primary, which got him to face off against Garvey, the Republican. who he ultimately won. And so Schiff, you know, Schiff is on the scene in the crypto space. Like I've been to events that Schiff was there. So he's knowledgeable about the space, but we didn't know that he was actually going to go to bat.

And my interpretation on what happened here is that he did go to bat. And that, you know, as a democratic voice, that carried a lot of weight that he did not want to see Crenshaw go through. And this is a new era in crypto advocacy in Washington because there were a handful of Democrats that were pro-crypto, but this is, he's breaking with party lines. This is really significant. And I think it really shows the effect of fair shake. Yeah, I mean, imagine if Katie Porter was in that seat instead of shift. This would have happened, I think. Yeah, she did not like crypto. She blamed crypto for her loss. Yeah. And Katie Porter is a disciple of Warren. So, she was also very annoying. Can I say that? She was extremely annoying. I sort of liked her early days.

would she pull out the poster with the sharpies? It's like, let me explain to you and she'd like put numbers down. That was good the first couple times. That didn't do it for me, you know. You didn't like it. It was funny.

It was amusing. It was like bring someone in front of your committee and talk to them like they're in second grade. It's, hey bud. Yeah, chief. Let me explain this to you. All right, well, we haven't talked enough about the Bitcoin Strategic Reserve,

but why don't we talk more about it? a Texas state representative by the name of Giovanni Capriaglone. I hope that's not the intern just playing games with us. Introduced a bill for a state-level Bitcoin Strategic Reserve in Texas. What do you think of this? Yeah, no, I know Rob Capri Gleone. He passed the proof of reserve legislation in Texas, actually. So he has a good track record passing bills,

per crypto bills in Texas. So it actually would not surprise me if this went through. And by the way, for a state, I fully support it. If it's the mineral fund or whatever state fund, that's fine. It's just when it is the U.S. government doing it and it throws the future of the dollar into doubt, that's when I don't support it. Some of these states have these huge funds.

I mean, if you think about how big the Wyoming fund is over $20 billion, I think. Yeah. for a state totally makes sense diversify good interesting portfolio characteristics Texas is a Bitcoin state you know makes a lot of sense it doesn't make a lot of sense if you're running massive budget deficits though I think Massachusetts would have a tough time doing one of these things yeah back to the Bitcoin minor conversation riot platforms the publicly traded minor they acquired 667 BTC they now have 17,000 bitcoins

Hmm. Can you put those in a time lock or are you just going to have to sell them when the market turns? Yeah, maybe. I'd be turning right now. I don't know. What do you make of this sailor going into a blackout period in January? So he's not going to be able to do any more at the money shelf offerings on his equity. And he's not going to be able to do any more converts. So he basically is looking at this, my guess, is that he's got 10 days here to run as hard as he can to, sell some more equity or converts. Why the blackout?

Just an SEC mandated blackout period. Nothing to do with Bitcoin, but he can't be doing at the money offerings. They're just like you've been doing too much, you know, cool off? It's just like the quarterly, like you can't be doing certain things outside of the reporting period. I mean,

it makes me nervous, frankly, because I think the market's very indexed on sailors' activities. He's like the new J-POW, you know, instead of announcing race. it's how much Bitcoin did he buy this week? If he stops buying for whatever reason,

I think the market would react very negatively. Well, especially if you don't have a Bitcoin strategic reserve. But I think you'll see other countries do this, actually. So I'm not as pessimistic on this at a sovereign level. I'd be shocked if you don't see some Middle East countries pop in a Bitcoin buy here in the next six months. No, I agree. So SEC News here, Cyber Kongs, the NFT collection. I think it's a monkey-based collection.

They got a Wells notice from the SEC. They said they've been suffering in silence for the last two years. Oh, man. Never heard of these guys. Tough one for the Kongs, yeah. I hate to see it. I mean, it's like 30 days until the SEC turns over and you get a Wells notice.

That really stinks. I mean, I'm looking at the art now. It's like pixelated monkeys. It's kind of like punks. but monkeys it's not really doing it for me the other interesting

lawsuit here hawk to a girl Haley Welsh so her real name has been sued and her team sued for alleged securities laws violations 12 plaintiffs who lost $150,000 have sued her

and her team so you just hate to see it you know Haley she was doing so good she was doing great with her 15 minutes of fame she had the talk to a podcast that was my weekly listen

did you really ever listen to it yeah I think she's funny and uh she's now gone silent she's been silent for two weeks no new episodes of talk toa like what am I meant to listen to while I do the dishes I mean there's a long history of

celebrities doing coin offerings and getting sued and then coming back I think she'll be fine but I thought she was in shack I just thought she'd such a good hat on our shoulders and then she ruined it all with the meme coin. I think what happens is you get these scammers that are like, hey, I'm a crypto expert. I'm going to help you launch a coin. It's great.

You don't have to worry about anything. You just go on and talk about it. And then some of these celebrities just do it. Really disappointing. In amazing legal news, Craig Wright, who falsely claimed to be Satoshi Nakamoto, I think we can say that now, has been sentenced to 12 months. in prison with two years suspended by a UK judge for contempt of court. It's incredible.

So it says the Australian computer scientist was sentenced to 12 months and suspended for two years. What does that mean? Does that mean he actually goes to jail? Yeah, I think, well, my guess is he would flee the UK. I don't even think he lives in Norway. And then if he does anything wrong, additionally, he would have to serve the extra two years. shout out to Copa for making this happen really an incredible endeavor I'm still not clear if this means he's on a 12 months suspended sentence or if this

means he's actually going to jail for 12 months I'm very curious about that I if I'd guess I would say he just skips town and heads to the Cayman or something wow that's what a wild development we spent a lot of time talking about this guy this is the end of the Craig Wright saga. It's been almost 10 years of this nonsense. I think he appeared on the scene in 2015, 2016. That's when I first started hearing about the Tulip Trust. Yeah, this was that coin desk consensus thing back in like 2015 or 16.

I remember that Gavin was on the stage with Fatalic and a couple other people. And Gavin came out and said, I know who Satoshi is. and it ended up being Craig Wright. Yeah, look, I'm not going to point fingers, but a lot of pretty well-regarded people in crypto fell for this, which is very irritating. I thought it was pretty transparently false. And it really has been a specter that's lingered over the Bitcoin space

for a long time. I mean, he was conducting kind of like very aggressive legal harassment of Bitcoin developers that themselves could not defend themselves very easily. The cultural side of this is so interesting. I was talking to one of our portfolio companies a couple nights ago and talking to the founding team there just around the state of Ethereum and what the culture is in Ethereum right now. And it's a little bit of a infighting dynamic. I don't know if you've been following it.

I'm sure you have just around arguments about the future of the protocol. And it kind of reminds you of the early Bitcoin days when there was a lot of infighting. And then you had the splintering into Bitcoin Cash and eventually Bitcoin SV and kind of things. three tribes emerged from that. And I don't think that would happen in Ethereum, but it is just interesting to see like the maximalists go against the people that are not maximalists in that community. Well, I think there's less to fight over in Bitcoin. I mean, there's a low level warfare in Bitcoin over certain op codes, but basically nothing ever happens in Bitcoin. So there's not that much to argue about because it's all completely theoretical. In Ethereum, it gets

upgraded and change a lot more often. So I think there is a lot more on the line. Yeah. I think you also have just, there's highly performant blockchains that continue to launch and take away developer mine share from Ethereum in Bitcoin. That doesn't really matter as much. And to the extent that protocols are being built on top of Bitcoin, they're actually being built using the EVM generally. I'd imagine at some point the SVM as well. Yeah. Last piece of news. this week a California judge sided with Coinbase in a suit brought by BIC Global, the new owner of WBTC. Coinbase moved to DLIST the asset, and the judge has found that they were fully able to do that. So Justin's son is not happy about that.

Do you think the Coinbase lawyers just saw this as like an alley-up? Like, okay, this is great. I get to show off a two-hand jam here because obviously we're going to have a good story to tell. here. We list assets based on the risks associated with them, and this one is backed by this guy, Justin's son, who the SEC is suing, the DOJ is rumored to be going after. It's kind of a no-brainer. Yeah, I think they're well within their rights to do that. Did you read the Wall Street Journal piece this week? De-banking and the return of Operation Chokepoint, don't blame the banks for canceling accounts. They are acting under pressure from federal regulators. That was a mouthful, but that was the title.

Yeah, it's a great article. The journal has been very good on this. They have been good. They're generally not that favorable to crypto, which kind of annoying. I think they would be. But on this front, they've been very good.

They had a lot of the original reporting around choke point 1.0, and they've been good on debanking. So, I mean, the tide is totally turned in the mainstream press. I mean, a few months ago when we would talk about this stuff, people would dismiss it as a conspiracy.

Now you've articles in the Times and in the journal basically validating what we're saying. So it really feels very vindicating. I think we're going to continue to peel back the onion on that story, though. There's going to be hopefully hearings where you get some of these bank executives to actually be able to go on the record. I think we will. That's one of the things I look forward to the most for next year.

So are we going to do our predictions this episode or maybe we'll do it next episode, are 2025 predictions. Yeah, let's save that for the end of the year. Did you make any predictions last year? I don't remember making any. I guess I should just tweet them if I make them. You made a bunch of them. Yeah, I had 23, and I got 12 out of 23, right?

So some were tricky ones that I got, but then I got some horrendously wrong. What's your biggest miss? well I said that the ETH BTC would price would go to 0.075 it's currently at 0.036 so that was horribly wrong I said Stables would do 80%

of total blockchain settlements closer to 50, 60%. I said ETH would be deflationary this year. It was inflationary. I said a smartphone manufacturer would add blockchain out of stations to images that did not happen. They should do that still.

I said crypto AI projects would not take off, and I was so wrong on that. I mean, crypto AI was one of the biggest themes of the year. Yeah, that's a hot category, to say the least. I got some stuff right. You got the stable coin stuff, right? Yeah, I said the stable coin supply would hit $200 billion. It hit that last week.

I said the winning stables for next year, for this year would be FD, U.S.D, PY, SD, U.S. STM and USDAE. Three of those four were basically the top growers this year, especially Athena's USDA. That was a huge winner. I said Polymarket TVL would hit $100 million. It actually peaked at $500 million.

I said Tether would not suffer an adverse legal event. I was right. So, yeah, you know, 50%. 50% is a failing grade, though. It's a failing grade, but you're not trying to get like an 80% You want to make them a little bit spicy. Yeah, so I actually don't know what I'm going to predict for next year, but yeah, we'll roll them out next week. All right, next week we'll both come prepared with some predictions and we'll roll.

All right, I think that is it for the week. Everybody have a safe and healthy weekend, and we will see you on Monday. Yeah.